BANK OF INDIA vs SANTAN on 5 January 2019

FINAL ORDER

The applicant bank has filed Original Application [OA] on 02.01.2013 under Section 19(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 for recovery of a sum of Rs.11,05,146.85 (Rupees Eleven lakhs five thousand one hundred forty six and paise eight five only) together with future interest at the rate of 13% with monthly rests from the date of filing the OA till date of realization and also from the assets of the defendant.

BRIEF FACTS OF THE CASE

1. The applicant is Body Corporate duly constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Head Office at ‘Star House, C-5, G-Block, Bandra-Kurla Complex, Bandra (East) Mumbai-400 051’ and among other places branch office at Puthenchantai.

2. The present application is filed by the Assistant General Manager, Thiruvananthapuram Main Branch being the Principal Officer and power of attorney holder is entitled to sign, verify and to file the present application for and on behalf of the applicant bank.

3. The applicant had granted credit on 20.09.2010 and defendant executed a security documents and a demand to repay the loan is made on 14.09.2012 and the applicant bank has filed the present OA 02.01.2013 for realizing the loan amount due to it from the defendant. Thus, the application is within the period limitation prescribed under section 24 of the RDDBFI Act. Since the amount due is more than Rs.10 lakhs and the applicant branch is at Puthenchantai Branch, Thiruvananthapuram, the OA is maintainable and the Tribunal has territorial jurisdiction to entertain the OA.

4. It is case of the applicant that the defendant is the proprietor of M/s.SPG Transport, had approached applicant and submitted an application on 06.09.2010 for a cash credit facility of Rs.8lakhs. At the request of the defendant, the applicant vide sanction letter dated 08.09.2010 sanctioned an amount of Rs.8 lakhs.

5. As a security for the loan, defendant had executed consolidated stamped agreement dated 20.09.2010, demand promissory note dated 20.09.2010, letter of undertaking dated

20.09.2010, Hypothecation of book debts dated 20.09.2010. As per the aforesaid agreements, it was agreed that he will pay the loan amount of Rs.8lakhs with interest thereon and also agreed to abide the terms and conditions of sanction.

6. It is the further case of the applicant that the defendant has failed to abide the terms and conditions of sanction and also failed to operate the account regularly. Since the defendant did not care to repay the balance amount after several requests, the bank issued legal notice on 14.09.2012 calling upon the defendant to pay the outstanding amount in 15 days from the date of receipt of notice. Despite of notice, defendant did not clear the debts. As on the date of filing the OA an amount of Rs.11,05,146.85 is due to the applicant from the defendant under the loan account No.853830110000008. Hence the present OA.

7. After filing of the OA, the applicant has taken out summons on defendant as directed by the Tribunal and filed proof service on 18.03.2013. Accordingly, the service of summons was completed as per the regulations. Inspite of service of summons, defendants neither appeared nor represented and he chose to remain absent and hence he was declared ex-parte on 16.08.2016.

8. The evidence on the side of the applicant bank consists of the proof affidavit of its Assistant General Manager, AW1 and Exhibits A1 to A14 is marked on the side of applicant and closed their side of evidence.

9. Heard arguments of the applicant bank and perused the records of the case. The following points arise for my consideration:

(i) Whether the applicant is entitled for the reliefs prayed for in the OA?

(ii) What order?

My findings on the above points are as follows:- Point No.(i):

In affirmative

Point No.(ii):

As per final order.

Reasons:-

10. The evidence of the applicant bank by way of proof affidavit of its Assistant General Manager AW1, reiterates the facts pleaded in the OA and the affidavit is corroborated by the above referred Exhibits A1 to A14 which clearly establishes the case of the applicant bank to allow the present OA. Added to this, absence of defendant inspite of service summons appears to be intentional without any bonafide reasons and it appears that he did not contest the matter as he admitted the entire case of the applicant as sought for in the OA. Even otherwise the whole case of the applicant bank is based on the documentary evidence and the witness has duly proved all the documents exhibited by him. It is quite evident from the documents placed on record by the applicant bank that defendant has availed the credit facility from the applicant bank and failed to repay the dues of the applicant bank.

11. Having regard to the amount advanced, the interest applied, the conduct and operations in the account and the default committed, I am of the view that the applicant bank is entitled to get a final order on the following lines:-

ORDER

(12) The OA is allowed with costs.

(a) The defendant is directed to pay the applicant bank a sum of Rs.11,05,146.85/-(Rupees Eleven lakhs five thousand one hundred forty six and paise eight five only) due under the cash credit loan account No.853830110000008 together with future interest on the sum of Rs.10,81,936.85 (Rupees Ten lakhs eighty one thousand nine hundred thirty six and paise eight five only) (Rs.11,05,146.85 – penal interest of Rs.23,210) at the rate of 13% per annum from 31.12.2012 till realization.

(b) In the event of failure of the defendant to pay the OA claim amount, the bank is at liberty to proceed against the personal assets of the defendant both movable and immovable as required under law.

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

(d) Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of the final order.

13. The Registry is directed to communicate copy of the order to the parties concerned by speed post or registered post with AD. [Dictated to the Steno, transcribed by him, corrected by me and then pronounced in the open court on this the 5th day of January, 2019]

(S.V.GOWRAMMA) Presiding Officer

A P P E N D I X Witness for Applicant: AW1: K.Muruganandan, Assistant General Manager of the applicant bank.

Witness for Defendant(s): Nil

Exhibits on the part of the applicant

Ext.No. Date Particulars of documents

A1. 06.09.2010 Loan application submitted by the defendant to the applicant bank for financial assistance to the tune of Rs.8lakhs. A2. 08.09.2010 Sanction letter given by the bank officials with the endorsement of the defendant. A3. 20.09.2010 Demand promissory note for Rs.8lakhs executed by the defendant in favour of the applicant bank. A4. 20.09.2010 Undertaking letter along with the annexure given by the defendant in favour of the applicant bank. A5. 20.09.2010 Consolidated stamped agreement for Rs.8lakhs executed by the defendant in favour of the applicant bank. A6. 20.09.2010 Charges and hypothecation of books debts executed by the defendant in favour of the applicant bank. A7. 14.09.2012 Legal notice issued by the applicant bank’s counsel to the defendant demanding the entire amount due to the bank. A8. 06.07.2010 True copy of Circular No.104/41 issued by Head office of the applicant bank showing the revision in BPLR with effect from 01.07.2010. A9. 15.11.2010 True copy of Circular No.104/94 issued by Head office of the applicant bank showing the revision in BPLR with effect from 11.10.2010. A10. 20.01.2011 True copy of Circular No.104/132 issued by Head office of the applicant bank showing the revision in BPLR with effect from 15.12.2010. A11. 08.03.2011 True copy of Circular No.104/155 issued by Head office of the applicant bank showing the revision in BPLR with effect from 03.02.2011. A12. 10.06.2011 True copy of Circular No.105/46 issued by Head office of the applicant bank showing the revision in BPLR with effect from 05.05.2011.

A13. 26.08.2011 True copy of Circular No.105/92 issued by Head office of the applicant bank showing the revision in BPLR with effect from 28.07.2011. A14.

Certified copy of the statement of account of the loan account No.SPG853830110000008 duly certified under Banker’s Book of Evidence Act.

Defendant Exhibits – Nil

(PRESIDING OFFICER)

IN THE DEBTS RECOVERY TRIBUNAL-II, KERALA AT ERNAKULAM

Dated this the 05th day of January, 2019

Present: S.V.Gowramma, B.A., LL.B Presiding Officer

Between Bank of India, Puthenchantai Branch. …Applicant

And Mr.Santan.

…Defendant

FINAL ORDER