UNION BANK OF INDIA v. OFFICE OF OFFICIAL LIQUIDATOR (SIDDHESHWAR INDUSTRIES PRIVATE LIMITED)

1. Rs.18,76,39,890/- (Cash Credit loan account) together with future interest @10.85% per annum with monthly rests;

2. Rs.7,58,94,780/- (WCTL-I loan account) together with future interest @11.40% per annum with monthly rests and

3. Rs.2,76,37,560/- (WCTL-II loan account) together with future interest @11.40% per annum with monthly rests from 01^stOctober, 2021 (Cash Credit) and from 30^thSeptember, 2021 (WCTL-I & II) till repayment/realization of the entire dues from the defendant Nos.2 to 8.

The applicant Bank has filed the present application against defendant No.1 (in liquidation) for release of properties mortgaged to the applicant Bank and defendant Nos.9 to 11 Banks. The applicant Bank has claimed recovery of dues only against the defendant Nos.2 to 8 in the capacity of Guarantors. The applicant Bank has not claimed any relief against defendant Nos.9 to 12 being formal defendants.

2. Brief facts of the application are as under:

The defendant No.1 is the Official Liquidator (in the matter of M/s. Siddheshwar Industries Pvt. Ltd.-now in liquidation) under the Order of Hon'ble Mumbai High Court in the liquidation proceedings filed by one of the Operational

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Creditors. The said Official Liquidator has been appointed who holds control over all the properties of the said M/s. Siddheshwar Industries Pvt. Ltd. (now in liquidation). The said properties also include properties mortgaged to the applicant Bank and Joint Lenders i.e. defendant Nos.9 to 11. Therefore, the applicant Bank is seeking directions against the defendant No.1 Company to release the said properties and handover to the applicant Bank and Joint Lenders i.e. defendant Nos.9 to 11. The applicant Bank further contended that defendant Nos.2 to 5 stood as personal guarantors and defendant Nos.6 to 8 stood as Corporate Guarantors to credit facilities granted by the applicant Bank and defendant Nos.9 to 11 to one M/s. Siddheshwar Industries Pvt. Ltd. (now in liquidation). The applicant Bank further contended that defendant Nos.9 to 11 are the Joint Lender Banks and the applicant Bank has not claimed any reliefs against them.

The defendant No.12 is the Security Trustee in whose favour the said borrower and defendant Nos.1 to 8 have created joint security by way of hypothecation, Pledge and mortgage of movable and immovable properties, shares etc. The applicant Bank further contended that the original

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Loan Cum Security documents were in custody of defendant No.11 i.e. State Bank of India who has produced the same before DRT, Pune in Original Application No.873/2019 filed by State Bank of India against defendant Nos.2 to 8 wherein this applicant Bank is one of the formal defendants along with other lenders. The applicant Bank therefore, seeks leave to rely upon the photocopies of those documents.

The applicant Bank further contended that the said borrower Company defendant No.1 was banking with defendant No.11 herein i.e. State Bank of India which had sanctioned credit facilities of Rs.29 Crores consisting of three facilities i.e. Cash Credit of Rs.10 Crores, Term Loan of Rs.15 Crores and BG and LG for Rs.4 Crores, vide sanction letter dated 10^thFebruary, 2010.

The applicant Bank further contended that the applicant Bank formed a Consortium [SBI led Consortium] along with defendant Nos.9 and 10 Banks and thereby appointed defendant No.11 (State Bank of India) as the Lead Banker, as per Inter-se Agreement dated 16^thFebruary, 2010. The applicant Bank further contended that initially the SBI led Consortium has sanctioned the credit facilities to defendant

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No.1 Company as set out in paragraph No.5.12 of the Original Application as detailed below:-

The defendant Nos.2 to 5 executed loan transaction and

security documents as mentioned in paragraph Nos.5.16 of the

Original Application.

The applicant contended that from the month of July, 2010

onwards on various dates the borrower Company defendant

No.1 approached the applicant Bank/Consortium for

enhancement of credit facilities/renewal/new facilities by

execution of various loan transaction and security documents

as enumerated through various Annexures ranging from

Annexure No.11 to Annexure No.116 as mentioned in

paragraph Nos.5.22 to 5.145 of the Original Application.

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The applicant Bank further contended that it has sanctioned restructured credit facilities vide sanction letter dated 30^thJune, 2015, more particularly mentioned in paragraph No.5.90 of the Original Application as detailed below:-

The applicant Bank further contended that the defendant

Nos.2 to 8 along with the borrower Company defendant No.1

executed various loan transaction and security documents in

favour of the applicant Bank as mentioned in paragraph

Nos.5.91 & 5.92 of the Original Application.

The applicant Bank further contended that the account of

borrower Company defendant No.1 was slipped into Non-

Performing Asset on 30^thJune, 2015 and therefore, the

applicant Bank recalled the credit facilities.

Thereafter, defendant No.11 herein initiated proceedings

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under The Recovery of Debts and Bankruptcy Act before Hon'ble Bombay High Court. During the proceeding, it was informed that the borrower has already been ordered to be liquidated by Hon'ble Mumbai High Court in the proceedings filed by one of the Operational Creditors, in view of which Hon'ble NCLT stayed the Resolution process in the matter of borrower Company. The Liquidation Order of Hon'ble Bombay High Court dated 19^thApril, 2018 and Order of NCLT, Mumbai dated 14^thMay, 2018 are placed on record of DRT, Pune by the applicant Bank.

Further, the applicant Bank contended that it has invoked the Guarantee of defendant Nos.2 to 8 vide Notice dated 16^th October, 2019 and thereby called upon defendant Nos.2 to 8 to repay the amount due and payable by the borrower. The applicant Bank further contended that defendant Nos.1 to 8 committed highly irregular activities and failed to repay the loan as per terms of Arrangement Letters. Despite regular follow up made by the applicant Bank, defendant No.1 failed to regularize its account.

Thereafter, the applicant Bank through its Advocate issued Legal Notice dated 16^thOctober, 2019 thereby calling upon

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defendant Nos.1 to 8 to repay the amount due and payable by the borrower Company defendant No.1. However, defendant Nos.1 to 8 failed to comply with the said Notice. Hence, this application is filed.

3. Defendants failed to appear despite service of summons. Hence, the application proceeded ex parte against them vide order dated 09^thJanuary, 2023 below the Application (Exhibit-

01).

4. The applicant Bank has filed Claim Affidavit of evidence (Exhibit-6) of Mr. Tella Subrahmanyam, Manager, Union Bank of India, 598 A, Sachapir Street, Camp, Pune which supports the case of the applicant Bank elucidated in the application.

5. The applicant Bank has produced on record the original loan transaction documents in evidence (AW-1-1 to AW-1-116) in the form of Annexures which corroborates the case of the applicant Bank.

6. I have heard arguments of the learned Advocate for the applicant Bank.

7. Since the defendants failed to appear and contest the application, I find no reason to disbelieve evidence of the applicant Bank. Therefore, the applicant Bank is entitled for

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reliefs as claimed.

8. The applicant Bank has claimed future interest @10.85% p.a. with monthly rests for Cash Credit loan Account and @11.40% p.a. with monthly rests for WCTL-I & WCTL-II loan accounts. However, considering the facts of the case, I am of the opinion that if future interest is granted @9% p.a. (simple) for all three loan accounts, it would be just and reasonable rate of interest.

9. Hence, I pass the following order:-

ORDER

(A) Original Application No.106/2022 is allowed with costs against defendant Nos.2 to 8.

(B) Defendant Nos.2 to 8 shall either jointly or severally pay to the applicant Bank i.e. Union Bank of India towards Cash Credit loan account the sum of Rs.18,76,39,890/- (Rupees Eighteen Crores Seventy- Six Lakhs Thirty-Nine Thousand Eight Hundred and Ninety only) with future interest @9% per annum from the date of filing of the Original Application i.e. 09^thNovember, 2021 till full payment/realization of the amount mentioned in

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this operative order.

(C) Defendant Nos.2 to 8 shall either jointly or severally pay to the applicant Bank i.e. Union Bank of India towards WCTL-I loan account the sum of

Rs.7,58,94,780/- (Rupees Seven Crores Fifty-Eight Lakhs Ninety-Four Thousand Seven Hundred and Eighty only) with future interest @9% per annum from the date of filing of the Original Application i.e. 09^thNovember, 2021 till full payment/ realization of the amount mentioned in this operative order.

(D) Defendant Nos.2 to 8 shall either jointly or severally pay to the applicant Bank i.e. Union Bank of India towards WCTL-II loan account the sum of

Rs.2,76,37,560/- (Rupees Two Crores Seventy-Six Lakhs Thirty-Seven Thousand Five Hundred and Sixty only) with future interest @9% per annum from the date of filing of the Original Application i.e. 09^thNovember, 2021 till full payment/ realization of the amount mentioned in this

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operative order.

(E) The aforesaid adjudicated amounts are secured by the valid and subsisting mortgage of the immovable properties being

Schedule-I properties:

1. All that piece and parcel of property bearing Plot No.A-49 admeasuring about 972 Sq. Meters in Pimpri Industrial Area, H Block, being and lying at Village Pimpri, Taluka and Sub- Registration District Haveli and District Pune and within the limits of Pimpri Chinchwad Municipal Corporation, together with all the buildings and structures constructed or to be constructed or erected thereon and all the equipments, fitting, furniture attached to the earth or permanently fastened to or anything to the earth or kept or laying thereon;

2. All that piece and parcel of property bearing Plot No.A-6, 7 & 8 admeasuring about 5176.5 Sq. Meters in Pimpri Industrial Area, H Block, being and lying at Village Pimpri, Taluka and

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Sub-Registration District Haveli and District Pune and within the limits of Pimpri Chinchwad Municipal Corporation, together with all the buildings and structures constructed or to be constructed or erected thereon and all the equipments, fitting, furniture attached to the earth or permanently fastened to or anything to the earth or kept or laying thereon;

3. All that piece and parcel of property bearing Plot No.A-28/B admeasuring about 6322.50 Sq. Meters in MIDC Industrial Area, Phase IV, being and lying at Village Nigoje, Taluka and Sub-Registration District Haveli and District Pune and within the limits of Pimpri Chinchwad Municipal Corporation, together with all the buildings and structures constructed or to be constructed or erected thereon and all the equipments, fitting, furniture attached to the earth or permanently fastened to or anything to the earth or kept or

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laying thereon;

4. All that piece and parcel of property bearing Plot No.PAP-A-26/6 admeasuring about 2370 Sq. Meters in MIDC Chakan Industrial Area, Phase IV, Final Plot No.26/6 being and lying at Village Nigoje, Taluka and Sub-Registration District Haveli and District Pune and within the limits of Pimpri Chinchwad Municipal Corporation, together with all the buildings and structures constructed or to be constructed or erected thereon and all the equipments, fitting, furniture attached to the earth or permanently fastened to or anything to the earth or kept or laying thereon;

more particularly mentioned in Schedule-I of the Original Application.

5. Schedule-II property:

Property owned by defendant No.8:

All that piece and parcel of landed property bearing Plot No.10 at Sector No.28 admeasuring about 448 Sq. Meters at Ganganagar, Village

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Akrudi, Pimpri Chinchwad Industrial Area, Taluka Haveli, District Pune within the limits of PCMC and PCNTDA and within the

registration District of Taluka Haveli District Pune exclusively to the applicant Bank for securing of its Fund Based Working Capital of Rs.15 Crores, together with all the structures thereon, fixtures & fitting, constructed, erected or installed thereon or to be constructed, erected or installed thereon at any time hereafter during the continuation of the security hereby constituted and attached to the earth or permanently fastened to anything attached thereto the earth, all undivided interest in the underlying land relating to such property and all the rights to use the common area and facilities and incidental attached thereto together with all the trees, fences, hedges, ditches, ways, sewers, waters, water course, liberties, privileges easements and appurtenances whatsoever to the aforesaid

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lands or any part thereof, hereditaments, easements and appurtenances to the aforesaid land whatsoever to thereof the premises or any part thereof, weather presently in existence or in future belongings to or in any way appurtenant thereto usually held, occupied or enjoyed therewith or expected to belong or be appurtenant thereto and all the estate, right, title, interest property, claim and demand whatsoever into or upon the same, more particularly mentioned in Schedule-II of the Original Application.

Schedule-III properties:

6. Property owned by Smt. Nanda Vikas Takawane:

a) Flat No.A-104 & A-105, Ishwari Heritage, Daund, admeasuring 107.80 sq. mtrs. purchased vide Sale Deed dated 24.05.2006;

b) Flat No.204, Sanmati Apartment, Daund, admeasuring 252.60 sq. mtrs. purchased

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vide Sale Deed dated 20.05.2006.

7. Property owned by Mr. Raviraj Vikas Takawane:

a) Agricultural land bearing Gat No.971, admeasuring 01H 20R, situated at Pargaon, Taluka Daund, District Pune, purchased vide Sale Deed dated 02.07.2010;

b) Agricultural land bearing Gat No.971/1B, admeasuring 01H 20R, situated at Pargaon, Taluka Daund, District Pune, purchased vide Sale Deed dated 02.07.2010;

8. Property owned by Mr. Yuvraj Vikas Takawane:

a) Irrigated Agricultural land bearing Gat No.957, admeasuring 01H 20R, situated at Pargaon, Taluka Daund, District Pune, purchased vide Sale Deed dated 09.11.2015;

b) Irrigated Agricultural land bearing Gat

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No.976, admeasuring 01H 61R, situated at Pargaon, Taluka Daund, District Pune, purchased vide Reconveyance Deed dated 09.11.2015;

c) Irrigated Agricultural land bearing Gat No.977/2, admeasuring 40 R, situated at Pargaon, Taluka Daund, District Pune, purchased vide Reconveyance Deed dated 09.11.2015,

9. Property owned by Mr. Vikas Bapurao Takawane:

a) Irrigated Agricultural land bearing Gat No.1083/3, admeasuring 52 R, situated at Pargaon, Taluka Daund, District Pune, purchased vide Reconveyance Deed dated 09.11.2015;

b) Agricultural land bearing Gat No.782, admeasuring 35 R, situated at Pisarve, Taluka Daund, District Pune, purchased vide Reconveyance Deed dated 28.04.2016;

c) Irrigated Agricultural land bearing Gat

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No.385, admeasuring 31.50 R, situated at Pargaon, Taluka Daund, District Pune, purchased vide Reconveyance Deed dated 09.11.2015;

d) Irrigated Agricultural Land bearing Gat No.972/1, admeasuring 60 R, situated at Pargaon, Taluka Daund, District Pune, purchased vide Reconveyance Deed dated 09.11.2015;

e) Irrigated Agricultural Land bearing Gat No.977/1/B, admeasuring 80 R, situated at Pargaon, Taluka Daund, District Pune, purchased vide Reconveyance Deed dated 09.11.2015,

more particularly mentioned in Schedule-III of the Original Application.

(F) The applicant Bank is entitled to sell the mortgaged properties for recovery of its dues with consent of the Official Liquidator and appropriate the sale proceeds with defendant Nos.9 to 11 Banks in ratio of share.

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(G) Issue Recovery Certificate.

(H) The Registrar is directed to send the copy of Judgment and Recovery Certificate to the applicant and defendants.

Sd/-

Place : Pune (Dilip G Murumkar) Date : 21.07.2023 Presiding Officer Debts Recovery Tribunal, Pune

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