BANK OF BARODA vs JASHBEER SINGH LABSINGH MATHARU on 3 December 2021

1. Mr. Jashbeer Singh Labsingh Matharu, Residing at : B-503, Sivam Residency, Govind Nagar, Nashik - 422 009

Defendant No. 1

2. Mr. Amrapreet Singh Jashbeer Singh Matharu, Residing at : B-503, Sivam Residency, Govind Nagar, Nashik - 422 009

Defendant No. 2

Present : Shri. Amol Naik, Advocate, for Applicant Bank Defendants remained ex-parte This Original Application (OA) is filed by Applicant under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 ("RDDB Act") (since changed to "Recovery of Debts and Bankruptcy Act, 1993") against the Defendants for the recovery of a sum aggregating to Rs. 16,39,717/- (Rupees Sixteen lacs Thirty Nine thousand Seven hundred and Seventeen only) in respect of the credit facility mentioned in the OA alongwith cost, charges, *pendente lite* future interest as stated therein from the date of filing of this OA till its realisation.

**Parties :**

Applicant is a Bank within Sec. 2(d) of the RDBB Act and lender of credit facility to Defendant No. 1 and 2.

Defendant No. 1 and 2 are individuals and borrowers of credit facility from Applicant. Defendant No. 1 and 2 are hereinafter referred to as "the Defendants".

**Factual matrix :**

1. 1. (a) As per OA, Applicant provided credit facility in the form of Rupee Term Loan of Rs. 15,00,000/- ("RTL") to the Defendants for purchase of new Honda Accord Car under Car Loan Scheme based on the documentation and security creation by the Defendants.

2. (b) As per OA, the Defendants failed and neglected to pay the outstanding dues in respect of the RTL as detailed in the OA. The Applicant accordingly called upon the Defendants to repay the entire outstanding amount of the RTL and, consequent to failure of the Defendants to repay, the OA has been filed.

1. 2. (a) Tribunal, after satisfying itself of the OA being within limitation and falling within its territorial jurisdiction as per RDBB Act, ordered issue of Summons to Defendants.

2. (b) Summons to Defendants could not be served by post as they no longer resided at the address with Applicant as per Affidavit filed by the Applicant. Hence, Tribunal allowed substituted service through newspaper publication, which was carried out.

3. (c) As Defendants did not appear either in person or through advocate and file Written Statements, the Defendants were set ex-parte on 25/01/2018 by an Order of the Tribunal.

3Order TOA 1143 of 2016 (Ex-parte)(Final)**Proceedings :**

3. As directed by the Tribunal, Applicant filed, through Shri. Jethanand G Chopra, Chief Manager, Claim Affidavit enclosing various Documents as Annexures (which have been taken on record by the Tribunal and marked as "Exhibits") and also filed Certified Statement of Account together with the Certificates under Bankers Books of Evidence Act, 1891, as Annexures (which is marked as Exhibit "29"). Of the Documents filed as Exhibits, the following, which are relevant for the Tribunal to consider and dispose of the OA orment, have been gone through.

<table border="1"> <thead> <tr> <th>S. No.</th> <th>Facility</th> <th>Document</th> <th>Exhibit</th> </tr> </thead> <tbody> <tr> <td rowspan="5">1.</td> <td rowspan="5">Rupee Term Loan<br/>(Rs. 15,00,000/-)</td> <td>Sanction Letter (Office Copy)</td> <td>"13"</td> </tr> <tr> <td>Demand Promissory Note (Original)</td> <td>"14"</td> </tr> <tr> <td>Instrument of Hypothecation of Vehicle (Original)</td> <td>"17"</td> </tr> <tr> <td>Letter of Ack. of Debt (Original)</td> <td>"18"</td> </tr> <tr> <td>Recall Notice (Office Copy)</td> <td>"19"</td> </tr> </tbody> </table>

**Observation on Evidences provided & Claim made :**

4. The Statement of Account filed by the Applicant, certified as per Bankers Books of Evidence Act, 1891, tallied with claim in OA. Further, the case of the Applicant is based on various Documents (including the above referred Exhibits) filed alongwith Claim Affidavit, which is a sworn Statement, which has gone unchallenged. In my view, there is no question of disbelieving the Exhibits and Claim Affidavit and other evidences let in by the Applicant and the Applicant has proved its case beyond reasonable doubt to the extent of sanctioning the RTL, completing Documentation and disbursement of the RTL.

However, the following aspect of the RTL transaction, which is crucial for the success of the recovery measures, has to be taken note of.

Instrument of Hypothecation of Vehicle (Exh "17") executed by the Defendants in favour of the Applicant though sought to create charge on the vehicle for securing the RTL does not contain credible details of the vehicle like Registration No., Vehicle type, year of manufacture, Chassis No., Engine No., etc. for creating legally identifiable, effective and enforceable charge in favour of the Applicant. Further, the financing does not appear to have followed the course normally associated with Car Loans. There is no reference to Car Dealer who normally provides the Provisional Invoice (giving price at which Car will be delivered) based on which Car Loan gets sanctioned and to which Car Dealer the Car Loan used to be disbursed directly on Borrower's request after documentation. Further there is no averment of Applicant name got included in the Registration Certificate of the Car. In any case, the Relief sought is of sale of hypothecated asset generally and does not refer to the Car specifically.

Additional Claim Affidavit filed by W L Desai on 23/11/2021 confirms that Applicant has no proof of charge on the Car either by way of RC Book reflecting the name of Applicant as Hypothecatee or the Regional Transport Authority record reflecting the Car in the name of the Borrower reflecting Applicant name as Hypothecatee.

1. 5. The Applicant has claimed interest at the rate of 10.50% p.a. with monthly rests for the RTL from the date of filing of the OA till its realisation. Having regards to Sec. 19(20) of the RDDB Act (which is analogous to Sec. 34 of Civil Procedure Code, 1908) the contract between the Applicant and Defendants comes to an end on the filing of the OA. Thus the Tribunal has discretion in awarding *pendente lite* and future interest. Considering the rate of interest charged by banks for similar facilities, I am of the opinion that interest of justice will be served if the rate interest is awarded at the rate of 8.00% p.a. on simple interest basis for the RTL.

6. In the light of above discussions, the Original Application is being allowed and Order passed on the following terms.

ORDER

(i) This Original Application is allowed with costs and decree to be issued on the terms set out below;

(ii) There shall be a Decree in favour of the Applicant for Rs. 16,39,747/- (Rupees Sixteen lacs Thirty Nine thousand Seven hundred and Seventeen only) alongwith future interest at the rate of 8.00% per annum (on simple interest basis) from the date of filing of the Original Application till the date of realisation in respect of Rupee Term Loan ("Decreed Amount for RTL");

(iii) Defendant No. 1 and 2, the Borrowers, are ordered to pay, jointly and severally, to the Applicant, within a period of 30 days, the Decreed Amount for RTL and, in the event of the Defendants failing to pay and discharge the dues as directed or in the event of shortfall, the Defendants be proceeded against personally by way of personal decree and business assets / personal assets / estates of Defendant No. 1 and 2 be attached and sold for realising the dues / shortfall, as the case may be;

(iv) Defendant No. 1 and 2 are directed to declare, on oath, to the Recovery Officer, Debts Recovery Tribunal - III, Mumbai, both moveable and immovable assets of theirs as also of their business for the purpose of attachment and sale as directed under Clause (iii) above;

(v) Recovery Certificate be issued forthwith as per above decree and sent to the Recovery Officer, Debts Recovery Tribunal - III, Mumbai;

(vi) Parties are directed to appear before the Recovery Officer, Debts Recovery Tribunal - III, Mumbai;

(vii) Copies of final order be sent to all concerned free of cost and File be consigned to records.

T.S Asokraji, Presiding Officer, Debts Recovery Tribunal - III, Mumbai.

Dated : 3^rd December 2021

Mumbai DRT