M/s. Raghuram Plastics vs Central Bank of India

S. Ravi Kumar, Chairperson

This Appeal is against Order dated 23.05.2018 of DRT-II, Chennai in OA 794/2015.

Brief facts leading to this Appeal are as follows:

Respondent Bank filed OA 794/2015 for recovery of Rs.42,94,765/- towards three Term Loan accounts of Appellants contending that Appellants availed Cash Credit Term Loan facilities and executed necessary loan documents, but failed to adhere to the terms and conditions of loan agreement and discharge the outstanding, therefore, liable to pay Rs.42,94,765/- together with interest at contract rate.

Appellants herein filed Written Statement disputing the allegations made against them contending that due to unforeseen rain in Chennai and its vicinity, D1 Company is seriously affected, and Bank, instead of allowing moratorium as per guidelines of RBI and Government, classified loan account of D1 Company as Non-Performing Asset (NPA), and filed OA, without any valid and justifiable reasons. Defendants also contended that during pendeny of OA proceedings, several rounds of negotiation took place, and instead of considering One Time Settlement (OTS) request for Rs.15 Lakhs, Bank claimed the entire OA amount. They further contended that Bank has not given due credit to various payments made and failed to give credit of subsidy amount and also insurance claim. They contended that claim amount of Bank is not correct and OA has to be dismissed.

On behalf of Bank, one witness is examined and nineteen documents are marked, so also, on behalf of Defendants, one witness is examined and seven documents are marked.

On a consideration of oral and documentary evidence, Tribunal below, did not accept objections of Defendants, and accordingly, Recovery Certificate in favour of Bank for OA amount of Rs.42,94,765/- with interest at the rate of 7.5 % p.a. (simple) from the date of OA till realization is granted. Aggrieved by the same, Defendants preferred present Appeal.

Both Appellants and Respondent Bank filed Written Arguments reiterating their respective contentions.

Main and foremost contention of Appellants is that at the time of offering OTS, they made payment of Rs.5,51,518/-, and thereafter, Rs.29,395/- on 12.09.2016. According to Appellants, they made total payments of Rs.19,10,642/- after OTS proposal, which comes to 27.3% of OTS amount. This aspect is not considered by Tribunal below. Advocate for Appellants vehemently contended that Tribunal below, without taking note of Appellants’ case, accepted the claim of Bank arbitrarily, therefore, the same has to be set aside.

On the other hand, Advocate for Respondent Bank submitted that Appellants submitted OTS proposal during pendency of OA, and even according to their own case, there is no written approval from Bank, and Bank orally agreed for OTS proposal. He submitted, according to Bank, amount indicated in Letter has to be paid on or before 30.06.2016, which is exclusive of amount receivable from Insurance Company and towards subsidy, but Appellants failed to make any payment before 30.06.2016, thereby the proposal of OTS is lapsed on 30.06.2016 itself, as such, any argument in respect of OTS is not acceptable. It is submitted Tribunal below rightly discarded the contentions of Appellants and there are no grounds to interfere with Order dated 23.05.2018.

I have perused impugned Order. In para 9 of its Order, Tribunal below recorded objections of Appellants and held that they are not acceptable for the reasons, all the payments received from Defendants are reflected in statement of account filed with OA, which is marked as Exhibit on behalf of Bank. Tribunal below also recorded that Bank only charged interest as per terms and conditions of loan agreement and RBI guidelines, therefore, objections of Appellants with regard to charging of interest is also not tenable.

As rightly pointed out by Advocate for Respondent Bank, Tribunal below, after considering documents of both sides, overruled the objections of Appellants, therefore, contentions of Counsel for Appellants that Tribunal below arbitrarily accepted the claim of Bank, cannot be accepted.

It is not in dispute that Appellants availed Cash Credit Term Loan facilities in three loan accounts, and as per material, Bank closed one account i.e. Account No. 1452307098, after adjusting insurance claim amount into that account, therefore, contentions of Appellants that Bank has not given credit to insurance claim is not at all correct. In Written Statement, it is very vaguely pleaded that payments made by Defendants are not given credit, without giving any details. When Defendants are pleading discharge, burden is on them to specifically plead and prove the payments, but, their general contention that their payments are not properly credited, cannot be accepted, when statement of account reflects to the payments made by Defendants. If there are any other payments, other than the payments shown in statement of account, it is for Defendants to produce proper evidence for those payments, and without doing so, any amount of argument is of no use. On a total scrutiny of the material, I am of the considered view that Tribunal below, rightly rejected objections of Defendants, and there are absolutely no grounds to interfere with Order dated 23.05.2018.

For the above reasons, it is held that Appeal is devoid of merits and liable to be dismissed.

In the result; Appeal RA 191/2018 is dismissed, but under certain circumstance, without costs. All pending IAs, if any, stand closed.