State Bank Of India vs M/s. Shashi Bhushan Agro Pvt. Ltd. And Ors.

1- This is an Original Application u/s 19 of the Recovery of Debts and Bankruptcy) Act, 1993 initiated by the applicant against the defendants praying for issuance of Recovery Certificate to the tune of Rs.2,92,84,598.00 as on 31.07.2018 together with future interest, cost and other usual reliefs.

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 defendant no. 1, M/S. Shashi Bhushan Agro Pvt.Ltd, is a Private Ltd Co. registered under the Indian Companies Act, 1956 having its four Directors viz., Shri Dhananjay Kumar, Sri Abhishek Kumar, Smt. Nutan Sinha and Sri Bipin Bihari Sharma. The Defendant No.1 acting through Defendant no.3 approached the Mithanpura, Muzaffarpur Branch of the applicant Bank and submitted the application from grant of cash credit limit of Rs.183.21.00 lacs and Term Loan of Rs.154.36 lacs on 12.03.2014 for processing of fruits and vegetable packing and sales. The Mithanpura, Muzaffarpur Branch of the applicant Bank sanctioned a Term Loan of Rs.154.36 lacs and Cash Credit Limit of Rs.183.21 lacs with a first year limit of Rs.91.50 lacs on 20.08.2014 on certain terms and conditions which was accepted by the defendants.

3.2- To avail the loan facility, the defendants executed various loan documents on 07.10.2014 as Agreement of Loan-cum-hypothecation, Unstamped letter furnishing particulars of assets/vehicles/equipment etc., Guarantee Agreement, Agreement to be executed by borrowers, Agreement to be executed by guarantor and Memorandum for deposit of Title Deeds. Defendant no.3 created mortgage over the leased property on 07.10.2014 by depositing lease deed no.9339, dated 02.05.2014, which was followed by a confirmatory letter dated 08.10.2014. The fact was notified to the Executive Director, Bihar Industrial Area Development Authority(Bihar) vide letter dated 14.05.2015. The defendant no. 6 on 07.10.2014 deposited Sale deed no.2158 dated 05.03.2011 for super structure of residential unit and sub lease deed for land in respect of dwelling unit bearing no.A-4-1 having super area 1540 Sqr. Ft. on the 4th floor in the Group Housing Scheme "Yarrows Apartment at Plot No.C-58/5, Sector 62, Naida for the purpose of creating mortgage over the property to secure the loan.

3.3- The Term loan was availed by the defendant no.1 on different dated starting from 21.10.2014. Similarly, the Cash credit facility was also availed on different dated starting from 15.05.2015. The defendant confirmed the outstanding in their cash credit account on 31.03.2017. The conduct of the term loan account was satisfactory till October, 2017 and it became irregular marginally in the month of November, 2017. But the irregularity increased thereafter and the account was classified as "Non Performing Assets" on 17.03.2018. As a result, a sum of Rs.90,13,371.00 in Term Loan and Rs.l,87,69,744.53in Cash credit total Rs.2,92,84,598.00 is due as on 31.07.2018 against the defendants, which the defendants has not paid despite repeated demands and requests. Finding no other way to recover the dues of the Bank, the applicant Bank had filed this Original Application for recovery of the aforesaid amount and for issuance of Recovery Certificate against the defendants.

3.4- 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.

4- U/s 19 (4) of the Act & Rule of the DRT [Procedure] Rules, 1993, copy of application & paper book was sent by this Tribunal to the defendant by registered/speed post on 04.09.2018 and summon/notice issued requiring the defendant to show-cause within 30 days of the service of summon/notice as to why relief prayed for, should not be granted. But the defendants did not appear. Hence, the Registry of this Tribunal has ordered to publish the notice in Newspaper and subsequently substituted service by publication of notices by way of advertisement in newspaper was also made against the defendants on 26.10.2018 m "Hindustan Times" daily Newspaper.

4.2- After registered summons/Notices and Paper publication, defendant No.4 & 6 appear by way of filling Vakalatnama in the name of Shri Arvind Kumar, Advocate but defendant no.1, 2, 3 & 5 neither appeared nor filed WS before this Tribunal to contest the case. Despite registered notice, paper publication as well as several opportunities, defendant no.1, 2, 3 & 5 are neither appearing nor filed WS in the matter hence, right to file WS of defendant no.1, 2, 3 & 5 is closed and matter is set ex parte against them. Several opportunities have already been given to the defendant no.4 & 6 but they also failed to file WS, hence, right to file WS of the defendant no.4 & 6 was also closed vide order dated 05.04.2019 of OA.

4.3- Ld. Counsel, Shri Arvind Kumar on behalf of defendant no.4 & 6 filed a recall petition for recalling the order dated 05.04.2019 of OA by which right to file WS of the defendant no. 4 & 6 was closed. Ld. Counsel for defendant no.4 & 6 submitted that they have requested repeatedly to the Bank to supply the entire statement of account for filing WS but the applicant Bank did not supplied the same. In the meantime the right to file WS of the defendant no.4 & 6 has been closed. Since the defendant no.4 & 6 want to contest the case hence the order dated 05.04.2019 may be recalled and defendant no.4 & 6 may be allowed to file WS.

Considering the submission of the defendant no.4 & 6, the request was allowed and the order dated 05.04.2019 was recalled vide order dated 30.05.2019 of OA. Accordingly, the defendant no.4 & 6 filed WS serving copy to the Ld. counsel of the applicant Bank. Ld. Counsel of defendant No.4 & 6 submitted that the OA filed by the applicant Bank is not legally maintainable for the reasons that the applicant Bank has come to this Tribunal with misconceived facts without filing the complete set of documents and OA is liable to be dismissed without seeing the merits of the case. The applicant Bank has failed to uphold the constitutional objectives of the State and is liable for grave dereliction of duty. The documents placed on record filed by the applicant Bank are not registered and nor properly stamped as per the mandatory requirements of laws. The present OA is not accompanied by a statement of account duly certified as per the Bankers Book of Evidence Act. The applicant Bank has charged interest at exorbitant, excessive and usurious rates. The defendants further submitted that their company has availed the said financial assistances from the applicant Bank for running of the business of the company. The amount of Notice u/s 13(4) SARFAESI Act shows different amount from the amount shown in this OA. Under the facts mentioned in the Written Statement, the defendants prayed to dismiss the present OA.

4.4- Ld.counsel of the applicant Bank filed Written arguments by which applicant Bank submitted that the OA has been filed for recovery of debts of Rs.2,92,84,598.00 as on 31.07.2018 plus pendentelite and future interest @ 15.50 % p.a. at monthly rest against the defendants. In support of its claim, the applicant Bank has produced twenty exhibits as evidence on affidavit and complied with all requirements to filing the OA. The defendant no. I, 2, 3 & 5 did not turned up before the Tribunal despite service of summons by post as well substituted service of notices by way of publication in the newspaper. As a result, matter was set exparte against them. The defendant no.4 & 6 appeared through Ld.Counsel but written statement has been filed by defendant no.6 only. Defendant no.4 & 6 are guarantors to the loan and have executed guarantee agreement, The written statement filed by defendant no.6 is totally evasive & devoid of any fact to rebut the submissions made by the applicant Bank. Further, applicant Bank has submitted that the defendant has raised the issue of concealment of facts about invoking of sarfaesi action in the case. But the sarfaesi act was brought into force seeking to recover debts against security interest. The applicant Bank further submitted that the written statement of defendant no.6 be rejected and relief sought for by the applicant Bank be granted against all defendants .

5- I have heard the learned Counsel for applicant Bank and Ld. Counsel for defendant no.4 & 6 and have perused the relevant documents.

6- The defendant no.4 & 6 had contested the case of the applicant Bank. Thus, the point for determination in this case is (i) Whether the claim of the applicant Bank is within time ? (ii) Whether the defendants had utilized the loan facilities granted by the Bank ? (iii) Whether the defendants are liable to the amount due to the applicant Bank or not?

7- The applicant Bank by oral and documentary evidence has established its case. The documentary evidence comprises from Annexure/Exhibit - 1 to 20, which are available in paper book filed by the applicant Bank.

8- From the perusal of the documents referred above and the certified copy of the statement of account, it is established that the defendants had availed the financial facilities from the applicant Bank and had withdrawn the amount through the account.

9- To prove its case, the applicant Bank has referred various documents including evidence on affidavit on 31.08.2018 by way of affidavit of Wasim Mehdi, Chief Manager of the applicant Bank. The averments in the application and the facts stated by the witness of the applicant Bank in his affidavit is unrebutted.

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

11- In the written statement, the defendant has admitted the loan facilities granted by the applicant bank and its utilization, further there is no any specific denial of the defendant, regarding execution of loan I security documents, to secure the loan facility. The defendants have challenged the maintainability of the OA. This Tribunal is not relied of the facts and pleadings as claimed by the defendants. However, keeping the facts and circumstances of the case, in mind and in the interest of natural justice, the defendants deserves some leniency in the rate of interest.

12- The applicant bank has sought for recovery of a sum of Rs.2,92,84,598.00 as on 31.07.2018 together with future interest at the contractual rate from 01.08.2018, cost and other usual reliefs, till realization.

13- In view of the above discussion and after considering the entire evidence-on-affidavit of the applicant Bank and the documents filed by the applicant Bank, I have no hesitation to hold that the applicant Bank is entitled to recover a sum of Rs.2,92,84,598.00 (Rs.Two crores ninety two lacs eighty four thousand five hundred and ninty eight only) as on 31.07.2018 from the defendants who are liable for the same. The applicant Bank shall also be entitled to pendentelite and future interest at the rate of 12% p.a. simple from 01.08.2018 till the date of realization.

O-R-D-E-R

(1) O.A.No.812 of 2018 filed by the applicant Bank is allowed and debt is determined with cost against the defendants. It is, hereby, ordered that the applicant Bank is entitled to recover from the defendants, total amount to the tune of Rs.2,92,84,598.00 (Rs.Two crores ninety two lacs eighty four thousand five hundred and ninty eight only) as on 31.07.2018 together with future interest at the rate of 12 % p.a. simple from O 1.08.2018, cost and other usual reliefs, till realization of the claim amount.

(2) Amount, if any, paid by the defendants in the loan accounts or amount, if any, recovered by the applicant Bank after filing of the O.A., may be taken into the account while arriving at the exact amount of dues/debt payable by the defendants. Accordingly, pendentelite and future interest shall be calculated on the reduced amount.

(3) Defendants are debarred from disposing, alienating or dealing with any of the properties belongings to them till the aforesaid decretal debt is recovered from the defendants.

(4) Thirty days time from date of Judgment/Final order is being given to the defendants for repaying of the above mentioned dues, failing which, Applicant Bank is entitled to recover its dues by sale of secured assets, personal movable or immovable properties of the defendants to recover the dues in accordance with law.

(5) Let a Certificate of Recovery be drawn up by Ld. Registrar forthwith in terms of Judgment for issuance of the same against defendants in favour of the Applicant Bank under Section 19(22) of the Recovery of Debts and Bankruptcy Act, 1993 and put up the same for issuance of the Certificate.

(6) Ld. Recovery Officer shall realize the amount as per the Recovery Certificate from the defendants in accordance of law.

(7) Ld. Registrar of this Tribunal is directed to deliver Recovery Certificate in terms of the final Judgment/order for recovery of the sum against the defendants in favour of the Applicant Bank under section 19(22) of the Recovery of Debts due to the Banks and Financial Institutions Act, 1993 now known as Recovery of Debts and Bankruptcy Act, 1993.

Accordingly, the Original Application being O.A.No.812 of 2018 is allowed and stands disposed of. File is consigned to Record Room.

Copy of the Judgment/Final Order be upload in the Tribunal's website.

File is consigned to the Record Room.

Judgment dictated to PS, transcribed by her, corrected, signed, sealed, and pronounced by me in the open court on this 20th Day of May, 2020.