DENA BANK vs NAND ARJUN on 28 March 2019

1. Mrs. Nanda Arun Jadhav, Post : Kokangaon (Koshimbe), Taluk : Dindori, District Nashik - 422 001

2. Mr. Eknath Devidas Jadhav, Post : Kokangaon (Koshimbe), Taluk : Dindori, District Nashik - 422 001

3. Mr. Arun Devidas Jadhav, Post : Kokangaon (Koshimbe), Taluk : Dindori, District Nashik - 422 001 Defendant No. 1 Defendant No. 2 Defendant No. 3 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. 89,44,730/- (Rupees Eighty

Nine lacs Forty Four thousand Seven hundred and Thirty 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, an agriculturist by occupation, availed credit facilities from the Applicant for which Defendant No. 2 and 3 provided personal guarantee as additional security. Factual matrix :

1. (a) As per OA, Applicant provided credit facility of Rupee Term Loan of Rs. 29,54,876/- ("TL") and DKCC Facility of Rs. 16,88,000/- ("DKCC") (TL and DKCC 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 personal guarantee provided by Defendant No. 2 and 3. DKCC was renewed on the request of Defendant No. 1.

(b) As a prelude to availing the Credit Facilities, Defendant No. 1 mortgaged her agricultural land in Village Kokangaon, Taluk Dindori, District Nashik in favour of the Applicant 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.

(c) At the request of Defendant No. 1, Applicant rescheduled the outstanding instalments and interests upto 30/06/2011 ("Rescheduled component of TL") on the terms and conditions set out in the Agreement for Restructure of Credit Facilities executed by Defendant No. 1.

(d) As per OA, Defendant No. 1 was highly irregular in operating the accounts of the Credit Facilities and interest for several months and several instalments of

TLs remained unpaid. It was further averment that Defendant No. 1 committed various irregularities and breaches of the terms and conditions of sanction as well as various security documents pertaining to the Credit Facilities. Applicant ultimately issued Recall Notice calling upon all the Defendants to repay the entire outstanding amounts of the Credit Facilities and, on their failure 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) On transfer of the case to this Tribunal, Transfer Notices were sent to the Defendants under Registered Post with Acknowledgement Due. The same 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 05/03/2019 by an Order of the Tribunal. Proceedings :

3. As directed by the Tribunal, Applicant filed, through Mr. Jaswanthlal P Suthar, 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 "27", "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. Term Loan (Rs. 29,54,876/-) DKCC (Rs. 16,88,000/-) Appraisal-cum-Sanction Memorandum (Office Copy) "11"

Hypothecation Agreement for Agricultural Loans (Original) "12"

D P Note for DKCC Facility (Original) "13"

Personal Guarantee of Def 2 & 3 (Original) "16" Mortgage by way of Declaration by Def

Regd with SRO, Dindori (Original) with 7 / 12 Extract "19" D P Note for DKCC Facility (Original) "22" Agreement i/ r of Rescheduled Instalments & Interests of TL (Orl) "24" Recall Notice (Office Copy) "26" 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 11.25% p.a. with monthly rests for TL (including Rescheduled Instalments with Interests as on 30/06/2011) and at the rate of 10.75% p.a. with monthly rests for DKCC, 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 10.50% p.a. on simple interest basis for all.

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. 62,59,719/- (Rupees Sixty Two lacs Fifty Nine thousand Seven hundred and Nineteen only) (including claim aggregating to Rs. 18,10,941 (Rupees Eighteen lacs Ten thousand Nine hundred and Forty One only) in respect of Rescheduled Instalments with Interests as on 30/06/2011) alongwith future interest at the rate of 10.50% 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 (including Rescheduled Instalments and Interests) (collectively "Decreed Amount for TL"); (b) For Rs. 26,85,011/- (Rupees Twenty Six lacs Eighty Five thousand and Eleven only) alongwith future interest at the rate of 10.50% 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");

(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 TL 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 (including claim on Rescheduled Instalments with Interests as on 30/06/2011) (covered by Exh "12" being the moveable assets charged & Exh "19" 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;

(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 DKCC 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 "12" being the moveable assets charged & Exh "19" 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 "12" in favour of the Applicant validly securing the Term Loan (including claim on Rescheduled Instalments with Interest as on 30/06/2011) 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 "19" in favour of the Applicant validly securing the Term Loan (including claim on Rescheduled Instalments with Interest as on 30/06/2011) and DKCC Facility;

(vii) 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 the business 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 3 are injuncted from dealing with the assets described in Exh "12" and Exh "19" as also assets declared on oath as per Clause (vii) above in any manner whatsoever till the complete recovery of Decreed Amount 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 : 28th March 2019