STATE BANK OF INDIA vs BINU RAJ on 27 August 2018

FINAL ORDER

This Original Application has been filed under Section 19(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 for recovery of a sum of Rs.13,64,035/- with further interest @11.75% per annum with monthly rests from the 1st defendant and by sale of ‘A’ schedule property.

BRIEF FACTS OF THE CASE

1. The 1st defendant approached the applicant for credit facility for construction of a residential house in the property belonging to him. During the period when the application was submitted, the 1st defendant was working at Riyad in Saudi Arabia and hence he had executed a Power of Attorney in favour of his brother Vinod Raj for the purpose of doing the necessary in connection with the property etc.; in fact, in the loan application, Binu Raju has also signed. The applicant considered the said application and granted to the 1st defendant a term loan of Rs.10,25,031/- as per arrangement letter dated 24.02.2006. As security for due repayment of the amount borrowed by the 1st defendant, he executed a term loan agreement on 24.02.2006. By way of further security, the 1st defendant through his Power of Attorney holder had deposited with the applicant bank the title deed bearing No.3753/2005 dated 26.09.2005 in respect of the property having an extent of 6.7 Ares (equivalent to 15 cents) comprised in Re-Sy.No.396/14, Block No.30 of Meenad Village in Kollam Taluk. The 1st defendant had also sent a letter dated 22.02.2006 regarding confirmation of deposit of title deed and creation of mortgage.

2. It is submitted by the applicant that the 1st defendant had borrowed entire amount sanctioned depending upon the stage of construction, but committed default in repayment of the amount borrowed by him. Therefore, the applicant through its lawyer issued notice dated 21.01.2008 recalling the entire advance. The 1st defendant executed revival letter on 23.02.2009 acknowledging the liability under the loan account. The applicant initiated proceedings under the SARFAESI Act against the secured asset belonging to the 1st defendant and demand notice dated 17.05.2010 was issued to him. In view of the continued default, the applicant through its Authorised Officer has taken symbolic possession of the secured asset (scheduled property) on 11.04.2011. Thereafter, the applicant has taken actual possession of the property through the Advocate Commissioner appointed by the CJM Court, Kollam on 23.06.2011.

3. It is urged by the applicant that the 2nd defendant approached the Tribunal by filing SA No.505/2011 claiming that he had purchased the property with the building in a SARFAESI sale and therefore, taking possession of the schedule property by the applicant is unsustainable. The applicant made enquiry which brought to light that the Power of Attorney holder of the 1st defendant had also got 15 cents of property lying contiguous to the schedule property on the basis of a separate document executed by their father. It seems that he had defrauded State Bank of Travancore and had availed facility showing construction of the building in his property which was incorrect. It is for this reason that the 2nd defendant is made a party in the OA and no other relief is claimed against him.

4. It is the case of the applicant that the account of the 1st defendant was classified as NPA w.e.f. 01.12.2010. As per the statement of account maintained by the applicant, an amount of Rs.13,64,035/- is due to the applicant as on 21.02.2012. It is submitted that no penal interest is either applied or capitalized in the account of the 1st defendant.

5. The defendants 1 and 2 were duly served with summons and they entered appearance and sought adjournment for filing written statement. However, when the matter was taken up before the Tribunal on 26.02.2014, learned counsel appearing for the 1st defendant submitted that she is relinquishing her vakalat as the case bundle has been taken back by the 1st defendant long back. As the 1st defendant remained absent and was not represented, he was set exparte on 26.02.2014. Though the 2nd defendant was granted time till 18.07.2012 to file his written statement, he did not file the same within the time granted; and his prayer for further enlargement of time for filing written statement stood rejected as per the proceedings dated 22.08.2012. Thereafter, even though the 2nd defendant has filed written statement on 21.12.2012, no petition has been filed to accept the same and as such, written statement filed by the 2nd defendant is not taken on record.

6. The evidence on the side of the applicant bank consists of the proof affidavit of its Assistant General Manager, AW1 and Exts.A1 to A14.

7. 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 to get the reliefs prayed for in the OA?

(ii) What order?

Findings:

Point No.1: In affirmative

Point No.2: As per order

Reasons:

8. The case of the applicant bank regarding recovery of the sum of Rs.13,64,035/- claimed as due under Exts.A13 and A14 statements of account relating to the housing term loan as on 21.02.2012 with interest pendente lite and post decree interest thereon from the 1st defendant and by sale of ‘A’ schedule property is proved by the proof affidavit of its Assistant General Manager, AW1 and Ext.A1 to A14. 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. Having regard to the amount advanced, the interest applied and the chronic default committed, the Tribunal is of the view that the applicant bank is entitled to get pendente-lite and post-decree interest @11.75% per annum with monthly rests, as prayed for.

ORDER

9. The OA is allowed with costs.

10. The applicant bank is allowed to recover the sum of Rs.13,64,035/- (Rupees thirteen lakhs sixty four thousand and thirty five only) with further interest thereon @11.75% per annum with monthly rests from 22.02.2012 till realization and also its costs from the 1st defendant and by sale of ‘A’ schedule property.

11. ‘A’ schedule to the OA shall be appended to this order.

12. The applicant bank shall file memo of costs within ten days from the date of this final order.

13. Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of the final order.

14. 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 PS, transcribed by her, corrected by me and then pronounced in the open court on this the 27th day of August, 2018]

(S.V.GOWRAMMA)

Presiding Officer

A P P E N D I X

Witness for Applicant: AW1: A.Joseph Williams, Assistant General Manager of the applicant bank.

Witness for Defendant(s): Nil

Exhibits on the part of the applicant

Ext.No. Date Particulars of documents

A1 10.10.2005 Power of Attorney executed by the 1st defendant in favour of Vinod Raj. A2 24.02.2006 Arrangement letter issued by the applicant sanctioning housing loan of Rs.10,25,031/- to the 1st defendant. A3 24.02.2006 Term loan agreement executed by the 1st defendant. A4 … Building plan submitted to the applicant by the 1st defendant. A5 … Estimate submitted to the applicant by the 1st defendant. A6

26.09.2005 Title deed No.3753/2005 of Chathannur SRO. A7

22.02.2006 Letter executed by the 1st defendant confirming the deposit of title deed with the applicant. A8

21.01.2008 Office copy of lawyer notice issued to the 1st defendant by the applicant. A9

23.02.2009 Revival letter executed by the 1st defendant. A10 16.03.2010 Letter submitted to the applicant by the 1st defendant undertaking to repay the irregularity before 20.03.2010. A11 17.05.2010 Copy of notice under S.13(2) of the SARFAESI Act issued to the 1st defendant. A12 23.06.2011 Letter submitted by the 1st defendant undertaking to pay the entire amount within three months. A13 … Certified copy of the statement of account relating to the housing term loan. A14 … Statement showing the rate of interest applied in Ext.A13 account and the interest accrued from 01.12.2010 to 21.02.2012.

Defendants’ Exhibits – Nil (PRESIDING OFFICER)

(PRESIDING OFFICER)

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

Dated this the 27th day of August, 2018

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

T.A No.66/2016 (O.A No.97/2012) Between State Bank of India

…Applicant And Binu Raj & another. …Defendants

FINAL ORDER