CANARA BANK vs Vijayan VS on 10 October 2017

1. Vijayan V.S, S/o Sanku, Vattathara House, Ayodhya Nagar, Pallipuram, Palakkad, Kerala – 678006.

2. Binuraj V.V,

S/o Vijayan, Vattathara House, Ayodhya Nagar, Pallipuram, Palakkad, Kerala – 678006. …Defendants This Transferred Application having been heard on 25.08.2017 in the presence of Advocate Sri P.P Joyi for the applicant bank, and the defendants being exparte, and stood over to this day for consideration, the Tribunal delivered the following:- F I N A L O R D E R This is an Application filed by the applicant bank under S.19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 – for short ‘the Act’ - for recovery of the sum of ₹15,08,635.95 due under vehicle loan account

No.2680603001403 with interest thereon @10.75% per annum with monthly rests plus penal interest @2% per annum from the defendants and their assets.

2. The Transferred Application was originally filed on 12.05.2016 before the Debts Recovery Tribunal - 2, Ernakulam which was then having jurisdiction over the State of Kerala except the districts of Ernakulam and Idukki with effect from 09.05.2016 as per notification published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii) dated 04.05.2016 vide S.O 1641(E) dated 02.05.2016, and was registered as (Original Application) ‘OA 3/2016’. In view of the amendment in area of jurisdiction in the aforesaid principal notification made by the Central Government vide notification published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii) dated 25.01.2017 vide S.O 253(E) dated 25.01.2017, OA 3/2016 stood consigned to this Tribunal and the proceedings continued before this Tribunal in the newly registered number as (Transferred Application) TA 110/2017.

3. The summonses sent to the defendants in OA 3/2016 and TA 110/2017 by registered post respectively on 03.06.2016 and 07.03.2017 were returned un-served with the postal endorsement ‘left’. Hence in terms of the provisions laid down under O.5 R.20(1-A) of the Code of Civil Procedure, 1908, substituted service of summons were taken out to the defendants in their last known correct address by way of publication in the Mathrubhumi daily dated 26.05.2017. But the defendants never appeared nor were they represented and thus they were declared exparte on 28.07.2017.

4. The Manager of the applicant bank, as AW1 filed proof affidavit and got marked Exts.A1 to A8 in support of its case.

5. Although the defendants did not contest the TA and remained exparte, I have examined the question of maintainability and jurisdiction and I found that the TA is well maintainable and this Tribunal has jurisdiction to entertain the TA.

6. According to the applicant bank, the 1st defendant on 31.05.2013 availed a vehicle loan of ₹12,70,000/- for the purchase of the schedule vehicle on due execution of necessary security documents in its favour. The loan was to be repaid in 72 equated monthly instalments of ₹24,173/- each commencing from 31.06.2013. The repayment of the amounts due under the aforesaid loan was guaranteed personally by the 2nd defendant and secured by the hypothecation over the schedule vehicle, which is now under the custody of the Station House Officer, North Police Station, Palakkad.

7. On the showing of the applicant bank itself, as could be inferred from paragraph 5.7 of the TA along with the averments of AW1 in his proof affidavit r/w Exts.A6 account and A7 statement relating to the vehicle loan, the sum of ₹15,08,635.95 claimed as due under the TA is inclusive of the sum of ₹21,937/- debited by way of penal interest under Ext.A6 account during the period from 19.06.2013 to 30.04.2016. It is well settled that penal interest cannot be capitalised and no interest can be charged on penal interest. If any authority is required we find the same in the decision of the Hon’ble Supreme Court in Central Bank of India v. Ravindra [reported in AIR 2001 SC 3095 : (2002) 1 SCC 367 : 2002 (1) KLT 743(SC)]. Therefore, the applicant bank is not entitled to claim interest on the aforesaid penal interest of ₹21,937/-.

8. In the above circumstances, the case of the applicant bank regarding recovery of the sum of ₹15,08,635.95 claimed as due under Ext.A6 certified copy of the statement of account relating to vehicle loan No.2680603001403 as on 12.05.2016, the date of the TA with interest pendentelite and post final order interest on the sum of ₹14,86,698.95 from the defendants and their assets is proved by the uncontroverted averments in the proof affidavit of AW1 along with Exts.A1 to A8.

9. Having regard to the amounts availed in the form of vehicle loan for purchase the schedule vehicle, and the repayments made, and the interest and the penal interest charged, this Tribunal in exercise of its discretionary power in granting interest as

provided under the provisions of S.19(20) of the Act holds that the applicant bank is entitled to get interest pendente-lite and post final order interest @10% per annum.

10. The applicant bank is entitled to and wherefore given a final order on the following lines:- (a) The applicant bank shall recover the sum of ₹15,08,635.95 (Rupees fifteen lakhs eight thousand six hundred thirty five and paise ninety five only) with interest on the sum of ₹14,86,698.95 (Rupees fourteen lakhs eighty six thousand six hundred ninety eight and paise ninety five only) @10% per annum from 12.05.2016 till realisation and also its costs from the defendants and their assets.

(b) The schedule to the TA shall be appended to this final order.

(c) The applicant bank shall file memo of costs within ten days from the date of this final order.

(d) A certificate of recovery shall be drawn up on the basis of this final order and be issued along with a copy of this final order to the Recovery Officer for recovery of the amount of debt specified under paragraph 10(a) above.

11. Communicate a copy each of this final order and the recovery certificate to be issued as specified under paragraph 10(d) above to both parties as provided under sub- section (21)(i) of S.19 of the Act r/w R.16 of the Debts Recovery Tribunal (Procedure) Rules, 1993 as amended from time to time. [Dictated to my PA directly on the computer, corrected and pronounced by me in the open Tribunal on this the 10th day of October 2017]

[ N. SOMASUNDAAR ]

Appendix TA 110/2017

A P P E N D I X Witness for Applicant: AW1: Suresh Kumar K.G, Manager of the applicant bank.

Witness for Defendant(s): Nil Applicant’s Exhibits

Ext.No. Date Particulars of documents

A1 31.05.2013 Loan application submitted by the 1st defendant to the applicant bank A2 31.05.2013 Canmobile agreement executed by the 1st defendant to the applicant bank A3 31.05.2013 Guarantee agreement executed by the 2nd defendant to the applicant bank A4 07.08.2013 Copy of the certificate of registration in respect of the schedule vehicle A5 16.12.2014 Copy of common order of the Judicial First Class Magistrate – II, Palakkad in criminal miscellaneous petition Nos. 3192/2014 in ST No.535/2014, 3514/2014 in ST No.534/2014 and 3067/2014 in ST No.535/2014 A6

Certified copy of the statement of account relating to vehicle loan No.2680603001403 A7

Statement showing the penal interest debited under Ext.A6 account and the effect of capitalisation thereof A8

Statement showing the varying rate of interest applied under Ext.A6 account during different periods Defendant’s Exhibits – Nil

(PRESIDING OFFICER)

IN THE DEBTS RECOVERY TRIBUNAL - 1, ERNAKULAM

PRESENT: SRI N. SOMASUNDAAR BA BL

Dated the 10th October 2017

TA NO. 110 OF 2017

Between

Canara Bank, having its registered office at Bangalore and branch among other places including an SME Branch at Chanson Aracade Building, Wise Park Road, Alamaram, Kanjikode P.O, Palakkad, Kerala – 678621. …Applicant

And

Vijayan V.S, S/o Sanku, Vattathara House, Ayodhya Nagar, Pallipuram, Palakkad, Kerala – 678006 and another. …Defendants

F I N A L O R D E R

IN THE DEBTS RECOVERY TRIBUNAL-1 ERNAKULAM

D.R.C. No. 254 OF 2017 IN TRANSFERRED APPLICATION NO.110 OF 2017

(Originally presented on 12.05.2016 before the Debts Recovery Tribunal-2 Ernakulam and registered as OA 3/2016)

R E C O V E R Y C E R T I F IC A T E (bearing even date of final order dated 10.10.2017)

Between

having its registered office at Bangalore and branch among other places including an SME Branch at Chanson Arcade Building, Wise Park Road, Alamaram, Kanjikode P.O., Palakkad, Kerala-678621. .....…Applicant/Certificate holder bank

And

1. Vijayan V.S., S/o Sanku, Vattathara House, Ayodhya Nagar, Pallipuram, Palakkad, Kerala-678006.

2. Binuraj V.V., S/o Vijayan, Vattathara House, Ayodhya Nagar, Pallipuram, Palakkad, Kerala-678006.

…………….Defendants/Certificate debtors

Whereas, the above titled Transferred Application under Section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act 1993 (hereinafter referred to as ‘the Act’, for short) having come up before me on 10th day of October,

2017 for final disposal and determination of the debt against the defendants/Certificate debtors.

2. It is hereby ordered and certified under the provisions of sub-section (22) of Section 19 of the Act for recovery of the sum of 15,08,635.95 (Rupees fifteen lakhs eight thousand six hundred thirty five and paise ninety five only) with interest on the sum of 14,86,698.95 (Rupees fourteen lakhs eighty six thousand six hundred ninety eight and paise ninety five only) @10% per annum from 12.05.2016 till realisation and also its costs from the defendants/certificate debtors and their assets.

Given under my hand and the seal of this Tribunal on this the 23rd day of November, 2017.

[ N. SOMASUNDAAR ]

SCHEDULE OF AMOUNT TO BE RECOVERED UNDER THE RECOVERY CERTIFICATE

Sl.No Item of amount to be recovered Amount(in )

(a) Amount determined to be recovered from the defendants/ certificate debtors and their assets. 15,08,635.95

(b) Interest @10% per annum from 12.05.2016 to 10.10.2017 (517 days) on 14,86,698.95/- 2,10,581.74

(c) Costs 37,065.00

Total amount to be recovered as on 10.10.2017 from the defendants/ certificate debtors and their assets. 17,56,282.69 (Rupees seventeen lakhs fifty six thousand two hundred eighty two and paise sixty nine only)

DEBTS RECOVERY TRIBUNAL, ERNAKULAM

SCHEDULED TO RECOVERY CERTIFICATE

TA 110 OF 2017

Canara Bank Vs. Vijayan V.S

DETAILS OF COSTS

Costs memo filed on 17.10.2017

Sl.No. Item of costs Claimed (in ) Allowed (in ) Remarks

Court fee 18,000.00 18,000.00

Stamp value 5.00 5.00 (vakalath fee)

Advocate’s fee 18,500.00 18,500.00

Clerkage 1,850.00

(not allowed)

Preparation of paper book 750.00 560.00 (typing, binding & Xerox charges)

Miscellaneous expenses 2,250.00

(not allowed) Total 41,355.00 37,065.00 (Rupees thirty seven thousand sixty five only)

Debts Recovery Tribunal-1, Ernakulam

TA No.110/2017

Final order dated 10.10.2017 and cost memo filed by the applicant bank are placed below for kind perusal. Accordingly, Recovery certificate has been typed and put up along with schedule of amount to be recovered under the recovery certificate, for kind approval and signature please.

Assistant Registrar

Registrar

Hon’ble Presiding Officer