PUNJAB NATIONAL BANK vs MS ROYALE CONCORDE EDUCATIONAL TRUST on 31 July 2025

:FINAL ORDER:

1. The present Original Application in short (OA) has been filed under section 19 of Recovery of Debts and Bankruptcy Act 1993 for seeking issuance of Recovery Certificate against the defendants for Rs.29,83,23,403/- (Rupees Twenty Nine Crore Eighty Three Lakh Twenty Three Thousand Four Hundred and Three only) with further interest thereon from the date of filing the Application till realization from the Defendants.

2. It is the case of the applicant that, the first defendant is a public charitable trust registered under the Indian Trust Act and the defendant Nos.2 to 5 are the trustees of the first defendant; with the second defendant as the Chairman and the third defendant as the Secretary. The second defendant is the husband of the third defendant and defendant Nos. 4 and 5 are children to defendant Nos. 2 & 3. The defendant Nos. 2 to 4 are guarantor/mortgagor and the 5th defendant is the guarantor to the liability availed by the 1st defendant trust.

3. The defendants availed the following credit facilities:

Sl. No. Facility with limit Sanctioned Date

Term Loan-I Account No.004100IC00024922 with a limit of Rs.18,50,00,000/- for its Hessarghatta Education Institution Project

All the three-term loan were sanctioned, as per common sanction letter dated 16.12.2015 and the same was revalidated, as per applicant bank’s letter dated 07.09.2016

Term Loan-II Account No.004100IC00024931 with a limit of Rs.4,20,00,000/- for its Kalyan Nagar Education Institution Project

Term Loan-III Account No.004100IC00024959 with a limit of Sarjapura

Educational Institution Project

Car Term loan-I bearing account No.004100NG00025296 – Rs.22.40 Lakhs for purchase of Toyota Innova bearing Registration No.KA-05-MU-7659 15.12.2016

Car Term Loan-II bearing Account No.004100NG00025366 Rs.22.50 Lakhs for purchase of Toyota Innova bearing Registration No.Ka-05-M-3897; and 26.04.2017

Car Term Loan-III bearing Account No.004100NG00025375 – Rs.45.80 Lakhs for purchase of Mercedes Benz Car- E Class 250 CDI Engine bearing No.65192433166866 and Chassis No.WDD2120036L058904 29.05.2017

4. It is also the case of the applicant that, in view of the above financed credit facility, the defendants have executed necessary loan documents apart from the creation of security interest by way of mortgage and hypothecation over the Schedule property.

5. It is further contended that, despite availing the credit facilities, agreeing to service the loan amount promptly and regularly, the defendants failed in complying the same, resulting in default in repayment and consequentially turning the loan accounts as NPA.

6. In the above circumstances, the applicant approached this Tribunal by filing this OA seeking issuance of Recovery Certificate for the balance amount due in the account.

7. Despite, service of summons on the defendants, they failed to appear, resulting the defendants being set exparte on 08.10.2024.

8. The applicant had let in evidence through AW-1, who filed their Proof Affidavit reiterating the contentions taken in the OA and also produced Exhibits A3 to A47 and got the same marked in evidence.

9. Heard the Ld. Counsel for the Applicant and considered the contentions as taken in the OA in the light of documentary evidence and proof affidavit.

10. The following issues arise for consideration in this matter: i) Whether the applicant had succeeded in proving the OA claim as against the defendants? ii) What order are to be passed?

Both these issues are gone into and decided together.

11. The case put forth by the applicant in the Application remains unrebutted as defendants remained exparte. The evidence tendered by the applicant remains uncontroverted and undisputed. The evidences put forth by the applicant were found admissible and are sufficient to prove availment of credit facilities as stated in the TA and execution of mortgage deed and hypothecation agreement agreeing creation of security interest as claimed by the applicant bank and the defaults committed in the accounts. The liability of the defendants and the claim of the amount due is also proved by the above documents. The claim of the applicant is well within the limitation.

12. Since the OA claim is arrived at by calculating agreed rate of interest, penal interest/default interest, which this Tribunal considers as on the higher side, pendentalite and future interest is awarded at fixed rate.

13. Hence in view of the above finding which cover both the issues raised in this manner, this Tribunal is of the view that TA is to be allowed.

14. In the result, TA.No.04/2020 stands allowed,

i) The applicant is allowed to recovery an aggregate sum of Rs.29,83,23,403/- (Rupees Twenty-Nine Crore Eighty-Three Lakh Twenty-Three Thousand Four Hundred and Three only) consisting of:

a) Rs.15,82,38,402/- with further interest of 11.65% p.a.(simple) in respect of term loan -I account No.004100IC00024922 from the date of filing OA till the realization from defendants;

b) Rs.3,69,38,302/- with further interest of 11.65% p.a.(simple) in respect of term loan-II facility account No.004100IC00024931 from the date of filing OA till the realization from defendants;

c) Rs.9,67,00589/- with further interest of 11.65% p.a.(simple) in respect of term loan-II facility account No.004100IC00024959 from the date of filing OA till the realization from defendants;

d) Rs.17,04,740/- with further interest of 9.35% p.a.(simple) in respect of car term loan-I facility account No.004100NG00025296 from the date of filing OA till the realization from 1st defendant;

e) Rs.17,98,297/- with further interest of 9.05% p.a.(simple) in respect of car term loan-II facility account No.004100NG00025366

from the date of filing OA till the realization from 1st defendant;

f) Rs.29,43,073/- with further interest of 9.05% p.a.(simple) in respect of car term loan-III facility account No.004100NG00025366 from the date of filing OA till the realization from 1st defendant; after giving credit to all the amount recovered and received during the pendency of the OA and allowed the same to be recovered by proceeding against schedule property. The schedule to the OA be the schedule to the Recovery Certificate.

ii) If the sale proceeds are not found sufficient to cover the amount due and payable to the applicant bank, the defendants jointly, severally, defendant No.2 to 5 personally and other their assets are liable for all such amounts due under the loan accounts.

iii) The applicant bank is allowed cost of the proceeding which applicant to file cost memo within 7 days from the date of receipt of the order.

iv) The Recovery Certificate to be drawn in terms of this order and transferred to Recovery for execution.

v) Interim Application pending, if any, stands disposed of with this Final Order.

15. Communicate a copy of the order to the parties concerned in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993. [Dictated to the Stenographer (PR), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 31st Day of July 2025].

Sd/-

(T. RAJESH) PRESIDING OFFICER

ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Chandrajeet Kumar, Chief Manager of the applicant bank. Exhibits on the part of the Applicant: Annexure Date Particulars A1

Affidavit Evidence A2

List of documents A3 16.12.2015 Sanction letter A4 07.09.2016 Revalidated sanction letter A5 12.09.2016 Board resolution A6 29.09.2016 Term loan agreement A7 29.09.2016 Agreement of hypothecation of assets to secure of term loan A8 29.09.2016 Letter of Undertaking

A9 29.09.2016 Agreement of Guarantee dated 29.09.2016 executed by 2nd defendant by is personal capacity A10 29.09.2016 Agreement of Guarantee dated 29.09.2016 executed by 3rd defendant in her personal capacity. A11 29.09.2016 Agreement of Guarantee dated 29.09.2016 executed by 4th defendant through his Father and GPA holder, viz., 2nd defendant (in his personal capacity) personal capacity A12 29.09.2016 Agreement of Guarantee dated 29.09.2016 executed by 5th defendant in his personal capacity. A13 29.09.2016 General power of attorney dated 29.09.2016 executed by 4th defendant in favour of his father – 2nd defendant herein. A14 29.09.2016 Memorandum relating to deposit of title deeds A15 30.09.2016 Letter confirming deposit of title deeds executed by defendant no.2 and 3 for the properties 1 and 2 A16 01.10.2016 Letter issued by the applicant bank acknowledged the receipt of the title deeds. A17 30.09.2016 Letter confirming deposit of title deeds executed by defendant No.3 and 4 for the properties 3 to 13

A18 01.10.2016 Letter issued by the applicant bank acknowledged the receipt of the title deeds. A19 30.09.2016 Letter confirming deposit of title deeds executed by defendant No.3 for the properties 14 to 16 A20 to A22 01.10.2019 Letter issued by the applicant bank acknowledged the receipt of the title deeds. A23 30.09.2016 Letter confirming deposit of title deeds executed by defendant No.1 for the properties 17 to 19 A24 & A25 01.10.2016 Letter issued by the applicant bank acknowledging the creation of lease hold rights A26 - Loan application form A27 05.12.2016 Board resolution A28 15.12.2016 Sanction letter A29 15.12.2016 Letter of hypothecation for car loan A30 03.04.2017 Board resolution A31 07.04.2017 Loan application form A32 15.12.2016 Sanction letter A33 27.04.2017 Letter of hypothecation for car loan A34 30.04.2017 Board resolution A35 - Loan application form A36 29.05.2017 Sanction letter A37 31.05.2017 Letter of hypothecation for car loan A38 14.10.2019 Undertaking letter

A39 24.04.2017 Balance and confirmation letter for term loan 004100IC00024922, 004100IC00024931, 004100IC0002459 A40 03.06.2019 Demand notice issued under Section 13(2) of the SARFAESI Act A41 08.08.2019 Possession notice issued under S.13(4) of the SARFAESI Act A42 25.09.2019 Certified statement of account term loan – I bearing No.004100IC00024922 along with the certificate as per the Banker’s Book of Evidence Act. A43 25.09.2019 Certified Statement of Account Term loan-I bearing No.004100IC00024931 along with the certificate as per the Banker’s Book of Evidence Act A44 25.09.2019 Certified Statement of account term loan-I bearing No.004100IC00024959 along with the certificate as per the Banker’s Book of Evidence Act. A45 25.09.2019 Certified statement of account – Car Term loan -I bearing No.004100IC00025296 – Toyota Innova LMV along with the certificate as per the Banker’s Book of Evidence Act.

A46 25.09.2019 Certified Statement of account-Term Loan-I bearing No.004100NG00025366-Toyota Innova LMV along with the Certificate as per the Banker’s Book of Evidence Act. A47 25.09.2019 Certified statement of account term loan-I bearing No.004100NG00025375 – Mercedes Benz Car along with the certificate as per the Banker’s Book of Evidence Act

Sd/- (T. RAJESH) PRESIDING OFFICER