Kotak Mahindra Bank Limited Vs Sh. Brij Satvindra Pal Singh Ahaluwalia (DRT Delhi)
The application was filed by the bank on 16.06.2014 under Section 19 of the RDB Act, 1993 before the Debts Recovery Tribunal (DRT), Delhi, seeking recovery of ₹12,38,383 along with interest at 19% per annum from the date of filing of the application until full realization.
According to the bank, defendant no.1 had requested a loan facility and was sanctioned financial assistance of ₹21,00,000 under a loan agreement dated 29.05.2012. The loan was secured by hypothecation of purchased construction equipment and machinery (LT Komatsu model LT_HEPQa00, serial no. NL 17250). Defendant no.2 acted as the guarantor for the loan. The defendants executed all necessary loan documents on the same date.
The bank stated that the defendants utilized the loan facility but failed to maintain financial discipline and defaulted in repayment of the dues. The bank made repeated efforts to regularize the loan account through visits and letters but received no response. Consequently, the bank issued a recall notice dated 06.05.2014 demanding payment of the outstanding amount. As the dues remained unpaid, the bank filed the present recovery application before the Tribunal.
Upon notice, the defendants appeared through counsel. Defendant no.1 filed a written statement and evidence contesting the claim. The defendant denied the facts stated in the application and argued that the recovery application was not maintainable because the amount claimed by the bank was not actually due. It was submitted that the bank had included prepayment charges in its claim. According to the defendant, prepayment charges can be levied only when a borrower voluntarily offers to repay the loan before its due date in a lump sum. In the present case, the borrower had not offered such payment; instead, the bank had recalled the loan. Therefore, the imposition of prepayment charges was claimed to be illegal and unjustified.
