PUNJAB NATIONAL BANK vs AARIC TECHNOLOGY PVT. LTD. on 16 October 2018

**FINAL ORDER**

This Original Application is filed on 08.01.2014 under Section 19(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 for recovery of a sum of Rs.16,79,911/- due to the applicant from the defendants with future interest at the rate of 15.75 % per annum with monthly rests from 07.01.2014 till the date of realization and by sale of Schedule A.

**BRIEF FACTS OF THE CASE:**

1. The applicant is a body corporate duly constituted under the Banking Companies Act, 1970 having its Head Office at 7, Bhikaji Cama Place, New Delhi and having branch among other places at Kazhakuttam Branch, Trivandrum represented by its Senior Manager and the Principal officer, duly authorized and empowered to represent the applicant in this proceeding.

2. It is submitted that the defendants availed the Cash Credit hypothecation loan of Rs.4,00,000/- and Rs.6,00,000 Term Loan Account on 15.02.2012, another term loan of Rs.5,00,000/- was availed by the defendants on 04.06.2012. The 1^st defendant executed Priority Sector Term Loan Agreement, Agreement for Hypothecation of Assets and 2^nd defendant executed Deed of Guarantee. Hence, the applicant declares and submits that the subject matter of the original application is within the period of limitation as provided under Section 24 of the Recovery of Debts Due to Banks and Financial Institutions Act 1993.

3. It is the case of the applicant that the 1^st defendant is a private limited company and defendants 2 and 4 are its Directors. The 1^st defendant through its Directors 2 and 4 approached the applicant bank for a Cash Credit loan of Rs.4,00,000/- and a term loan of Rs.6,00,000/- for the purpose of running the business and the same was sanctioned by the applicant bank on 13.02.2012. Subsequently 3^rd defendant was appointed as a director of the company. The defendants availed the loan on 15.02.2012 and security towards the credit facilities, the defendants executed Priority Sector Term Loan Agreement, Agreement of Hypothecation of Assets agreeing to hypothecate the interior decorations, desktop systems, printers and other accessories and book debts as described under Schedule A of the application.

4. The defendants again approached the applicant bank for a Cash Credit loan of Rs.5,00,000/- and the same was sanctioned on 04.06.2012. The loan was availed by the defendants on 04.06.2012 by executing an Agreement of hypothecation of Assets agreeing to hypothecate the interior decorations, desktop systems, printers and other accessories and book debts as described under Schedule A of the application. The 2^nd defendant executed a Deed of Guarantee on 15.02.2012 and 04.06.2012 guaranteeing the repayment of credit facilities availed by the 1^st defendant.

5. The defendants had agreed to repay the loan with interest @13.75% per annum and as per the said agreement the loan along with interest was to be repaid within a period of one year. It is submitted that after availing the loans, the defendants were irregular in payment and defaulted in several monthly installments even though the bank requested the defendants to liquidate the outstanding dues. Since no repayment were made by the defendants, the accounts of the defendants were classified as NPA on 31.12.2012 as per the RBI guidelines. Subsequently, the applicant bank vide lawyer notice dated 17.01.2013 called upon the defendants to repay the amount due and in case of any default the bank will be constrained to initiate legal actions. As per the statement of account maintained by the applicant bank a total amount of Rs.16,79,911/- is due to the applicant and hence the applicant has filed this original application for recovery of the amount from the defendants.

7. After filing of the OA, the applicant bank has taken out the summons as directed by the Tribunal and has filed the proof of service on 11.03.2014. The summons issued to the defendants are duly served and service of summons is completed as per the regulations. In view of the transfer of the matter from DRT1 to DRT2, the Registry had issued notice to defendants for appearance before this Tribunal. In spite of notice, there was no appearance for the defendants nor represented by any counsel. The defendants have neither filed vakalah and hence the defendants were placed exparte on 03.03.2017.

8. The evidence on the side of the applicant bank consists of the proof affidavit of its Senior Manager, AW1 and Exhibits A1 to A9 is marked on the side of applicant and closed their side of evidence.

9 Heard arguments of the applicant bank and perused the records of the case. The following points arise for my consideration:

**(i) *Whether the applicant is entitled for the reliefs prayed for in the OA?***

**(ii) *What order?***

My findings on the above points are as follows:- **Point No.(i): In the affirmative**

**Point No.(ii): As per final order.**

5**Reasons:-**

10. The evidence of the applicant bank by way of proof affidavit of its Senior Manager AW1 reiterates the facts pleaded in the OA and the affidavit is corroborated by the above referred Exhibits A1 to A9 which clearly establishes the case of the applicant bank to allow the present OA. Even otherwise, the whole case of the applicant bank is based on the documentary evidence and the witness has duly proved all the documents exhibited by him. It is quite evident from the documents placed on record by the applicant bank that defendants have availed the financial credit facilities from the respondent bank and have failed to repay the dues towards the loan accounts. Added to this, the defendants did not contest the matter as they admitted the entire case of the applicant as sought for in the OA. In view of the above, the present OA is to be allowed with costs as sought by the applicant bank.

11. Having regard to the amount advanced, the interest applied, the conduct and operations in the account and the default committed, I am of the view that the applicant bank is entitled to get a final order on the following lines:-

**ORDER**

- (a) The OA is allowed with costs.

- (b) The defendants are jointly and severally directed to pay a sum of Rs.16,79,911/- (Rupees Sixteen Lakhs Seventy Nine Thousand Nine Hundred and Eleven only) together with future interest compounded monthly on sum of

Rs.16,51,336/- [Rs.16,79,911- Penal interest of Rs.28,575] @12% per annum from 07.01.2014 till realization and also its costs from the defendant;

- (c) In the event of failure of the defendants to pay the OA claim amount, the bank is at liberty to sell the OA 'A' schedule property of the defendants and the sale proceeds be appropriated towards the OA claim amount as required under law;

- (d) In the event of non-realization of the OA claim amount despite the sale of the mortgaged properties referred above, the bank is at liberty to proceed against the other properties of the defendant, as required under law;

- (e) Schedule property shown in the OA shall become part and parcel of the final order of the OA and Recovery Certificate of present OA;

- (f) The applicant bank shall file memo of costs within ten days from the date of this final order;

- (g) Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of the final order.

12 The Registry is directed to communicate copy of the order to the parties concerned by speed post or registered post with AD.

*[Dictated to the steno, transcribed by her, corrected by me and then pronounced in the open court on this the 16^th day of October, 2018]*


A P P E N D I X

Witness for Applicant:

AW1: Mr. C.Gopakumar, Senior Manager of the applicant bank.

Witness for Defendant(s): Nil

Exhibits on the part of the applicant

<table border="1"> <thead> <tr> <th><u>Ext.No</u></th> <th><u>Date</u></th> <th><u>Particulars of documents</u></th> </tr> </thead> <tbody> <tr> <td>A1</td> <td>15.02.2012</td> <td>Priority Sector Term Loan Agreement</td> </tr> <tr> <td>A2</td> <td>15.02.2012</td> <td>Hypothecation Agreement</td> </tr> <tr> <td>A3</td> <td>15.02.2012</td> <td>Hypothecation Agreement</td> </tr> <tr> <td>A4</td> <td>04.06.2012</td> <td>Hypothecation Agreement</td> </tr> <tr> <td>A5</td> <td>15.02.2012</td> <td>Agreement of Guarantee</td> </tr> <tr> <td>A6</td> <td>04.06.2012</td> <td>Agreement of Guarantee</td> </tr> <tr> <td>A7</td> <td>17.01.2013</td> <td>Recall Notice</td> </tr> <tr> <td>A8</td> <td>-</td> <td>Statement of Accounts</td> </tr> <tr> <td>A9</td> <td>-</td> <td>Statement of rate of Interest.</td> </tr> </tbody> </table>

Defendant's Exhibits - Nil


**A SCHEDULE**

Interior decoration, furniture and fittings and computers, accessories, printers server etc.

A faint rectangular stamp or box is located on the right side of the page. It contains a checkmark and the word 'APPROVED' in capital letters. The stamp is very light and appears to be a watermark or a faded official mark.

**IN THE DEBTS RECOVERY TRIBUNAL-II, KERALA AT ERNAKULAM**

Dated this the 16^th day of October, 2018

**Present: S.V.Gowramma, B.A., LL.B** **Presiding Officer**

T.A No: 901/2016[OA.No:100 / 2014]

**Between**

Punjab National Bank, ...Applicant

**And**

Aaric Technology Pvt.Ltd, & others ...Defendants

**FINAL ORDER**