BANK OF BARODA (DENA BANK) vs SMT HEMALATA PRATAPRAO DESHMUKH on 7 March 2019

1. Smt. Hemalata Prataprao Deshmukh, Post : Dindori (Rathgalli), Taluka : Dindori, Dist Nashik. Pin : 422 001

2. Yashoda Nivrutti More, Post : Nilwandi, Taluka : Dindori, Dist Nashik - 422 001

3. Sudam Bhivaji Patil, ) Post : Pade, Taluka : Dindori, Dist Nashik - 422001) ...

4. Pramila Sudam Patil, ) Post : Oze, Taluka : Dindori, Dist Nashik - 422 001) Applicant Defendant No. 1 Defendant No. 2 Defendant No. 3 Defendant No. 4 Present: Mr. H S Dharmadhikari, Advocate, i/b K D Shukla, 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. 27,49,050/- (Rupees Twenty Seven lacs Forty Nine thousand 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 ofcredit facilities to Defendant No. 1. Defendant No. 1 to 4 are individuals. Defendant No. 1 availed credit facilities from the Applicant for which Defendant No. 2 to 4 provided their personal guarantees as additional security. Factual matrix :

1. (a) As per OA, Applicant provided credit facility of Agricultural Term Loan of Rs. 9,20,000/- ("ATL") and DKCC Facility of Rs. 4,10,000/- ("DKCC Facility") (ATL and DKCC Facility are collectively called "Credit Facilities") to Defendant No. 1 based on the documentation and security creation by Defendant No. 2 to 4 provided additional security in the form of joint and several personal guarantee. Defendant No. 1 secured the Credit Facilities by way of mortgage security in respect of her agricultural lands located in Village Dindori, Taluk Dindori in District Nashik, by executing Declaration under Sec. 5 of Maharashtra Provision of Facilities for Agricultural Credit by Bank Act, 1974 and got the same registered with SRO, Dindori, besides getting the Declaration registered in the 7 / 12 Register under Maharashtra Land Revenue Code, 1966.

(b) As per OA, Defendant No. 1 failed to observe and follow the terms and conditions of repayment of the Credit Facilities resulting in the accounts becoming Non-Performing Asset. Applicant accordingly issued Advocate Notice calling upon all the Defendants to repay the entire outstanding amount •

of the Credit Facilities and, consequent to failure of the Defendants 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.

(b) Summons to the Defendants were sent by way of Registered Post with Acknowledgement Due. Postal covers addressed to Defendant No. 1, 2 and 4 got delivered and Acknowledgement Due Cards received. Postal cover addressed to Defendant No. 3 returned undelivered with postal endorsement "Person Not Found". On application by the Applicant, Tribunal allowed substituted service by way of newspaper publication, which was carried out by the Applicant. 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 10/11/2017 by an Order of the Tribunal. Proceedings :

3. As directed by the Tribunal, Applicant filed, through Mr. Rahul M Girase, 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 Certificate issued under Information Technology Act, 2000 and Certificates under Bankers Books of Evidence Act, 1891, as Annexures (which are marked as Exhibit "28" & "29"). 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.

2. Agri. Term Loan (Rs. 9,20,000/-) DKCC Facility (Rs. 4,10,000/-) Loan Proposal and Branch Manager's Report (Office Copy) "17" D P Note for ATL (Original) "19"

D P Note for DKCC Facility (Original) "20"

Hypothecation Agreement (Original) "21"

Personal Guarantee of Def 2 & 3 (Original) "22"

Mortgage by way of Declaration by Def 1 and Regd with SRO, Dindori (Original) with 7 / 12 Extract "25" Recall Notice (Office Copy) "27" 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 13.00% p.a. with yearly rests for both the facilitiesfrom 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 12.00% p.a. on simple interest basis for both ATL and DKCC Facility.

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. 19,23,587/- (Rupees Nineteen lacs Twenty Three thousand Five hundred and Eighty Seven only) alongwith future interest at the rate of 12.00% per annum (on simple interest basis) from the date of filing of the Original Application till the date of realisation in respect of Agricultural Term Loan ("Decreed Amount for ATL"); (b) For Rs. 8,25,463/- (Rupees Eight lacs Twenty Five thousand Four hundred and Sixty Three only) alongwith future interest at the rate of 12.00% per annum (on simple interest basis) from the date of filing of the Original Application till the date of realisation in respect of DKCC Facility ("Decreed Amount for DKCC Facility");

(iii) Defendant No. 1, the Borrowers, 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 ATL 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 Agricultural Term Loan (covered by Exh "21" being the moveable assets charged & Exh "25" being the immoveable properties mortgaged) be attached / taken possession of and be sold to the

(xi) Copies of final order be sent to all concerned free of cost and File be consigned to records. T S Asokr Presiding Officer, Debts Recovery Tribunal - Mumbai.

(vii) Defendant No. 1 to 4 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 her either alone or jointly with any other person(s) for the purpose of attachment and sale as directed under Clause (iii) and / or Clause (iv) above;

(viii) Defendant No. 1 to 4 are injuncted from dealing with the assets described in Exh "21" and Exh "25" 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; (Pronounced in open Court) Dated : 7th March 2019

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 and 2, the Borrowers, and Defendant No. 3 and 4, the Guarantors, are ordered to pay, jointly and severally, to the Applicant, within a period of 30 days, the Decreed Amountfor DKCC Facility 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 DKCC Facility (covered by Exh "21" being the moveable assets charged & Exh "25" 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 "21" in favour of the Applicant validly securing the Agricultural Term Loan and DKCC Facility;

(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 "25" in favour of the Applicant validly securing the Agricultural Term Loan and DKCC Facility;