BANK OF BARODA vs RAJENDRA CHINTAMAN DESHMUKH on 1 November 2023

JUDGMENT

1. 1. The case of the Applicant Bank is that the Defendant No.1 approached the Applicant Bank vide Loan Application dt.13.10.2003 Exh.10 for grant of Term Loan of Rs.1,75,000/- for purchase of Tractor. The loan was sanctioned vide Sanction Letter dt.16.10.2003 Exh.11.

2. 2. To secure the aforesaid Term Loan of Rs.1,75,000/-, Defendant No.1 executed Demand Promissory Note dt.16.10.2003 Exh.12, Letter of General Lien and Set Off dt.16.10.2003 Exh.13 and Composite Hypothecation Agreement dt.16.10.2003 Exh.14.

3. 3. The Defendant No.1 is the Borrower and Defendant No. 2 and 3 stood Guarantors and executed Letter of Guarantee dt.16.10.2003 Exh.15 and Letter of General Lien and Set-Off dt.16.10.2003 Exh.16.

4. 4. The Defendant No.1 again approached the Applicant Bank vide Loan Application dt.03.09.2005 Exh.17 for grant of Crop Loan of Rs.4,60,000/- under Dena Kisan Cash Credit Scheme. The loan was sanctioned vide Sanction Letter dt.03.09.2005 Exh.18.

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5. To secure the aforesaid Crop Loan of Rs.4,60,000/-, Defendant No.1 executed Demand Promissory Note dt.03.09.2005 Exh.19, Letter of Continuity dt.03.09.2005 Exh.20, Letter of General Lien and Set Off dt.03.09.2005 Exh.21 and Composite Hypothecation Agreement dt.03.09.2005 Exh.22.

6. The Defendant No.1 is the Borrower and Defendant No. 2 and 4 stood Guarantors and executed Letter of Guarantee dt.03.09.2005 Exh.23 and Letter of General Lien and Set-Off dt.03.09.2005 Exh.24.

7. The Defendant No.1 again approached the Applicant Bank vide Loan Application dt.26.05.2006 Exh.25 for grant of Term Loan of Rs.12,34,000/- for Grape Garden and Crop Loan of Rs.4,44,000/-. The Loan was sanctioned vide Sanction Letter dt.26.05.2006 Exh.26.

8. To secure the aforesaid Term Loan of Rs.12,34,000/- and Crop Loan of Rs.4,44,000/-, Defendant No.1 executed Demand Promissory Note dt.26.05.2006 Exh.27, Letter of Continuing dt.26.05.2006 Exh.28, Letter of General Lien and Set Off dt.26.05.2006 Exh.29 and Composite Hypothecation Agreement dt.26.05.2006 Exh.30.

Handwritten signature and date: 01-11-2023

9. The Defendant No.1 is the Borrower and Defendant No. 2 and 4 stood Guarantors and executed Letter of Guarantee dt.26.05.2006 Exh.31 and Letter of General Lien and Set-Off dt.26.05.2006 Exh.32.

10. The Defendant No.1 also executed Declaration of Mortgage dt.18.05.2006 Exh.33 mortgaging the property i.e. All that piece and parcel of land bearing Survey Nos. 68/1, 150, 185/1 and 197 situated at Village Khedale, Taluka Dindori, District Nashik.

11. The Defendant No.1 also approached the Applicant Bank vide Loan Application dt.08.10.2007 Exh.34 Rephased/restructured the aforesaid Term Loan-I (Tractor), Term Loan-II and the said Crop/Demand Loan (DKCC) by fixing a fresh repayment schedule in respect of amounts then due under the said Term Loan-I (Tractor) and Term Loan-II and also restructured the Crop/Demand Loan by converting a sum of Rs.7,35,586/- then outstanding under the said Crop/Demand Loan (DKCC) into a Term Loan for enabling the Defendant no.1 to repay the same in installments and also granted a fresh Crop Loan (DKCC) of Rs.5,65,000/- which was sanctioned vide Sanction Letter dt.06.11.2007 Exh.35.

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12. In respect of the said restructured Term Loan-I (Tractor), Term Loan-II (Grape Garden) and Term Loan-III (Restructured Crop Loan), the Defendant No.1 executed Conversion/Rephasement of Loan dt.22.11.2007 Exh.36, Exh.37 and Exh.38 respectively.

13. To secure the above Crop Loan of Rs.5,65,000/-, the Defendant No.1 executed Demand Promissory Note dt.22.11.2007 Exh.39, Letter of Continuing Security dt.22.11.2007 Exh.40, Letter of General Lien and set off dt.22.11.2007 Exh.41 and Composite Hypothecation Agreement dt.22.11.2007 Exh.42.

14. The Defendant No.1 is the borrower and Defendant No.5 and 6 stood Guarantors and executed Letter of Guarantee dt.22.11.2007 Exh.43 and Letter of General Lien and Set Off dt.22.11.2007 Exh.44.

15. The Defendant No.1 also executed Acknowledgement of Debts and Securities dt.21.02.2011 Exh.45 and dt.12.06.2012 Exh.46.

16. The Applicant Bank stated that pursuant to the request made by the Defendant No.1, the Applicant Bank in or about 18.02.2011 restructured the said Crop Loan (DKCC)

by converting a sum of Rs.7,71,958/- then outstanding under the said Crop Loan (DKCC) into a Term Loan repayable in yearly installments.

17. The Applicant Bank has further submitted that the Defendants committed breach of terms and conditions of sanction and security documents and failed to maintain financial discipline of the Bank.

18. The Legal Notice was issued to Defendants through Advocate of the Applicant Bank on 04.12.2014 Exh.47 calling upon Defendants to pay and clear the dues of the Applicant Bank under the said loan but to no effect, hence, this Original Application for recovery of Rs.53,09,029/- alongwith future interest has been filed.

19. The notice of this Original Application was given to Defendants but they failed to appear despite service and hence, they were proceeded against ex-parte.

20. To prove his case, the Applicant Bank has filed Claim Affidavit of Avinash Mohan Pawar, Chief Manager of Applicant Bank and he has supported the case of the Applicant Bank in all material particulars and he has also proved the documents executed between the parties.

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21. The Applicant Bank has placed on record Statement of Account alongwith Certificates under Banker's Book Evidence Act Exh.51, Exh.52, Exh.53 and Exh.54 which corroborates the version of Avinash Mohan Pawar, Chief Manager of Applicant Bank.

22. The evidence so brought on record by the Applicant Bank goes un-rebutted, unchallenged and unopposed and there is no reason to disbelieve the version of Applicant Bank.

23. In view of evidence brought on record, this Tribunal finds that the Defendant No.1 availed the loan and he hypothecated the goods and mortgaged the property i.e. All that piece and parcel of land bearing Survey Nos. 68/1, 150, 185/1 and 197 situated at Village Khedale, Taluka Dindori, District Nashik with the Applicant Bank and Defendant No.2 to 6 stood Guarantors but the Defendant No.1 to 6 failed to repay the outstanding loan amount despite repeated requests and Legal Notice dt.04.12.2014 was sent by the Bank through Advocate but still the Defendants failed to pay the outstanding loan amount. Hence, Applicant Bank is entitled to recover Rs.53,09,029/- alongwith further interest from the date of filing of application till payment and/or realization. Defendant

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No.1 to 3 are held jointly and severally liable to pay outstanding due of Rs.1,06,363/- alongwith interest pendentelite and future interest at rate of 13.75% p.a. under Term Loan-I, Defendant No. 1, 2 and 4 are held jointly and severally liable to pay outstanding due of Rs.24,89,086/- alongwith interest pendentelite and future interest at rate of 13.75% p.a. under Term Loan-II, Defendant No. 1, 2 and 4 are held jointly and severally liable to pay outstanding due of Rs.14,15,837/- alongwith interest pendentelite and future interest at rate of 13.75% p.a. under Term Loan-III and Defendant No.1, 5 and 6 are held jointly and severally liable to pay outstanding due of Rs.12,97,743/- alongwith interest pendentelite and future interest at rate of 13.05% p.a. under Term Loan-IV. Thus, Applicant Bank has been able to prove his case by preponderance of probabilities. Transfer Original Application No.1776 of 2016 is allowed accordingly.

24. As per the provision of Section 19(20) of the Recovery of Debts Due to Banks and Financial Institution Act, 1993 which is analogous to Section 34 of CPC, on filing of the suit/claim, the contract between the parties comes to an end and the Court/Tribunal has a discretion to award interest depending upon the circumstances of each case.

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Same principle has been laid down by the Hon'ble Apex Court in the case of Central Bank of India Vs. Ravindra & Others Taking Stock of all the circumstances, this Tribunal is of the opinion that the ends of justice would meet if the Applicant Bank is awarded interest pendentelite and future interest at the rate of 13.75% p.a. under Term Loan-I, Term Loan-II and Term Loan-III and 13.05%p.a. under Term Loan-IV from the date of filing of Original Application till final recovery is made from Defendants.

ORDER

O.A. stands allowed with cost and the Defendant No.1 to 3 are held jointly and severally liable to pay to the Applicant Bank within two months a sum of Rs.1,06,363/- together with interest pendentelite and future interest @13.75% per annum, Defendant No.1, 2 and 4 are held jointly and severally liable to pay to the Applicant Bank within two months a sum of Rs.24,89,086/- together with interest pendentelite and future interest @13.75% per annum, Defendant No.1, 2 and 4 are held jointly and severally liable to pay to the

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Applicant Bank within two months a sum of Rs.14,15,837/- together with interest pendentelite and future interest @13.75% per annum and Defendant No.1, 5 and 6 are held jointly and severally liable to pay to the Applicant Bank within two months a sum of Rs.12,97,743/- together with interest pendentelite and future interest @13.05% per annum from the date of filing of this O.A till the date of realization, failing which the aforesaid amount shall be recovered from the sale of hypothecated goods and mortgaged property i.e. All that piece and parcel of land bearing Survey Nos. 68/1, 150, 185/1 and 197 situated at Village Khedale, Taluka Dindori, District Nashik and in case of shortfall, the same shall be recovered from the sale of the movable and immovable properties of the Defendants.

25. Defendant No.1 to 6 are directed to declare, on oath, to the Recovery Officer, Debts Recovery Tribunal - III, Mumbai,

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both moveable and immoveable assets of them for the purpose of attachment and sale for realizing the shortfall.

26. Let a Recovery Certificate be issued with memo of cost immediately u/s 19(22) of The Recovery of Debts and Bankruptcy Act, 1993 together with the details of the properties, if any, by fixing 02.01.2024 before Learned R.O., DRT - III, Vashi, Navi Mumbai.

27. The Defendant No.1 to 6 are restrained from depleting, transferring, encumbering, alienating or in any way dealing with their properties/assets without first paying the claim of the Applicant Bank.

28. Copies of this judgment be sent to the parties free of cost and file be consigned to record room.

Give under my hand and the seal of this Tribunal on this date :

01.11.2023.

Dictated on 01.11.2023.

(ARUN KUMAR SINGAL) PRESIDING OFFICER DRT-III, VASHI, NAVI MUMBAI

Typed By - Mrs. Monika Pawar, Stenographer.