OFFICE OF THE ARBITRAL TRIBUNAL

THE COSMOS CO-OP. BANK LTD

Mira Sagar Building, Havroji Lane,
Ghatkopar (W), Mumbai- 400086

ARBITRATIONS CASE IO. ARB /COSJ D OF 2023

The Cosmos Co-op. Bank Ltd.

...Disputant Bank

1. M/s. Muniraj Synthetics India Pvt. Ltd.

2. Mr. Narpat Deshmal Jain

Mrs. Veena Narpat Jain

4. Mr. Harish Ratanchand Jain
...Respondents

Whereas the Cosmos Co-op. Bank Ltd had instituted the above Arbitration Case under
section 84 of the Multi State Co-operative societies Act, 2002 against you for
a) Adjudicating the present dispute under section 84 of the Multi State Co-operative
societies Act, 2002 and to declare that the Respondents are jointly and severally

liable to pay the Disputants an amount of Rs.3,30,34,465.36 along with interest

thereon @14% p.a. from 01.05.2023 till realization.

" b) And for such other and further relief be granted as the nature and circumstances
of the case reveal themselves. The said matter was under hearing.

Therefore, You Respondents are hereby summoned to appear before me at Arbitration

Centre at Mira Sagar Building, Navroji Lane, a opar (\V), Mumbai-400086 in person
or by any Advocate duly instructed and able to answer all material questions relating
to the dispute on such questions on the 0 1 1 OF 1 9 D, 12.00 Noon further to
answer the claim in the Arbitration Case. *

TAKE NOTICE that, despite of service of this notice upon you, if you fail to remain
present before me either personally or through your authorized representative on the
day and time as mentioned hereinabove the Arbitration case will be heard and

determined Ex-parte against you.

°t Given under my hand and seal this day of v W , 2023.

Vasantrao Mundhe
(ARBITRATOR)
 (Application U/ Sec. 84 of the Multi State Co-op. Societies Act,
2002)
ARBITRATION CASE NO. ARB/COS/ OF 2023.

THE COSMOS CO-OPERATIVE BANK LTD )

A Society registered Under the Multi State Co-operative )
Societies Act 2002, having its registered office at )
Cosmos Tower, Plot No.6, ICS Colony, University Road, )
Ganeshkhind, Shivajinagar, Pune 411007 and having )
Its Regional office at Horizon Building, )
Recovery Department, 1•t floor, )
Ranade Road and Gokhale Road North, )
Dadar West, Mumbai 400028 and one of its Branch )
at Borivali (W) through its authorized officer
Rupa Date ) ...Claimant Bank

Versus
1. M/s. Muniraj Syntbetics India Pvt. Ltd
A company registered under the Companies Act,
Having its Address at:- Unit No. 5-#.- 120,
Akshay Mittal Industries Premises CHSL,
Sanjay Building, Mittal Industrial Estate,
Sir M.V. Road, Andheri-Kurla Road,
Sakinaka, Andheri East, Mumbai- 400 059.

2. Mr. Narpqt Deshmal Jain

Flat No-1201/1202, 12th Floor, Raj Sahyog Apt,
Opp. Navneet Hospital, 7/5 CJ?¡• r Road,
Daulat Nagar, Borivali East, Dlo. thai- 400 068.
 Mrs. Veena Narpat Jain
Flat No-1201/1202, 12th Floor, Raj Sahyog Apt,
Opp. Navneet Hospital, 7/5 Corner Road,
Daulat Nagar, Borivali East, Mumbai- 400 068.

4. Mr. Harish Ratanchand Jain

)
Flat No-901/902, Gopal Darshan, Road No. 9,
)
Next to Hinduja Hall, Daulat Nagar, Borivali East,
)
Mumbai- 400 066.
)...RESPONDENT
Disoute upder Section B4 of the Multt
and .coct¿on 23 of Arbitration and
Conciliation Act. 1996Aor recovery..»_(
outstaridir e loan amnunt of Rs.
3.30.34.465.36 as on 30.04.Z023 witE

THE CLAIMANT ABOVENAMED SUBMIT AS UNDER:

1. The Claimant is a Society registered under the Multi-State-Co-Operative
Societies Act, 2002. The Claimant is running Banking business which is
governed by Banking Regulations Act, 1949 and other allied laws. The
Claimant Bank during the course of their business grants or otherwise
sanctions various credit facilities to its members. The Claimant has its
Registered office at Cosmos Tower, Plot no. 6, ICS Colony, University Road, '°‘
Ganeshkhind, Shivajinagar, Pune 411 007 and having one of its Branch at
Borivali (W). The Claimant Bank has authorized and empowered its Asst.
General Manager by Notification dated 13.10.2014 to refer this dispute
before the Arbitral Tribunal and to give evidence and to produce the
documents to get it affectively settled or get it decided from this Arbitral
Tribunal. The certified copy of the NotificaGon of Authorized officer
dated 13.10.2014 is hereto annexed and marked as Annexure _
“A”. The Order of Appointment of Arbitrator dated 02.03.2023 is
produced along with this reference. The Certified Copy of Order of
Appointment dated 02.03.2023 of the Arbitrator is hereto annexed
and marked as Annexure -“B”.
 2. The Respondent No.l to 4 are the members of the Claimant Bank. That
the Respondent No.1 is the borrower Company and Respondent No.2
and 3 are the Directors of the said company who also stood as the
Guarantors in their personal capacity and Respondent No. 4 is the
Guarantor for credit facility availed by the Respondent No.1 company
from the Claimant Bank.

3. That at the inception the Respondent no.1 company (Formerly known as

Rajguru Synthetics (India) Private Limited), Respondent No.1 through its
Directors via letter dated 14.11.2010 applied for Cash Credit Facilities for
Rs.300.00 Lakhs @11.50% for working Capital Finance and Letter of
Credit of Rs. 50.00 Lakhs for purchase of Raw Material from Borivali West
Branch of Claimant Bank for their financial needs. The Claimant Bank
sanctioned the Credit Facilities of Rs. 3, 50,00,000/- (Rupees Three Crore
Fifty Lacs only) vide it’s letter of sanction dated 28/12/2010. The
Certified Copy of Sanction letter dated 28/12/2010 and is annexed
hereto marked as Annexure -”C”.

4. That Rajguru Synthetics through a special resolution dated 18.12.2010

held by the shareholders at its extra ordinary general meeting undertook
p to change the name of the company and accordingly the name was
changed from Rajguru Synthetics (India) Pvt Ltd to Muniraj Synthetics
Private Limited.
The Certified of special resolution dated 18a December 2010 for
change in name of Company is annexed hereto and marked as
Annexure-”DI

5. The Respondent No.1 through its Directors again applied for review of
Credit Facility of Rs.325 Lakhs. (Exist. Rs.300.00 Lakhs + Addl. Rs.25.00
Lakhs) @ 13.50% p.a. floating as per present credit rating, Review of
Letter of Credit of Rs. 50.00 Lakhs, Term Loan (Machinery) of Rs. 260.00
Lakhs @ 13.50% p.a. floating as per present credit rating for the period of
 60 months + 6 months moratorium period for purchase of plant and
machinery and One Time LC of Rs. 290.00 Lakhs for purchase of
machinery as per the terms and conditions mentioned in sanction
letter dated 27/08/2011. The Certified copy of sanction letter dated
27/08/2011 is annexed hereto and marhed as Annexure -”E”.

6. The Claimant Bank submits that, to secure the aforesaid facilities of

Rs. 635.00 lakhs the Respondents have executed the following documents
on 10/10/2011:-
i. Promissory Note
ii. Letter of continuing security
iii. Letter of Lien and Set Off
iv. Loan Agreement
v Deed of Hypothecation of Stock, Book Debts & Machinery
vi. Deed of Guarantee

The Certified Copies of the aforesaid loan documents are annexed

hereto and marked as Annexure ‘FI-FT .feoHv.3

7. The Sisputant Bank states that, in addition to above execution of

documents the loan facility was secured with the Personal Guarantee of :-

1. Mr. Narpat DeshmalJain - Respondent No.2

2. Mrs. Veena Narpat Jain -Respondent No.3
3. Mr. Harish Ratanchand Jain -Respondent No.4

8. The Claimant Bank submits that, in order to secure the repayment of

above referred Credit Facilities of Rs.6,35,00,000/- (Rupees Six Crores
Thirty Five Lakhs only), the Respondent Nos. 1 to 3 have validly executed
“Composite Deed of Mortgage & Hypothecation for Creation of Further
Charge” dated 11/10/2011 bearing Registration No. BDR9-09107-2011
and the same was registered before the Sub-Registrar at Andheri 3 and
by virtue of execution and registration of the said “Composite Deed of
 Together with right to avail & enjoy the common areas and factories
appurtenant to the said Gala with right of way, easement and parking
made available to said Gala together with the proportionate rights in the
land with share certificate and membership attached to the said Gala.
Certified Copy of “Composite Deed of mortgage & Hypothecation for
Creation of Further Charge” dated 11/10/2011, is hereto annexed
and marked Annexure "G“‘.

9. The Claimant Bank further reviewed the Cash Credit Facility of

Rs.325.00 Lakhs and Letter of Credit for Rs. 50.00 Lakhs vide sanction
letter dated 10.11.2012 as per the terms and conditions mentioned
therein. Certified copy of the Sanction Letter dated 10/11/2012 is
hereto annexed and marked as Annexure -“H".

10. The Respondent No.1 through its Directors again applied for Credit
FaciliGes of Rs.450.00 Lakhs (Exist. Rs.325.00 Lakhs + Addl. Rs.125.00
:Lakhs) @ 13.75% p.a. floating as per present credit rating and Review of
£etter of Gredit of Rs. 50.00 Lakhs for purchase of Raw as per the
terms and conditions mentioned in sanction letter dated 11/12/2012.
The Certified copy of sanction letter dated 11/12/2012 is annexed
hereto and marked as Annexure ”.
' /'c

11. The Claimant Bank state that to secure the aforesaid facility of Rs.
500.00 lakhs the Respondents have executed the following documents
on 14/12/2012:-
i. Promissory Note
ii. Letter of continuing security
iii. Letter of Lien and Set Off
i . Loan Agreement
v Deed of Hypothecation of Stock, Book Debts & Machinery
o Deed of Guarantee.
The Certified Copies of each of the aforesaid loan documents are
annexed hereto and marked Annexure “11-16” fcoIlv.1 Upon
execution of above documents, the Claimant allowed the Respondent
No.1 to utilise the entire Loan of Rs.500.00 Lakh. ’

12. The Claimant Bank states that, in order to secure the repayment of
above referred Credit Facilities of Rs. 5,00,00,000/- ( Rupees Five Crores
only), the Respondent Nos. 1 to 3 have validly executed “Composite Deed
of Mortgage & Hypothecation for Creation of Further Charge” dated 14a
December 2012 bearing Registration No. BDRI- 13179-2012 and the
same was registered before the Sub-registrar at Andheri 1 and by virtue
of execution and registration of the said “Composite Deed of Mortgage &
Hypothecation for Creation of Further Charge” dated 14 th December
2012, bank has encumbered the immovable property more particularly
described hereunder.
SCHEDULE
All that piece and parcel of Gala No.A-120 admeasuring about 1265 sq.ft.
Built up situated in the building known as Sanjay Building No.5 of Akshay
Mittal Industrial Premises Co-operative Society Ltd. standing on piece of
land bearing CTS No. 1637, of village Marol situated at Sir M.V Road,
Andheri (E) Mumbai 400059 within Registration District and Sub-
District of Mumbai City & Mumbai Suburban and within limits of Greater
Mumbai Municipal Corporation.
 Together with right to avail & enjoy the common areas and facilities
appurtenant to the said Gala with right of way, easement and parking
made available to said Gala together with the proportionate rights in the
land with share certificate and membership attached to the said Gala.
Certified Copy of “Composite Deed of Mortgage & Hypothecation for
Creation of Further Charge” dated 14/12/ 2012, is hereto annexed
and marked Annexure “K”.

13. The Respondent No.1 through its Directors again applied for Cash
Credit Facility of Rs. 5,00,00,000/- ( Rupees Five Crores only ) ( (Exit.
Rs.450.00 Lakhs + Addl. Rs.50.00 Lakhs)@ 12.75% p.a. as per present
credit rating as per the terms and conditions mentioned in sanction letter
dated 10/12/2013. The Certified copy of sanction letter dated
10/12/2013 is annexed hereto and marked as Annexure JL”.

14. The Claimant Bank state that to secure the aforesaid facility of Rs.
5,00,04,000/- the Respondents have executed the following documents
on 27/12/2013:-
i. Promissory Note
ü. Lei er of conGnuing security
iii. Letter of Lien and Set Off
iv. Loair Agreement
. Deed of Guarantee
n. First Supplemental Deed of Hypothecation of Stock, Book Debts &
Machinery
thé Certified Copies ,of each of the aforesaid loan documents are
•aunexed-Iieretoand marked Annexure “MI-M6” fcoIlv.1
Upon execution of above documents, the Claimant allowed the
Respondent No.1 to utilise the entire Loan of Rs. 5,00,00,000/-.

15. The Claimant Bank states that, in order to secure the repayment of
above referred term loan facility of Rs.5,00,00,000/- ( Rupees Five Crores
only), the Respondent No. 1 to 3 have validly executed “Composite Deed
 of Mortgage & Hypothecation for Creation of Additional Charge” dated
27a December 2013 bearing Registration No. BDRI- 12891-2013 and the
same •xas registered on 30° December 2013 before the Sub-Registrar at
Andheri 1 and by virtue of execution and registration of the said
“Composite Deed of Mortgage & Hypothecation for Creation of Additional
Charge” dated 30th December 2013, bank has encumbered the immovable

property more particularly described hereunder.

SCHEDULE
All that piece and parcel of Gala Not-120 admeasuring about 1265
sq.ft. Built up situated in the building known as Sanjay Building No.5 of
Akshay Mittal Industrial Premises Co-operative Society Ltd. standing on
piece of land bearing CTS No. 1637, of village Marol situated at Sir M.V
Road, Andheri (E) Mumbai 400059, situated within Registration
District and Sub- District of Mumbai City & Mumbai Suburban and
within limits of Greater Mumbai Municipal Corporation.
Together with right to avail & enjoy the common areas and factories
appurtenant to the said Gala with right of way, easement and parking
made available said Gala together with the proportionate rights in the
land with share certificate and membership attached to the said Gala.
Certified Copy of “Composite Deed of Mortgage & Hypothecation for
Creation of AddiGonal Charge” dated 30/12/2013, is hereto
annexed and marked Annexure “N”.

16. In the year 2015, the Respondent No.1 through its Directors again
applied for Review of Cash Credit Facility of Rs. 500.00 Lakhs @ 12.75%
p.a. as per Credit Rating repayable on demand/Review upto 31.12.2015
and WCTL of Rs.50.00 Lakhs @ 12.75 % p.a. as per present Credit Rating
for the period of 36 months for working capital finance as per the terms
and conditions mentioned in sanction letter dated 14/01/2015. The
Certified copy of sanction letter dated 14/01/2015 is annexed hereto
and marked as Annexure -”O”.
 17. The Claimant Bank state that to secure the aforesaid facility of Rs.
50.0 lakhs the Respondents have executed the following documents on
17/03/2015:-
i Promissory Note
ii. Letter of continuing security
Letter of Lien and Set Off
i Loan Agreement
• Deed of Hypothecation of Stock, Book Debts & Machinery
u Deed of Guarantee

The Certified Copies of each of the aforesaid loan documents are

annexed hereto and marked Annexure “P1-P6” fcoliv.). Upon
execution of above documents, the Claimant allowed the Respondent
No.1 to utilise the entire Loan of Rs.50.00 Lakh.

18. The Claimant Bank states that, in order to secure the repayment of
above referred loan facilities of Rs. 50,00,000/- (Rupees Fifty lacs only),
the respondent has validly executed “Composite Deed of Mortgage &
Hypothecation for Creation of Additional Charge” dated 24‘ March 2015
bearing Registration No. BDRI- 2444-2015 registered on 24th March

2015 before the Sub-registrar at Andheri 1 and by virtue of execution and

o registration of the said “Composite Deed of Mortgage & Hypothecation
for Creation of Additional Charge” dated 24* March 2015, bank has
encumbered the immovable property more particularly described
hereunder.
SCHEDULE
All that piece and parcel of Gala Not-120 admeasuring about 1265 sq.ft.
Built up situated in the building known as Sanjay Building No.5 of Akshay
Mittal Industrial Premises Co-operative Society Ltd. standing on piece of
land bearing CTS No. 1637, of village Ma7Ol situated at Sir M.V Road,
Andheri (E) Mumbai 400059, situated within Registration District and
Sub- District of Mumbai City & Mumbai Suburban and within limits of
Greater Mumbai Municipal Corporation.
 Together with right to avail & enjoy the common areas and factories
appurtenant to the said Gala with right of way, easement and parking
made available to said Gala together with the proportionate rights in the
land with share certificate and membership attached to the said Gala.
Certified Copy of “Composite Deed of Mortgage & Hypothecation for
Creation of Additional Charge” dated 24/03/2015, is hereto
annexed and marked Annexure

19. The Claimant Bank further reviewed the Cash Credit Facility of
Rs.500.00 Lakhs vide sanction letter dated 31.12.2015 as per the
terms and conditions mentioned therein. Certified copy of the
Sanction Letter dated 31/12/2015 is annexed hereto and marked
as Annexure -”R”.

20. The Respondent No.1 through its Directors again applied for Term
Loan (L & B) of Rs.3.15 Crores for 78 months + 6 months moratorium
period for purchase of Land and Building and renovation thereof as per
the terms and conditions mentioned therein.. The Certified copy of
sanction letter dated 02/05/2016 is annexed hereto and marked as
Annexure -”S”.

21. The Claimant Bank state that to secure the aforesaid facility of Rs. 3.15
Crores the Respondents have executed the following documents on
02/08/2016:-
i. APidavit of Non - Encumbrance
The Certified Copy of the Affidavit of Non- Encumbrance is annexed hereto
and marked Annexure “T”.

22. The Claimant Bank state that to secure the aforesaid facility of Rs. 3.15
Crores the Respondents have executed the following documents on
13/06/2016:-
 I Promissory Note
Letter of continuing security
iii Letter of Lien and Set Off
iv. Loan Agreement
. Deed of Hypothecation of Stock, Book Debts & Machinery
vi. Deed of Guarantee

The Certified Copies of the aforesaid loan documents are annexed

hereto and marked as Annexure “U1-U6”. Upon execution of above
documents, the Claimant allowed the Respondent No.1 to utilise the
entire Loan of Rs.315.00 Lakh.

23. The Claimant Bank states that, in order to secure the repayment of
above referred term loan facility of Rs. 3.15 Crores (Rupees Three Crores
Fifteen lacs only), the Respondent No.1 has validly executed “” Deed of
Mortgage of Additional Security” dated 17* September, 2016 bearing
Registration No.PLR-4978-2016 registered on 17" September, 2016
before the Sub-Registrar at Palghar and by virtue of execution and
registration of the said “Deed of Mortgage of Additional Security ” dated
17* September, 2016, bank has encumbered the immovable property
more particularly described hereunder.
O SCHEDULE
All that piece and parcel of Plot of land and construction thereon at
Plot No. C-1/2, the Tarapur Industrial Area, within the village limits of
Kolwade, Taluka Registration sub - Palghar District and registration sub
District Palghar containing by admeasurements about 3452 sq. mtrs. and
Building admeasuring 1570.51 sq. mtrs thereabout bounded as
thereabout bounded as follows that it to say
On or towards the North by: Plot no. C-1/1
On or towards South by : Plot no. C-1/3
On or towards East by : Power line and part of plot No.C-1/8, Estate
Road and Plot’No. C-1/7
On or towards West by : MIDC Road
 Together with all rights of way easement available to said property along
with structure standing and/or to be constructed herein after. Cenified
Copy of “Deed of Mortgage of Additional Security” dated
17/09/2016, is hereto annexed and marhed Annexure 'W”.

24. The Claimant Bank further reviewed the Cash Credit Facility of
Rs.500.00 Lakhs vide sanction letter dated 10.01.2017 and 05.01.2018 as
per the terms and conditions mentioned therein. ,Certified copy of the
Sanction Letters dated 10.01.2017 and 05.01.2018 are annexed
hereto and marked as Annexure -‘ W“ and “X”

25. The Respondent No.1 through its Directors again applied for Cash
Credit Facility of Rs. 650.00 Lakhs (existing Rs.500.00 Lakhs + Addl.
Rs.150.00 Lakhs) @ 9.65% p.a. as per present credit rating as per the
terms and conditions mentioned therein. The Certified copy of sancGon
letter dated 25/01/2019 is annexed hereto and marked as
Annexure -”Y”.

26. The Claimant Bank state that to secure the aforesaid facility of Rs.
650.0 lakhs the Respondents have executed the following documents on
21/02/2019:-
i Promissory Note
ii Letter of continuing security
iii. Letter of Lien and Set Off
iv. Loan Agreement
v Deed of Hypothecation of Stock, Book Debts and Machinery
vi. Deed of Guarantee

The Certified Copies of the aforesaid loan documents are annexed

hereto and marked as Annexure ‘Z1-Z6‘ fcollv.). Upon execution of
above documents, the Claimant allowed the Respondent No.1 to utilise
the entire Loan of Rs.650.00 Lakh.
27. The Claimant Bank states that, in order to secure the repayment of
above referred term loan facility of Rs. 6,50,00,000/- ( Rupees Six Crores
Fifty lacs only), the respondent has validly executed “Composite Deed of
Mortgage & Hypothecation for Creation of Additional Charge” dated
22/02/2019 bearing Registration No.BDR18-2166-2019 and the same
was registered on 22.02.2019 before the Sub-registrar at Andheri-1 and
by virtue of execution and registration of the said “Composite Deed of
Mortgage & Hypothecation for Creation of Additional Charge” dated
22/02/2019, bank has encumbered the immovable property more
particularly described hereunder.

SCHEDULE I
All that piece and parcel of Gala Not-120 admeasuring about 1265
sq.ft. Built up situated in the building known as Sanjay Building No.5 of
Akshay Mittal Industrial Premises Co-operative Society Ltd. standing on
piece of land bearing CTS No. 1637, of villaq•e Marol situated at Sir M.V
Road, Andheri (E) Mumbai 400059, situated within Registration
District and Sub- District of Mumbai City & Mumbai Suburban and
within limits of Greater Mumbai Municipal Corporation.

Together with right to avail & enjoy the common areas and factories
appurtenant to the said Gala with right of way, easement and parking
made available to said Gala together with the proportionate rights in the
land with share certificate and membership attached to the said Gala.

SCHEDULE II
All that piece and parcel of Plot of land and construction thereon at
Plot No. C-1/2, the Tarapur Industrial Area, within the village limits of
Kolwade, Taluka Registration sub - Palghar District and registration sub
District Palghar containing by admeasurements about 3452 sq. mtrs. and
Building admeasuring 1570.51 sq. mtrs thereabout bounded as
thereabout bounded as follows that it to say
 On or towards the North by: Plot no. C-1/1
On or towards South by : Plot no. C-1/3
On or to‘<ards East by : Power line and part of plot No.C-1/8, Estate
Road and Plot No. C-1/7
On or towards West by : MIDC Road

Together with all rights of way easement available to said property along
with structure standing and/or to be constructed herein after. Certified
Copy of “Composite Deed of Mortgage & Hypothecation for Creation
of Additional Charge” dated 22/02/2019, is hereto annexed and
marked Annexure “AB”.

28. The Claimant Bank further review the Cash Credit Facility of Rs.650.00
Lakhs vide sanction letter dated 17.02.2020 as per the terms and
conditions mentioned therein. Certified copy of the Sanction Letter
dated 17/02/2020 is annexed hereto and marked as Annexure -”AC”.

29. The Respondent No.1 through Authorized Signatories again applied

for Term Loan of Rs. 130.00 Lakhs @ 9.75% p.a. as per present credit
rating for working capital purpose as per the terms and conditions
mentioned therein. The Certified copy of sanction letter dated
03/07/2020 is annexed hereto and marked as Annexure -”AD”.

30. The Claimant Bank state that to secure the aforesaid facility of Rs.
130.0 lakhs the Respondents have executed the following documents on
03/07/2020:-
i. Promissory Note
11. Letter of continuing security
. Letter of Lien and Set Off
iv Loan Agreement
v Deed of Hypothecation of Stock, Book Debts & Machinery
o. Deed of Guarantee.
 The Certified Copies of the aforesaid loan documents dated
03/07/2020 are annexed hereto and marked Annexure Al -AE6”
fcoIiv.1

31. The Respondent No.1 through its Directors applied for Review with
Curtailment of Rs. 352 Lakhs out of existing Credit Facilities of Rs. 650.00
Lakhs being Rs. 2.98 Crores @ 9.75% p.a. as per present credit rating for
working Capital finance as per the terms and conditions mentioned
therein. The Certified copy of sanction letter dated 22/01/2021 is
annexed hereto and marked as Annexure -”AF”.

32. The Claimant Bank by a letter dated 24.02.2021 bearing reference No.
COS/LPD/BVL/166/2020-21 informed the Directors of Respondent No.1
that Plot No.C-1/2 Tarapur Industrial Area MIDC, near camlin naka,
boisar,’ palghar -401506 that was kept as collateral on 10.01.2017 has
been released as they had already deposited an amount of Rs. 550.00
Lakhs. The Certified copy of letter dated 24.02.2021 is annexed
hereto and marked as Annexure -”AG”.

33. The Respondent availed and enjoyed by utilizing loan by operating the
Cash Credlt Loan Account No. 02460010569 at Borivali Branch of the
Claimant Bank. The Respondent operated the said account and did the
transaction in due course of its business and certified account extract
from the original extract maintained by the Bank is produced herewith
and the said account extract is duly certifi•d by the Authorized Officer of
the! back under the prevailing rule of law and frolr the said account
extract, the balance standing as on 30.04.J023 at the foot of loan account
payable by the Respondents to the Claimant Bank is Rs. 3,30,34,465.36
plus further interest @14 % p.a till realization and other charges thereon.

34. The Claimant Bank states that, the loan amount is defaulted by the
Respondent No.1. The Claimant Bank states that they have sent several
reminder/ oral requests to the Respondents calling upon them to pay the
 amounts due. The Respondents have however failed and neglected to pay
the amount in spite of the aforesaid reminders/ requests.

35. The Claimant Bank states that, the Respondents failed to comply with the
terms of the sanction and committed persistent default in repayment of
the liability and therefore the account was classified as Non- Performing
Asset (NPA) on 01/07/2021 as per the RBI Guidelines.

36. The Claimant Bank state that, as no payment were received from the
Respondents, the claimant sent a final demand notice to the Respondents
on 12/07/2021 calling upon them to clear their outstanding dues
amount of Rs. 4,39,06,233.90 being the amount due as on 30/06/2021
along with future interest thereon @l4% p.a. subject to RBI directives/
Bank’s policy from time to time till realization. The Claimant Bank state
that although the Respondents have received the aforesaid notice, they
have failed and neglected to make payments as demanded by the
Claimant Bank. The Certified copy of the Final Demand Notice dated
12/07/2021 is hereto annexed and marked as Annexure “AH”.

37. The Disputant Bank states that as per the amendment to The
Enforcement of Security Interest and Recovery of DebtsLaws
(Amendment) Act, 2012, (1 of 2013 dated 3.1.2013) the said Act is ,y
applicable to Multi State Co-operative Bank and the Disputant Bank is
therefore under the purview of the Securitization and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002. On the
basis of this amendment, the Disputant Bank is authorized to enforce the
secured assets by taking its possession and by disposing off, recover its
dues without intervention of the Court. The Disputant Bank states that
the provisions of this Act are in addition to and not in derogation of
any of the law.

38. The Disputant Bank further submits that in view of the provisions
made under above said Act, the Disputant Bank decided to make its
recovery under Securitization and Reconstruction of Financial Assets and
 Enforcement of Security Interest Act, 2002 (SARFAESI). The Disputant
Bank accordingly, issued the notice under Section 13(2) of the
(SARFAESI) to the Respondents on 26.10.2021 thereby asking the
Respondents to pay Its.4,49,96,743.90 plus further interest thereon. As
the Respondents failed to comply with the said notice, the Disputant
Bank initiated action under SARFAESI Act. Certified Copy of the Notice
dated 26/10/2021 U/s.13 (2) of SARFAESI Act, is hereto annexed
and marked as Annemire-“AI”.

39. The Claimant Bank states that the Bank has sanctioned and granted loan
facilities to the Respondent No.1 Company as the primary borrower and
Respondent No.2 and 3 are the Directors, who stood as Guarantors in
personal capacity and Respondent No. 4 as the Guarantor agreed and
undertook to make its repayment together with interest and other money
in terms of an agreement executed by them and further agreed to make
the repayment of the said loan together with interest and other moneys
immediately on demand on the part of the Claimant Bank. The

Respondent No.1 along with its Guarantors agreed to pay the interest
regularly and punctually chargeable by the Bank on daily balance
standing at the foot of the said loan account and which was payable by
the Respondent No.1 by the end of every month or by the end of every
quarter as per terms of the agreement.

411. The Claimant Bank further submits that, the Respondent failed, neglected
and avoided to repay the balance outstanding at the foot of Loan account
and interest thereon and therefore the outstanding balance standing at

the foot of the Loan account of the Respondents after partial W/OFF
which is due and payable by the Respondents is still recoverable from the
Respondents. The particular thereof are as follows:

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 Cash Credit Loan Account No. 02460010569

Principal Rs. 2,65,45,456.56/-

Interest (up to 30/04/2023) Rs. 64,89,008.80/-
Total outstanding Rs. 3,30,34,465.36 +
further interest @14% p.a.
from 01/05/2023 till
realization.

The statement of account in respect of all the entries pertaining to the

said account of Respondent No.1 is produced along with this reference.
The correctness of the said statement is also duly certified by the
authorized officer of the Claimant Bank as required under the Bankers
Book of Evidence Act 1871 as modified by Information Technology Act.
2002. The Certified copy of the Statement of Account is hereto
annexed and marked as Annexure AJ

41. The Respondent Nos.1 to 4 have executed Guarantee Agreement /1oan

documents wherein the Guarantors inter alia agreed to stand themselves
as Guarantors for the loan availed in terms of the Guarantee Agreement /
loan documents to the loan sanctioned or to be advanced by the Claimant
Bank to the Respondent No.1 and agreed to make its repayment of said
loan together with interest and other moneys or the balance standing at
the foot of the said loan account. In the event of default on the part of
Respondent No. 1 to make its repayment or in the event of any breach of
.’ violation of anyone or more term of contract on the part of the
Respondent No.1 and thereby the Respondent Nos.2 to 4 being
Guarantors have agreed and accepted the responsibility of the liability.
Thus, the liability of the loan together with interest and other moneys
jointly and severally together with Respondent No.1.

42. The Claimant Bank submits that, the Loan account transaction which is
subject matter of this proceeding has taken place within territorial
jurisdiction of this Arbitral Tribunal and between the Applicant Bank and
the Respondents, who are the members of the Claimant Bank. Further,
 the matter in the Proceeding is under the provisions of Section 84 of
Multi State Co-Operative Societies Act, 2002. As such this Hon’ble Arbitral
Tribunal has jurisdiction to settle/decide this claim application.

43. The Claimant Bank submits that, the subject matter of the present
proceeding is the recovery of outstanding amount of loan standing at the
foot of credit facility account of Respondent No.1 and interest thereon i.e.
the dispute has arisen between rhe Claimant Bank and the Respondents
i.e. the Society and its members about the repayment of the loan and
interest thereon and the said dispute is touching the business of the
Claimant Bank. For all the above reasons this Hon’ble Arbitrator has
jurisdiction to entertain, try and decide the present proceeding under
section 84 of the Multi State Co-operative Societies Act, 2002.

44. The Claimant Bank states that ie Respondents ordinarily agreed to

make the repayment of loan who agreed to make the repayment of the
credit amount together with interest or such other rate as the Bank may
decide from time to time as per the Sanction letter and or as per the
directives of R.B.I. or the resolution of the Board of the Directors.
Accordingly, the prevailing rate of interest to such type of the loan being
the N.PA account decided by the Bank. It is further agreed by the
Respondents that in the event of default of payment of interest or part
thereof, in the present case, the Respondents have committed default and
made breach of contract. The Respondents ordinarily agreed to make
the repayment of loan amount together with the interest @14% p.a. at the
time of execution of loan agreement (contract) with the Claimant Bank
now as per the present policy and as per the RBI directives the
Respondents are entitled to furnish @14% including penal interest.

45. The cause of actipn accrued to the present proceeding when the
Respondents committed the default and breach of terms of contract and
further failed, neglected and avoided to make the repayment of the claim

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 amount even after service of Demand Notice and the said cause of action
is continued up to this date. The Respondents failed to make the
repayment of the claim amount till this date.

46. The Claimant state that their Board of Directors in their meeting held on
23.12.2022 have passed a resolution No.179 to file the present
application under section 84 of the Multi State Co-op. Soc. Act, 2002. The
Copy of the aforesaid resolution is hereto annexed and marked
Annexure “AK”.

47. The Claimant Bank hereby craves leave of this Hon’ble Tribunal to add,
alter, amend and/or modify any of the aforesaid contents/ground and to
file additional documents in support of the same as and when required.

THEREFORE IT IS PRAYED THAT:

i. The claim be decided and award be granted directing the
Respondent Nos.1 to 4 jointly and severally liable to make
repayment of Rs. 3,30,34,465.36 together with interest thereon
@14% p.a. from 01.05.2023 till complete realization of the entire
claim amount.

ii. Entire cost of Arbitration proceeding be awarded to the Claimant

Bank from the Respondents;

iii. That this Hon’ble Authority be pleased to pass the order of

attachment of/freeze the Bank account of the Respondents
maintained with Nationalized Bank / Public Sector Bank or any
other Bank wherein the Respondents have their respective salary
accounts or any other account along with the order of remittance
from the said account to the loan account of the Borrower and / or
all the Respondents with the Claimant up to the realization towards
the outstanding amount in the loan account.
 iv. Any other just and proper orders as this Hon’ble Arbitral Tribunal
deems fit and proper in the interest of justice be passed.

Mumbai

Claimant Bank
Rupa Date
Asst. General Manager
Boriwali (West)

V E R I F I CA T I O N

I, Mrs. Rupa Date /.uthorised Officer of the Claimant Bank state on solemn
affirmation that whatever stated as information hereinabove is true and
correct to the best of our knowledge and belief. I believe the same to be

4ue.

Solemnly affirmed at Mumbai,

On this ” day of 2023 )

Advocate for the Claimant Bank Claimant Bank

Rupa Date
,¿,sL ssne‹a\ Manager
Boriwali (West)