BANK OF BARODA vs MADHUKAR SHRIPAT NATHE on 4 December 2023

JUDGMENT

1. 1. The case of the Applicant Bank is that the Defendant No.1 and 6 approached the Applicant Bank for grant of DKCC of Rs.1,95,000/- and Term Loan of Rs.4,30,000/- which were sanctioned by the Applicant Bank.

2. 2. To secure the DKCC of Rs.1,95,000/- and Term Loan of Rs.4,30,000/-, the Defendant No.1 and 6 executed Demand Promissory Note dt.07.06.2004 Exh.10 and Exh.11, Letter of General Lien and Set off for Rs.1,95,000/- Exh.12, Letter of Continuity dt.07.06.2004 Exh.13, General Letter of Lien and Set Off dt.07.06.2004 Exh.14 and Hypothecation of Agreement for Agricultural Loan dt.07.06.2004 Exh.15. The Defendant No.4 and 5 stood Guarantors and executed Letter of Guarantee dt.07.06.2004 Exh.16.

3. 3. The Defendant No.1 and 6 again approached the Applicant Bank for grant of Term Loan-I of Rs.3,43,000/- which was sanctioned by the Applicant Bank.

4. 4. To secure the above Term Loan-I of Rs.3,43,000/-, the Defendant No.1 and 6 executed Demand Promissory Note dt.20.05.2005 Exh.17, Letter of General Lien and set off dt.20.05.2005 Exh.18, Hypothecation-Agreement for Agricultural Loans dt.20.05.2005 Exh.20. The Defendant

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No.2 and 3 stood Guarantors and executed Letter of Guarantee dt.20.05.2005 Exh.21 and Letter of Lien and set off dt.20.05.2005 Exh.19.

1. 5. The Defendant No.1 and 6 again approached the Applicant Bank for grant of DKCC-II Facility of Rs.5,40,000/- and Term Loan of Rs.2,39,000/- which was sanctioned by the Applicant Bank.

2. 6. To secure the above DKCC-II Facility of Rs.5,40,000/- and Term Loan of Rs.2,39,000/- the Defendant No.1 and 6 executed Demand Promissory Note dt.06.07.2007 Exh.22, Letter of Continuity dt.06.07.2007 Exh.23, Letter of General Lien and Set Off dt.06.07.2007 Exh.24 and Hypothecation of Agreement dt.06.07.2007 Exh.26. The Defendant No.3 stood Guarantor and executed Letter of Guarantee dt.06.07.2007 Exh.27 and Letter of General Lien and Set Off dt.06.07.2007 Exh.25.

3. 7. The Defendants also created charge by way of mortgage on 06.07.2007 over the entire Agricultural Land admeasuring Survey No.130, Area 2.15 Hector, Village Pade, Tal. Dindori, Dist. Nashik.

4. 8. The Applicant Bank submitted that in the year 2010, upon the request of Defendants, the Applicant Bank converted the existing crop loan into term loan and rescheduled the Term Loan and to secure this, Defendants executed Agreement for Conversion of Crop Loan into Term Loan dt.15.10.2010 Exh.28 and dt.28.06.2012 Exh.29 and Agreement of Rephrasing dt.15.10.2010 Exh.30 and dt.28.06.2012 Exh.31.

1. 9. The Defendants also executed Letter of Acknowledgement of Debt dt.26.06.2013 Exh.32.

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

3. 11. It is the plea of the Applicant Bank that Defendants neglected and failed to repay the installments despite repeated reminders, so, his account was declared as NPA on 01.04.2014 and the Applicant Bank issued Recall Notice to Defendants through their Advocate on 05.12.2014 Exh.33 calling upon the Defendants to pay and clear the dues of the Applicant Bank but to no effect, hence, this Original Application for recovery of Rs.28,15,035/- alongwith interest at the rate of 11.75% p.a. has been filed.

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

13. To prove his case, the Applicant Bank has filed Claim Affidavit of Mr. Mukesh Kumar Chate, 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.

14. 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.

15. The Applicant Bank has placed on record Statement of Account Exh.34 which corroborates the version of Mr. Mukesh Kumar Chate, Chief Manager of the Applicant Bank.

16. From the evidence brought on record, this Tribunal finds that the Defendant No.1 and 6 availed the loan and they mortgaged the property i.e. Agricultural Land admeasuring Survey No.130, Area 2.15 Hector, Village Pade, Tal. Dindori, Dist. Nashik with the Applicant Bank and Defendant No.2 to 5 stood Guarantors but Defendant No.1 to 6 failed to repay the outstanding loan amount

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despite repeated requests and Recall Notice dt.05.12.2014 was sent by the Bank through Advocate but still the Defendants failed to repay the outstanding loan amount. Hence, Applicant Bank is entitled to recover Rs.28,15,035/- alongwith further interest at the rate of 11.75% p.a. from the date of filing of application till realization. Defendant No.1 to 6 are held jointly and severally liable to pay the outstanding dues of Rs.28,15,035/- alongwith interest pendentelite and future interest at the rate of 11.75% p.a. Thus, Applicant Bank has been able to prove his case by preponderance of probabilities. Original Application No.1749 of 2016 is allowed accordingly.

17. 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

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interest at the rate of 11.75% 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 6 are held jointly and severally liable to pay to the Applicant Bank within two months a sum of Rs.28,15,035/- together with interest pendente lite and future interest @11.75% 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 mortgaged property i.e. Agricultural Land admeasuring Survey No.130, Area 2.15 Hector, Village Pade, Tal. Dindori, Dist. Nashik and in case of shortfall, the same shall be recovered from the sale of the movable and immovable properties of the Defendants. The Defendant No.2 to 5 being Guarantors shall be liable to the extent of their liabilities only.

18. 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.

19. 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 05.02.2024 before Learned R.O., DRT - III, Vashi, Navi Mumbai.

20. 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.

21. 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 :

04.12.2023.

Dictated on 04.12.2023.

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

Typed By - Mrs. Monika Pawar, Stenographer.