BANK OF BARODA (DENA BANK) vs M/S. VINTEX TEXTILES PVT LTD AND ORS on 1 November 2023

**JUDGMENT**

1. The case of the Applicant Bank is that the Defendant No.1 approached the Applicant Bank for grant of various credit facilities i.e. Term Loan No.1 of Rs.28.13 Lacs, Term Loan No.2 of Rs.125.48 Lacs, Letter of Credit of Rs.130 Lacs and CC Hypo of Rs.7 Lacs. The loan was sanctioned vide Sanction Letter dt.27.03.2006 Exh.13.

*[Signature]* 01.11.2023

1. 2. To secure the aforesaid credit facilities, Defendant No.1 executed Loan Agreement for Land and Building/Industrial gala dt.17.06.2006 Exh.15, Demand Promissory Note dt.17.06.2006 Exh.16, Exh.17, Exh.18 and Exh.20, Letter of Continuity dt.17.06.2006 Exh.19 Exh.21, Agreement for Hypothecation dt.17.06.2006 Exh.22 and General Letter of Lien and Set Off dt.17.06.2006 Exh.25.

2. 3. The Defendant No.1 is the Borrower and Defendant No. 2 and 3 stood Guarantors and executed Letter of Guarantee dt.17.06.2006 Exh.24 and Letter of General Lien and Set-Off dt.17.06.2006 Exh.25.

3. 4. The Defendants also executed Acknowledgement of Debts Letter dt.16.08.2009 Exh.26 and dt.27.11.2009 Exh.27.

4. 5. The Defendant No.1 also hypothecated movable plant & machineries, Goods, book debts etc. and mortgaged the property i.e. Factory land and building situated at Plot No.J/179, Tarapur Industrial Estate, MIDC, Boisar, Taluka Palghar, Dist. Thane - 401501. Also Defendant No.3 mortgaged the property i.e. Commercial Unit No.419, 4^th Floor of the Building known as Yusuf Building 23.42 sq.

mtrs. situated at the corner of Veer Nariman Road, M. G. Road, Fort, Mumbai - 400 001.

1. 6. The Applicant Bank stated that they took the possession of the said mortgaged/hypothecated properties and sold the hypothecated assets to M/s. Saunay Jewels Pvt. Ltd. for Rs.35 Lacs and sale certificate was issued in its favour on 18.12.2009, mortgaged immovable properties being J/179, Tarapur Industrial Estate, MIDC, Boisar sold to M/s. Saunay Jewels Pvt. Ltd. for Rs.65 Lacs and sale certificate was issued in its favour on 18.12.2009 and mortgaged immovable property at commercial unit No.419, 4^th Floor of the Building known as Yusuf Building 23.42 Sq. mtrs situated at the corner of Veer Nariman Road, M. G. Road, Fort, Mumbai - 400 001 to Mr. Chandra prakash Sanklecha for Rs.25 Lacs and sale certificate was issued in his favour on 15.04.2009 Exh.29.

2. 7. 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.

*Chakraborti* 01.11.2023

1. 8. Legal Notice was issued to Defendants by the Applicant Bank on 20.06.2011 Exh.30 calling upon Defendants to repay and clear the dues of the Applicant Bank under the said loan but to no effect, hence, this Original Application for recovery of Rs.98,77,396.35/- alongwith interest at the rate of 12.75% p.a. with monthly rests has been filed.

2. 9. The Defendant No.2 and 3 through their Advocates vide letter dt.01.07.2011 Exh.31 replied to the said letter dt.20.06.2011.

3. 10. 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.

4. 11. To prove his case, the Applicant Bank has filed Claim Affidavit of Mr. Pradip Dethe, Senior 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.

5. 12. The Applicant Bank has placed on record Statement of Account Exh.32, Exh.33 and Exh.34 which corroborates the

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version of Mr. Pradip Dethe, Senior Manager, of Applicant Bank.

1. 13. 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.

2. 14. In view of evidence brought on record, this Tribunal finds that the Defendant No.1 availed the loan Defendant No.2 and 3 stood Guarantors but the Defendant No.1 to 3 failed to repay the outstanding loan amount despite repeated requests and Notice dt.20.06.2011 was sent by the Bank but still the Defendants failed to pay the outstanding loan amount. Hence, Applicant Bank is entitled to recover Rs.98,77,396.35/- alongwith further interest at the rate of 12.75% p.a. from the date of filing of application till payment and/or realization. Defendant No.1 to 3 are held jointly and severally liable to pay outstanding due of Rs.98,77,396.35/- alongwith interest pendentelite and future interest at rate of 12.75% p.a. Thus, Applicant Bank has been able to prove his case by preponderance of probabilities. Transfer Original Application No.604 of 2017 is allowed accordingly.

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15. 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. 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 12.75% p.a. 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.98,77,396.35/- together with interest pendentelite and future interest @12.75% per annum from the date of filing of this O.A. till the date of realization; failing which the aforesaid amount shall be

Arun 01.11.2023

recovered from the sale of the movable and immovable properties of the Defendants.

1. 16. Defendant No.1 to 3 are directed to declare, on oath, to the Recovery Officer, Debts Recovery Tribunal - III, Mumbai, both moveable and immoveable assets of them for the purpose of attachment and sale for realizing the shortfall.

2. 17. 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.

3. 18. The Defendant No.1 to 3 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.

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

*John* 01-11-2023

Give under my hand and the seal of this Tribunal on this date 01.11.2023.

Dictated on 01.11.2023.

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

Typed By - Mrs. Monika Pawar, Stenographer.

DRT - III MUMBAI