BANK OF BARODA (DENA BANK) vs MR SHRIRAM GOPAL on 25 March 2019

1. Mr. Jhadav Shriram Gopal, Post : Hatnore, Taluk : Dindori, Dist : Nashik - 422 001

2. Mr. Boraste Sahebrao Dattu, ) Post : Hatnore, Taluk : Dindori, ) Dist : Nashik - 422 001 ) • • •

3. Mr. Boraste Motiram Dattu, Post : Hatnore, Taluk : Dindori, Dist : Nashik - 422 001

4. Mr. Bairagi Duttadas Ramdas, Post : Hatnore, Taluk : Dindori, Dist : Nashik - 422 001

5. Mr. Anwat Sahebrao Madukar, Post : Hatnore, Taluk : Dindori, Dist : Nashik - 422 001 Defendant No. 1 Defendant No. 2 Defendant No. 3 Defendant No. 4 Defendant No. 5 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. 24,30,586/- (Rupees Twenty Four lacs Thirty thousand Five hundred and Eighty Six 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 5 are individuals. Defendant No. 1, an agriculturist by occupation, availed credit facilities from the Applicant and Defendant No. 2 to 5 provided additional security for the credit facilities by way of personal guarantee in the manner stated below in favour of the Applicant. Factual matrix :

1. (a) As per OA, Applicant provided to Defendant No. 1, credit facility of Rupee Term Loan of Rs. 7,70,000/- ("RTL") and Crop Loan (under DKCC Scheme) of Rs. 2,50,000/- ("CL") (RTL and CL are collectively called "Credit Facilities") based on the documentation and security creation by Defendant No. 1 and the additional security of personal guarantee of Defendant No. 2 and 3 in respect of RTL and personal guarantee of Defendant No. 4 and 5 in respect of CL. Defendant No. 1 also created mortgage on his agricultural land located in Village Hatnore, Taluk Dindori, District Nashik, as security for the Credit Facilities. The mortgage was created under Sec. 5 of Maharashtra Provision of Facilities for Agricultural Credit by Bank Act, 1974 by way of execution of Declaration by Defendant No. 1 and Registration with SRO, Dindori, and the Declaration was recorded in the 7 / 12 Extract.

(b) At the request of Defendant No. 1, the Applicant rescheduled the outstanding amount of RTL and restructured the CL into Working Capital Term Loan ("WCTL") and Defendant No. 1 executed necessary Agreement for Restructuring dated 23/02/2011.

(c) As Defendant No. 1 became irregular in operating the account with interest for several months remaining unpaid and also annual instalments in respect of the Credit Facilities as per the terms of the Credit Facilities as stated in the OA, the Applicant called 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 Registered Post with Acknowledgement Due which got delivered and Applicant filed necessary Service Affidavit in this regards.

(c) As Defendants did not appear either in person or through advocate and file Written Statements, the Defendants were set ex-parte on 06/11/2017 by an Order of the Tribunal. Proceedings :

3. As directed by the Tribunal, Applicant filed, through Mr. 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 Certificate issued under Information Technology Act, 2000 and Certificates under Bankers Books of Evidence Act, 1891, as Annexures (which are marked as Exhibit "33", "34", "35", "36"& "37"). An Additional Affidavit was also filed clarifying security. 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. Rupee Term Loan (Rs. 7,70,000/ -) Appraisal-cum-Sanction Memorandum (Office Copy) "12"

Hypothecation - Agreement for Agri. Loans (Original) "13"

Demand Promissory Note (Original) "14"

Personal Guarantee of Def 2 & 3 (Original) "16"

2. Crop Loan (Rs. 2,50,000/-) Since converted to Working Capital Term Loan Appraisal-cum-Sanction Memorandum (Office Copy) "19"

Hypothecation - Agreement for Agri. Loans (Original) "20"

Demand Promissory Note (Original) "21"

Personal Guarantee of Def 4 & 5 (Original) "24"

3. Common for all Credit Facilities Mortgage by way of Declaration by Def 1 and Regd with SRO, Dindori (Original) with 7 / 12 Extract "27" Agreement for Restructuring "29" Recall Notice (Office Copy) "31" 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 10.50% p.a. with yearly rest for RTL and at the rate of 12.25% p.a. with yearly rest for WCTL (arising out of Restructuring of CL) 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 10.00% p.a. on simple interest basis for RTL and at the rate of 12..,00% p.a. on simple interest basis for WCTL.

6. hi 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. 19,25,273/- (Rupees Nineteen lacs Twenty Five thousand Two hundred and Seventy Three 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 Rupee Term Loan ("Decreed Amount for RTL");

(b) For Rs. 5,05,313/- (Rupees Five lacs Five thousand Three hundred and Thirteen 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 Crop Loan (under DKCC Scheme)since restructured into 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 RTL and, in the event of the said Delendants failing to pay and discharge the dues as directed or in the event of shortfall, the assets forming security for the Rupee Term Loan (covered by Exh "13" being moveable assets charged& Exh "27" being immoveable assets mortgaged) be attached / taken possession of and be sold to the extent ofrealising 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 3be attached and sold for realising the dues / shortfall, as the case may be;

(iv) Defendant No. 1, the Borrower, and Defendant No. 4 and 5, the Guarantors, are ordered to pay, jointly and severally, to the Applicant, within a period of 30 days, the Decreed Amount for 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 Crop Loan (under DKCC Scheme) since restructured into Working Capital Term Loan (covered by Exh "20" being moveable assets charged & Exh "27" being immoveable assets 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. 4 and 5be 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 "13" & "20" in favour of the Applicant validly securing the Rupee Term Loan and Working Capital Term Lon(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 "27" 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 5 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 being carried on by her for the purpose of attachment and sale as directed under Clause (iii) and / Clause (iv) above;

(viii) Defendant No. 1 to 5 are injuncted from dealing with the assets described inExh "13", "20" and "27" 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;

(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 - III, Mumbai. (Pronounced in open Court) Dated : 25th March 2019