w w w . L a w y e r S e r v i c e s . i n



Union Bank of India V/S Progressive Emulsion Bitumen Manufacturer (India) LLP and Others.


Company & Directors' Information:- S V CORPORATION LLP [Active] CIN = AAQ-7877

Company & Directors' Information:- BITUMEN CORPORATION INDIA PRIVATE LIMITED [Active] CIN = U23200MH1998PTC116492

Company & Directors' Information:- A P T AND CO LLP [] CIN = AAL-8025

Company & Directors' Information:- R D N A AND CO LLP [Active] CIN = AAM-4183

Company & Directors' Information:- C A P A (INDIA) LLP [] CIN = AAF-9325

Company & Directors' Information:- V R PROGRESSIVE PRIVATE LIMITED [Active] CIN = U20219UP2003PTC098135

Company & Directors' Information:- M D S & CO LLP [] CIN = AAF-2760

Company & Directors' Information:- A A A M & CO LLP [Active] CIN = AAT-1669

Company & Directors' Information:- J B PROGRESSIVE PRIVATE LIMITED [Active] CIN = U34300MP2005PTC017528

Company & Directors' Information:- R C A AND CO LLP [Active] CIN = AAU-3441

Company & Directors' Information:- D B Y & CO LLP [] CIN = AAF-3364

Company & Directors' Information:- PROGRESSIVE EMULSION BITUMEN MANUFACTURER (INDIA) PRIVATE LIMITED [Converted to LLP] CIN = U23101BR2011PTC017307

Company & Directors' Information:- C A N V A S & CO LLP [] CIN = AAG-1661

Company & Directors' Information:- E I U INDIA LLP [] CIN = AAG-0189

Company & Directors' Information:- S S S R & COMPANY LLP [Active] CIN = AAS-6238

Company & Directors' Information:- BITUMEN (INDIA) PVT LTD [Strike Off] CIN = U52342WB1973PTC028667

Company & Directors' Information:- M B S P & CO LLP [] CIN = AAI-4025

Company & Directors' Information:- Y N G AND CO LLP [] CIN = AAJ-6096

Company & Directors' Information:- ECOIRIA LLP [Active] CIN = AAO-2501

Company & Directors' Information:- V S K A & COMPANY LLP [Active] CIN = AAU-5542

Company & Directors' Information:- F A M S & CO LLP [Active] CIN = AAU-9603

Company & Directors' Information:- N K R G AND CO LLP [Active] CIN = AAX-4256

Company & Directors' Information:- H N C P & CO LLP [Active] CIN = AAT-5981

Company & Directors' Information:- V G R A N D & CO LLP [Under Process Of Strike Off] CIN = AAO-5777

Company & Directors' Information:- R S A C & CO LLP [Active] CIN = AAX-1702

Company & Directors' Information:- A B D AND CO LLP [] CIN = AAG-4228

Company & Directors' Information:- D G K T & CO LLP [Active] CIN = AAY-0763

Company & Directors' Information:- R H D B & CO LLP [] CIN = AAF-9564

Company & Directors' Information:- N J S R & CO LLP [Active] CIN = AAS-6904

Company & Directors' Information:- M S T S AND CO LLP [] CIN = AAJ-9789

Company & Directors' Information:- A G N & CO LLP [Active] CIN = AAT-3343

Company & Directors' Information:- A H S G & CO LLP [Active] CIN = AAU-8429

Company & Directors' Information:- J K J S & CO. LLP [] CIN = AAI-5880

Company & Directors' Information:- A B A M & CO. LLP [] CIN = AAF-2113

Company & Directors' Information:- M N S H & CO LLP [] CIN = AAG-4390

Company & Directors' Information:- T & R INDIA LLP [] CIN = AAH-4079

Company & Directors' Information:- S G S R & CO LLP [] CIN = AAH-3391

Company & Directors' Information:- D M M & COMPANY LLP [] CIN = AAJ-7431

Company & Directors' Information:- Y S K AND CO LLP [Active] CIN = AAN-5713

Company & Directors' Information:- J K K & COMPANY LLP [Active] CIN = AAX-1522

Company & Directors' Information:- K L S AND CO LLP [] CIN = AAJ-7210

Company & Directors' Information:- A Y K J & CO LLP [Active] CIN = AAS-7373

Company & Directors' Information:- K N A AND CO LLP [Active] CIN = AAU-0083

Company & Directors' Information:- H S K & CO LLP [Active] CIN = AAT-9072

Company & Directors' Information:- S D U AND CO LLP [Active] CIN = AAM-9609

Company & Directors' Information:- PROGRESSIVE CORPN PVT LTD [Strike Off] CIN = U80902MH1932PTC001861

Company & Directors' Information:- A P A R & CO LLP [Active] CIN = AAS-8336

Company & Directors' Information:- A A M K & CO LLP [Active] CIN = AAT-0385

Company & Directors' Information:- V U D & CO LLP [Active] CIN = AAT-1391

Company & Directors' Information:- A K M W AND CO LLP [Active] CIN = AAF-4352

Company & Directors' Information:- M B D & CO LLP [] CIN = AAG-6725

Company & Directors' Information:- S R J N & CO LLP [] CIN = AAH-0969

Company & Directors' Information:- A T M S & CO LLP [] CIN = AAH-2210

Company & Directors' Information:- J J J AND COMPANY LLP [] CIN = AAH-6513

Company & Directors' Information:- B G K & CO LLP [] CIN = AAI-2849

Company & Directors' Information:- M N K D & CO LLP [] CIN = AAI-9526

Company & Directors' Information:- D S R V AND CO LLP [] CIN = AAJ-5358

Company & Directors' Information:- K D M AND CO LLP [] CIN = AAJ-9144

Company & Directors' Information:- S P K G & CO LLP [] CIN = AAK-1705

Company & Directors' Information:- V D S R & CO LLP [] CIN = AAK-2237

Company & Directors' Information:- M A S P N & CO LLP [] CIN = AAK-4575

Company & Directors' Information:- N P K & COMPANY LLP [] CIN = AAL-7453

Company & Directors' Information:- J B S K & CO LLP [Active] CIN = AAN-2033

Company & Directors' Information:- D R P B AND CO LLP [Active] CIN = AAN-7871

Company & Directors' Information:- PALVIT DEVELOPERS LLP [Active] CIN = AAO-3310

Company & Directors' Information:- N G V R AND COMPANY LLP [Active] CIN = AAO-4093

Company & Directors' Information:- J A S N & CO LLP [Active] CIN = AAP-0336

Company & Directors' Information:- R S A G AND CO LLP [Active] CIN = AAP-1444

Company & Directors' Information:- P R P A & COMPANY LLP [Active] CIN = AAT-7868

Company & Directors' Information:- S M B C & COMPANY LLP [Active] CIN = AAU-0557

Company & Directors' Information:- L M R K & CO LLP [Active] CIN = AAV-4030

Company & Directors' Information:- S L B M AND CO LLP [Active] CIN = AAV-4289

Company & Directors' Information:- V K & COMPANY LLP [Active] CIN = AAW-7564

Company & Directors' Information:- D A M & CO LLP [Active] CIN = AAW-8134

Company & Directors' Information:- N A D & CO LLP [Active] CIN = AAW-9504

Company & Directors' Information:- A B R & CO LLP [Active] CIN = AAX-0331

Company & Directors' Information:- V H P A & CO LLP [Active] CIN = AAY-1712

Company & Directors' Information:- N C A P & COMPANY LLP [Active] CIN = AAY-2026

Company & Directors' Information:- B M P S & CO LLP [Active] CIN = AAW-9364

Company & Directors' Information:- J K J & CO LLP [] CIN = AAE-5439

Company & Directors' Information:- S G C O & CO LLP [] CIN = AAI-0379

Company & Directors' Information:- G P S & CO LLP [] CIN = AAI-0872

Company & Directors' Information:- K K A B & CO LLP [] CIN = AAJ-3296

Company & Directors' Information:- C S D AND CO LLP [] CIN = AAJ-4629

Company & Directors' Information:- M P G V & CO LLP [] CIN = AAJ-5351

Company & Directors' Information:- A T S G & CO LLP [] CIN = AAK-3751

Company & Directors' Information:- G G S H & CO. LLP [] CIN = AAL-8083

Company & Directors' Information:- J N S V & CO LLP [Active] CIN = AAM-6900

Company & Directors' Information:- S P K T & CO LLP [Active] CIN = AAN-7572

Company & Directors' Information:- S H A & CO LLP [Active] CIN = AAO-4028

Company & Directors' Information:- R S S P K & CO LLP [Under Process Of Strike Off] CIN = AAR-2109

Company & Directors' Information:- A A S S & COMPANY LLP [Active] CIN = AAT-4426

Company & Directors' Information:- R R S J & CO LLP [Active] CIN = AAV-8062

Company & Directors' Information:- A R B R & CO LLP [Active] CIN = AAX-6334

Company & Directors' Information:- S K B & COMPANY LLP [Active] CIN = AAT-5051

Company & Directors' Information:- P R S S & CO LLP [Active] CIN = AAW-2115

Company & Directors' Information:- G A S A & CO LLP [Active] CIN = AAU-4365

Company & Directors' Information:- S P A S AND CO LLP [Active] CIN = AAS-9005

Company & Directors' Information:- S K R AND COMPANY LLP [Active] CIN = AAB-9330

Company & Directors' Information:- C S AND CO LLP [] CIN = AAL-5204

Company & Directors' Information:- M M G S AND CO LLP [Active] CIN = AAW-8857

Company & Directors' Information:- A J M S & CO LLP [Active] CIN = AAS-6794

Company & Directors' Information:- S B S S & CO LLP [] CIN = AAG-2178

Company & Directors' Information:- P Y S & CO LLP [] CIN = AAG-9715

Company & Directors' Information:- P U M & CO LLP [Under Process Of Strike Off] CIN = AAP-1869

Company & Directors' Information:- P V R A & CO LLP [Active] CIN = AAP-2457

Company & Directors' Information:- K S N C & CO LLP [Active] CIN = AAQ-8095

Company & Directors' Information:- A R N P AND CO LLP [Active] CIN = AAS-7063

Company & Directors' Information:- N M G K & COMPANY LLP [Active] CIN = AAU-2181

Company & Directors' Information:- S H A P AND COMPANY LLP [Active] CIN = AAU-5309

Company & Directors' Information:- B K Y & CO LLP [Active] CIN = AAU-7172

Company & Directors' Information:- B R D P & CO LLP [Active] CIN = AAV-4924

Company & Directors' Information:- S R B A & CO LLP [] CIN = AAF-9001

Company & Directors' Information:- C S M & CO LLP [Active] CIN = AAW-1462

Company & Directors' Information:- A C C A & CO LLP [] CIN = AAF-2112

Company & Directors' Information:- PROGRESSIVE BANK LIMITED [Dissolved] CIN = U65191KL1901PLC000928

Company & Directors' Information:- PROGRESSIVE BANK LIMITED [Not available for efiling] CIN = U65191KL1930PLC000864

Company & Directors' Information:- K A M AND CO LLP [Active] CIN = AAU-7380

Company & Directors' Information:- S C M K & CO LLP [Active] CIN = AAT-2422

Company & Directors' Information:- UNION BANK OF INDIA LIMITED [Active] CIN = U99999MH1919PTC000615

    OA Case No. 638 of 2017

    Decided On, 02 January 2020

    At, Debts Recovery Tribunal Patna

    By, THE HONORABLE JUSTICE: R.M. KUSHAWAHA
    By, (PRESIDING OFFICER)

    For Petitioner: A.K. Sharan, Advocate And For Respondents: Nishant Kumar, Advocate



Judgment Text

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 27.10.2017, against the defendants to recover lis debts from defendants of Rs. 1,93,47,611.09/- upto 30.09.2017 alongwith pendente lite and future interest at the contractual rate with monthly rest from 01.10.2017 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 corporate, constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act 1970, having its Central Office at "239" Vidhan Bhawan Marg Nariman Point, Mumbai - 400 021 inter alia, carrying on business through different branches including one at Patna Main Branch Dist.- Patna, commonly known as 'Union Bank of India'. Patna Main Branch' Abhay Bhawan, Praser Road, Patna
The defendant No. 1, is a Limited Liability Partnerships which was converted from M/s. Progressive Emulsion Bitumen Manufacturer (India) Pvt. Ltd. in the Limited Liability Partnerships, registered as per the provisions of the Section 58(1) of the Limited Liability Partnerships Act, 2008 on 05.07.2013, duly represented through its Designated Partners/Partners. The Defendant No. 2, 3 & 4, approached the applicant bank for sanction of some credit facilities for running their business manufacturing of Coke. Refined Petroleum Products Bitumen Emulsion, etc.

On the request of the defendant no. 1, through its partners through loan application dated 03.052014, the applicant Bank on 22.05.2014, sanctioned in favor of the defendant no. 1, under the security of primary and collateral coverage of overall limit of Rs. 100.00 lacs [i.e. Cash Credit (Hypothecation) limit of Rs. 75.00 lacs + Term loan limit of Rs. 25.00 lacs) on 22.05.2014 for smooth running of business, vide Sanction Letter dated 22.05.2014 with terms and conditions stipulated therein, which were duly acknowledged by the Borrowers/Guarantors.

The defendants, executed the various loan documents in favour of the bank i.e. hypothecation agreements, hypothecation of goods & debts, general term loan agreement, letter of undertaking and letter of guarantee.

The credit facilities were granted by the applicant bunk to the defendant no. 1, was repayable on demand with interest at the rate of minimum of @ 13.75% (Base Rate + 3.50%) p.a. with monthly rest on Cash Credit limit and @ 13.75% (Base rate + 3.50%) p.a, with monthly rest on Term Loan limits.

As security, the Defendant No. 1 represented through its partner, had created an equitable mortgage of its immovable property as primary/collateral security in favour of the applicant Bank by deposit of Registered Sale Deed No. 14493 dated 13.10.2011, Land Possession certificate dated 30.03.2013, Land Conversion Certificate dated 12.12.2011. The creation of equitable mortgage was farther recorded in Memorandum of Deposit of Title Deeds AD-13 dated 30.05.2014.

The charge of security interest (Asset ID and Security Interest ID) over the mortgaged properties was also created with central registry under section 20 of the Security Interest Act over the property with central registry on 28.06.2014.

Further on the request of the Defendant No. 1, represented through its Designated Partners, had again approached to the applicant Bank with a request for Enhancement of existing Credit facilities for smooth running of their aforesaid business, vide its loan application of additional Credit facilities sanctioned earlier on 22.05.2014. After due consideration, the applicant Bank was pleased to enhanced the Credit facilities from Rs. 100.00 lacs to Rs. 150.00 lacs [i.e. Cash Credit (Stocks) limit of Rs. 125.00 lacs + Term loan limit of Rs. 25.00 lacs vide their Sanction Letter dated 12.10.2014. The terms and conditions of enhancement/sanction of Credit facilities was further confirmed by the defendants.

The defendants, executed the various loan documents in favour of the bank, i.e., supplemental agreement, common agreement, agreement of guarantee.

The enhanced credit facilities were granted by the applicant bank to the defendant no. 1, was repayable on demand with interest at the rate of minimum @ 13.25% p.a. with monthly rests on Cash Credit limit and interest was agreed @ 13.50% p.a. with monthly rest on Term loan limit.

The applicant bank in its usual and ordinary course of business maintained two open. Mutual, Current and continuous accounts. All the transactions as operated by defendant no. 1 have been entered in the ledger of the applicant bank.

As security in order to avail the enhanced overall loan limit first charge on the entire fixed assets of the company to the applicant bank with an undertaking to furnish return and statement of stock from time to time to the applicant Bank. The defendant no. 1 & 5, respectively created equitable mortgage by deposit of Registered Sale Deed No. 13713 dated 12.09.2014 and Regd. Sale Deed No. 01399 dated 01.02.2008(registered at Kolkata) by way of collateral security in the presence of the branch Manager of the Patna Main Branch of the applicant Bank which was later entered in the Memorandum of Entry (Extension of Mortgage in favour of the Bank) maintained in the bank on 12.10.2014. The same was also confirmed through creation of charge at registrar of companies in form no. 8 over the properties of the defendant no. 1 & 5 on 28.03.2016.

After some time, the defendant no. 1 as the borrower of credit enjoyed and utilized the credit facilities of the applicant bank as but thereafter did not adhere to the terms and conditions of the facilities. And despite repeated requests did not clear dues with the credit facilities and thus the account became irregular The account has been declared as NPA on 31-05.2017. The applicant Bank has issued a Demand Notice U/s 13(2) dated 25-07-2017 under SARFAESI Act calling upon the defendants to discharge the Bank's dues as mentioned in the said notice in lull within 60 days as per the provisions of the aforesaid Act.

The dues against the defendants in loan account payable to the bank is Rs. 1,93,46,611.09, including interest calculating up to 30.09.2017 plus farther interest from 01.10.2017 will be payable till realization.

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 inspite 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 & Rules of the DRT [Procedure] Rules, 1993, copies of application & paper book were sent by this Tribunal to the defendants by registered/speed post on 11.11.2017 and summon/notices issued requiring the defendants to show-cause within 30 days of the service of summon/notices as to why relief prayed for, should not be granted.

In response, the defendant no. 5 has appeared and filed his vakalatnama, but the defendant no. 1 to 4 have not appeared despite notice, therefore, the notice was published in newspaper against defendant no. 1 to 4 on 16.5.2018 in Telegraph, newspaper.

In response, the defendant no. 3 has appeared and filed his Vakalatnama on 13-7.2018.

However, the sufficient time has been given to the defendants no. 1, 2 & 4 to defend their case, but they failed to appear and to file WS, hence opportunity to file WS by the defendants was closed and matter was set ex parte against the defendants no. 1, 2 & 4 on 28.8.2018.

The defendant no. 3 & 5 filed Written Statement cum reply, slated that they denying and disputes their liability made in the Original application, They said they got the knowledge of the case through paper publication dated 16-05.2018 (Telegraph)- They submitted that prior to filing of the present Original application certain developments took place, which led to settlement between the applicant and the Defendants.

They further submitted that prior to filing of the original application against the Defendants; the said LLP was taken over by the Progressive Industries Pvt. Ltd. on 15.03.2016, after completing all the legal formalities. The said company entered into on agreement with the Indian Oil Corporation Ld. for manufacturing, processing and packaging of Bitumen and Bitumen Emulsion with Indian Oil Corporation.

Further the supplementary written statement was filed on 09.08.2018 on behalf of the defendant no. 3 & 5 in which they again submitted that the OA is suffers from the statutory defect of limitation, which strikes to the roots of the present case. The acknowledgement of last debt, was done on 20.10.2014 the applicant ought to had filed the present list by date 19.10.2017, but the present case was filed on 24.10.2017. Not only that, the proper observation of the annexure-43 of the OA, at page 250-254, it would transpire that the same has been tampered and manipulated by the applicant bank, in order to save the date of limitation and in order to illegally manipulated the agreed manifestation of the said documents for own wrongful gains of the applicant bank. The acknowledgement letter of the acquisition of the defendant no-1 LLP was given by the applicant bank to the defendants on date 15.03.2016 that the applicant had the knowledge of the non existence of the said LLP and of the existence of the present company as on date of filing of the present list and ever prior to that, but neither the claim of the applicant has been made against the company, nor even the company has been impleaded as defendant, despite being necessary party to the present list. Hence the present OA is time barred as against the company. The defendant no. 1 acquired by the company as on date 01.04.2016 and since then the legal status of the defendant no. 1 and also of all the defendants came to The defunct, as has also been displaying on the web portal of ministry of corporate affairs, government of India- The liabilities of the defendant no. 1 LLP were transferred to the company, and the same was even accepted by the bank.

The defendants no. 3 & 5 are the Directors of the M/s. Progressive Industries Pvt. Ltd. a company duly incorporated under the companies act 2013, having CIN No. U11200BR2016PTC025640, dated 05.01-2016 and having its registered office at house no. MIG 220, Lohianagar, Kankarbagh. Patna. The sole proprietor of the Progressive Drums enterprises' Mr. Mritunjay Kumar (Defendant No. 5) sold out all business stakes alongwith all rights and liabilities of the Progressive Drums Enterprises to the Defendant Company Progressive Industries Pvt. Ltd. by agreement dated 01.04.2016 and by virtue of such acquisition of the Progressive Drums Enterprises, the Defendant has acquired all of the assets of the Progressive Drums Enterprises and the Company has also become entitled to sue and the be sued, to participate, contest, in all the matters related to the business affairs of the Progressive Drums Enterprises, Progressive Emulsion Bitumen Manufacturer (India)LLP was incorporated on 05.07.2013, bearing registration number AAB-6322 and having three Director partners namely, 1, Sachin Yadav, 2. Mrs. Sarika, 3. Mrs. Nitu Bagaria, Progressive Drums Enterprises was established subsequently by the Defendant Mr. Mritunjay Kumar in year 2015 as a proprietorship firm, having its office at house No. MIG 220, Lohiangan Kankarbagh. Patna. On 05.01.2016, the present company Progressive Industries Pvt. Ltd. was incorporated under the companies Act 2013, with two directors Mr. Mritunjay Kumar and Mrs. Sarika (the answering Defendants), having CIN No. U11200BR2016PTC025640, dated 05.01.2O16, and having its registered office at MIG 220, Malahi Pakdi Chowk, Lohia Nagar, Kankarbagh, Patna -800 020. The sole proprietor of the progressive drums enterprises Mr. Mritunjay Kumar (the defendant No. 5) sold the Progressive Drums enterprises to the company progressive Industries Pvt. Ltd. by agreement dated 01.042016, regarding acquisition of the progressive drums enterprises by the Progressive Industries Pvt. Ltd. a letter dated 05.03.2016, was conveyed by the answering defendant to the appellant Bank. For transportation purpose, a proprietorship firm, progressive carriers, was also established by Mr. Mritunjay Kumar (the defendant) on 06.10.2015- After coming into existence, the company of the defendant has been enjoying all the assets of and dealing with all the business and existing liabilities of the previous two business entities namely Progressive Drums Enterprises and of progressive emulsions bitumen manufacturer (India) Ltd. The Bank accounts of following descriptions and being maintained by the company of the defendant with applicant bank at main branch. Fitter Road, Patna.



For smooth running of business, the defendant was availing one case credit account no. 300205080000109 and two advance term loans, i.e. TL-I of amount Rs. 40 lacs under the loan account no. 300206170000034 and TL2 of amount Rs-10 lacs. Under the loan account no. 30020617000002416, from the applicant Bank. The defendant had been very sincerely and very diligently maintaining all of his accounts with the applicant bank and had been paying all the installments of term loan in time. Even one of the term loan of Rs. 25 lacs. existing in the account of progressive emulsion bitumen manufacturer (India) LLP was fully and finally repaid by the defendant company within time. It would transpire that the applicant bank committed sheer illegality upon the defendant company, setting aside the prevailing norms of fair banking settled by RBI, and in direct conflict with the law of the land. leading to deficit account and ultimately to declaration of the account of the Defendant company to be an NPA.

On contrary the Ld. Counsel for the applicant bank had filed its reply to the written statement and supplementary written statement on 21.12.2018 denied all the allegations leveled against the Bank and its officials. The applicant had objected the very filing of the Written statement and supplementary written statement in view of the provisions of the section 19(5) of the said RDB Act, 1993, which says that statement/show cause can be filed within 30 days from the service of notice. In exceptional case, the Hon'ble Presiding Office can grant a time of 15 days to file a written statement/show cause, with reason. Further he relying on the judgment passed by the Hon'ble Madhya Pradesh High Court, duly confirmed by the Hon'ble Supreme Court in case of M/s. Crest and East Pvt. Ltd. Vs Punjab National Bank, In both the written statement and supplementary written statement, the defendants borrowers duly accepted the sanctioned/disbursement and utilization of loan amount. They have not raised any objection as raised in the said written statement- In both the written statement and supplementary written statement defendants borrower tried to mislead this Court that his said loan account and another loan a/c had been taken over by their another company namely, M/s. Progressive Industries Pvt. Ltd. The same was never approved by the applicant even after its recommendation by the then Chief Manager, as it was without any consent of the Bank. Both of them had been filed to delay the disposal of the present original application- The defendants are admitting the entire claim of the applicant The defendants cannot denied the execution of the loan agreements their liability, creation of mortgage and utilisation of the entire loan amount. Further stated that mere intimation of take over the defendant no-1, without consent of the Bank will not exonerate the defendants to clear their liability. The Bank and its officials had never accepted their said proposal. It is sole responsibility of the Borrower and its guarantors to clear their debt by repaying the entire dues of the Bank. It is incorrect that the bank had agreed for the opening of the account Opening of the current account does not mean it is a replacement of the old account The other allegations are strictly denied, not admitted. The amount if any had been debited from the current account after the request made by the defendant The amount, if any has been transferred only after request of the account holder. There is no settled terms in between the bank and the answering defendants. The applicant bank and its officials have no ill-will against any of the borrower, specially the present one. Since, the loan account became non-performing assets since, long, so as per the provisions of the law, the present application is made for realization of the dues, before the Hon'ble Tribunal. The preliminary objections is not maintainable in the eye of law, as the entire process has been done by the Defendants without any consent of the bank. The bank cannot sue to a non-identity other than the Borrowers and Guarantors to the said loan account In absence of any valid agreement the bank cannot allow the other company to take over the liability. The bank had not consented for the said arrangements. Mere recommendation of any proposal to the higher authorities, does not mean that their said action was permitted, otherwise the bank must have entered in to agreement with the new company,

Further, in reply to the supplementary affidavit, the applicant denied all the allegations leveled against the bank by the defendants. It is submitted that the bank cannot made party to a non-identity other than borrower. So the plea taken in this supplementary affidavit is not acceptable to the applicant Since there is no agreement in between the parties, under what provision of law the bank can make party to the company or other person The entire transformation has been done without the consent of the bank- Which is highly objectionable. So whoever given their personal guarantee and executed the guarantee agreement are jointly and severally liable for the repayment of the loan, owe from the applicant bank. The question of limitation does not arise were the loan accounts were in operation since 2017 and the accounts became NPA on 31.03.2017, The question of limitation also does not arise were the immovable properties were mortgaged to cover the loan. Moreover, in MA/Written Statement/Supplementary Affidavit the entire liability of the Bank has been duty admitted by the defendants, so the plea of barred by Umhalion will not going to help the defendants in any manner. In is also incorrect statement to say that the limitation is covered through the DBC dated 28.10.2014, whereas the entire loan account was in operation till the 2017, so the question of limitation does not arise. The statement of account itself proved that the loan account was in operation by the Borrowers 2017, which is duly annexed with the present original application. The demand notice to any other company who have no direct agreement with the Bank, is not legally maintainable. It is incorrect statement that the bank had accepted the said transformation of the company. The defendants make out their own case which is legally not maintainable either on facts or on law. The amendment of para 22 was made and the amount [Rs. 50.00 lacs] and date [07.02.2017] was on properly corrected through proper amendment application dated 12.04.2018 and order dated 27.04.2018 already on record. The assessment and observations of proposal will not create any legal right, it's mere recommendation to be consider by the competent authority. The receiving of any letter by bank in usual course, does not mean that they have acknowledged the act of the borrower or consented to act as per their convenience- The enhancement and transfer of fund is made by the Bank, only after request of the borrower. If they have any grievance of any entry or transfer of year 2016, why they keep mum at that point of time. The same plea cannot be taken at this belated stage. The answering defendants are educated person, how they will allow to transfer the fund to any other account, that's too without any consent. The borrower is not denying the liability that they have not utilized the said OD loan amount. The bank is public sector bank, the official cannot hide anything from the borrower, whatever transaction was made, that was made after request of the borrower. Now when the loan account is bad, they introduce such plea, just to prove their innocence. The same cannot be believe at this belated stage. The plea of coercion is not acceptable to the applicant- Further para wise reply was also made in the reply of the applicant bank.

Further the second supplementary affidavit was filed on 24.09.2018 by the defendant no. 3 & 5 on direction of the Tribunal dated 31.08.2018 to show whether any consent has been made by the Bank to transform the LLP in to Pvt. Ltd. Company and further for want of the implement of party to the Progressive Industries Pvt. Ltd. In the said affidavit some letter, notice and search report of the MCA is annexed with a prayer to made the party to the Company as the LLP was already acquired by the Progressive Industries Pvt. Ltd.

Further, ld. Counsel of the applicant bank had argued that the said affidavit does not show that any consent has been given by the applicant bank for change of legal entity of the LLP into the Pvt. Ltd. Company further, the implement of the party is not maintainable, as there is no direct or indirect agreement with the said company with the applicant bank. He farther argued that the said pleas had already been replied in the reply to the written statement and supplementary affidavit

Arguments of ld. Counsels of the applicant bank and ld. Counsel of defendants no. 3, 5 & 6 were heard and record perused and considered.

5. To prove its case, the applicant Bank has referred various documents before this Tribunal on 24-10-2017. The applicant Bank has also given evidence on affidavit on 24.10.2017 by way of affidavit of Shri Manoj Kumar, Chief Manager of the applicant bank. The details of documents are as follows,:-




6. It is submitted by ld. Counsel of applicant bank that the defendants no. 3, 5 & 6 have admitted the loan facilities, granted to them and there is no any specific denial of execution of loan documents by the defendants. It is further submitted that there is no any stay granted by the Hon'ble Higher Court in the matter.

It is further submitted that the applicant bank has filed the Original Application, for recovery of due amount, after deducting all the amounts, deposited by the defendants and by calculating the interest charged, as agreed by the defendants. It is further submitted that the defendants have not deposited any amount, after filing of the OA.

It is further submitted that the Ld. Counsel of the defendants no. 3 & 5 the Ld. Counsel of applicant Bank submitted that the defendants have taken 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 documentary evidence. Ld. Counsel for the applicant Bank has further submitted that no Written Statement was filed by the Defendant No. 3 & 5 within 30/45 Days, later any WS/Show cause/IA filed by the Defendants, are not maintainable, in view of the decision of the Hon'ble High Court Madhya Pradesh, M/s. Crest Steel And Power Pvt. Ltd. Vs. Punjab National Bank, confirmed by the Hon'ble Supreme Court (Section 19(5) of the RDB Act). Applicant all ready replied all the petitions/MA/LA.

It is further submitted that the defendants no. 3 & 5 have undertaken before the Hon'ble Tribunal that they will make an undertaking in which the said Pvt. Ltd. company will take entire liability of the present Defendants and apart from the others, the certificate will be also issued against the said Company. Now trying to mislead this Hon'ble Tribunal, they failed to established, how a third party stranger can became a defendant in the present original application. The intention of the defendants are not good, they trying to escape from the liability after making the new company as defendant, who is non-identity to the Bank Court.

It is further submitted that no prior consent has been ever taken from the Bank, before any acquisition of the Company, therefore the defendants who have executed the loan documents cannot be exonerated from their liability. The Guarantors are also equally liable with the Borrower, as their liability is co-extensive with Borrowers.

It is farther submitted that since the new company have no direct relation with the Bank, so the question of demand notice or any notice to it does not arise. The judgement mentioned in the notes is not going to favour to the Defendants. The defendants agreed during the course of hearing that they will file an application for addition of the defendant to their third party stranger Company, which is not acceptable to the bank, A person cannot be made party, if he have no any direct or indirect link with the loan account with the Bank. The company have no direct link with the Bank, so the Bank have not made party to the said Company- The acquisition of the company without any consent of the Bank is illegal, the defendants cannot be exonerated from their liability even after NPA of the loan account or acquisition of the LLP by the Company,

It is further submitted that the averments in said Original Application at Page No. 27 at para 22 in advertently, in place of Rs. 50.00 lacs" the amount Rs. 65.00 lacs was typed and in place of on "07.02.2017" inadvertently on 31.01.2017 has been typed. It is typographical mistake in the plaint The same is amended 'corrected in the application after due permission of the Court, vide Order dt. 27.04.2018. The application is already on record with 1A, which was considered before passing of the said Order.

It is further submitted that the limit of OD has been made after due demand made by the Defendants. The defendants utilized the same and thereafter they made objection, which is after thought The loan taken by the defendants and its utilization is contractual matters- The defendants are under contractual obligations to repay the same. The security kept by the defendants are also as per their wish.

It is further submitted that the defendants are in view that the claim is time barred, whereas, they are in totally dark, that from which date the limitation of claim will starts. The loan was running till 2017, the date of NPA is 31.05.2017. The EQM was created by them at the time of sanction of loan in the year October 2014 The account was in operation till 2017. The demand of loan was made from the date i.e., 25.07.2017, therefore the date of limitation will run from this date. Moreover, the question of limitation also not arise, because even after filing of the present application they, admitted their utilisation of the loan taken by the Defendants in their each and every petition/MVIA. After Tiling of this case they deposited more than Rs. 24.17 lakhs (approx) in piece meal. According to law, once they admitted their liability the question of limitation does not arise. (Section 58 of Indian Evidence Act). The acquisition of the LLP by the Pvt. Ltd- Company before the NPA and that too without any previous permission cannot fasten any bank or financial institution to institute any claim before any Court of law, which owe money from bank and under contractual obligation.

It is further submitted that the question or liability of defendants partners of LLP are jointly and severally as they have executed their personal guarantee also- The prayer made in the last para about the exemption from the liability is without any basis. The ruling cited by the defendant is not applicable in the present case. The CPC does not applied in the matte relates to RDB Act. The liability of the Guarantor is very well described under section 128 of Contract Act.

It is further submitted that the In view of the facts duly emerged in the Original Application, the documents duly annexed and marked exhibited the present written notes of argument be accepted and after considering the same, reject the plea taken by the defendants and issued a Certificate of Recovery, for realization of the huge public money owe by the defendants.

It is requested that the recovery certificate may be issued for the claim amount, as made in On as there is no any specific denial by the defendants.

7. It is submitted by ld. counsel of the defendants no. 3, 5 & 6, that the defendants have taken loan facility from the applicant bank and utilized the same and farther the defendants have executed various loan documents, to secure the loan facility.

It is further submitted that the original application is not maintainable either on facts or on law. The OA is still both and untenable in the eyes of law, for want of implement of necessary party, i.e., the Progressive Industries Pvt. Ltd. The company stepped in to the shoes of the borrower LLP by acquiring all the assets and liabilities of the LLP and the said acquisition was well communicated to the bank. It is submitted that in Mumbai International Airport (p) Ltd. Vs. Regency Convention Centre and Hotels (P) Ltd. (2010) 7 Sec. 417, and in Razia Begum vs. Sahebzadi Anwar Begum & Others (: 1958 AIR 886 : 1959 SCR 1111). The Hon'ble supreme Court considered the scope of Order 1 rule 10(2) CPC and observed:" The general rule in regard to impleadment of parties is that the plaintiff a suit, being do-minus litis, may choose the persons against whom he wishes to litigate and cannot be compelled to sue a person against whom he does not seek any relief Consequently a person who is not a party has no right to be impleaded against the wishes to the provisions of Order 1 Rule 10(2) of the CPC, which provides for impleadment of proper or necessary parties. The Apex Court further observed that the said provision makes its clear that a court may, at any stage of the proceedings (including suits for specific performance), either upon or even without any application, and on such terms as may appear to it be just, direct that any of the following person may be added as party, any person who ought to have been joined as plaintiff for defendants, but not added or, person whose presence before the court may be necessary in order to enable the court to effectively and completely adjudicate upon and settle the questions involved in the suit. In the said judgment of the Hon'ble Supreme Court ascertained that A "necessary party" is a person who ought to have been joined as a part)' and in whose absence no effective decree could be passed at all by the court. If a necessary party is not impleaded, the suit is not found to be a proper or necessary party, the court has no jurisdiction to implead him, against the wishes of the plaintiff. The discretion under the sub-rule can be exercised either suo motu or on the an application of a person who is not a party to the suit In exercising its judicial discretion under Order 1 Rule 10(2) of the Code, the court will of course act according to reason and fair play and not according to whims and caprice." The said LLP was a dead entity, and hence no recovery could have boon claimed as against the dead entity. The division bench judgment of Hon'ble Madras High Court has been elaborated the manner and mode of notice when the actual borrower dies, in sheeha Philaminal Merlin Vs. The Repatriates Co-op Finance & Development Bank Ltd. Anr. : (2010) 5 CTC 449(Madras). The partnership firm is not a legal entitle like a company, it is a group of individual partners. Partnership Finn name is only a compendious name given to the partnership and the partners are real owners of assets and partnership firm is not a distinct legal entity, as held by the Hon'ble Supreme Court in comptroller & Auditor General Vs. Kamlesh Vadilal Mehta, : {2003} 2 SCC 349 N. Khadervali Saheb V.N. Gudu Saheb : (2003) 3 SCC 229, Malabar Fisheries Co. V. I.T. Commissioner, Kerala : AIR 1980 SC 176. But, LLP per se is a body corporate formed and incorporated under this Act and legal entity separate from that of its partners, as defined under section 3 of LLP Act, So in view of the said submission the Progressive Industries Pvt., Ltd. may also be added as defendant in the OA, who had taken entire asset and liability of the LLP.

It is further submitted that the applicant bank has charged the rate of interest on very higher side, which is against the RBI norms and also against the directions given in Ravindra cause, by the Hon'ble Supreme Court of India and further requested to waive all the interest etc. charged since beginning.

8. 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. 10.00 lacs. The applicant Bank is functioning within the jurisdiction of this tribunal. Therefore, this Tribunal has territorial as well as pecuniary jurisdiction to adjudicate upon the present application.

9. On the issue of Limitation, to prove it, the applicant Bank has submitted that the applicant bank has declared the account as NPA on 31.05.2017, whereas the present application has been filed on 27.10.2019. 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.

10. In the affidavit of Shri Manoj Kumar, Chief Manager of the applicant Bank, has stated that he 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 state above.

11. On perusal of the above documents, it is clear that the applicant bank has granted various loans facilities to the defendants and to secure the loans, various loan documents were executed by the defendants and loan facilities were availed by the defendants as stated in the application.

12. In the written statement and in argument of the ld. Counsel of defendants no. 3, 5 & 6, they have admitted the loan facilities, granted by the applicant bank and its utilization and further admitted the execution of loan documents, by the defendants, to secure the loan facility.

So far as the defendant no. 3, 5 & 6, admitted the utilization of the amount, execution of the documents, creation of equitable mortgage, its confirmation, they are not disputed the claim, therefore the claim referred to the tribunal is recoverable till full and final reaction of the claim. In view of their application dated 09.09.2019, for addition of the party under Order 1 rule 10(2) to the M/s. Progressive Industries Pvt. Ltd. represented through its Managing Director, Mritunjay Kumar, was allowed as the entire assets and liabilities of the LLP (defendant no. 1) has been taken over by the said company who came before this Tribunal to make them as party, so the said company was made a necessary party as Defendant No. 6, vide order dated 29.11.2019, despite of the objection raised by the applicant bank. Therefore the defendant no. 6 is liable alongwith other defendants to pay the entire dues,

So far as the dispute regarding charging of higher rate of interest, is concerned, in this matter, the applicant bank has sanctioned the loan facilities with interest and on perusal of the documents and statement of accounts, it appears that the bank has charged the rate of interest, as agreed by the defendants. Further it was certified by the applicant bank that 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 the RBI, The statement of account is certified under the Banker's Books of Evidence Act. Therefore, this dispute is not acceptable and is hereby rejected.

However, keeping the facts, circumstances of the case, as stated by ld. Counsel of defendants and in the interest of natural justice, the defendants deserve some leniency in the rule of interest.

13. The documents as stated above reveal that the defendants have applied for loans and bank had sanctioned loans, thereafter, 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.

14. The applicant bank has also furnished statement of account as shown 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.

15. 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 busin

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ess, 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[1] of the Act. Hence, the entries in the Statement of Account are also proved. 16. On consideration of the arguments and on perusal of the application, documents, affidavit and admission of defendants no. 3, 5 & 6, it is proved that the applicant bank has granted the loan facilities to the defendants and to Secure the loan, various loan document were executed by the defendants and facilities were availed by the defendants as stated in the application. 17. The Section 58 of the Indian Evidence Act. 1872 reads as under- "58. Facts admitted need not be proved.- No fact need to be proved in any proceeding which the parties thereto or their agents agree in admit at the hearing, or which, before the hearing, they agree to admit by any writing under their hands, or which by any rule of pleading in force at the time they are deemed to have admitted by their pleadings; Provided that the Court may, in its discretion, require the facts admitted to be proved otherwise than by such admissions. 18. In Indian Bank Vs. Blue Jaggers Estates Limited and others : [2010] 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 he 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." 19. Facts of the case, in my view, are well proved by evidence of the applicant bank as well as admission of defendants no. 3, 5 & 6, The applicant bank is entitled to receive from defendants, jointly and severally of Rs. 1,93,47,611.09 alongwith pendente lite; and future interest @ 10% p.a. simple from 01.10.2017 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 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. 1,93,47,611.09 alongwith pendente lite and future interest @ 10% p.a. simple from 01-10.2017 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 realise 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.
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