UNION BANK OF INDIA vs P. SASIKALA on 21 September 2018

**FINAL ORDER**

This Original Application is filed on 21.08.2012 under Section 19(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 for recovery of a sum of Rs.22,66,932.99 (Rupees Twenty Three Lakhs Sixty Six Thousand Nine Hundred and Thirty two and paise ninety nine only) along with future interest from 01.08.2012 onwards till realization and also entire costs of the proceedings from both the defendants jointly and severally and also against their personal assets and also through the sale of mortgaged properties movable and immovable and more particularly described in the schedule and such other matters of recovery as are deemed fit and proper.

**BRIEF FACTS OF THE CASE**

1. The applicant is a body corporate duly constituted under the provisions of the Banking Companies Act, 1970, having its head office at 239, Vidhan Bhavan Margh, Mumbai - 21 and having branches all over India and one of such branch in Attipra, Kulathoor in Trivandrum. The applicant bank is represented by its Branch Manager and Principal officer and Power of Attorney Holder who is entitled to sign and verify this application and represent the bank in this proceedings.

2. The applicant declares that the 1^st defendant availed a Cash credit loan for business purpose on 11.10.2007 for an amount of Rs.5,00,000/- and again enhanced on 18.01.2008 to Rs.9,50,000/- and again on 19.12.2008 to Rs.15,00,000/- after executing Demand Promissory Note and other security documents including mortgage of property included in the schedule as well as hypothecation. The last payment was made by the defendant on 02.11.2009 and the transaction was being continued. On account of willful default in repaying the liabilities the present OA is filed for recovery of the debt 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 1^st defendant availed a Cash Credit Hypothecation facility of Rs.5,00,000/- and executed a demand promissory note dated 11.10.2007 in favour of the applicant bank. As security to the cash credit facility availed the 2^nd defendant mortgaged his property by depositing the title deeds having an extent of 4.05 Ares situated in Re.Sy.No.40021 BL.15 of Uliyazhathura Village in Trivandrum Taluk within Trivandrum District covered by Sale Deed No. 3230 of 2007 registered before the Pothencode SRO described under Schedule A of the application. The 2^nd defendant guaranteed the transaction by giving a letter of guarantee in favour of the applicant bank.

4. After availing the loan, the defendants enhanced the credit facility to Rs.9.5Lakhs and the defendants executed a demand promissory note dated 18.01.2009 for Rs.9.5 Lakhs in favour of the applicant bank undertaking to repay the entire loan account with interest. The existing mortgage of property of the 2^nd defendant created for the loan transaction amounting to Rs.5,00,000/- is extended to the transaction made by the defendant on 18.01.2008 for an amount of Rs.9,50,000/- by executing a letter of continuity.

5. The 1^st defendant again enhanced the Cash Credit Hypothecation facility from Rs.9.5Lakhs to Rs.15Lakhs on 19.12.2008 and also executed a Demand Promissory note for Rs.15,00,000/- on the same day and extended the mortgage of the property as security for the transaction amounting to Rs.15,00,000/- and executed a letter of continuity dated 19.12.2008 evidencing the extension of mortgage of the property. The 2^nd defendant executed a letter of guarantee dated 19.12.2008 under taking to repay the entire outstanding amount and interest due from the defendants.

6. The 1^st defendant on 19.12.2008 hypothecated the Electrical goods, fans, heater etc and furniture and fixtures kept in their business premises and executed a Hypothecation of goods and Debts Agreement in favour of the applicant bank to create a charge to secure the Cash Credit Hypothecation and undertook not to alienate the Hypothecated goods and executed a supplementary agreement to the hypothecation agreement.

7. After availing the loan facilities, the defendants failed to repay their liabilities and all their business transactions were not routed through the bank. As per the books of accounts maintained by the bank, the defendants had made their last payment on 02.11.2009 and acknowledged their indebtedness to the bank and also agreed to repay the balance amount immediately. As there was no constructive effort from the defendants to repay the outstanding amount and liquidate the liability, the applicant issued a lawyer's notice dated 29.07.2012 calling upon the defendants to repay the outstanding amount in the account. As per the accounts maintained by the applicant bank an amount of Rs.22,66,932.99 (Rupees Twenty Three Lakhs Sixty Six Thousand Nine Hundred and Thirty two and paise ninety nine only) is due from the defendants and hence the applicant bank was constrained to file this original application for recovery of the said amount.

8. After filing of the OA, the applicant has taken out summons as directed by this Tribunal and has filed proof of service on 22.10.2012. The summons issued to the defendant is duly served and service of summons is completed as per the Regulations. The defendants neither appeared nor filed the vakalah to contest the case.

Since there was no appearance for the defendants nor were represented by any counsel, they were placed exparte on 15.11.2017.

9. The evidence on the side of the applicant bank consists of the proof affidavit of its Branch Manager and Authorized Officer, AW1 and Exhibits A1 to A19 is marked on the side of applicant and closed their side of evidence.

10. 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:-**

11. The evidence of the applicant bank by way of proof affidavit of its Branch Manager and Authorized Officer AW1, reiterates the facts pleaded in the OA and the affidavit is corroborated by the above referred Exhibits A1 to A19 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.

12. 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 defendants are jointly and severally directed to pay a sum of Rs.22,66,932.99 (Rupees Twenty Three Lakhs Sixty Six Thousand Nine Hundred and Thirty two and paise ninety nine only) to the applicant bank with future interest thereon @ 11% p.a with monthly rests from 01.08.2012 till realization and also its costs from the defendants;

- (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 A and Schedule B properties of the defendants 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 properties 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.

13. 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 her, corrected by me and then pronounced in the open court on this the 21^st day of September, 2018]*


RECORDING OFFICE

**APPENDIX**

Witness for Applicant:

AW1: Mr. S.R.Rakesh, Branch Manager & Authorized Officer of the applicant bank.

Witness for Defendant(s): Nil

**Exhibits on the part of the applicant**

<table border="1"><thead><tr><th><u>Ext.No.</u></th><th><u>Date</u></th><th><u>Particulars of documents</u></th></tr></thead><tbody><tr><td>A1</td><td>11.10.2007</td><td>Demand Promissory note for Rs.5,00,000/-</td></tr><tr><td>A2</td><td>11.10.2007</td><td>Letter dated 11.10.2007</td></tr><tr><td>A2(a)</td><td>10.10.2007</td><td>Memorandum of deposit of title deed</td></tr><tr><td>A3</td><td>11.10.2007</td><td>Letter of Guarantee</td></tr><tr><td>A4</td><td>18.01.2008</td><td>Demand Promissory Note for Rs.9,50,000/-</td></tr><tr><td>A5</td><td>18.01.2008</td><td>Letter of continuity</td></tr><tr><td>A6</td><td>19.12.2008</td><td>Demand Promissory Note for Rs.15,00,000/-</td></tr><tr><td>A7</td><td>19.12.2008</td><td>Letter of Guarantee</td></tr><tr><td>A8</td><td>19.12.2008</td><td>Letter of continuity executed by 2^nd defendant</td></tr><tr><td>A9</td><td>19.12.2008</td><td>Letter of continuity executed by 1^st defendant</td></tr><tr><td>A10</td><td>19.12.2008</td><td>Letter of undertaking not to alienate<br/>hypothecated goods</td></tr><tr><td>A11</td><td>19.12.2008</td><td>Hypothecation Agreement of goods and debts</td></tr><tr><td>A12</td><td>19.12.2008</td><td>Supplementary Agreement to the<br/>hypothecation agreement</td></tr><tr><td>A13</td><td>29.07.2011</td><td>Lawyer's notice</td></tr><tr><td>A14</td><td>29.07.2012</td><td>Postal receipt</td></tr><tr><td>A15</td><td>-</td><td>Returned Lawyer's notice</td></tr><tr><td>A16(a)</td><td>-</td><td>Statement of accounts</td></tr><tr><td>A16(b)</td><td>-</td><td>Statement of accounts</td></tr><tr><td>A17</td><td>11.04.2014</td><td>Sale certificate</td></tr><tr><td>A18</td><td>-</td><td>Statement of Accounts</td></tr><tr><td>A19</td><td>-</td><td>Statement of Accounts</td></tr></tbody></table>

Defendant's Exhibits - Nil

**A SCHEDULE**

(Covered by Sale Deed No.3230/2002 owned by the 2^nddefendant)

<table> <tbody> <tr> <td>District</td> <td>:</td> <td>Thiruvananthapuram</td> </tr> <tr> <td>Sub District</td> <td>:</td> <td>Pothencode</td> </tr> <tr> <td>Taluk</td> <td>:</td> <td>Thiruvananthapuram</td> </tr> <tr> <td>Village</td> <td>:</td> <td>Uliyazhathura</td> </tr> <tr> <td>Block No.</td> <td>:</td> <td>15</td> </tr> <tr> <td>Resurvey No.</td> <td>:</td> <td>400/2/1</td> </tr> <tr> <td>Pattayam no.</td> <td>:</td> <td>16251</td> </tr> <tr> <td>Extent</td> <td>:</td> <td>4.05 Ares (10 cents)</td> </tr> </tbody> </table>

**DESCRIPTION OF PROPERTY**

All that part and parcel of total extent of land measureing to 4.05 Ares of property situated in Re.Sy.No.400/2/1, BL.15 of Uliyazhathura Village in Trivandrum Taluk within Trivandrum District in the name of Sureshkumar covered by Sale Deed No.3230 of 2007 registered before Pothencode SRO.

**BOUNDARIES**

<table> <tbody> <tr> <td>North</td> <td>:</td> <td>Property of Vidyanandan</td> </tr> <tr> <td>East</td> <td>:</td> <td>Property of Sairandri</td> </tr> <tr> <td>West</td> <td>:</td> <td>Road</td> </tr> <tr> <td>South</td> <td>:</td> <td>Property of Hema</td> </tr> </tbody> </table>

**B SCHEDULE**

Electrical Goods, fans, heater, furniture, fixtures etc in S.S Agencies.

**IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM**

Dated this the 21^st day of September, 2018

**Present: S.V.Gowramma, B.A., I.L.B Presiding Officer**

T.A No: 1142/2016 [OA No:369/2012]

**Between**

Union Bank of India, Trivandrum

...Applicant

**And**

P.Sasikala, & another

...Defendants

**FINAL ORDER**