INDIAN OVERSEAS BANK vs PREMKRISHNA K.S on 15 October 2018

FINAL ORDER

This Original Application is filed on 15.12.2015 under Section 19(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 for recovery of a sum of 16,01,426/- (Rupees Sixteen Lakhs One Thousand Four Hundred and Twenty Six only) along with interest @ 11.90% per annum with monthly rests for Rs.16,01,426/- from 30.11.2015 till date of recovery ; to recover a sum of Rs.1,11,740/-(Rupees One

Lakh Eleven Thousand Seven Hundred and Forty only) along with interest @11.45% per annum with monthly rests for Rs.1,11,740/- from 30.11.2015 till date of recovery and to recover a sum of Rs.26,84,596/- (Rupees Twenty Six Lakhs Eighty Four thousand Five Hundred and Ninety Six only) along with interest @11.66% per annum with monthly rests for Rs.26,84,596/- from 30.11.2015 till date of recovery. BRIEF FACTS OF THE CASE:

1. The applicant is a body corporate constituted under the Banking Companies Act 1970, carrying on business of banking and having its registered office at Chennai and having branches all over India including one at Vattiyoorkavu, Trivandrum represented by its Senior Manager who is one of the Principal officer of the bank and is duly authorized by a power of attorney to represent the applicant bank and who is able to and competent to depose on behalf of the applicant bank.

2. It is declared by the applicant bank that the various documents based on which the applicant bank provided vehicle loans to the defendants have been executed by them on 17.11.2011, 14.12.2011 and 22.05.2012. The defendants have also executed Revival letters on 09.01.2014, 11.12.2014 and 14.05.2015. Hence, it is declared by the applicant bank that the above OA is within the period of limitation prescribed under the Limitation Act, 1963.

3. It is the case of the applicant that the 1st defendant is a businessman engaged in transport business had approached the bank for a vehicle loan for the purpose of purchasing a brand new Ashok Leyland Goods Carriage. The applicant bank sanctioned loan for an amount of Rs.14.40 Lakhs after satisfying the financial eligibility of the defendant, vide Credit Sanction Advice dated 17.11.2011 communicating the terms and conditions upon which the vehicle loan was sanctioned and the same was accepted by the 1stdefendant. The vehicle loan was repayable in 60 equal installments of Rs.33,660/-.each with effect from 17.02.2012. The defendant executed a Demand Promissory note for Rs.14,40,000/-, a Deed of Hypothecation, hypothecating the vehicle purchased favoring the applicant bank. Further the defendant has executed a letter requesting the applicant bank to permit repayment of the loan in equated monthly installments and a letter of undertaking in favour of the applicant bank on 17.11.2011. Subsequently, the defendant purchased a brand new Ashok Leyland Goods Carriage bearing registration No.KL-01-BE-620 by utilizing the funds provided by the applicant bank and the same was hypothecated with the applicant bank.

4. It is submitted that during 2012, the defendants approached the applicant bank for financial assistance for their agricultural activities and the applicant bank sanctioned a cash credit limit of Rs.1,00,000/- to the defendants vide Credit Sanction Advice dated 14.12.2011 communicating the terms and conditions upon which the cash credit was sanctioned to them. The credit facility was availed by the defendants after executing Demand Promissory note for Rs.1,00,000/-, a take delivery letter and an agreement of hypothecation for agriculture loans in favour of the applicant bank on 14.12.2011. As security towards the KCC loan account, the defendants hypothecated the crops standing in 12.10 Ares of property in Survey No.9218 and 9214/2 of Malayinkeezh Village favoring the applicant bank.

5. Again on May 2012, the first defendant approached the applicant bank for a Vehicle loan for the purchase of another brand new Leyland Goods Carriage in connection with his business and the same was sanctioned by the applicant bank for an amount of Rs.22,00,000/- vide Credit Sanction Advice dated 22.05.2012 communicating the terms and conditions upon which the vehicle loan was sanctioned and the same was accepted by the 1stdefendant. The 1stdefendant availed the loan on execution of a Demand Promissory note for Rs.22,00,000/-, a Deed of Hypothecation, a letter requesting the applicant bank to permit repayment of the loan in equated monthly installments and a letter of undertaking in favour of the applicant bank on 22.05.2012. The defendant purchased a brand new Ashok Leyland Goods Carriage bearing registration No.KL-01-BG-0610 by utilizing the funds provided by the applicant bank and the same was hypothecated with the applicant bank.

6. It is submitted that after availing the loans the defendantswere irregular in payment and defaulted installments and failed to liquidate the outstanding dues. It is submitted that inspite of maximum leniency and sufficient time granted to the defendants to liquidate the liability and to regularize the account, no sincere effort was taken to liquidate the dues to the applicant bank and hence the accounts of the defendant were classified as NPA on 01.07.2013 as per the RBI guidelines. The defendant issued a revival letters in respect of the loans availed on 09.01.2014, 11.12.2014 and 14.05.2015 admitting and acknowledging his liability with the applicant bank.

7. As per the statement of accounts maintained by the applicant bank, the total amount outstanding in the vehicle loan account No. 311100086 availed by defendants on 17.11.2011 amounts to Rs.16,01,426/-, amount outstanding in cash credit account No.175 availed on 14.12.2011 amounts to Rs.1,11,740/- and an amount of Rs.26,84,596/- is outstanding in the term loan account no.311200035 availed on 22.05.2012. As the amount due to applicant has not been paid till date, the applicant has constrained filed this original application for recovery of the said amount.

8. After filing of the OA, the applicant bank has taken out summons as directed by this Tribunal and has filed proof of service on 02.03.2016. The summons issued to the defendants is duly served and service of summons is completed as per the regulations. The defendants neither appeared before the Tribunal nor filed the vakalath. Hence, the defendants were placed exparte on 21.10.2016.

9. The evidence on the side of the applicant bank consists of the proof affidavit of its Senior Manager and Principal

Officer, AW1 and Exhibits A1 to A10 is marked on the side of applicant and closed their side of evidence.

10. 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 the affirmative

Point No.(ii):

As per final order.

Reasons:-

11. The evidence of the applicant bank by way of proof affidavit of Senior Manager and Principal Officer AW1, reiterates the facts pleaded in the OA and the affidavit is corroborated by the above referred Exhibits A1 to A10 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 that defendants have availed the financial assistance from the respondent bank and have failed to repay the dues of the applciant bank. Added to this, the defendants did not contest the matter as they admitted the entire case of the applicant as sought for in the OA.In view of the above, the present OA is to be allowed with costs as sought by the applicant bank.

12. 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

(a) The OA is allowed with costs.

(b) The 1stdefendant is directed to pay a sum of Rs.16,01,426/- (Rupees Sixteen Lakhs One Thousand Four Hundred and Twenty Six only) together with future interest @ 11.90% per annum with monthly rests from 30.11.2015 till realization and also its cost from the defendant.

(c) The 1st and 2nddefendants are jointly and severally directly pay a sum of Rs.1,11,740/- (Rupees One Lakh Eleven thousand Seven Hundred and Forty only) together with future interest @ 11.45% per annum with monthly rests from 30.11.2015 till realization and also its cost from the defendant.

(d) The 1stdefendant is directed to pay a sum of Rs.26,84,596/- (Rupees Twenty Six Lakhs Eighty Four thousand Five Hundred and Ninety six only) together with future interest @ 11.66% per annum with monthly rests from 30.11.2015 till realization and also its cost from the defendant.

(e) In the event of non-realization of the OA claim amount, the bank is at liberty to proceed against the properties of the defendant, as required under law; (f) The applicant bank shall file memo of costs within ten days from the date of this final order; (g) 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 15th day of October, 2018]

(S.V.GOWRAMMA)

A P P E N D I X

Witness for Applicant: AW1: Mr. S.K.Nair, Senior Manager and Principal Officer of the applicant bank. Witness for Defendant(s): Nil

Exhibits on the part of the applicant

Ext.No. Date Particulars of documents A1 17.11.2011 Credit Sanction Advice issued by the applicant bank to the 1stdefendant A1(a) 17.11.2011 Demand promissory note for Rs.14,40,000/-executed by the 1stdefendant A1(b) 17.11.2011 Deed of Hypothecation executed by the

A1(c) 17.11.2011 Letter requesting the applicant bank to permit repayment of the loan in equated monthly installments A1(d) 17.11.2011 Letter of undertaking executed by the 1st defendant A2 14.12.2011 Credit Sanction Advice issued by the applicant bank to the 1st defendant A2(a) 14.12.2011 Demand Promissory note for Rs.1,00,000/- executed by the defendant A2(b) 14.12.2011 Take delivery letter executed by the 1st defendant along with demand promissory note in favour of the applicant bank A2(c) 14.12.2011 Agreement of Hypothecation for agriculture loans executed by the defendants in favour of the applicant bank A3 22.05.2012

applicant bank to the defendant A3(a) 22.05.2012 Demand Promissory note for Rs.22,00,000/- executed by the defendant A3(b) 22.05.2012 A deed of hypothecation executed by the 1st defendant in favour of the applicant bank A3(c) 22.05.2012 Letter requesting the applicant bank to permit repayment of loan in equated monthly installments A3(d) 22.05.2012 Letter of undertaking executed by the 1st defendant A4 09.01.2014 Revival letter executed by the defendant in favour of the applicant bank A5 11.12.2014 Revival letter executed by the defendant in favour of the applicant bank A6 14.05.2015 Revival letter executed by the defendant in favour of the applicant bank A7 - Statement of accounts pertaining to the term loan account availed on 17.11.2011 for the period 17.11.2011 to 01.07.2013 A8 - Statement of accounts pertaining to the term loan account availed on 14.12.2011 for the period 14.12.2011 to 01.07.2013 A9 - Statement of accounts pertaining to the term loan account availed on 22.05.2012 for the period 22.05.2012 to 01.07.2013 A10 - Statement of interest charged on the term loan account during the distinctive periods.

Defendant’s Exhibits – Nil

(PRESIDING OFFICER)

IN THE DEBTS RECOVERY TRIBUNAL-II, KERALA AT ERNAKULAM Dated this the 15thday of October, 2018 Present: S.V.Gowramma, B.A., LL.B Presiding Officer T.A 262/2016 [OA.No.106/2016] Between

Indian Overseas Bank,

…Applicant And

Premkrishna.K.S

& another

…Defendant

FINAL ORDER