BANK OF BARODA (DENA BANK) vs SUKDEO HARI SHELKE on 25 March 2019

1. Mr. Shelke Sukdeo Hari, Post : Kokangaon, Taluk : Dindori, ) ) Dist : Nashik - 422 001 ) • • Defendant No. 1

2. Mr. Deshmukh Satish Shivaji, Post : Dindori, Taluk : Dindori, Dist : Nashik - 422 001 ) ) ) • • • Defendant No. 2

3. Mrs. Jhadav Manjulabai Tulsiram, Post : Dindori, Taluk : Dindori, Dist : Nashik - 422 001 ) ) ) • • • Defendant No. 3

4. Mr. Shelke Ashok Hari, Post : Kokangaon, Taluk : Dindori, Dist : Nashik - 422 001 ) ) ) • • • Defendant No. 4

5. Mr. Shelke Pandit Bhagwan, Post : Kokangaon, Taluk : Dindori, Dist : Nashik - 422 001 ) ) ) • • • 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 toRecovery of Debts and Bankruptcy Act, 1993) against the Defendants for the recovery of a sum aggregating to Rs. 23,23,765/- (Rupees Twenty Three lacs Twenty Three thousand Seven hundred and Sixty Five 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. Defendant No. 1 to 5 are individuals. Defendant No. 1,anagriculturist by occupation, availed credit facilities from the Applicant and Defendant No. 2 to 5 provided personal guarantee for the credit facilities in the manner stated below. Factual matrix :

1. (a) As per OA, on the basis of the Application made by Defendant No. 1, Applicant provided to Defendant No. 1 facility of Rupee Term Loan of Rs. 9,40,000/- ("RTL") and Crop Loan (under DKCC Scheme) of Rs. 4,20,000/- ("CL") (RTL and CL are collectively called "Credit Facilities") based on the documentation and security creation by Defendant No. 1. Defendant No. 2 and 3 provided personal guarantee for RTL and Defendant No. 4 and 5 provided personal guarantee for CL. The Credit Facilities also stood secured by mortgage of agricultural lands held by Defendant No. 1 in Village Kokangaon, Taluk Dindori, Dist : Nashik with Defendant No. 1 executing Declaration under Sec. 5 of Maharashtra Provision of Facilities for Agricultural Credit by Bank Act, 1974 and registering the same with SRO, Dindori besides getting it recorded in the 7 / 12 Extract.

(b) Applicant rescheduled the outstanding amount of RTL and restructured the CL into Working Capital Term Loan ("WCTL") on the advice of Government of Maharashtra due to drought condition prevailing in different parts of the State.

(c) Defendant No. 1 became irregular in operating the accountresulting in interest for several months remaining unpaid and also annual instalments in respect of the Credit Facilities not being paid as per the terms of the Credit Facilities as stated in the OA. Consequently, the Applicant called upon all 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) Summons to the Defendants, which were sent by Registered Post with Acknowledgement Due, got delivered and Applicant filed 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 underBankers Books of Evidence Act, 1891, as Annexures (which are marked as Exhibit "29", "30", "31", "32", "33", "34"& "35"). An Additional Affidavit was also filed clarifying the reschedulement and restructuring of the Credit Facilities. 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. 9,40,000/-) 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. 4,20,000/-) 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"

Recall Notice (Office Copy) "28"

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 10% 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 both RTL and WCTL.

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. 13,91,359/- (Rupees Thirteen lacs Ninety One thousand Three hundred and Fifty Nine 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. 9,32,406/- (Rupees Nine lacs Thirty Two thousand Four hundred and Six 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 (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 Amountfor RTL 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 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 3 be 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 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 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 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. 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 Loan (arising out of Restructuring of CL);

(vi) Based on the Original Documents placed before this Tribunai,\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 / or 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 Asokra Presiding Officer, Debts Recovery Tribunal - III, Mumbai.

(Pronounced in open Court) Dated : 25th March 2019