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 20.3.2019, against the defendants to recover its debts from defendants of Rs. 44,78,346.46 as on 28.2.2019 along with pendente lite and future interest at the contractual rate from 1.3.2019 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 is a body corporate, constituted under the Banking Companies (Acquisition and Transfer of Undertakings) act 1970, having its Central Office at Union Bank Bhavan 239, Vidhan Bhawan Marg, Nariman Point, Mumbai-400021 and carrying on business through different branches including one at Main Branch, Abhay Bhawan, Fraser Road, District-Patna, Bihar.
The defendant no. 1, a partnership firm, its partners defendant no. 2 & 3, who is engaged in production of Vermin Compost unit for agriculture production and acting on the representation and believing the same to be true the applicant bank.
The defendant no. 1 represented through the defendant no. 2 & 3, felt necessity of fund and so approached the applicant bank for financial assistance for smoothly running of their business. Considering the loan application dated 17.12.2015, the applicant bank was pleased to sanction and advice to them on 19.12.2015 and after due consideration sanction the overall limit of Rs. 50 lacs vide sanction letter dated 24.3.2016 with terms and conditions.
As security in order to avail the overall limit of Rs. 50 lacs under the Union Progress Scheme, the various documents were executed by the defendants in favour of the applicant bank i.e. DP note, hypothecation agreement of goods and debts, letter of undertaking, letter of continuity, term loan agreement, letters of guarantee, deed of guarantee and PDR.
The sanctioned amounts were duly disbursed by the applicant bank and utilized by the defendants after executing all the security documents in favour of the applicant bank. An account in the name of defendants was also opened. All the transactions have been entered in the ledger duly maintained by the applicant bank in usual course of its business.
As security in order to secure the repayment of loan the defendants have hypothecated all the stocks etc. of the firm to the applicant bank with an undertaking to furnish stock statement to the applicant bank from time to time.
The defendant n. 2 for the purpose of securing repayment of the debit balance lying outstanding from time to time in the loan accounts, on 14.3.2016 visited the Registry Office, Patna with Branch Official with intention of mortgage and executed registered simple mortgage deed no. 3364 dated 14.3.2016 standing in the name of defendant no. 2 along with rent receipt, LPC, NEC has been deposited in the applicant bank by the defendant no. 2 duly confirmed that the property belonging to her is under absolute ownership and the same will remain as mortgaged till realization of the dues of the bank, the mortgage in respect of the property details given below:-
Simple mortgage of the immovable property created by defendant no. 2, piece and parcel of land measuring an area of area 1 acre equivalent to 100 decimal together with all trees and buildings, situated at Mouza-Ajawan, Village-Ajawan, Thana -Noubatpur, Thana no. 143, Tauzi no. 2604, District-Patna being a apart of Survey Plot no. 2791, khata no. 614, together with building and structure thereon within the jurisdiction of sub registry office Bikrampur and sadar registration office and district Patna. Boundary of Plot no. 2791, North-Nij Rasta, South-Nij Plot, East-Nij, West-Road.
After some time, the defendants as the borrowers of aforesaid credit/loan enjoyed and utilized the said credit facilities of the applicant bank as aforesaid but thereafter did not adhere to the terms and conditions of the said facilities. And despite repeated requests did not clear dues/installments within the time specified in the terms and conditions connected with the aforesaid credit facility and thus the aforesaid account became irregular and the account has been declared as NPA as on 31.10.2016.
As per the statement of account and applying interest up to 28.2.2019 the dues comes to the tune of Rs. 44,78,346.46 which the defendants are liable to repay with interest at the contractual rate with monthly rest from 1.3.2019 untill payment in full.
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, 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 4.6.2019 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 4.6.2019, 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 23.7.2019 in "Prabhat Khabar", 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 13.12.2019.
5. To prove its case, the applicant Bank has referred various documents before this Tribunal on 16.5.2019. The applicant bank has also given evidence on affidavit on 16.5.2019 by way of affidavit of Shri Amit Ranjan, 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 loan and utilized the same and also executed the various loan documents to secure the loan. Further, submitted that the claim of the bank has been proved by documentary 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 31.10.2016, whereas the present application has been filed on 20.3.2019. 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 from the date of declaring the account as NPA. As such, it is established that present application has been filed well within the period of limitation.
9. In the affidavit of Shri Amit Ranjan, 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 loan and the bank had sanctioned the loan and to secure the loan 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 un-rebutted 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 facility, documents were executed by the defendants and facility was 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. 44,78,346.46 with cost and further interest at the contractual rate from 1.3.2019 till realization.
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 R B I, 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 pennissible 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 applicant bank. The applicant bank is entitled to receive from defendants, jointly and severally of Rs. 44,78,346.46 alongwith pendente lite and future interest @10% p.a. simple from 1.3.2019 till realization. So the final order may be passed accordingly, to meet the ends of justice.
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. 44,78,346.46 alongwith pendente lite and future interest @10% p.a. simple from 1.3.2019 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 8-2-2020. 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.