IDBI BANK vs KIRTI KUMAR on 28 November 2023

J U D G M E N T

1. The Original Application has been filed by the Applicant on 28.01.2013 before the Ld. DRT-II, Mumbai, which stands transferred to this Tribunal on 07.11.2016 as per Govt. Notification dated 26.09.2016 and registered as TA No.1601/2016. The OA has been filed for recovery of the aggregate sum of Rs.77,66,826/- from the Defendant No.1 & 2 with further interest at the contractual rate of interest compounded monthly from the date of filing of the present OA till its realization.

2. Facts as succinctly set out in the OA are that the Defendant is carrying on business of trading, Defendant No.2 is the Guarantor and the Defendant No.3 is a Co-operative Bank claiming mortgage/charge upon the immovable properties which have been equitable mortgaged with the Applicant Bank. The Defendant No.1 approached the Applicant in November, 2008, for grant of financial assistance for the purpose of trading of mainly MS, Tor, Steel, MS Channels, beams etc. The said request was considered by the Applicant and sanctioned the Cash Credit Facility of Rs.40 lakhs vide sanction letter dated 18.12.2008. The Defendant No.1 executed the various loaning and security documents on 30.12.2008 which includes Loan-cum- Hypothecation-Agreement; Demand Promissory Note; Unconditional and Irrevocable Guarantee Agreement executed by Defendant No.2 and Undertaking etc.

3. In order to secure the said loan, the wife of Defendant No.1 namely Hemlata Salot (Defendant No.2) attended the office of the Applicant on 30.12.2008 and deposited the title documents in respect of the following immovable properties:

(i) All that piece and parcel of shop premises situated at Shop No.3 (admeasuring 101 sq. ft.), Lower Ground Floor, in building known as Patil Sainath Plaza of patil Sainath Plaza Premises Co-operative Society, Survey No.83, Plot No.61, and 32, CTS No.1187, Jawaharlal Nehru Road, Mulund (W), Mumbai- 400080.

(ii) All that piece and parcel of shop premises situated at Unit No.G-3A, Ground Floor, (admeasuring 180 sq. ft.) in building known as Gokul of Gokulesh Premises Co-operative Society Ltd., Plot No.80-A, and 32, CTS No.19, Princess Dock, Baroda Street, Mumbai-400009.

4. It is further stated that the Defendant No.1 again approached the Applicant in the year 2010 for grant and enhancement of financial assistance from Rs.40 lakhs to Rs.60 lakhs. The said request was considered by the Applicant and enhanced the Cash Credit Facility to Rs.60 lakhs vide sanction letter dated 30.03.2010. In consideration of sanction/enhancement the said facility, the Defendant No.1 executed the various loaning and security documents on 24.06.2010 such as Supplementary Facilities Agreement; Demand Promissory Note; Supplemental Deed of Hypothecation; Unconditional and Irrevocable Guarantee Agreement executed by Defendant No.2; Undertaking by Defendant No.2; Deed of Indemnity for original title documents are lost misplaced by Defendant No.2.

5. However, the Defendant No.1 failed and neglected to repay the outstanding dues. The Applicant issued a recall notice dated 31.10.2011 and called upon the Defendant No.1 to pay the dues but he failed to pay the dues. Thus, the Applicant invoked the Guarantee of Defendant No.2 and issued notice dated 25.11.2011 invoking guarantee to the Defendant No.2 but the Defendant No.2 neither replied to the said notice nor paid any dues. Hence, the present OA has been filed.

6. Notices were issued to the Defendants. Defendant No.1, 2 and Defendant No.3 filed their respective written statements. Despite opportunities no CAOD has been filed, thus, their right to file the CAOD was forfeited vide order dated 24.07.2017. Record reveals that since 13.03.2018, no one appeared on behalf of the Defendants.

7. In the written statement, the Defendant No.1 & 2 have raised the following objections that:

(i) The OA has not been filed by a duly authorized person;

(ii) The alleged deed of guarantees not signed and executed by the Defendant No.2;

(iii) The statement of Account is not certified as per Banker’s Book of Evidence Act.

8. In the written statement, the Defendant No.3 has raised the objection that the suit properties i.e. Shop at Mulund and Shop at Masjid Bunder are already attached by the Executing Court of the Defendant No.3 Bank in execution of the Recovery Certificates against the Defendant No.2 and 3 who are also Borrowers/Guarantors of the Defendant No.3 Bank. The Special Recovery Officer of the Defendant

No.3 Bank by the order dated 23.03.2007 attached both the premises and same is much before the Defendants have created alleged mortgage in the year 2010 in favour of the Applicant Bank. It is stated that when the Applicant came to know about the attachment of the said properties by Defendant No.3 Bank, the Applicant Bank filed FIR with EOW Unit of Mumbai Police against Defendant No.1 & 2 stating that the Defendant No.1 & 2 cheated with them in respect of the mortgage of the said properties. It is also stated that the Defendant No.3 have to recover the total amount of Rs.4,24,90,451.56 from the Defendant No.1 & 2 and taken appropriate steps in execution proceeding under Disputes Cases Nos.CC/III/46/1996 under Judgment and Award dated 13.06.2005 and cannot be obstructed from the same, therefore, mortgage claim of the Applicant is much later to the attachment in execution proceeding and cannot supersede the provision of Section 64 of the CPC.

9. The Applicant Bank has filed its evidence by way of affidavit of Shri Rohit Kumar Singh, Assistant General Manager of the Applicant Bank who has proved the loaning and security documents such as Exhibit A to Exhibit X.

10. I have heard the Ld. Counsel for the Applicant and perused the record. Now hereinafter, I would like to decide the issue raised by the Defendant No.1 to 3 in their respective written statements.

(i) The Defendant No.1 & 2 have raised the first objection that the OA has not been filed by a duly authorized person.

The OA has been filed by Sh. Rohit Kumar Singh, Assistant General Manager of the Applicant, who is fully conversant with the facts of the case and he is competent to sign, verify and institute the present OA. Even otherwise, the OA cannot be dismissed on this technical ground as held by Hon’ble Supreme Court in UBI Vs Naresh Kumar & Ors., AIR 1997 SC 3. Therefore, the objection raised by the Defendant No.2 is declined.

(ii) The next objection raised by the Defendant No.1 & 2 is that the alleged deed of guarantees not signed and executed by the Defendant No.2.

I have gone through the Guarantee Agreements dated 30.12.2008 and 24.06.2010 which are duly signed and executed by the Defendant No.2. Thus, the objection raised by the Defendant No.1 & 2 is baseless hence, rejected.

(iii) The next objection raised by the Defendant No.1 & 2 is that the statement of Account is not certified as per Banker’s Book of Evidence Act.

I have perused the record, it reveals that the Applicant has produced the complete statement of Accounts “Exb.W and Exb.X) alongwith certificate. Therefore, the objection raised by the Defendant No.1 & 2 is not sustainable hence, rejected.

(iv) The Defendant No.3 in its written statement has raised objection that the Defendant No.3 is having prior charge in respect of the subject properties and stated that the Special Recovery Officer of the Defendant No.3 Bank by the order dated 29.03.2006 as well as order dated 23.03.2007 attached both the premises respectively and same is much before the creation of mortgage by the Defendant No.1 & 2 in the year 2010 in favour of the Applicant Bank.

(v) On the other hand, the Applicant Bank objected to the contention of the Defendant No.3 and stated that the original title documents in respect of the mortgaged properties are lying with the Applicant Bank thus, the Defendants No.3 required to submit the strict proof before this Tribunal to prove the said allegations.

(vi) I have gone through the record.

(vii) Record reveals that the Applicant Bank has produced the original title documents viz. Memorandum of Entry, Agreement for sale and Share Certificate; Declaration and Undertaking; Deed of Indemnity, in respect of the following properties:

a. All that piece and parcel of shop premises situated at Shop No.3 (admeasuring 101 sq. ft.), Lower Ground Floor, in building known as Patil Sainath Plaza of patil Sainath Plaza Premises Co-operative Society, Survey No.83, Plot No.61, and 32, CTS No.1187, Jawaharlal Nehru Road, Mulund (W), Mumbai-400080.

b. All that piece and parcel of shop premises situated at Unit No.G-3A, Ground Floor, (admeasuring 180 sq. ft.) in building known as Gokul of Gokulesh Premises Co- operative Society Ltd., Plot No.80-A, and 32, CTS No.19, Princess Dock, Baroda Street, Mumbai-400009.

(viii) On the other hand, the Defendant No.3 has produced the copy of order dated 29.03.2006 passed by Special Recovery Officer’s (SRO) for attachment of business premises being Shop No.3 at Sainath Plaza Bldg, Mulund, Mumbai, and copy of order of Special Recovery Officer dated 23.03.2007 in respect of property situated at

Steel Market Building, Elphinstan Estate-I, Baroda Street, Masjid, Bunder, Mumbai-400009.

(ix) However, description of the mortgaged properties in the present OA and description of properties as mentioned in the orders of the Special Recovery Officer are different. This Tribunal granted sufficient opportunity to the Defendant No.3 to prove the case however, despite opportunity the Defendant No.3 failed to file the Claim Affidavit as well as to produce the original documents before this Tribunal to prove their prior charge in respect of the mortgaged property. Whereas the Applicant has produced the original title documents in respect of the mortgaged properties. Therefore, the objection of the Defendant No.3 is not sustainable hence, declined.

11. The witness of the Applicant has fully corroborated the averments made in the OA/TA, even otherwise the whole case of the Applicant is based on documents and the witness has duly proved all these documents as against the Defendant No.1 & 2. In my view there is no question of disbelieving the evidence led by the Applicant and the Applicant has proved its case beyond reasonable doubt. The liability of Defendant No.1 & 2 is joint and several.

12. In the light of above discussions, the Original Application deserves to be allowed against the Defendant No.1 & 2.

O R D E R

(i) The present O.A. is hereby allowed and Defendant No.1 & 2 are hereby directed to pay to the Applicant Bank, within a period of 60 days, a sum of Rs.77,66,826/- with further interest at the contractual rate of interest compounded monthly from the date of filing of the present OA till its realization.

(ii) Failing which the aforesaid amount shall be recovered from the sale of the mortgaged properties, hypothecated goods and assets as well as other personal moveable and immoveable assets/properties of the Defendant No.1 & 2.

(iii) Defendant No.1 & 2 are hereby directed not to deal with their properties till further direction of Ld. Recovery Officer.

(iv) Defendant No.1 & 2 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: 28.11.2023 Presiding Officer,

DRT-1, Mumbai

SC/-