PUNJAB NATIONAL BANK vs SMT JIGYASA CHANPURA on 13 June 2019

J U D G M E N T

1. Applicant Bank had filed this Original Application on 10.09.2015 under section 19(1) of the Recovery of Debts Due to Banks & Financial Institutions Act, 1993 (as amended from time to time) against the sole Defendant before Debts Recovery Tribunal, Lucknow for recovery of Rs.50,62,697/- (Rupees Fifty Lacs Sixty-Two Thousand Six Hundred Ninety- Seven only) alongwith pendente-lite and future interest @12.25% per annum with monthly rests w.e.f. 09.09.2015 till the date of realization and costs.

2. The brief facts of case are that the Sole Defendant being principal borrower approached Applicant Bank for grant of financial assistance in the shape of Term Loan of Rs.44,50,000/- for purchase of plot. Applicant Bank after considering the loan application on 21.04.2014 sanctioned a Term Loan of Rs.44,50,000/- for purchase of plot to the Sole Defendant against primary security of equitable mortgage of immovable property after purchase through bank finance by the Sole Defendant in favour of Applicant Bank. However, Sole Defendant has not deposited the sale deed of aforesaid property. The Sole Defendant executed and signed various loan and security documents on 21.04.2014 in favour of Applicant Bank. The rate of interest was agreed between the parties, applicable at that time @10.25% per annum with monthly rests plus penal interest @2.00% per annum subject to change from time to time as per RBI Guidelines.

3. However, after availing the aforesaid Loan/Credit Facility, the Sole Defendant neither deposited sale deed to create equitable mortgage to secure the above Term Loan nor maintain financial discipline as per terms and conditions of the loan agreement due to which loan account became irregular. Consequently, the said account of the Sole Defendant was classified as NPA on 30.09.2014 and recalled by Applicant Bank. Thereafter, Applicant Bank served Demand Notice to Sole Defendant to repay the outstanding dues but the Sole Defendant failed to make the payment of outstanding dues. Hence, the present Original Application has been filed by Applicant Bank against the Sole Defendant for recovery of Rs.50,62,697/- (Rupees Fifty Lacs Sixty-Two Thousand Six Hundred Ninety-Seven only) alongwith pendente-lite, future interest, costs and for issuance of Recovery Certificate for the said amount.

4. The averments of Applicant Bank are set out in detail in its Original Application and therefore, these are not being stated here afresh to avoid a repetition of facts.

5. The summons was issued to the Sole Defendant. However, after ordinary service, none appeared for the Sole Defendant. Hence, the Sole Defendant was ordered to be served by substituted mode of service by way of Publication in the Newspaper.

6. Subsequently, vide order dated 08.03.2018 case was transferred from Debts Recovery Tribunal, Lucknow to this Tribunal in view of change of jurisdiction in pursuance of establishment of new DRT at Dehradun on 16th. February 2017 vide Gazette Notification 411, S.O.454 (E) dated 15.02.2017, 692, S.O.784 (E) dated 23.02.2018 and corrigendum Gazette Notification 719 S.O. 816(E) dated 27.02.2018. The case was re-numbered as T.A. No. 76/2018.

7. Thereafter, the Sole Defendant was again ordered to be served by substituted mode of service by way of publication in two Newspapers by this Tribunal. However, despite substituted mode of service, none appeared for the Sole Defendant. Hence, the Sole Defendant was proceeded ex- parte vide order dated 11.12.2018.

8. Applicant Bank filed its evidence by way of affidavit of Sh. Pawan Kumar Koul, Chief Manager of Applicant Bank as AW-1/1 who proved the various loan and security documents by way of admission and denial which are marked as Exhibit- AW-1/1 to Exhibit- AW-1/7.

9. I have heard the ex-parte arguments of Ld. Counsel for Applicant Bank and perused the material on record.

10. The point for consideration is whether Applicant Bank is entitled to recover the claim as prayed for?

11. Section 17(1) of the RDB Act of 1993 vests a Tribunal constituted under the Act with the jurisdiction, powers and authority to entertain and decide applications from the Banks and Financial Institutions for recovery of debts due to such Banks and Financial Institutions. 'Debt' is, defined in Section 2(g) of the Act, 1993. The RDB Act, 1993 creates a complete code for the adjudication of matters referred to in Section 17 and provides for the procedure in respect thereof. The jurisdiction of the Civil Courts to try cases in respect of recovery debts of Rs.10.00 Lac and above due to Banks and financial institutions stands ousted by the Act. Hence, Original Application filed U/s 19(1) of the Recovery of Debts and Bankruptcy Act, 1993 is within the jurisdiction and legally maintainable before this Tribunal.

12. Further, Applicant Bank has fully corroborated the averments made in the O.A. against the Sole Defendant through evidence of witness Sh. Pawan Kumar Koul, Chief Manager of Applicant Bank as AW-1/1. The Applicant Bank has also established its case through documentary evidence being Exhibit- AW-1/1 to Exhibit- AW-1/7. On a careful scrutiny of the evidence on affidavit and exhibits marked as Exhibit- AW-1/1 to Exhibit- AW-1/7, it is proved that the Sole Defendant had availed the Term Loan facility from the Applicant Bank, by executing various loan documents detailed as above in favour of the Applicant Bank. A perusal of Original Application, evidence and documents relied upon clearly show that the Sole Defendant had utilized the above loan facility as granted to her.

13. However, after availing the aforesaid Loan/Credit Facility, the Sole Defendant failed to maintain financial discipline as per terms and conditions of the loan agreement. Consequently, the said account was rightly classified as NPA on 30.09.2014 and recalled by Applicant Bank. Thereafter, Applicant Bank served Recall Notice dated 04.11.2014 Exhibit- AW-1/6 to the Sole Defendant to repay the outstanding dues but the Sole Defendant failed to make the payment of outstanding dues. The whole case of the Applicant Bank is based on documentary evidence and the witness has duly proved all these documents. In my view there is no question of disbelieving the evidence lead by the Applicant Bank and Applicant Bank has proved its case beyond reasonable doubts.

14. Further, on perusal of Exhibits AW-1/7 show that Applicant Bank has maintained the Books of account in the ordinary course of banking business showing disbursal of the loan amounts as per provisions of Bankers Books Evidence Act, 1891 and Guidelines of RBI under Banking Regulation Act, 1949. It further shows that Applicant Bank had regularly credited the amount if any, paid by the Sole Defendant in the books of account. Applicant Bank had also charged interest from time to time and the entries are relevant U/s 4 of the Bankers Books Evidence Act, 1891 as reflected from A/c Statements attached with O.A. Exhibits AW-1/7.

15. Moreover, Applicant Bank has been able to prove that the Sole Defendant availed the Term Loan Facility and failed to repay the same in terms of loan documents. Since, the transactions are of commercial nature between the parties, the Sole Defendant is bound to repay the loan amount with interest as agreed upon and Applicant Bank is entitled to recover suit amount with interest as claimed by it. The Original Application has been presented on 10.09.2015 i.e. within three years from the date of execution of loan documents and last deposit which was made on 04.11.2014 admitting debt liability for the purpose of limitation as reflected from Account Statement Exhibit AW-1/7. Thus, it is proved that the Sole Defendant is liable to pay the claim made in the O.A. to the Applicant Bank.

16. Applicant Bank has claimed interest @12.25% per annum monthly rests w.e.f. 09.09.2015 till the date of realization and costs. The contract between Applicant Bank and the Sole Defendant comes to an end and after filing of the O.A. as per the provisions of Section 19(20) of the Recovery of Debts and Bankruptcy Act, 1993 (as amended from time to time) which is analogous to Section 34 of the CPC, the Tribunal/Court has discretion in awarding pendente-lite and future interest. I am also supported in my view by the Hon’ble Supreme Court in a case titled Central Bank of India Vs. Ravindra and others reported in AIR 2001 SC page 3095. On the basis of the foregoing discussion, interest of justice will be served if pendente-lite and future interest is granted @10.00% per annum simple rate on reducing balance from the date of filing of the O.A. till the date of realization with costs.

17. In the light of above discussion, the Original Application deserves to be allowed against the Sole Defendant with costs.

ORDER

(i) The Original Application is allowed declaring that the Sole Defendant is liable to pay a total sum of Rs.50,62,697/- (Rupees Fifty Lacs Sixty-Two Thousand Six Hundred Ninety-Seven only) to Applicant Bank alongwith pendente-lite and future interest @10.00% per annum simple rate of interest on reducing balance from the date of filing of the O.A. i.e. 10.09.2015 till the date of realization with costs.

(ii) Applicant Bank is entitled to recover aforesaid amount by attachment and sale of the personal movable and

immovable assets of the Sole Defendant. Applicant Bank is at liberty to enforce the claim through due process of law.

(iii) Any other application pending stands disposed of.

(iv) Recovery Certificate be issued forthwith in above terms U/s 19(22) of the Recovery of Debts and Bankruptcy Act, 1993 (as amended from time to time) and be sent to the Recovery Officer-I, DRT, Dehradun.

(v) Applicant Bank is directed to file revised statement of account before the Recovery Officer of this Tribunal. Parties are directed to appear before the Recovery Officer-I, DRT, Dehradun on 25.07.2019.

(vi) The Sole Defendant is hereby restrained by means of injunction from depleting, transferring, encumbering, alienating, selling or otherwise dealing with their properties/estates without first paying the above claim of Applicant Bank.

(vii) In case, Sole Defendant expires, the legal representatives shall be liable to pay in proportion to the inheritance.

(viii) Copy of this Judgment and Recovery Certificate be given Dasti to Applicant Bank and be sent to the Sole Defendant free of cost by Registered Post in terms of section 19(21) (i) of the RDB Act, 1993 (as amended from time to time) and Rules as well as to the Recovery Officer and after due compliance, file be consigned to record room.

18. Applicant Bank is directed to file a Memo of Cost, if not filed earlier, for preparing Recovery Certificate U/s 19(22) of the

Recovery of Debts and Bankruptcy Act, 1993 (as amended from time to time). Judgment pronounced in the open court on this 13th Day of June, 2019. (SHAMMI KHAN) Presiding Officer, DRT, Dehradun