“A Cash Credit (CC) is a short-term source of financing for a company, it is a short-term loan. It enables a company (here the proprietorship) to withdraw money from a bank account without keeping a credit balance. The account is limited to only borrowing up to the borrowing limit.” Petitioners prayed to seek instruction regarding the deposit. This judgment and final order were given in the high court of Punjab and Haryana at Chandigarh on 02/07/2021 by the Hon’ble Mr. Justice Jaswant Singh and Hon’ble Mr. justice Rajesh Bhardwaj in the case M/s om Prakash Parshotam Lal & another versus the Indian bank &another CWP-8217-2021(O&M). The proceedings of the court were held in the virtual platform due to the covid -19 and hence recorded over a video conferencing.
The following are the facts of the case, the petitioner (No.1) Amit Pamma was the sole owner of a proprietorship concern. This proprietorship had availed, Rs. 50 lakhs in the year 2016 through a Cash credit limit loan. This cash credit loan was borrowed from the Allahabad bank however this bank is now the Indian bank (respondent -1). Smt. Sudesh Pamma the mother of the proprietor (petitioner no.2) she stood as the guarantor and as collateral security offered a double storey building which was a shop and residential area about three marlas (The Marla is a traditional unit of area that is used in India, Pakistan and Bangladesh). The premises were located in the district of Jalandhar.
In the year 2019, it was averred that the cash credit loan account was declared as N.P.A (Non- performing asset) I.e. it refers to a classification of loans or advances that are in default or in arrears. A loan is in arrears when principal or interest payments are late or missed. The NPA was declared due to the failure of payments of the installments by the petitioners. According to the proceedings of The Indian bank, they were seeking symbolic possession on the 3rd of March 2021 under the SARFAESI act section 13(4) which states that In case the borrower fails to discharge his liability in full within the period specified in the law, the secured creditor may take measures to recover his secured debt, by taking possession of the secured assets. Or by appointing any person to manage the secured assets and the possession. The outstanding loan amount as of 28/02/2019 was Rs. 59,97,545.69. The petitioners prayed before the court seeking to get instructions from the respondent (the Indian bank) for depositing Rs. 15-20 lakhs to meet the amount overdue.
In conclusion, the court held that “At the time of hearing today, counsel for the petitioners submits that in spite of best efforts no instructions could be obtained on the previous date of hearing and the position is same even today. He, thus, prays for permission to withdraw the present petition, at this stage. Prayer is allowed. The present petition is dismissed as withdrawn, at this stage.”