UNION BANK OF INDIA vs VISWANATHAN .R @ VISWANATH .R on 20 October 2018

FINAL ORDER

This Original Application is filed on 08.12.2015 under Section 19(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 [for brevity RDDBFI Act 1993] for recovery of a sum of

Rs.39,02,090.80/- due under the housing loan account of the defendants with future interest at the agreed rate of 10.25% p.a + 2% interest with monthly rests from 31.10.2015 till realization from the defendants jointly and severally and by sale of the mortgaged property described in the schedule to the OA. BRIEF FACTS OF THE CASE

1. The applicant is a body corporate duly constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 having its head office at 239, Vidhan Bhavan Margh, Mumbai-21 having branches all over India and one such branch is situated at Peroorkada, Thiruvananthapuram, The Branch Manager, Peroorkada Branch being the Principal Officer and power of attorney holder is entitled to sign and verify this application and represent the bank in this proceedings.

2. The applicant declares that the application is presented within the period limitation prescribed under Section 24 of the RDDBFI Act 1993, as the defendants approached and availed a housing loan for Rs.37,00,000/- on 31.10.2014 after executing necessary loan documents and they willfully defaulted in repaying the loan amount. Further the applicant bank filed the present OA on 08.12.2015 for recovery of the outstanding amount due under the loan account of the defendants. Hence the OA is within the period of limitation.

3. It is the case of the applicant that defendants approached the applicant for a Housing loan facility. After considering the request of the defendants, applicant bank sanctioned an amount of

Rs.37,00,000/- on 31.10.2014. As 1st defendant was abroad at the time of availing the loan facility, he executed a power of attorney dated 14.08.2014 in favour of the 2nd defendant authorizing the 2nd defendant to avail the loan facility from the applicant bank. Hence the 2nd defendant executed the loan documents both in her individual capacity as well as the lawful power of attorney holder of the 1st defendant. Accordingly, as security for the credit facility, the 2nd defendant had executed a demand promissory note for Rs.37,00,000/- on 31.10.2014 undertaking to repay the entire loan amount and interest on demand by the applicant, housing loan agreement dated 31.10.2014 agreeing abide the term and condition of loan and letter of under taking dated 31.10.2014 agreeing that the credit facility and obligation in continuation of the same will be complied. That apart the 3rd defendants had executed a letter of guarantee dated 31.10.2014, thereby guaranteed the due repayment towards the loan account.

4. The credit facility was further secured by mortgage of the OA schedule immoveable property owned by defendants by deposit of Title Deed No.2611/2014 of SRO, Karakulam dated 31.10.2014 and also executed a memorandum of deposit of title deed dated 04.11.2014, thereby confirmed the creation of equitable mortgage of the property covered under the aforesaid title deed, as security for repayment of all the amounts advanced or to be advanced and for all the credit facilities granted to the defendants together with interest.

5. It is the contention of the applicant, inspite of undertaking made by the defendants to regularly repay the amount and interest, they failed to do so and failed to regularize the account in spite of letters and remainders including personal requests of the officials of the bank to repay the outstanding amounts in the account. However, the defendants did not regularize the account. Hence, the applicant issued a lawyer notice dated 14.11.2015 to the defendants calling upon to repay the entire outstanding amount in the account.

6. It is the further case of the applicant that the 1st and 2nd defendant received the lawyer notice on 16.11.2015. But the 3rd defendant deliberately avoided the lawyer’s notice even though the postal authorities have intimated her of the same. As per the statement of accounts maintained by the applicant bank, an amount of Rs.39,02,090.80 is due from the defendants under the Housing loan account. Hence, the applicant is constrained to file this OA for the recovery of the entire outstanding amount against the defendants.

7. After filing of the OA, the applicant bank has taken out the summons as directed by the Tribunal. The summons issued to the defendants were duly served on them and on 10.02.2016 the 2nd defendant has filed her vakalath, but she failed to represent the matter. As there was no representation for the defendants inspite of service of summon, the Tribunal vide order dated 01.06.2016 placed the defendants as exparte.

8. The evidence on the side of the applicant bank consists of the proof affidavit of its Branch Manager and Principal Officer, AW1 and Exhibits A1 to A15 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 the affirmative

Point No.(ii):

As per final order.

Reasons:-

10. The evidence of the applicant bank by way of proof affidavit of the Branch Manager and Principal Officer AW1 reiterates the facts pleaded in the OA and the affidavit is corroborated by the above referred Exhibits A1 to A15 which clearly establishes the case of the applicant bank to allow the present OA. Added to this, the absence of defendants inspite of service of summons and after filing of Vakalath by the 2nd defendant, 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. 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 financial assistance from the applicant bank and have 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

(a) The OA is allowed with costs.

(b) The defendants are jointly and severally directed to pay the applicant bank a sum of Rs.39,02,090.80 (Rupees Thirty nine lakhs two thousand ninety and paise eighty only) with future interest thereon @ 10.25% per annum with monthly rests from 01.11.2015 till realization and also its costs from the defendants;

(c) In the event of failure of the defendants to pay the OA claim amount, the bank is at liberty to sell the OA schedule property of defendants 1 and 2 and the sale proceeds be appropriated towards the OA claim amount as required under law; (d) In the event of non-realization of the OA claim amount despite the sale of the mortgaged property referred above, the bank is at liberty to proceed against the other properties of the defendants, as required under law;

(e) Schedule property shown in the OA shall become part and parcel of the final order of the OA and Recovery Certificate of present OA; (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.

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 20th day of October, 2018]

(S.V.GOWRAMMA) Presiding Officer

A P P E N D I X Witness for Applicant:

AW1: Sunil.S, Manager and Principal Officer of the applicant bank.

Witness for Defendants: Nil

Exhibits on the part of the applicant

Ext.No. Particulars of documents

A1. Power of attorney dated 14.08.2014 executed by the 1st defendant in favour of the 2nd defendant. A2. Demand promissory note dated 31.10.2014 executed by the defendants 1 and 2. A3. Housing loan agreement dated 31.10.2014 executed by the defendants 1 and 2. A4. Guarantee agreement dated 31.10.2014 executed by the 3rd defendant. A5. Letter of undertaking executed by the defendants 1 and 2 dated 31.10.2014. A6. Title Deed No.2611/2014 of SRO Karakulam dated 31.10.2014. A7. Memorandum of deposit title executed by 2nd defendant. A8. Copy of request given by the defendants dated 04.11.2014 in favour of the applicant to issue the receipt of the documents deposited with the applicant. A8(a) Receipt of the documents dated 04.11.2014 given by the applicant bank to the defendants 1 and 2 evidencing equitable mortgage. A9. Office copy of lawyer notice issued by the applicant to the defendants dated 14.11.2015. A10. Acknowledgement card received from the 1st defendant dated 16.11.2015. A11. Acknowledgement card received from the 2nd defendant dated 16.11.2015. A12. Returned cover of lawyer notice issued to the 3rd defendant. A13. Reply legal notice dated 27.11.2015.

A14. Certified copy of bank statement with respect to the Housing loan account No.544906650000165. A15. Certified copy of balance/total amount due under the Housing loan account No.544906650000165.

Defendants Exhibits – Nil

(PRESIDING OFFICER)

(PRESIDING OFFICER)

IN DEBTS RECOVERY TRIBUNAL-II, KERALA AT ERNAKULAM

Dated this the 20th day of October, 2018

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

T.A.No.397/2016 (OA.No.559/2015) Between Union Bank of India, Peroorkada Branch.

…Applicant And Viswanathan.R @ Viswanath.R & others

…Defendants

FINAL ORDER