SOUTH INDIAN BANK vs SARASWATHY AMMA on 14 August 2018

FINAL ORDER

This Original Application is filed on 22.01.2016 under Section 19(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 for recovery of a sum of Rs.17,82,366/- being the amount due under the FSL (HL) NRI Loan of Rs.15Lakhs with interest at 10.30% per annum with monthly rests and Penal interest @2% per annum on Rs.17,41,365/- from 22.01.2016 from the 4th defendant and her assets and also from the assets of Late Sivadasan Pillai M and charged on the Original Application Schedule property. BRIEF FACTS OF THE CASE:

Applicant is a banking company registered under the Companies Act, 1913 and governed by the provisions of the Banking Regulations Act (Central Act X of 1949) having its Head office at Thrissur and branches all throughout India including one at Sasthamcotta, Kollam District. The applicant bank is represented by its Branch Manager having authority to act for and on behalf of the bank.

Late Sivdasan Pillai M had availed a housing loan and 4th defendant wife of Late Sivdasan Pillai M is the guarantor to the laon availed by her husband. The defendants 1 is the mother, 2nd defendant is the daughter and 3rd defendant is the son are the legal heirs of Late Sivdasan Pillai M. Late Sivdasan Pillai M was sanctioned with a housing loan of Rs.15Lakhs on 25.01.2013 wherein the 4th defendant stood as guarantor and security documents were executed on 28.01.2013 by mortgage of the title deeds on 22.03.2013 and the OA is within the period of limitation prescribed in Section 24 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

It is the case of the applicant that Late.Sivadasan Pillai along with the 4th defendant approached the applicant bank for a Housing Loan of Rs.15Lakhs and the same was sanction by the applicant bank vide the Sanction Letter dated 25.01.2013. The

LateSivadasan Pillai along with 4th defendantcounter signed the sanction letter accepting the terms and conditions of grant of loan. As per the terms of the loan, the loan was to be repaid in 114 monthly installments of Rs.21,000/- with interest @10.50% p.a with monthly rests.

On 28.01.2013 Late Sivadasan Pillai executed a Housing loan agreement, agreeing to pay the amount of Rs.15Lakhs with interest as per the terms of the sanction and also executed an Agreement of Guarantee on the same day, guaranteeing due performance of terms of the agreement and undertaking to pay the amounts due in case of default complying to the terms of the sanction. Late Sivadasan Pillai he executed an agreement dated 28.01.2013, creating equitable mortgage of the property as collateral security sought to be purchased with the credit facility availed from the applicant and deposited the title deed of the property dated 23.03.2013 described in the schedule of the OA.

After availing the credit facility by Late Sivadasan Pillai and the 4th defendant they defaulted in repayment of the amounts due to the applicant bankresulting in the classification of the account became NPA as on 30.09.2014 as per the RBI guidelines. Despite several demands made by the applicant bank, the defendants did not care to regularize the account. Hence, the applicant issued recall notice dated 09.10.2014 and Guarantee invocation letter dated 09.10.2014 demanding repayment of amount due to Late Sivadasan Pillai and the 4th defendant. Since there were no payments made as per recall notice, the Authorized Officer of the applicant bank issued demand notice under Section 13(2) of the Securitisation Act 2002 on

05.12.2014 demanding a sum of Rs.15,43,297/- due as on 01.12.2014 with subsequent interest.

However, the loan amount dues remained unpaid even after the lapse of statutory period and the applicant initiated proceedings under the SARFAESI Act, 2002, aggrieved by the measures initiated by the bank under the Act, Late Sivadasan Pillai approached this Ho’ble Tribunal and filed an SA 151/2015. Meanwhile, it was learnt that Sivadasan Pillai, the borrower has expired and besides the 4th defendant, the applicant issued registered letter with acknowledgement dated 20.01.2016 to wife of late Sivadasan Pillai who is guarantor to the loan and to defendants 1,2 & 3 who are the legal heirs of the borrower.

As per the statement of accounts of the applicant bank, the total amount due under the FSL(HL) NRI Loan account is Rs.17,82,366/-. As the amount due to applicant has not been paid till date, the applicant has constrained to file this original application for recovery of the said amount.

After filing of the OA, the applicant bank has taken out summons as directed by this Tribunal and has filed proof of service on 26.05.2016. The summons issued to the defendantsare duly served and service of summons is completed as per the regulations. The defendants have neither appeared before the Tribunal not filed the vakalath. There was no appearance for the defendants nor defendants were represented by any counsel and hence defendants were placed exparte on 20.02.2017.

The evidence on the side of the applicant bank consists of the proof affidavit of its Senior Manager, AW1 and Exhibits A1 to A11 is marked on the side of applicant and closed their side of evidence.

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:-

The evidence of the applicant bank by way of proof affidavit of Senior Manager AW1, reiterates the facts pleaded in the OA and the affidavit is corroborated by the above referred Exhibits A1 to A11 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 financial assistance from the respondent bank and have failed to repay the dues of the respondent bank. Added to this, it appears that the defendant did not contest the matter as she 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.

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 4th defendant is directed to pay a sum of Rs.17,82,366/- (Rupees Seventeen lakhs Eighty Two Thousand Three Hundred and Sixty Six only) together with future interest compounded monthly on sum of Rs.17,41,365/-[17,82,366 - Penal interest of Rs.41,001/-] @ 10.30% p.a from 22.01.2016 till realization and also its cost from the defendant.

(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 the defendant 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 properties referred above, the bank is at liberty to proceed against the other properties of the defendant, 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.

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 14thday of August, 2018]

(S.V.GOWRAMMA)

A P P E N D I X

Witness for Applicant: AW1: Mr. Anoop Francis, 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 25.01.2013 Sanction Intimation Letter A2 28.01.2013 Housing Loan Agreement A3 28.01.2013 Agreement of Guarantee A4 28.01.2013 Agreement to create mortgage A5 28.01.2013 Sale deed no. 287/2013 of Sasthamcotta SRO A6 23.03.2013 Memorandum of Deposit of Title Deed A7 09.10.2014 Recall Notice A8 09.10.2014 Guarantee Invocation Notice A9 05.12.2014 Demand Notice issued under SARFAESI Act A10 19.01.2016 Recall notice issued to Legal heirs of the borrower A11 - Certified Copy if statement of accounts

Defendant’s Exhibits – Nil

(PRESIDING OFFICER)

PROPERTY SCHEDULE

District

:

Kollam Sub District

:

Sasthamcotta Taluk

:

Kunnathur Village

:

Sasthamcotta Resurvey No.

:

70/18-1 Extent

:

4.05 Ares (10 cents) DESCRIPTION OF PROPERTY An extent of land admeasuring 4.05 Ares equivalent to 10 cents, along with house building bearing Door No.229 of Sasthamcotta Panchayath, with all improvements thereon, in Sy.No.581, Re- Sy.No.70/18-1 of Sasthamcotta Village, Kunnathur Taluk and Kollam District more fully described in Sale Deed No.287/2013 dated 28.01.2013 of Sasthamcotta SRO. BOUNDARIES

North

: Property of Ramani

East

: Property of Sreelas

South

: Property of Kunjamma

West

: Road

[PRESIDING OFFICER]

IN THE DEBTS RECOVERY TRIBUNAL-II, KERALA AT ERNAKULAM Dated this the 14thday of August, 2018 Present: S.V.Gowramma, B.A., LL.B Presiding Officer T.A No. 675/2016 [OA.No.214 /2016] Between

The South Indian Bank,

Kollam,

…Applicant And

Saraswathy Amma,

& others

…Defendants

FINAL ORDER