DENA BANK NOW BANK OF BARODA vs NIVRUTTI POPAT on 20 March 2019

1. Mr. Nivrutti Popat Medhane, ) Post : Mheluske, Tal : Dindori, Dt : Nashik-422001 ) Defendant No. 1

2. Mr. Eknath PopatBarde, ) Post : Mheluske, Tal : Dindori,Dt : Nashik-422001 ) Defendant No. 2

3. Mr. Gotiram Rangnath Barde, ) Post : Mheluske, Tal : Dindori, Dt : Nashik-422001 ) Defendant No. 3 Present: Shri. C R Shah, Advocate, i/b Rajesh L Shethia, Counsel 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. 18,29,350/- (Rupees Eighteen lacs Twenty Nine thousand Three hundred and Fifty only) in respect of the various credit facilities 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 RDDB Act and lender of credit facilities to Defendant No. 1. Defendant No. 1, an agriculturist by occupation, availed credit facilities from the Applicant for which Defendant No. 2 and 3 stood personal guarantee by way of additional security. Factual matrix :

1. (a) As per OA, Defendant No. 1 availed from the Applicant Term Loan of Rs. 6,40,000/- ("TL") and Crop Loan (under DKCC Scheme) of Rs. 2,94,000/- ("CL") (TL and CL are collectively called "Credit Facilities") based on the documentation and security creation by him and the additional security of personal guarantee provided by Defendant No. 2 and 3.Defendant No. 1 created mortgage security for the Credit Facilities on his agricultural land located in Village Mheluske, Taluk Dindori, District Nashik, by executing Declaration under Sec. 5 of Maharashtra Provision of Facilities for Agricultural Credit by Bank Act, 1974 and getting the same registered with SRO, Dindori besides getting the Declaration registered in the 7 / 12 Register under Maharashtra Land Revenue Code, 1966.

(b) At the request of Defendant No. 1, Applicant rescheduled the overdue Instalments of the TL and restructured the outstanding CL into Working Capital Term Loan ("WCTL") and Applicant executed Agreements for Restructuring of Credit Facilities accepting the restructuring and rescheduling and the terms and conditions thereof.

(c) As per OA, Defendant No. 1 was highly irregular in operating the accounts of the Credit Facilities resulting in interest for several months and several instalments of TL remaining unpaid. As per further averment, Defendant No. 1

committed various irregularities and breaches of the terms and conditions of sanction as well as various security documents. Consequently, Applicant issued Advocate's Notice calling upon the Defendants to repay the entire outstanding amount of the Credit Facilities and, on their failure to repay, the OA has been filed.

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

(b) On transfer of the OA to this Tribunal, Transfer Notices to the Defendants were sent by Registered Post with Acknowledgement Due. While from Defendant No. 1, Acknowledgement Due Card was received, as, regards Defendant No. 2 and 3, Acknowledgement Due Card was not received. As per download from the computerised postal articles delivery tracking system, the delivery of postal covers to Defendant No. 2 and 3 was confirmed. Applicant filed Service Affidavit.

(c) As Defendants did not appear either in person or through advocate and file Written Statements, the Defendants were set ex-parte on 26/02/2019 by an Order of the Tribunal. Proceedings :

3. As directed by the Tribunal, Applicant filed, through Shri. Jayant Bapat, 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 are marked as Exhibit "33" & "34"). Of the Documents filed as Exhibits and gone through by the Tribunal, the following are found relevant for the Tribunal to consider and dispose of the OA on merit.

S. No. Facility Document Exhibit

1. Term Loan (Rs. 6,40,000/-) Appraisal-cum-Sanction Memorandum (Office Copy) "13"

Hypothecation - Agreement for Agri. Loans (Original) "14"

Demand Promissory Note (Original) "15"

Personal Guarantee of Def 2 & 3 (Original) "17" Agreement for Restructuring (Original) "30"

2. Crop Loan (Rs. 2,94,000/-) Since converted to Working Capital Term Loan Appraisal-cum-Sanction Memorandum (Office Copy) "20"

Hypothecation - Agreement for Agri. Loans (Original) "21"

Demand Promissory Note (Original) "22"

Personal Guarantee of Def 2 & 3 (Original) "25" Agreement for Restructuring (Original) "30"

3. Common for all Credit Facilities Mortgage by way of Declaration by Def

Regd with SRO, Dindori (Original) with 7 / 12 Extract "28" Recall Notice (Office Copy) "32" 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 Credit Facilities, completing Documentation and disbursement of the Credit Facilities.

5. The Applicant has claimed interest at the rate of 11.50% p.a. with yearly rests for TL and at the rate of 11.25% p.a. with yearly rests for WCTL bothfrom 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 11.00% p.a. on simple interest basis.

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 as under - (a) For. Rs. 12,54,682/- (Rupees Twelve lacs Fifty Four thousand Six hundred and Eighty Two only) alongwith future interest at the rate of 11.00% per annum (on simple interest basis) from the date of filing of the Original Application till the date of realisation in respect of Term Loan ("Decreed Amount for TL"); (b) For Rs. 5,74,668/- (Rupees Five lacs Seventy Four thousand Six hundred and Sixty Eight only) alongwith future interest at the rate of 11.00% per annum (on simple interest basis) from the date of filing of the Original Application till the date of realisation in respect of Crop Loan ("CL") under DKCC Scheme since converted to Working Capital Term Loan ("Decreed Amount for WCTL");

(iii) Defendant No. 1, the Borrower, and Defendant No. 2 and 3, the Guarantors, are ordered to pay, jointly and severally, to the Applicant, within a period of 30 days, the Decreed Amount for TL and, in the event of the said Defendants failing to pay and discharge the dues as directed or in the event of shortfall, the assets forming security for the Term Loan (covered by Exh "14" being the moveable assets charged &Exh "28" being the immoveable properties mortgaged) be attached / taken possession of and be sold to the extent of realising the dues / shortfall, as the case may be, and in the event of further shortfall, the said Defendants be proceeded against personally by way of personal decree and business assets / personal assets / estates of Defendant No. 1 and personal assets / estates of. Defendant No. 2 and 3 be attached and sold for realising the dues / shortfall, as the case may be;

(iv) Defendant No. 1, the Borrower, and Defendant No. 2 and 3, the Guarantors, are ordered to pay, jointly and severally, to the Applicant, within a period of 30 days, the Decreed Amountfor WCTL and, in the event of the said Defendants failing to pay and discharge the dues as directed or in the event of shortfall, the assets forming security for the Working Capital Term Loan (arising out of conversion of Crop Loan) (covered by Exh "21" being the moveable assets charged &Exh "28" being the immoveable properties mortgaged) be attached / taken possession of and be sold to the extent of realising the dues / shortfall, as the case may be, and in the event of further shortfall, the said Defendants be proceeded against personally by way of personal decree and business assets / personal assets / estates of Defendant No. 1 and personal assets / estates of Defendant No. 2 and 3 be attached and sold for realising the dues / shortfall, as the case may be;

(v) Based on the Original Documents placed before this Tribunal, supported by the pleadings, it is Declared that there is a valid, subsisting and enforceable hypothecation / charge on the moveable assets of the Defendant No. 1, the Borrower, as per Exh "14" & "21" in favour of the Applicant validly securing the Rupee Term Loan and Working Capital Term Loan (arising out of Restructuring of CL);

(vi) Based on the Original Documents placed before this Tribunal, supported by the pleadings, it is Declared that there is a valid, subsisting and enforceable mortgage over the immoveable properties described in Exh "28" in favour of the Applicant validly securing the Rupee Term Loan and Working Capital Term Loan (arising out of Restructuring of CL);

(vii) 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 theirs as also Defendant No. 1 is directed to declare, on oath, both moveable and immoveable assets of the business carried on by him for the purpose of attachment and sale as directed under Clause (iii) and / or Clause (iv) above;

(viii) Defendant No. 1 to 3 are injuncted from dealing with the assets described in Exh "14"& "21" and Exh "28" as also assets declared on oath as per Clause (vii) above in any manner whatsoever till the complete recovery of Decreed Amounts under Clause (ii) above;

(ix) Recovery Certificates be issued forthwith as per above decrees and sent to the Recovery Officer, Debts Recovery Tribunal - III, Mumbai;

(x) Parties are directed to appear before the Recovery Officer, Debts Recovery Tribunal - III, Mumbai; to records. (Pronounced in open Court) Dated : 20thMarch 2019 , • dier T S Asokr. Presiding Officer, Debts Recovery Tribunal - III, Mumbai.

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