AXIS BANK vs SHRI SAHEBRAO TRYAMBAK MAHALE on 11 March 2019

1. Shri. Sahebrao Tryanabak Mahale, Post : Antarveli, Tal. : Niphad, Dist Nashik. Pin : 422 303

2. Mrs. Nisha Sahebrao Mahale, Post : Antarveli, TM.: Niphad, Dist Nashik. Pin : 422 303

3. Shri. Narayan Vishnu Mahale, Post : Antarveli, Tal. : Niphad, Dist Nashik. Pin : 422 303

4. Shri. Hiraman Vishnu Mahale, Post : Antarveli, Tal. : Niphad, Dist Nashik. Pin : 422 303 Defendant No. 1 Defendant No. 2 Defendant No. 3 Defendant No. 4 Present: Ms. Akshata Padi, Advocate, i/b Raju U Shinde, 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. 34,41,339/52 (Rupees Thirty Four lacs Forty One thousand Three hundred and Thirty Nine and paise Fifty Two 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 and 2. Defendant No. 1 to 4 are individuals. Defendant No. 1 and 2 availed credit facilities from the Applicant for which Defendant No. 3 and 4 provided personal guarantee as additional security. Defendant No. 1 and 2 are jointly and severally revered to as "the Borrowers". Factual matrix :

1. (a) As per OA, Applicant provided credit facilities to the Borrowers in the form of Rupee Term Loan of Rs. 15,47,000/- ("TL-I"), Rupee Term Loan of Rs. 1,78,000/ - ("TL-II") and Cash Credit Facility of Rs. 7,65,000/- to the Borrowers based on the documentation and security creation by them. Defendant No. 3 provided additional security of personal guarantee. Subsequently, at the request of the Borrowers, the Cash Credit Facility got enhanced to Rs. 11,25,000/- ("CCF") based on the documentation and security creation by the Borrowers and Defendant No. 3 and 4 provided additional security of personal guarantee for the CCF. Borrowers also provided mortgage security for the Credit Facilities by executing Simple Mortgage Deeds in respect of immoveable properties located in Village Antarveli, TalukNiphad, DistrictNashik which were registered with SRO, Niphad. TL-I, TL-II and CCF are hereinafter collectively referred to as "Credit Facilities")..

(b) As the Borrowers failed to pay the instalments in respect of the Credit Facilities, the accounts got classified as NPA and the Applicant called upon 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) Transfer Notices were sent to the Defendants by Registered Post with Acknowledgement Due and 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 08/02/2018 by an Order of the Tribunal. Proceedings :

3. As directed by the Tribunal, Applicant filed, through Shri. Sandip Yadavrao Aware, Asst. 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 "31" & "32"). 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.

3. Term Loan - I (Rs. 15,47,000/ -) Term Loan - II (Rs. 1,78,000/ -) Cash Credit Facility (Rs. 7,65,000/ -) Sanction Letter (Office Copy) "15"

Loan-cum-Hypothecation Agreement (Original) "16"

D P Note for Rs. 7,65,000/- (Original) "19" Personal Guarantee of Def

(Original) "18" Simple Mortgage Deed by Def 1 & 2 regd with SRO, Niphad (Original) "17"

4. Cash Credit Facility enhanced to Rs. 11,25,000/- Sanction Letter (Office Copy) "21"

Loan-cum-Hypothecation Agreement (Original) "22"

DP Note for Rs. 11,25,000/- (Original) "25" Personal Guarantee of Def 3 & 4 (Original) "24" Simple Mortgage Deed by Def 1 & 2 regd with SRO, Niphad (Original) "23"

5. Common for all Recall Notice (Office Copy) "30" 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 14.35% p.a. with monthly rests for all the facilities 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 12.00% 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. 17,41,596/52 (Rupees Seventeen lacs Forty One thousand Five hundred and Ninety Six and paise Fifty Two 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 Term Loan - I ("Decreed Amount for TL-I"); (b) For Rs. 1,21,236/62 (Rupees One lac Twenty One thousand Two hundred and Thirty Six and paise Sixty Two 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 Term Loan - II ("Decreed Amount for TL-II");

(c) For Rs. 15,78,506/18 (Rupees Fifteen lacs Seventy Eight thousand Five hundred and Six and paise Eighteen 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 Cash Credit Facility ("Decreed Amount for CCF");

(iii) Defendant No. 1 and 2, the Borrowers, and Defendant No. 3, the Guarantor, are ordered to pay, jointly and severally, to the Applicant, within a period of 30 days, the Decreed Amount for TL-I 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 - I (covered by Exh "10" being the moveable assets charged & Exh "17" 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 2 and personal assets / estates of Defendant No. 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, the Guarantor, are ordered to pay, jointly and severally, to the Applicant, within a period of 30 days, the Decreed Amount for TL-II 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 - II (covered by Exh "16" being the moveable assets charged & Exh "17" 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 2 and personal assets / estates of Defendant No. 3 be attached and sold for realising the dues / shortfall, as the case may be;

(v) 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 CCF 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 Cash Credit Facility (covered by Exh "16" and "22" being the moveable assets charged & Exh "17" and "23" 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 2 and personal assets / estates of Defendant No. 3 and 4 be attached and sold for realising the dues / shortfall, as the case may be;

(vi) 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 and 2 are directed to declare, on oath, both moveable and immoveable assets of the business carried on by them as also severally by them for the purpose of attachment and sale as directed under Clause (iii) and / or Clause (iv) and / or Clause (v) above;

(vii) Defendant No. 1 to 4 are injuncted from dealing with the assets described in Exh "16" and "22" & Exh "17" and "23" 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; T S Asokraj, Presiding 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. (Pronounced in open Court) Dated : 11th March 2019