INDIAN OVERSEAS BANK vs M/s ADORN FAMILY SALOON & SPA on 5 January 2019

FINAL ORDER

The applicant bank has filed Original Application [OA] on 25.06.2015 under Section 19(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 for recovery of a sum of Rs.12,80,978/- (Rupees Twelve lakhs eighty thousand nine hundred and seventy eight only) with interest @ 13.80% per annum with monthly rests from the date of this application till the date of recovery and also from the assets of the defendants.

BRIEF FACTS OF THE CASE

1. The applicant is body corporate constituted under Banking Companies (Acquisition and Transfer of Undertaking) Act 1970 carried on business of banking and having its registered office at Chennai and having branch all over India including one at Gandhi Nagar Branch, Thiruvananthapuram. The applicant is represented by its Chief Manager who is duly authorized by a power of attorney to represent the applicant bank.

2. The defendants availed the credit facility and executed security document on 26.04.2013 and the applicant had filed the OA on 25.06.2015. Hence the application is presented within the limitation prescribed under Section 24 of the RDBFI Act 1993.

3. It is the case of the applicant that the 1st defendant is a proprietary concern of 2nd defendant had applied for a term loan of Rs.10,00,000/-. At the request of the 2nd defendant, applicant on 26.04.2013 sanctioned Rs.10,00,000/-. As security for the term loan facility, 2nd defendant on her behalf and acting on behalf of the 1st defendant concern executed a term loan agreement dated 26.04.2013, demand promissory note dated 26.04.2013, term loan and hypothecation agreement dated 26.04.2013, letter dated 26.04.2013 requesting the applicant to permit the defendants to repay the loan in equated monthly installments and letter of undertaking dated 26.04.2013.

4. As per the aforesaid documents, defendants have agreed to abide the terms and conditions of sanction and to repay the loan amount in 57 monthly installments of Rs.23,102/- each from 26.08.2013 and agreed to repay the amount with interest thereon as an when demanded.

5. It is the further case of the applicant that the defendants did not adhere to the terms and conditions of sanction and committed default in repayment of loan amount resulting in classification of the account as NPA on 01.04.2014. As per the statement of account maintained with the applicant bank, an amount of Rs.12,80,978/- is due from the defendant as on 20.06.2015. Hence the present OA.

6. After filing the OA, the applicant bank has taken out the summons on the defendants as directed by the Tribunal and has filed the proof of service on 18.09.2015. The summons issued to the defendants were returned as “Left”. Hence the Tribunal had order to issue summons on the defendants by substitute service by way of paper publication. Accordingly, applicant had taken out summons by way of substitute service by paper publication in Mathrubhumi daily dated 03.12.2016 at the last known address of the defendants and service of summons was completed as per the regulations. Inspite of service of summons the defendants neither appeared nor represented and they chose to remain absent and hence they were declared ex-parte on 17.01.2017.

7. The evidence on the side of the applicant bank consists of the proof affidavit of its Senior Manager, AW1 and Exhibits A1 to A8 were marked on the side of applicant and closed their side of evidence.

8. 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:-

9. The evidence of the applicant bank by way of proof affidavit its Senior Manager AW1, reiterates the facts pleaded in the OA and the affidavit is corroborated by the above referred Exhibits A1 to A8 which clearly establishes the case of the applicant bank to allow the present 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 defendants have availed the credit facility from the applicant bank and have failed to repay the dues of the applicant bank. Added to this, the absence of defendants inspite of service of summons appears to be intentional without any bonafide reasons and it appears that they remained absent as they admitted the entire case of the applicant as sought for in the present OA. In view of the above the present OA is to be allowed with costs as sought by the applicant bank.

10. 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:-

O R D E R

(11) The OA is allowed with costs.

(a) The defendants are directed pay the applicant bank a sum of Rs.12,80,978/- (Rupees Twelve lakhs eighty thousand nine hundred and seventy eight only) due under the term loan account together with further interest on the sum of Rs.12,52,791/- (Rupees Twelve lakhs fifty two thousand seven hundred and ninety one only) (Rs.12,80,978 – penal interest of Rs.28,187) @11.80% per annum from 21.06.2015 till realization.

(b) In the event of non-realization of the OA claim amount, the bank is at liberty to proceed against the personal properties of the defendants 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.

12. 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: Devaraj.K, Senior Manager of the applicant bank.

Witness for Defendant(s): Nil

Exhibits on the part of the applicant

Ext.No. Date Particulars of documents

A1 26.04.2013 Credit Sanction advice issued by the applicant to the 1st defendant. A2 26.04.2013 Demand promissory note for Rs.10,00,000/- executed by the 2nd defendant on her behalf and acting on behalf of 1st defendant concern in favour of the applicant. A3 26.04.2013 Term loan agreement executed by the by the 2nd defendant on her behalf and acting on behalf of 1st defendant concern in favour of the applicant A4 26.04.2013 Term loan and hypothecation agreement executed by the by the 2nd defendant on her behalf and acting on behalf of 1st defendant concern in favour of the applicant. A5 26.04.2013 Letter of requesting the applicant bank to permit repayment of the loan in equated monthly installments executed by the by the 2nd defendant on her behalf and acting on behalf of 1st defendant concern in favour of the applicant A6 26.04.2013 Letter of undertaking to repay the loan in installments executed by the by the 2nd defendant on her behalf and acting on behalf of 1st defendant concern in favour of the applicant. A7

Certified copy of statement of account pertaining to the term loan account of the 1st defendant. A8

Statement of interest charged on the term loan account during the distinctive periods.

Defendants Exhibits – Nil

(PRESIDING OFFICER)

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

Dated this the 5th day of January, 2019

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

Between Indian Overseas Bank, Gandhi Nagar Branch. …Applicant And M/s.Adorn Family Salon & Spa & another.

…Defendants

FINAL ORDER