INDIAN OVERSEAS BANK vs SAJI V on 21 August 2018

FINAL ORDER

This Original Application is filed on 23.12.2015 under Section 19(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 for recovery of a sum of Rs.13,11,511.48 [Rupees Thirteen lakhs eleven thousand five hundred and eleven and paise forty eight only] from the defendants together with future interest thereon @13.42%p.a with monthly rests from 01.11.2015 till realization, to be recovered by sale of other assets of the defendants and personally against them. BRIEF FACTS OF THE CASE

1. The applicant is a Nationalized Bank, owned by Govt. of India constituted under the Banking Companies (Acquisition of Transfer of Undertakings Act – Act 5 of 1970) having its Central Office at 763, Anna Salai, Chennai and having branches all over India including one at Attingal and represented by the Senior Manager and Principal Officer of the Attingal Branch, Anil Kumar.K, who is conversant with all facts of the case from the records maintained by the branch and is competent to verify and authorized to sign the pleadings and take all legal actions representing the applicant bank in this proceedings.

2. The credit facility was granted to the defendants on 14.02.2011 on execution of security documents and defendants has executed Demand Promissory note and hypothecation agreement along with other security documents on 14.02.2011. The defendants executed revival letter dated 11.06.2013 acknowledging the liability under the financial facility availed and the claim of the bank is within the limitation prescribed in Sec.24 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

3. It is the case of the applicant that the defendants are engaged in the business of running of buses. The defendants approached the applicant bank on January 2011 for financial facilities for the purchase of Tata LP 410 mini bus and the applicant sanctioned a Term Loan under the SL-SRTO Scheme of Rs.11,20,000/- for the purchase of the vehicle. The defendants have accepted the terms and conditions of sanctions and have signed the Credit Sanction Advice dated 14.02.2011. The defendants also executed security documents and deed of hypothecation of vehicle in favour of the applicant bank to secure the Term Loan. The terms loan was also secured by execution of demand promissory note dated 14.02.2011 agreeing to pay the sum of Rs.11,20,000/- on demand along with interest and a request letter dated 14.02.2011 was executed requesting for payment of the term loan in 60 equal monthly installments of Rs.24,360/- the first installment commencing from May 2011. The defendants also executed letter of undertaking dated 14.02.2011 agreeing that the bank will have its discretion/right to recall the entire loan amount in case of violation of conditions provided therein. The defendants also executed revival letter dated 11.06.2013 acknowledging their liability under the term loan facility and have acknowledged that the security documents executed along with the charge created including hypothecation shall continue to remain in force.

4. After availing the loan, the defendants committed default in repayment of the monthly installments and neglected to abide by the terms and conditions of the loan agreement. Inspite of several requests made by the applicant bank, the defendants failed to repay the instalments or to regularize the loan account and hence the account became NPA on 31.03.2012

as per the RBI guidelines. After the account becoming NPA, the applicant bank was constrained to initiate recovery proceedings under Kerala Revenue Recovery Act, 1968 and the concerned authorities took possession of the hypothecated vehicle and the same was sold in public auction for an amount of Rs.5,35,000/-. After deducting the commission charges and other recovery expenses an amount of Rs.4,53,633/- is credited to the loan account.

5. On 10.09.2015 the applicant bank issued a lawyer notice, calling upon the defendants to repay the balance outstanding amount due under the loan account within 10 days of receipt of the notice. As per the accounts maintained by the applicant bank, a sum of Rs.13,11,511.48 is due from the defendants and hence the applicant was constrained to file this original application for recovery of the said amount.

6. After filing of the OA, the applicant has taken out summons as directed by this Tribunal and has filed proof of service on 29.02.2016.The summons issued to the defendant is duly served and service of summons is completed as per the Regulations. The defendants neither appeared not filed the vakalath to contest the case. Since there was no appearance for the defendants nor were represented by any counsel, they were placed exparte on 01.03.2017.

7. The evidence on the side of the applicant bank consists of the proof affidavit of its Manager and Principal Officer, AW1 and Exhibits A1 to A8is 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 the affirmative

Point No.(ii):

As per final order.

Reasons:-

9. The evidence of the applicant bank by way of proof affidavit of its Manager and Principal Officer 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 financial assistance from the applicant bank and have failed to repay the installments and amount dues in the loan account. Added to this, it appears that 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.

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:-

ORDER

(a) The OA is allowed with costs.

(b) The defendants are jointly and severally directed to pay a sum of Rs.13,11,511.48 [Rupees Thirteen lakhs eleven thousand five hundred and eleven and paise forty eight only] to the applicant bank with future interest thereon @ 11% p.a with monthly rests from 01.11.2015 till realization and also its costs from the defendants;

(c) In the event of non-realization of the OA claim amount, the bank is at liberty to proceed against the properties of the defendants, as required under law; (d) The applicant bank shall file memo of costs within ten days from the date of this final order; (e) Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of the final order.

11. 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 21st day of August, 2018]

(S.V.GOWRAMMA)

A P P E N D I X

Witness for Applicant: AW1: Mr. Anil Kumar.K, 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 14.02.2011 Credit Sanction advice dated 14.02.2011

A2 14.02.2011 Demand Promissory note dated 14.02.2011

A3 14.02.2011 Request letter of the defendants dated 14.02.2011 A4 14.02.2011 Letter of undertaking dated 14.02.2011

A5 11.06.2013 Revival Letters dated 11.06.2013

A6 11.06.2013 Revival Letters dated 11.06.2013

A7 10.09.2015 Lawyer notice dated 10.09.2015

A7(a) - Acknowledgement Card

A7(b) - Acknowledgement Card

A8 - Computerized Statement of account in term loan account No.141503431100012 for the period from 01.02.2011 to 15.12.2015

Defendant’s Exhibits – Nil

(PRESIDING OFFICER)

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM Dated this the 21st day of August, 2018 Present: S.V.Gowramma, B.A., LL.B

T.A No: 36 / 2016 [OA No:49/2016] Between

Indian Overseas Bank,

Attingal Branch, ….Applicant

And

Saji.V,

& another …Defendants

FINAL ORDER