Debts Recovery Tribunals and Appellate Tribunals
SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA vs VARUN INDUSTRIES LTD on 31 October 2023
Registered on: 17.04.2014
Decided on: 31.10.2023
IN THE DEBT RECOVERY TRIBUNAL-I MUMBAI
TRANSFER ORIGINAL APPLICATION NO. 1638 of 2016
SMALL INDUSTRIES DEVELOPMENT BANK)
OF INDIA, having its head office at SIDBI Tower,)
Ashok Marg, Lucknow- 226001 and having its )
Branch office at 11-13, 1st Floor, Atlanta Building )
209, V. K. Shah Marg, Nariman Point, Mumbai )
400 021
)
… APPLICANT
VERSUS
1. VARUN INDUSTRIES LTD. A company)
Incorporated under the provisions of the)
Companies Act, 1956 having its registered)
Office at 13, Shankeshwar Darshan, A. G.)
Pawar Cross Lane, Byculla East,
)
Mumbai 400 027
)
2. MR. KIRAN N. MEHTA, Son of Mr.
)
Navaratanmal Mehta, residing at A/401)
Shankeshwar Darshan A. G. Pawar Cross)
Lane, Byculla, Mumbai 400 027
)
3. MR. KAILASH S. AGARWAL, Son of )
Shreeram Agarwal, residing at A-1/502, )
Shankeshwar Darshan, A. G. Pawar Cross)
Lane, Byculla, Mumbai 400 027
)
...DEFENDANTS
____________________________________________________________
Counsel for the Applicant :
Adv. Raju Shinde a/w Pooja Gupta,
i/b Adv. Tamil Selvi Laxman
Counsel for the Defendants :
Ex-parte
______________________________________________________________
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J U D G M E N T
1. The Original Application has been filed by the Applicant against the Defendants before the Ld. DRT-II, Mumbai, which stands transferred to this Tribunal on 17.02.2017 as per Govt. Notification dated 26.09.2016 and registered as TA No.1638/2016. The OA has been filed for recovery of Rs.7,61,65,290/- (Rupees Seven Crore Sixty One Lakh Sixty Five Thousand Two Hundred Ninety only) together with further interest at the rate of 13.96% per annum plus penal interest/ liquidated damages at the rate of 2% p.a. compounded monthly from the date of filing of the Original Application till payment and/ or realization.
2. Facts as succinctly set out in the O.A./T.A are that the Defendant No.1 is the principal borrower and Defendant No. 2 is the Chairman and Managing Director of Defendant No. 1. Defendant No. 3 is joint Managing Director of Defendant No. 1. It is stated that on 19.03.2009 the Applicant issued sanction letter to Defendant No. 1. The Applicant sanctioned a limit of Rs. 10 Crore under MSME Receivable Finance Scheme for direct discounting of bills. The terms and conditions of the sanction were duly accepted by the Defendant No.1. The Defendant No.2 & 3 on 21.03.2009 singed and executed the Agreement of guarantee.
3. It is further stated that on 05.10.2009, the Applicant issued sanction letter to Defendant No. 1. The Applicant enhanced the limit from Rs.10 Crores to Rs. 15 Crores under MSME Receivable Finance Scheme for direct discounting of bills. The terms and conditions of the sanction were duly accepted by the Defendant No.1. The Defendant No.2 & 3 on 21.03.2009 singed and executed the Agreement of guarantee.
4. As per the aforementioned receivable finance scheme, Defendant No.1 sent 10 Bills for discounting aggregating to Rs. 5,80,60,516/-.
5. It is stated that on 03.06.2011 Defendant No. 1 addressed letter to the Applicant for renewal-cum-enhancement of the limit of Rs. 15 Crore.
6. It is also stated that on 10.10.2011 Defendant No. 1 admitted and acknowledged its liability by confirming the outstanding balance of Rs. 14,75,00,000/- as on 30.09.2011. Further, on 15.02.2012 Defendant No. 1 addressed letter to the Applicant and assured to make the payment of Rs. 25 lakhs on daily basis. Thereafter, on 16.05.2012, the Applicant addressed letter to Defendant No.1 wherein it was recorded that the account of Defendant No.1 has turned into NPA on 27.03.2012 and further recorded that entire outstanding amount has become overdue. On 26.06.2012, the Defendant No.1 addressed letter to the Applicant wherein it was recorded that it has planned to make the payment of the admitted liability. However, the Defendant No.1 failed to pay the same. Again on 18.01.2013, the Defendant No.1 admitted and acknowledged its liability by confirming the outstanding balance of Rs.5,80,60,516/- as on 31.12.2012. Thereafter, the Applicant issued notice dated 07.02.2013 and called upon the Defendants to pay the entire outstanding dues. The Defendant No.1 on 14.02.2013 addressed letter to the Applicant wherein it was again admitted the liability. On 20.02.2013, the Defendant No.1 also addressed letter to the Applicant requesting to accept the proposal towards repayment of the admitted liability and forwarded three cheques towards payment of the principal amount and three cheques towards payment of interest upto 31.01.2013. The Applicant on 31.07.2013, invoked guarantee of Defendant No.2 and 3 and called upon them to pay the dues but to no avail.
7. It is also stated that all the three cheques issued by the Defendant No.1 were dishonoured and returned unpaid for the reasons “funds insufficient”, therefore, the Applicant issued notice dated 12.08.2013. Since the Defendants failed to make the payment of the outstanding dues, the Applicant has left with no other option but to approach this Tribunal hence, the present OA has been filed.
8. Notices were issued to the Defendants. Despite service, no one appeared for the Defendants thus, they were proceeded ex-parte vide order dated 21.09.2023.
9. The Applicant Bank has filed and produced all the relevant documents and original documents alongwith their claim affidavit filed through their Asst. General Manager S. Srinivas.
10. I have heard the Ld. Counsel for the Applicant and gone through the record.
11. The witness of the Applicant Bank has fully corroborated the averments made in the OA/TA, even otherwise the whole case of the Applicant Bank is based on documents and the witness has duly proved all these documents as against the Defendants. In my view there is no question of disbelieving the evidence led by the Applicant Bank and the Applicant Bank has proved its case beyond reasonable doubt. The liability of Defendant No.1 to 3 are joint and several.
12. In the light of above discussions, the Original Application deserves to be allowed against the Defendant No.1 to 3.
O R D E R
(i) The present O.A. is hereby allowed and Defendant No.1 to 3 are hereby directed to pay to the Applicant Bank, jointly and severally, within a period of 60 days, a sum of Rs.7,61,65,290/- (Rupees Seven Crore Sixty One Lakh Sixty Five Thousand Two Hundred Ninety only) together with further interest at the rate of 13.96% per annum with monthly rests and 2% penal interest from the date of filing of the present OA till payment and/ or realization.
(ii) Failing which the aforesaid amount shall be recovered from the sale personal movable and immovable assets of the Defendants.
(iii) Defendants are hereby directed not to deal with their properties till further direction of Ld. Recovery Officer.
(iv) Defendants shall also pay the cost and expenses of the OA/TA.
(v) Recovery Certificate be issued forthwith and be sent to the Recovery Officer of this Tribunal.
Copy of this order be sent to the parties as per rules. File be consigned to record.
Place: Mumbai.
(Dr. Rekha G. Dhakar) Date : 31.10.2023
Presiding Officer,
DRT-1, Mumbai
Tjs/-