BANK OF BARODA vs DAGU SHANKAR on 6 March 2019

1. Shri. Dagu Shankar Rajdev, Post : Lakhamapur, Tal : Dindori, Dist Nashik. Pin : - 422 202

2. Shri. Samadhan Balasaheb Rajdev, Post : Lakhamapur, Tal : Dindori, Dist Nashik. Pin : - 422 202

3. Shri. Shankar Vasant Barde, Post : Lakhamapur, Tal : Dindori, Dist Nashik. Pin : - 422 202 Applicant Defendant No. 1 Defendant No. 2 Defendant No. 3 Present:. Shri. Nilesh Bamne, Advocate, i/b M/s A R Bamne & Co., 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. 13,53,549/- (Rupees

Thirteen lacs Fifty Three thousand Five hundred and Forty Nine 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 to 3 are individuals. Defendant No. 1 is agriculturist by occupation and availed credit facilities from the Applicant. Defendant No. 2 and 3 provided joint and several personal guarantee to the Applicant as additional security for the credit facilities. Factual matrix :

1. (a) As per OA, Applicant provided credit facility of Medium Term Loan of Rs. 6,33,000/- ("MTL") and Crop Loan (under DKCC Scheme) of Rs. 2,25,000/- ("CL") (MTL and CL are collectively called "Credit Facilities") to Defendant No. 1 based on the documentation and security creation by Defendant No. 1 and the additional security of joint and several personal guarantee of Defendant No. 2 and 3.

(b) As per OA, Defendant No. 1, the borrower, was highly irregular in operating the accounts of the Credit Facilities and failed and neglected to pay instalments and interests accrued in respect of the Credit Facilities resulting in several instalments and interest for several months remaining unpaid. It is further averred that Defendant No. 1 committed various irregularities and breaches of the terms and conditions as well as various security documents in respect of the Credit Facilities. It is further averred that in spite of several requests, Defendant No. 1 did not regularise the accounts and undo the breaches. Applicant, ultimately, called upon the Defendants to repay the entire outstanding amount of the Credit Facilities and, on the 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) Transfer Notices were sent to the Defendants by Registered Post with Acknowledgement Due and they got served on the Defendants. 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 06/10/2017 by an Order of the Tribunal. Proceedings:

3. As directed by the Tribunal, Applicant filed, through Shri. Avinash Mohan Pawar, 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 "22" & "23"). 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. . Med. Term Loan Rs. 6,33,000/-) Crop Loan (Rs. 2,25,000/-) Sanction Letter (Office Copy) "10"

D P Note for Crop Loan (Original) "11"

Hypothecation Agreement (Original) "14"

Personal Guarantee of Def 2 & 3 (Original) "15"

Ack. of Debt and Security "17"

Recall Notice (Office Copy) "18"

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 dou14- 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 11.25% p.a. with monthly rests for MTL and interest at the rate of 10.00% p.a. with monthly rests for CL, both 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 11.00% p.a. for MTL and at the rate of 10.00% p.a. for CL, both 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. 10,46,642/- (Rupees Ten lacs Forty Six thousand Six hundred and Forty 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 Medium Term Loan ("Decreed Amount for MTL"); (b) For Rs. 3,06,907/- (Rupees Three lacs Six thousand Nine hundred and Seven only) alongwith future interest at the rate of 10.00% 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 ("Decreed Amount for CL");

(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 MTL 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 Medium Term Loan (covered by Exh "14" being the moveable assets charged) 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 Amount for CL 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 Crop Loan (covered by Exh "14" being the moveable assets charged) 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" in favour of the Applicant validly securing the Medium Term Loan and Crop Loan;

(vi) 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 business carried on by him for the purpose of attachment and sale as directed under Clause (iii) and / or Clause (iv) above;

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

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

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

(x) 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 - III, Mumbai.

(Pronounced in open Court) Dated : 6th March 2019