1. The Applicant bank has made this application u/s. 19 of the Recovery of Debts and Bankruptcy Act, 1993 (here-in-after referred to as Act) on 10.7.2019, against the defendants to recover its debts from defendants of Rs. 5,27,66,187/- upto 1.7.2019 alongwith pendente lite and future interest at the contractual rate from 2.7.2019 with costs till realization.
2. The application has been duly registered and numbered as above.
3. The brief facts of the case of the applicant bank as stated in the application are as under-
The applicant bank is a body constituted under the Banking Companies (Acquisition and Transfer of Undertaking) Act 1980 having its Head Office At-2, Netaji Subhash Road, Kolkata-700001 and amongst other Branch Office, SAM Branch, District-Patna, Bihar.
The defendant no. 1, is a partnership firm incorporated on 24.6.2015 registered under the Partnership Act, herein after, called to as defendant no. 1, having its registered office at Chand Choura, Chouraha, Branch, Gaya-823001 Bihar, duly represented by its partners.
The defendant no. 1 is partnership firm and defendant no. 3 & 4 are partners as well as guarantors and also executed personal guarantee, it is submitted that defendant no. 2 is also partnership firm and defendant no. 3 & 4 are partners as well as guarantors and also executed personal guarantee.
The defendants no. 1 to 3 passed resolution dated 14.8.2015 were authorized to honour all cheque drafts signed drawn, accepted or made on behalf of the company jointly.
The defendant no. 1, through its partners approached the applicant bank for financial assistance, vide application for term loan of Rs. 300 lacs and cash credit limit of Rs. 100 lacs for the purpose of establishment of multipurpose cold storage unit for preservation of seed, potato, and other agriculture and horticulture product and agri. input Center in the name of M/s. Dobhi Agro Industries Pvt. Ltd., business.
The applicant bank considered the loan application of defendant no. 3 & 4, on the behalf of defendant no. 1, and sanctioned as term loan of Rs. 300 lacs and cash credit of Rs. 100 lacs on terms and conditions vide sanction letter dated 7.9.2015.
The defendants executed the various loan documents in favour of the bank i.e. term loan agreement, ADV-24 and DP note.
As per agreed terms and conditions the term loan repaid in 6 yearly installments of Rs. 50 lacs after a construction period and moratorium period of 6 months. The first installments shall fall due on December 2016 and last on December 2021 and rate of interest BR+ 2.50% with monthly rest i.e. @9.95% and cash credit repayment on demand and the interest at the rate of BR + 2.50% with monthly rests i.e. BR is @9.95%.
The defendant no. 1 also collateral security by created equitable mortgage of land by depositing the sale deed no. 6703 dated 13.6.2009, in the name of Nawal Kishore Sinha, situated at Main Road other location kolara Hospital Chand Choura to Punjabi Dharmsala Road Ward no. (old)8, New-24, Hal -41, Holding no. ' 192 (Old), New 201 Presently 277/280, New Plot no. 18937, Survey Plot no. 31, Area 1136.10 Varg fit (2.60 decimal). Measurement North to South 32 fit 3 inch, East to West-35 fit 3 Inch.
Bounded as:- North-Sadak Sarkari, South-Smt. Tara Devi, East-Gali, West-Smt. Bharti Mohan Sinha.
Again the defendant no. 1 through its partner no. 4, approached the applicant bank for financial assistance, vide application dated 17.12.2015 for additional term loan of Rs. 60 lacs in addition to term loan of Rs. 300 lacs and working capital facilities of Rs. 100 lacs sanction on 7.9.2015 for the purpose of purchase of additional Machinery for multipurpose cold storage of 2000 MT in the name of M/s. Dobhi Agro Industries, Business.
The applicant bank, considered the loan application of defendant no. 4, on the behalf of defendant no. 1 and sanctioned as additional term loan of Rs. 60 lacs in addition to (exiting) term loan of Rs. 300 lacs and working capital facilities of Rs. 100 lacs sanction on 7.9.2015, on terms and conditions vide sanction letter dated 17.12.2015 acknowledgement of sanction letter dated 23.12.2015.
The defendants, executed the various loan documents in favour of the bank i.e. term loan agreement, hypothecation agreement, ADV-30, ADV-24 and DP note. The defendant no. 3 & 4 have execute the agreement of guarantee.
As per agreed terms and conditions the term loan repaid in 6 yearly installment of Rs. 54.51 lacs after a construction period and moratorium period of 16 months the first installments shall fall due on December 2016 and lacs on December 2021 Door to Door tenure.
As per agreed terms and conditions the cash credit loan was repayable within one year and term loan within 5 years. The interest at the rate of 2% p.a. at over the Allahabad Bank base rate + 2%.
The defendants further executed extension of charge of mortgage on by deposit title deed, the defendants created further mortgage on the properties for which the title deeds were deposited, the fact of creation of further mortgage is also confirmed by defendants, the details of creation mortgaged security are already mentioned in para no. viii. Letter of mortgage controlling deposit of title deeds for borrower on 23.12.2015 to secure the credit facilities availed by defendant no. 1. And further created equitable mortgage by depositing of title deed by deposit title deeds, vide letter of mortgage controlling deposit of title deeds for borrower i.e. in the name of Dobhi Agro Industries Registered office, Chand Choura, Gaya Pin code 823001, Bihar, Measuring an area 74, Decimal mortgaged property situated at Gram Kushabija, Thana Dobhi, District-Gaya, Thana no. 812, East of Gurudwara sub division and Registry Sherghati. Khata no. 441, old 42, plot no. 2284 old 381 butted and bounded as:-north Umesh Keshan, South-Umesh Keshan, East-Umesh Keshan, West-Road.
Again the defendant no. 1, through its partners, approached the applicant bank for review cum renewed and capitalization of interest up to March 2017 for renewed of term loan 1 of Rs. 300 lacs at present O/S, term loan II of Rs. 60 lacs at present O/s, and cash credit of Rs. 100 lacs at present o/s business. The applicant bank considered the loan application of defendant no. 3 & 4 on the behalf of defendant no. 1 and sanctioned/review cum renewed and capitalization of interest up to march 2017 of sanction letter dated 28.7.2016. The defendants executed the advance against hypothecation of goods and book debts to partnership firms and defendant no. 3 & 4 have executed the agreement of guarantee.
As per agreed terms and conditions the term loan repaid in 6 yearly installment of Rs. 54.51 lacs after a construction period and moratorium period of months. The first installments shall fall due on Dec 2016 and last on Dec 2021 door to door tenure is 77 months.
As per agreed terms and conditions the cash credit loan was repayable within one year and term loan within 5 years. The interest at the rate of 2% p.a. at over the Allahabad bank Base rate + 2%.
The defendants, created further mortgage on the properties for which the title deeds were deposited, the fact of creation of further mortgage is also confirmed by defendants, the details of creation mortgaged security.
The defendants however failed and neglected to repay the amounts due under the facility, inspite of the applicant's repeated requests and demands. The defendants failed to comply the terms and conditions of sanctioned of credit facility. The account of the defendants was classified as NPA on 28.7.2016.
The applicant bank invoked the provisions of SARFAESI Act and issued a 60 days notice u/s. 13(2) of SARFAESI Act to the borrower as an additional steps calling upon them to discharge the Bank's dues as mentioned in the notice in full within 60 days as per the provisions of the act. In case of failure the bank's reserves its right to exercise all or any of the rights detailed under sub section 4 section 13 and under other applicable provisions of the act. After the service of the notice the defendants are directed not to transfer by sale, lease, or otherwise the secured assets described in the notice without obtaining written consent to the bank.
The total outstanding as on 1.7.2019 is Rs. 5,27,66,187/- along with pendente lite and future interest at the contractual rate of interest from 2.7.2019 till realization of dues.
The interest/compound interest has been charged at such rates, and capitalized at such periodical rests as are permitted by and do not run counter to the directives of Reserve Bank of India.
Since, the defendants have failed and neglected in spite of several reminders to make payment of the dues recoverable to bank, hence this application has been filed by the bank.
4. U/s 19 (4) of the Act & Rule of the DRT [Procedure] Rules, 1993, copies of application & paper book were sent by this Tribunal to the defendants by registered/speed post on 9.8.2019 and summons/notices issued requiring the defendants to show-cause within 30 days of the service of summons/notices as to why relief prayed for, should not be granted.
On perusal of the case records, it is seen that on 9.8.2019, summons/notices were sent to the defendants, but the defendants have not appeared, hence, the Registry of this Tribunal has ordered to publish the notice in newspaper and subsequently, substituted service by publication of notice by way of advertisement in newspaper was also made against the defendants on 27.9.2019 in "Dainik Bhaskar", newspaper.
Despite the registered summons/notices and publication of notice in newspaper, the defendants have not appeared before this Tribunal to contest the case. The sufficient time has been given to the defendants to defend their case, but they failed to appear and to file WS, hence, the Tribunal has passed an order to proceed ex parte against the defendants on 4.12.2019.
5. To prove its case, the applicant Bank has referred various documents before this Tribunal on 15.7.2019. The applicant bank has also given evidence on affidavit on 15.7.2019 by way of affidavit of Shri Binod Kumar Jha, Chief Manager of the applicant, bank. The details of documents are as follows.:-
6. Opportunity of hearing has been fully given to both the parties, but despite several opportunities given to defendants, the defendants have not appeared to contest the case, hence, the ex parte arguments of learned counsel for applicant bank were heard. Perused the case record and considered.
Ld. counsel of applicant bank submitted that the defendants have taken the loans and utilized the same and also executed the various loan documents to secure the loans. Further, submitted that the claim of the bank has been proved by evidence. Ld. Counsel for the applicant bank has further submitted that the defendants have not deposited any amount, after filing of the OA.
It is further submitted by Ld. Counsel of applicant bank that there is no any stay granted by any Higher Court, in respect of the proceedings of the present OA and requested to issue recovery certificate, as claimed for, in OA.
7. It has been established that defendants are living and carrying on their business in the state of Bihar. Cause of action also arose in the State of Bihar. The said claim on the date of filing of application exceeded Rs. 10 lacs. The applicant bank is functioning within jurisdiction of this tribunal. Therefore, this Tribunal has territorial as well as pecuniary jurisdiction to adjudicate upon the present application.
8. On the issue of Limitation, to prove it, the applicant bank has submitted that the applicant bank has declared the account as NPA on 28.7.2016, whereas the present application has been filed on 10.7.2019. Even, it is counted for the purpose of Limitation, then it is established that the applicant bank has filed the case within the limitation period. As such, it is established that present application has been filed well within the period of limitation.
9. In the affidavit of Shri Binod Kumar Jha, Chief Manager of the applicant bank, has stated that he is well acquainted with the facts of the case and has on verification of record, sworn in the affidavit in support of contents of application and the documents as evidence and established on oath the pleadings and documents of the applicant bank as stated above.
The documents as stated above reveal that the defendants have applied for loans and the bank had sanctioned the loans and to secure the loans and for repayment of loan amount with interests etc., the defendants have executed various loan documents, which strength the case of the applicant bank.
The applicant bank has also furnished statement of account as above, which is not only admissible but shall be taken as correct statement of account, more so since the entries in the statement of account has not been challenged.
10. Since, the defendants were proceeded ex parte, all contentions raised and documents produced by plaintiff remained unrebutted and the tribunal may act upon the affidavit of the applicant as per law. Defendants have neither denied the utilization of funds advanced by applicant bank nor have pointed out any specific error and discrepancy in the Statement of Account, which is kept in due course of business, evidence on affidavit, which has supported the claim of the applicant bank, established to have fully correct and believable. Provisions contained in Section 4 of the Banker's Books Evidence Act, 1891 apply to certified copies of entries in banker's book furnished along with the application filed under section 19 of the Act. Hence, the entries in the Statement of Account are also proved.
11. On consideration of the arguments and on perusal of the application, documents and affidavit, it is proved that the applicant bank has granted the loan facilities, documents were executed by the defendants and facilities were availed by the defendants as stated in the application.
12. Now, whether interest has been charged as per agreement and as per R.B.I. Guidelines
13. The applicant bank has sought for recovery of a sum of Rs. 5,27,66,187/- with cost and further interest at the contractual rate from 2.7.2019 till realization.
As per the submission of the Ld. Counsel of applicant bank that the applicant bank has received Rs. 72,22,100/- from the defendants through SARFAESI Actions and after filing of the OA and after deducting this amount, the claim amount now remains (Rs. 5,27,66,187.00 -Rs. 72,22,100.00) = Rs. 4,55,44,087/- and bank is entitled for issuance on recovery certificate for this amount.
14. Learned Advocate appearing for applicant bank submits that the applicant bank has charged interest in terms of the agreements and that interest has been charged at such rates, and capitalized at such periodical rests as are permitted by and do not run counter to the directives of Reserve Bank of India.
15. On consideration of the arguments and on perusal of the pleadings, documents and affidavit, it is proved that the applicant has charged interest against defendants in terms of documents and as per directives of RBI, but keeping the facts and circumstances of the case in mind, the defendants deserve some leniency in the rate of interest.
16. None of the defendants appeared before the tribunal to contest the claim made by the applicant, therefore, it necessarily goes to establish that the claim made by the applicant bank is genuine and true. It is manifest that the defendants have not disputed the claim, therefore, the claim referred to the tribunal is recoverable till full and final realization of the claim.
17. In Indian Bank Vs. Blue Jaggers Estates Limited and others :  8 SCC 129, the Hon'ble Supreme Court of India has observed as under-
"The Court cannot lose sight of the fact that the bank is a trustee of public fund. It cannot compromise the public interest for benefiting private individuals. Those who take loan and avail financial facilities from the bank are duty bound to repay the amount strictly in accordance with the terms of the contract. Any lapse in such matters has to be viewed seriously and the bank is not only entitled but duty bound to recover the amount by adopting all legally permissible methods. Parliament enacted the act because it was found that legal mechanism available till then was wholly insufficient for recovery of the outstanding dues of the banks and Financial Institutions."
18. Facts of the case, in my view, are well proved by evidence of the applican
t bank. The applicant bank is entitled to receive from defendants, jointly and severally of Rs. 4,55,44,087/- alongwith pendente lite and future interest @10% p.a. simple from 2.7.2019 till realization. So the final order may be passed accordingly, to meet the ends of justice. ORDER In the result, the application of the applicant bank is, allowed ex parte and debt is determined with costs against the defendants and it is, hereby, ordered that the applicant bank is entitled to receive from defendants, jointly and severally, it's debts with interest, amounting to Rs. 4,55,44,087/- alongwith pendente lite and future interest @10% p.a. simple from 2.7.2019 till realization of the entire sum due and recoverable with costs. It is made clear that any amount deposited by the defendants, be deducted in the claim amount, if not deducted. Defendants are debarred from transferring, alienating encumbering or otherwise dealing with or disposing of the mortgaged or hypothecated or any other properties and assets without paying the aforesaid adjudicated dues to the applicant bank to secure the ends of justice. Let a certificate of recovery be drawn up forthwith and put up for signatures in terms of provisions contained in Section 19(22) of the Act to be issued, on the basis of the order of the Tribunal to the Recovery Officer. The Recovery Officer shall realize the amount as per the certificate in the manner and mode prescribed under the Act from the defendants, by sale of mortgaged/hypothecated assets as well as other personal movable/immovable assets of the defendants. Parties are directed to appear before the Recovery Officer, DRT, Patna on 08-2-2020. The order be communicated accordingly. Judgment signed, sealed, dated and pronounced in the open court on this 2nd Day of January, 2020. Dictated & Corrected by me.