STATE BANK OF INDIA vs MARIAMMA P. MATHEW on 15 December 2018

FINAL ORDER

The Original Application is filed under Section 31A of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as ‘the Act’) by the applicant herein, the applicant is the decree holder in OS No.381/2009on the file of the Additional Sub Court, Kottayam. The original application is filed for issuing Recovery Certificate in terms of the decree dated 09.01.2012for recovery of the amount due thereunder.

BRIEF FACTS OF THE CASE

1. The applicant is the State Bank of Travancore, a banking corporation incorporated under the State Bank of India (Subsidiary Banks) Act 38 of 1959 and is represented by its Chief Manager who is having authority to act for and on behalf of the applicant in this legal proceeding. The application is continued and the remedy enforced by State Bank of India, a body corporate constituted under Act No.23 of 1955, as successor of State Bank of Travancore in terms of Acquisition of State Bank of Travancore Order, 2017 published in the Gazette of India dated 22.02.2017, from its effective date i.e., 01.04.2017.

2. The applicant declares that OA is filed within the limitation prescribed in Section 24 of RDDBFI Act 1993 as the decree in OS.No.381/2009 by the Addl. Sub Court, Kottayam was passed on 09.01.2012 in favour of the applicant.

3. The 1stdefendant, proprietrix of M/s.Fairdeal Agencies, engaged in the business of distribution of cattle feeds was granted a cash credit limit of Rs.5lakhs by the applicant bank which was availed by her for meeting the working capital requirements of the business. Repayment of the dues under the said loan has beenguaranteed by defendants 2nd and 3rd and secured by way of mortgage of immovable property belonging to the 2nd defendant more particularly described in the schedule to the decree.

4. The 2nd defendant availed a medium term loan of Rs.2,14,000/- for purchaser of a MaruthiOmini LPG van from the applicant bank. Repayment of the dues under the said loan has been guaranteed by the 3rd defendant and secured by mortgage of the decree schedule property.

5. The 3rd defendant availed a medium term loan of Rs.1,75,000/- for purchaser of a Tata 407 van from the applicant. Repayment of the dues under the said loan has been guaranteed by the 2nd defendant and secured by decree schedule property.

6. Despite demands, defendants did not repay the amounts due under the loan account to the applicant bank. Therefore, the applicant filed suit OS.No.381/2009 on 25.07.2009 before the Addl. Sub Court, Kottayam for recovery of the amounts due to it together with interest from the date of suit till realization and costs of the proceedings from the defendants and their assets and decree schedule property. The defendants admitted the plaint claim and withdraw the contention raised by them. Thus, a decree was passed on admission of the defendants and it has become final. As per the decree as on 05.06.2014 the applicant is entitled get an aggregate sum of Rs.11,63,993/- from the defendants. Hence the present OA.

7. The defendants came on record and filed written statement contending that the OA is not maintainable either in law or on facts. It is true that the 1st defendant is a proprietrix of a concern known as M/s.Fairdeal Agencies, and it was engaged in the distribution of cattle feed. It is also admitted that the 1st defendant had availed a cash credit limit of Rs.5lakhs. But the allegation that the 2nd and 3rd defendants guaranteed the said loan and it was secured by the mortgage of the immovable property belonging to the 2nd defendant who is the wife of the 3rd defendant is not mentally ill and she is not competent enough to enter into any type of contract with applicant bank.

8. It is true that the 2nd and 3rd defendant availed medium term loan of Rs.2,14,000/- and Rs.1,75,000/- but there was no proper and valid mortgage property belonging to the 2nd defendant since the 2nd defendant was not competent enough to mortgage her property and not competent enough to enter any type of guarantee. The applicant bank has not accounted the entire payments made by the defendants towards the loan account. These defendants have paid substantial amount to the bank in discharge of the liability of the defendants, but the ban has willfully suppressed those payments. It is true that applicant had filed OS.No.381/2009, before the Addl.Sub Court, Kottayam and it is also admitted that the defendants admitted the plaint claim and withdraw the contentions raised by them and decree was also passed on admission of the defendants. But it is not correct that these defendants are liable to pay an amount of Rs.11,63,933/- with future interest. The statement of account produced by the bank is incorrect and baseless. The interest charged by the applicant bank is excessive. On these contentions respondents prayed for dismissal of the OA with costs.

9. Heard submissions and perused the records of the case. Following points arise for my consideration: -

1. Whether the applicant bank is entitled to any of the reliefs as prayed for:

2. What order?

Findings:

Point No.1: In Affirmative

Point No.2: As per order

For the following reasons, I answer the above referred points in the following manner:

Reasons:

10. The primary contention raised by the defendants is that 2nd defendant is not competent enough to enter into any type of contract with the applicant bank as she has been under the psychiatric treatment of doctors for many years and has produced Annexure B1 prescription of the Dr.Danny Vincent, Consultant Psychiatrist, Vishranthi Centre, Kottayam. On perusal of the Annexure B1 document, it reveals that the 2nd defendant is under treatment wherein some medicines were prescribed. But thereare no details of the illness as claimed by the 2nddefendant, nor the doctor has certified that the 2nd defendant is not competent enough to enter into any type of agreement. Further on perusal of the written statement filed by the defendants, under the heading of verification, the 2nd defendant has stated that “she hasverified that the contents of the paragraph 1 to 9 of the written statement are true to the best of my information, belief and knowledge”.Furthermore, the 2nd defendant had put her signature on the relevant page of the written statement and also on the place where her name is mentioned. That apart, the 2nd defendant had also preferred SA i.e,TSA.No.149/2016 (SA.No.472/2010) before this Tribunal against the SARFAESI proceedings initiated by the respondent bank against the secured asset.Hence the contention of the defendants,that the 2nd defendant is not competent to enter into any agreement as she has been under the psychiatric treatment of doctors for many years is devoid of any merits.

11. The further contention with regard to the availment of loans, execution of loan documents and claim of the applicant bank are already admitted by the defendants in OS.No.381/2009. The relevant para 4 of the judgement is extracted as under: Para 4: “Even though the defendants filed written statement disputing the liability when the suit is taken up for trial, the learned counsel for the defendants submitted that the defendants are admitting the plaint claim. Accordingly the endorsement has been made in the written statement by the learned counsel.”

After considering the fact and the evidence adduced by the parties, the Addl. Sub Court Kottayamdecree the suit in favour of the applicant. As the defendants have not challenged the judgment and decree till date. Hence, the decree awarded by the Addl. Sub-Court had attained finality. Therefore, the contentions raised by the defendants in the written statement is not sustainable and thescope of this OA is only to issue the Recovery Certificate in terms of the decree.

12. As per the calculation shown in the OA, the amount claimed as due under the decree on hand as on 05.06.2014, the date of the OA exceeds Rs.10 lakhs and in view of S.19(22) r/w Ss.1(4), 17(1) and 18 of the Act, jurisdiction of civil court to execute the decree is barred, and it is the Tribunal which alone has jurisdiction to recover the amount due thereunder and, the Tribunal, therefore, has to issue Recovery Certificate for recovery of the amount due under the decree.

13. The applicant bank, therefore, is entitled to get a final order directing the issuance of Recovery Certificate on the following lines: -

“In the result, it is ordered to issue Recovery Certificate in terms of the decree dated 09.01.2012 in OS.No.381/2009 before the Addl. Sub Court, Kottayam, for recovery and payment to the applicant bank,

(i) the sum of Rs.5,95,100/- (Rupees Five lakhs ninety five thousand and one hundred only) due under the cash credit limit granted to the 1st defendant together with future interest on the sum of Rs.4,31,369/- (Rupees Four lakhs thirty one thousand three hundred and sixty nine only) @ 6% per annum from 06.06.2014 till date of payment from the defendants 1 to 3 jointly and severally and by sale of decree schedule property.

(ii) the sum of Rs.2,46,024/- (Rupees Two lakhs forty six thousand and twenty four only) due under the medium term loan granted to the 2nd defendant together with future interest on the sum of Rs.1,80,752/- (Rupees One lakh eighty thousand seven hundred and fifty two only) @ 6% per annum from 06.06.2014 till date of payment from the defendants 2 and 3 jointly and severally and by sale of decree schedule property.

(iii) the sum of Rs.2,21,956/- (Rupees Two lakhs twenty one thousand nine hundred and fifty six only) due under the medium term loan granted to the 3rd defendant together with future interest on the sum of Rs.1,63,070/- (Rupees One lakh sixty three thousand and seventy only) @ 6% per annum from 06.06.2014 till date of payment from the defendants 2and 3 jointly and severallyand by sale of decree schedule property.

(iv) The applicant is also entitled to get costs of this proceedings from the defendants.

(v) . The schedule to the decree shall be appended to this order.

14. Communicate copy of this order to both parties as provided in R.16 r/w R.2(c) of the Debts Recovery Tribunal (Procedure) Rules, 1993.

[Dictated to the steno, transcribed by him, corrected by me and then pronounced in the open court on this the 15th day of December, 2018]

(S.V.GOWRAMMA) Presiding Officer

A P P E N D I X

Witness for Applicant: Nil

Witness for Defendant(s): Nil

Document on the part of the Applicant

Document No. Date Particulars of documents

Doc.1 09.01.2012 Certified Copy of judgment in OS.No.381/2009 passed by the Addl.Sub Court, Kottayam. Doc.2 09.01.2012 Certified Copy of decreein OS.No.381/2009 passed by the Addl.Sub Court, Kottayam.

Document on the part of the Defendants

Document No. Date Particulars of documents

Doc.1 23.02.2003 True copy of the prescription of the Dr.Danny Vincent, Consultant Psychiatrist, Vishranthi, Centre Kottayam.

[PRESIDING OFFICER]

DECREE SCHEDULE PROPERTY (immovable) (12 ares 14 sq.mts)

District

: Kottayam Sub District : Kottayam Addl. Taluk

: Kottayam Village

: Manarcadu Kara

: Thiruvanchoor Tenure

: Pandaravakapattom

Old Sy.No. : 905/10AB.

Re.Sy.No. : 463/2/2

Block

:

Ares

: 12 cents 14 sq.mts.

Panchayath : Vijayapuram BOUNDARIES

East

: ManarcaduThiruvanchoor

Road

South

: Property of Liziamma George

and Punnen Kurian

West

: Thiruvanchoor Byepass

North

: Property of Kurian Mathew. DESCRIPTION The aforesaid 12 ares 14 sq.mts of land with improvements situated within the boundaries specified.

[PRESIDING OFFICER]

IN THE DEBTS RECOVERY TRIBUNAL-II, KERALA AT ERNAKULAM

Dated this the 15th day of December, 2018

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

Between State Bank of India, Successor of State Bank of Travancore, Pampady Town Branch. …Applicant And

Mariamma.P.Mathew & others

...Defendants

FINAL ORDER