STATE BANK OF INDIA vs SUNIL KUMAR on 28 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.13,82,506.02 is due to the applicant and the applicant is entitled to recover the said sum together with interest for the sum of Rs.13,77,506.02 at the rate of 12.75% per annum with monthly rests from 21.10.2015 till date of payment, to be recovered by sale of other assets of the defendants and personally against them.

BRIEF FACTS OF THE CASE

The applicant is the State Bank of Travancore, a body corporate constituted under the State Bank of India (Subsidiary Banks) Act 38 of 1959 having its Head Office at Thriuvananthapuram and branches at various places including the one at Palode in Trivandrum. The branch Manger is empowered to sign and verify pleadings and institute legal proceedings on behalf of the applicant.

2. The application is continued by State Bank of India, a body corporate constituted under the State Bank of India Act, 1955 which, in terms of Acquisition of State Bank of Travancore Order, 2017 published in the Gazette of India dated 22.02.2017, is entitled to continue and enforce the claim from 01.04.2017

3. The defendant availed the loan and executed the loan documents for repayment of the debt were executed on 07.05.2013 and the loan is secured by Mortgage of immoveable property favoring the applicant bank on 06.05.2013. The present OA is filed on 23.12.2015 within the limitation prescribed in Section 24 of the Recovery of the Debts Due to Banks and Financial Institutions Act 1993.

4. It is the case of the applicant that the defendant is sole proprietor engaged in the business of works contract under the name M/s Chaitram Constructions. The defendant approached the applicant bank for availing financial facility and the bank granted him a cash credit limit of Rs.15,00,000/-

(Rupees Fifteen Lakhs only) for meeting the working capital requirements of his business.

5. The defendant executed Hypothecation–Cum- Working Capital Agreement dated 07.05.2013 hypothecating the book debts and receivables of the proprietary concern M/s. Chaithram Constructions which is described under ‘A’ schedule favoring the applicant bank as security for the cash credit facility availed by him. The defendant deposited the title deed of his property having an extent of 10.30 Ares of land comprised of 04.20 ares in Re-sy No. 400/25, 05.20 Ares in Re-sy No. 400/10 and 90 sq.mts in Re-sy No. 400/25.1, Block No. 50 of Uzhamalakka Village, Nedumangadu Taluk, Thiruvananthapuram District described under “B” Schedule on 06.05.2013 with an intent to create equitable mortgage. The defendant also executed a Memorandum dated 06.05.2013 evidencing the intention to create the mortgage and deposit of the title deed.

6. 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. Several requests were made by the applicant to repay the loan and the defendants sought time for the repayment. Even after granting sufficient time to the defendant to regularise his account the dues were not repaid and hence the applicant issued a Lawyer’s Notice dated 07.05.2015 demanding to repay the amount due to the applicant. As per the accounts maintained by the applicant bank, an aggregate amount of Rs.13,82,635.02 is due from the defendants and hence the applicant was constrained to file this original application for recovery of the said amount.

7. After filing of the OA, the applicant has taken out summons as directed by this Tribunal and has filed proof of service on 11.12.2015. The summons issued to the defendant is duly served and service of summons is completed as per the regulations. The defendant neither appeared nor 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 21.07.2017.

8. 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 A8 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 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 respondent bank and have failed to repay the dues of the respondent bank. 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.

11. Having regard to the amount advanced, the interest applied, the conduct and operations in the account and the default committed, the tribunal is 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 defendant is directed to pay a sum of Rs.13,82,506.02 (Rupees Thirteen Lakhs Eighty Two Thousand Five Hundred and Six and paise two only) together with future interest compounded monthly on sum of Rs.13,77,503.02 [Rs.13,82,506.02 – Penal interest of Rs.5003] @12% per annum from 21.10.2015 till realization and also its costs from the defendant;

(c) In the event of failure of the defendant to pay the OA claim amount, the bank is at liberty to sell the OA ‘A’ schedule and ‘B’ Schedule properties 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.

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 28th day of August, 2018]

(S.V.GOWRAMMA)

A P P E N D I X

Witness for Applicant: AW1: Mr. N.P. Rajulu, 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 07.05.2013 Hypothecation cum Working capital Agreement dated 07.05.2013 A2 - Doc No. 2877 of 2012 of SRO Arynad A3 - Memorandum of Deposit of Title Deeds dated 06.05.2013 A4 20.02.2015 Office copy of the Lawyer’s notice dated 20.02.2015 A5 - Statement of Accounts relating to the Cash Credit account A6 - Calculation Statement of interest accrued but not applied in the aforesaid cash credit account A7 - Certificate regarding the period and rate of interest applied in the aforesaid cash credit account A8 - Certificate of penal interest applied and capitalized portion of the same in the aforesaid cash credit account.

Defendant’s Exhibits – Nil

(PRESIDING OFFICER)

A SCHEDULE

All the book debts and receivables of the sole proprietary concern M/s Chaithram Constructions of the defendant B SCHEDULE

District

:

Thiruvananthapuram Sub District :

Aryanad Taluk

:

Nedumangad Village

:

Uzhamalakkal Muri

:

Chittuveedu Panchayath

:

Uzhamalakkal Sy.No.

:

Resurvey No. :

Block No.

:

Extent

:

04.20 ares Resurvey No. :

Block No.

:

Extent

:

05.20 ares Resurvey No. :

400/25.1 Block No.

:

Extent

:

90 Sq.Mts DESCRIPTION OF PROPERTY A total extent of 10.30 Ares of land comprised of 04.20 Ares in Re.Sy.No.400/25, 05.20 Ares in Re.Sy.No 400/10 and 90 Sq Mts in Re.Sy.No.400/25.1, Block No. 50 of Uzhamalakkal Village Nedumangadu Taluk, Trivandrum covered by Document No.2877/2012 dated 21.11.2012 of the SRO, Aryanad together with building and other improvements thereon and all easements attached thereto BOUNDARIES

East : Road

North : Property of Sudarsana

West : Rock

South : Property of Chandrika

[PRESIDING OFFICER]

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM Dated this the 28th day of August, 2018 Present: S.V.Gowramma, B.A., LL.B Presiding Officer T.A No: 736 / 2016 [OA No:553/2015] Between

State Bank of India

(successor of State Bank of

Travancore), …Applicant

And

S.Sunil Kumar, …Defendant

FINAL ORDER