CANARA BANK vs PURVI COMMODITIES PVT LTD on 29 April 2026

J U D G M E N T

This is an application under Section 19(1) of the Recovery of the Debts due to Banks and Financial Institutions Act, 1993 renamed as Recovery of the Debt and Bankruptcy Act, 1993 (for short, ‘the

Act’) to recover aggregate amount of

₹13,62,31,502/- (Rupees Thirteen Crores Sixty- Two Lakhs Thirty-One Thousand Five Hundred Two Only) i.e. ₹7,96,60,329/- (Rupees Seven Crores Ninety-six Lakhs Sixty Thousand Three Hundred Twenty-Nine Only) upto 30.06.2014 with future interest @ 16.20% per annum (inclusive of 2% penal interest) compounded with monthly rests in respect to OCC limit and a sum of ₹5,65,71,173/- (Rupees Five Crores Sixty-Five Lakhs Seventy-One Thousand One Hundred Seventy-Three Only) upto 30.06.2014 with further interest thereon @ 19.20% per annum (inclusive of 2% penal interest) compounded with monthly rest in respect of 3 BGs thereon from the date of presentation of the Transferred Original Application i.e. 01.07.2014 till payment/realization and to enforce the hypothecated and mortgaged securities.

The details of the claim amount are as under: - SrNo Nature of Facility O/s. amount

OCC A/c No.0129261002593 inclusive of contractual rate of interest charged as on 30.06.2014. ₹7,70,49,796/-

Penal Interest @ 2 % on simple basis from 31.07.2012 till 30.06.2014. ₹26,10,533/-

Total Amount ₹7,96,60,329.00/-

DIBG (Bank Guarantee) a/c. no.0129741011714 inclusive of contractual rate of interest charged as on 30.06.2014. ₹2,19,12,944.00/-

Penal Interest @ 2 % on simple basis from 28.07.2012 till ₹7,14,638.00/-

30.06.2014.

Total Amount ₹2,26,27,582.00/-

DIBG (Bank Guarantee) a/c. no.0129741011715 inclusive of contractual rate of interest charged as on 30.06.2014. ₹2,19,12,944.00/-

Penal Interest @ 2 % on simple basis from 28.07.2012 till 30.06.2014. ₹7,14,638.00/-

Total Amount ₹2,26,27,582.00/-

DIBG (Bank Guarantee) a/c. no.0129741011716 inclusive of contractual rate of interest charged as on 30.06.2014. ₹1,09,58,615.00/-

Penal Interest @ 2 % on simple basis from 28.07.2012 till 30.06.2014. ₹3,57,394.00/-

Total Amount ₹1,13,16,009.00/-

Grand Total Amount ₹13,62,31,502.00/-

Less: Sale Proceeds ₹4,84,39,900/-

Total Amount ₹8,77,91,602/-

It is undisputed fact in the matter that the Defendant nos.1 to 5 were duly served with the summons vide order-sheet dated 12.06.2015. Despite service, the defendants did not enter their appearance and therefore, they were set ex-parte on 02.11.2023.

Defendant no.1, a Private Limited Company are the borrowers who approached the Applicant Bank seeking financial assistance by way of OCC and Bank Guarantee Facility wherein Defendant nos.2 & 3 are Guarantors and Mortgagors, Defendant no.4 as Guarantor and Defendant no.5 in the capacity of the corporate guarantor. Pursuant to the loan application vide Application Form for loans to Micro and Small Enterprise (MSME) dated

11.06.2011 made by defendants, the Applicant sanctioned the loan vide Sanction Letter dated 06.07.2011 in aggregate sum of ₹11 crores wherein an amount of ₹6 crores are due under OCC limit and an amount of ₹5 crores are due under BG limit payable with interest at the rate of 14.25% per annum floating interest being compounded monthly.

The details of the Sanction amount are as under: - S r N o D a t e o f S a n c t i o n N a t u r e o f F a c i l i t y A m o u n t R O I S e c u r i t y C o l l a t e r a l

0 6 . 0 7 . 2 0 1 1 O C C ₹ 6 , 0 0 , 0 0 , 0 0 0 / - 1 4 . 2 5 % p e r a n n u m f l o a t i n g i n t e r e s t b e i n g c o m p o u n d e d m o n t h l y H y p o t h e c a t i o n o f S t o c k a n d B o o k - d e b t s a n d G o o d s p u r c h a s e d u n d e r B G . 1 . R e s i d e n t i a l F l a t N o . 2 0 1 , G a n e s h A p a r t m en t , M V P a n d l o s k a r M a r g , V i l l e P a r l e ( E ) , M u m b a i i n n a m e M r B h a r a t C P a r e k h a n d M r s A r u n a B P a r e k h . ( V a l u a t i o n R e p o r t o f S J A T e c h n i c a l C o n s u l t a n t s P v t L t d d a t e d 1 7 . 0 6 . 2 0 1 1 ; 2 . R e s i d e n t i a l B u n g l o w N o . 1 3 , L a l B u n g l o w C o m p l e x , O M G a n e s h S a l i N a g a r C o - o p e r t a i v e S o c i e t y , L o n a v a l a , D i s t r i c t P u n e i n n a m e o f M / s R e a l D i a m o n d M u l t i t r a d e P v t L t d ( V a l u a t i o n R e p o r t o f S J A T e c h n i c a l C o n s u l t a n t s P v t L t d d a t e d 2 2 . 0 6 . 2 0 1 1 ) ; 3 . R e s i d e n t i a l F l a t s i t u a t e d a t 2 5 , C h a i t r a b a n A p a r t m e n t , C r o s s R o a d N o . 1 , V i l l e P a r l e ( E ) ; 4 . H y p o t h e c a t i o n o f P l a n t a n d M a c h i n e r y . 5 . G u a r a n t e e d b y t h e f o l l o w i n g : - ( a ) M r B h a r a t C P a r e k h ; ( b ) M r s A r u n a B P a r e k h ; ( c ) M r P r a v i n P a r e k h .

B G ₹ 5 , 0 0 , 0 0 , 0 0 0 / - -

6 . C o r p o r a t e G u a r a n t e e o f M / s . R e a l D i a m o n d M u l t i t r a d e P v t L t d .

T o t a l A m o u n t - ₹ 1 1 , 0 0 , 0 0 , 0 0 0 / - - - -

On the dates given below, defendants signed and executed the loan and security documents as set out in paragraph nos. 5.3 to 5.22 of the Transferred Original Application. Defendants hypothecated Stock and Book-debts and Goods purchased under BG and Plant and Machinery and mortgaged the following properties: -

(i) Residential Flat No.201, Ganesh Apartment, M V Pandloskar Marg, Ville Parle (E), Mumbai in name Mr Bharat C Parekh and Mrs Aruna B Parekh. (Valuation Report of SJA Technical Consultants Pvt Ltd dated 17.06.2011;

(ii) Residential Bunglow No.13, Lal Bunglow Complex, OM Ganesh Sali Nagar Co-opertaive Society, Lonavala, District Pune in name of M/s Real Diamond Multitrade Pvt Ltd (Valuation Report of SJA Technical Consultants Pvt Ltd dated 22.06.2011) and

(iii) Residential Flat situated at 25, Chaitraban Apartment, Cross Road No.1, Ville Parle (E) and Gala no.50, 2nd floor in Building known as Sidhpura Industrial Estate situated at Gaiwadi, S V Road, Goregaon (W), Mumbai to secure the loan.

The details of the documents executed by the Defendants are as under: -

(a) Application Form for loans to Micro and Small Enterprise (MSME) dated 11.06.2011; (b) Sanction Letter dated 06.07.2011 in aggregate sum of ₹11 crores;

(c) Board Resolution of Purvi Commodities Pvt. Ltd. dated 06.07.2011;

(d) Request for overdraft Facilities dated 12.07.2011;

(e) Pronote dated 12.07.2011 for ₹6 crores;

(f) Promissory Note dated 12.07.2011;

(g) Bank Guarantee No.15/2011 dated 01.11.2011;

(h) Bank Guarantee No.16/2011 dated 03.11.2011;

(i) Bank Guarantee No.17/2011 dated 03.11.2011;

(j) Common Hypothecation Agreement dated 12.07.2011;

(k) Guarantee Agreement dated 12.07.2011 from Ms Aruna B Parekh;

(l) Guarantee Letter dated 12.07.2011 for an amount of ₹11,00,00,000/- (Rupees Elven Crores Only) from Ms Aruna B Parekh; (m) Guarantee Agreement dated 12.07.2011 from Mr Pravin Parekh; (n) Guarantee Letter dated 12.07.2011 for an amount of ₹11,00,00,000/- (Rupees Elven Crores Only) from Mr Pravin Parekh;

(o) Board Resolution of Real Diamond Multi Trade Pvt. Ltd. dated 05.07.2011;

(p) Copy of Board Resolution of Real Diamond Multi Trade Pvt. Ltd. dated 23.07.2011 wherein it is stated that a mortgage has been created on the Gala no.50, 2nd floor in Building known as Sidhpura Industrial Estate situated at Gaiwadi, S V Road, Goregaon (W), Mumbai; (q) Copy of Letter evidencing deposit of Tile deed dated 11.08.2011; (r) Letter evidencing deposit of Title deeds dated 28.10.2011 from the C.K.P. Co-operative Bank Ltd. and M/s Purvi Commodities Pvt Ltd, Ghatkopar (W);

(s) Copy of Ministry of Corporate Affairs dated 16.08.2011 (ROC Form No.8); (t) Copy of Certificate of Registration of Mortgage under Section of the Companies Act,1956;

(u) Invocation Ltd bearing Reference no.BEX/ADV/SS/12-13/33 for ₹2,00,00,000/- (Rupees 2 Crores Only) dated 25.04.2012;

(v) Invocation Ltd bearing Reference no.BEX/ADV/SS/12-13/32 for ₹1,00,00,000/- (Rupees 1 Crores Only) dated 25.04.2012;

(w) Invocation Ltd bearing Reference no.BEX/ADV/SS/12-13/34 for ₹2,00,00,000/- (Rupees 2 Crores Only) dated 25.04.2012;

(x) Invocation of Bank Guarantee Reference no.BEX/ADV/SS/12-13 dated 30.04.2012.

After availing the loan, defendants did not adhere to the financial discipline and committed default in payment of instalments and repayment of the loan and accordingly the accounts of the borrowers were declared as Non-Performing Assets (N.P.A.) on 28.07.2012 as per RBI Guidelines. Defendant nos. 1 to 5 failed and neglected to pay.

As on 30.06.2014, there was owing, due and payable by defendants to the applicant the aggregate sum of aggregate amount of ₹13,62,31,502/- (Rupees Thirteen Crores Sixty- Two Lakhs Thirty-One Thousand Five Hundred Two Only) i.e. ₹7,96,60,329/- (Rupees Seven Crores Ninety-six Lakhs Sixty Thousand Three Hundred Twenty-Nine Only) upto 30.06.2014 with future interest @ 16.20% per annum (inclusive of 2% penal interest) compounded with monthly rests in respect to OCC limit and a sum of ₹5,65,71,173/- (Rupees Five Crores Sixty-Five Lakhs Seventy-One Thousand One Hundred Seventy-Three Only) upto 30.06.2014 with further interest thereon @ 19.20% per annum (inclusive of

2% penal interest) compounded with monthly rest in respect of 3 BGs thereon. The applicant has maintained the loan ledger extract and the entries posted therein are made in the usual and ordinary course of the banking business.

Since, defendants failed and neglected to make the payment, the applicant was left with no other alternate but to file the Transferred Original Application which was presented on 01.07.2014.

The applicant has filed affidavit (exhibit-11) in lieu of examination in chief of Mr Ranesh Bansal, Officer and list of documents (exhibit-12) thereby adducing in evidence the documents at AW-1 to AW-17, which are admitted in evidence, read, recorded and exhibited.

Accordingly, in the Transferred Original Application was filed for the recovery of aggregate amount of ₹13,62,31,502/- (Rupees Thirteen Crores Sixty-Two Lakhs Thirty-One Thousand Five Hundred Two Only) i.e. ₹7,96,60,329/- (Rupees Seven Crores Ninety-six Lakhs Sixty Thousand Three Hundred Twenty-Nine Only) upto 30.06.2014 with future interest @ 16.20% per annum (inclusive of 2% penal interest) compounded with monthly rests in respect to OCC limit and a sum of ₹5,65,71,173/- (Rupees Five Crores Sixty-Five Lakhs Seventy-One Thousand One Hundred Seventy-Three Only) upto

30.06.2014 with further interest thereon @ 19.20% per annum (inclusive of 2% penal interest) compounded with monthly rest in respect of 3 BGs thereon from the date of presentation of the Transferred Original Application i.e. 01.07.2014 till payment/realisation.

The Applicant filed Claim Affidavit dated 02.11.2023 wherein it is stated that the Residential Flat No.201, Ganesh Apartment, M V Pandloskar Marg, Ville Parle (E), Mumbai in name Mr Bharat C Parekh and Mrs Aruna B Parekh. (Valuation Report of SJA Technical Consultants Pvt Ltd dated 17.06.2011 was sold vide e-auction under SARFAESI Act, 2002 vide 18.03.2019 for ₹3,16,89,900/- (Rupees Three Crores Sixteen Lakhs Eighty-Nine Thousand Nine Hundred Only), Gala no.50, 2nd floor in Building known as Sidhpura Industrial Estate situated at Gaiwadi, S V Road, Goregaon (W), Mumbai was sold vide e- auction held on 05.02.2021 for ₹1,20,25,000/- (Rupees One Crore Twenty Lakhs Twenty-Five Thousand Only) and Residential Bunglow No.13, Lal Bunglow Complex, OM Ganesh Sali Nagar Co- opertaive Society, Lonavala, District Pune in name of M/s Real Diamond Multitrade Pvt Ltd (Valuation Report of SJA Technical Consultants Pvt Ltd dated 22.06.2011) was sold vide e-auction held on 24.03.2021 for ₹47,25,000/- (Rupees

Forty-Seven Lakhs Twenty-Five Thousand Only). Thus, a total of ₹4,84,39,900/- (Rupees Four Crores Eighty-Four Lakhs Thirty-Nine Thousand Nine Hundred Only) was received from the sale of the mortgage properties. Thus, after deducting the amount received from the Sale proceeds, the actual total claim amount is ₹8,77,91,602/- (Rupees Eight Crores Seventy-Seven Thousand Ninety-One Thousand Six Hundred Two Only).

The Tribunal has scrutinised and examined the allegations contained in the Transferred Original Application and analysed the evidence adduced by the applicant which has gone unchallenged, uncontroverted and unrebutted.

Upon careful scrutiny and the examination of the Transferred Original Application, analysing the evidence and giving due weightage to the documentary evidence adduced by the applicant, the Tribunal views that there is no reason to disbelieve the claim made by the applicant bank.

In view of the observations made hereinabove, Transferred Original Application filed by the applicant deserves to be allowed.

Hence, the following order:

ORDER

(A) The Transferred Original Application No.1716 of 2016 in Original Application No.71 of 2014 is allowed with costs.

(B) Defendant no.1 company wherein Defendant nos.2 & 3 are Guarantors and Mortgagors, Defendant no.4 as Guarantor and Defendant no.5 in the capacity of the corporate guarantor are ordered and directed to pay to the applicant, either jointly or severally, the aggregate amount of ₹13,62,31,502/- (Rupees Thirteen Crores Sixty- Two Lakhs Thirty-One Thousand Five Hundred Two Only) i.e. ₹7,96,60,329/- (Rupees Seven Crores Ninety-six Lakhs Sixty Thousand Three Hundred Twenty-Nine Only) upto 30.06.2014 with future simple interest @ 12% per annum in respect to OCC limit and a sum of ₹5,65,71,173/- (Rupees Five Crores Sixty-Five Lakhs Seventy-One Thousand One Hundred Seventy-Three Only) upto 30.06.2014 with further simple interest thereon @ 12% per annum in respect of 3 BGs thereon from the date of presentation of the Transferred Original Application i.e. 01.07.2014 till payment/realization after adjusting the recoveries made by the Applicant under SARFAESI Act, 2002 or any other amount paid by the borrowers after filing of this T.O.A. No.1716 of 2016. (C) The aforesaid adjudicated amount is secured by the valid and subsisting hypothecated properties, that is, Stock and Book-debts and Goods purchased under BG and Plant and Machinery. (D) The aforesaid adjudicated amount is secured by the valid and subsisting immovable mortgaged property, that is, Residential Flat situated at 25, Chaitraban Apartment, Cross Road No.1, Ville Parle (E). (E) Defendant no.1 company wherein Defendant nos.2 & 3 are Guarantors and Mortgagors, Defendant no.4 as Guarantor and Defendant no.5 in the capacity of the corporate guarantor are entitled to redeem the hypothecated and mortgaged properties as per law failing which the applicant has right to proceed to sell the hypothecated and mortgaged properties and recover dues as per law. (F) Issue Recovery Certificate. (G) The learned Registrar is directed to send a copy of the judgment and recovery certificate to (i) the applicant, (ii) defendant and (iii) the Recovery Officer by post and email.

Sd/-

(Harish Kumar Kaushik) Presiding Officer, DRT-2, Mumbai