INDIAN OVERSEAS BANK vs Naushad E on 1 May 2018

**FINAL ORDER**

This Original Application is filed on 28.09.2015 under Section 19(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 for recovery of a sum of Rs.14,46,988/- from the defendant together with future interest thereon @ 14.40% per annum with half yearly rests from 22.09.2015 till realization and by sale of OA 'A' and 'B' schedule properties.

**BRIEF FACTS OF THE CASE**

1. The applicant is a Nationalized Bank constituted under the Banking companies (Acquisition of Transfer of Undertaking Act-Act 5 of 1970) having its Central office at 763, Anna Salai, Chennai-6000 002

with Regional Offices and branches at various places in India including a branch at Pandalam, Pathanamthitta. The Senior Manager and Principal Officer is competent to verify and authorized to sign the pleadings and take all legal actions representing the applicant bank.

2. The applicant declares that the application is presented within the limitation prescribed under Section 24 of the RDBFI Act 1993. As the applicant had granted credit facility to the defendant on 11.08.2012, defendant availed term loan facility on 16.08.2012 and executed equitable mortgage by deposit of title deeds on 08.04.2013. The liability under the aforesaid facility and security documents were acknowledged by the defendant vide revival letter dated 16.05.2015.

3. It is the case of the applicant that the defendant had approached the applicant bank in August, 2012 seeking financial assistance for the purchase of land for agricultural purpose. Accordingly, the applicant sanctioned a term loan of Rs.10 lakhs to the defendant as per credit sanction advice dated 11.08.2012 under Bhoomi Lakshmi Scheme. The defendant accepting the terms and conditions of sanction had executed a letter of undertaking agreeing to repay the loan amount in 20 equal half yearly installments of Rs.85,450/- commencing from 30^th September, 2014 and demand promissory note dated 16.08.2012 promising to pay to the applicant a sum of Rs.10,00,000/- together with interest thereon.

4. In addition to the above, defendant executed letters dated 16.08.2012 authorizing the applicant to pay Sunish Philip a sum of Rs.10,95,000/- as sale consideration for the 8.26 Ares of land purchased from him and to recover the loan amount under Kerala Revenue Recovery Act in case of any default. The defendant had also executed a hypothecation agreement dated 16.08.2012 hypothecating standing crops and future crops in 8.28 Ares of land situated at Re.Sy.No.359/3-2 of Palamel Village, Mavelikara Taluk more fully described under 'A' schedule to the OA, which the defendant intends to purchase. The credit facility was collaterally secured by creation of equitable mortgage of 8.28 Ares of property comprised in Re.Sy.No.359/3-2 of Palamel Village, Mavelikara Taluk covered by Sale Deed No.1908/2012, Nooranad SRO more fully described under 'B' schedule to the OA owned by the defendant. The original of the aforesaid sale deed was deposited with the applicant bank on 08.04.2013, with an intention to create equitable mortgagee over the said property and the same was confirmed by him vide confirmation letter dated 09.04.2013.

5. It is stated that despite the undertaking made by the defendant, he failed to make payment of any installment of principal or interest. Hence, the account was classified as NPA on 30.06.2015. Thereafter, the applicant through its lawyer issued a notice demanding the defendant to pay of the entire amount outstanding due under the loan account and the same was duly acknowledged by him. Despite receipt of the notice, the defendant failed to remit the amount. It is further stated that on 16.05.2015 defendant had executed a revival letter acknowledging the liability under the term loan account. As per the statement of account maintained by the applicant bank an amount Rs.14,46,988/- is due under the agricultural term loan account and hence the applicant has constrained to file this original application for recovery of the said amount.

6. After filing of the OA, the applicant bank has taken out the summons as directed by the Tribunal and has filed the proof of service on 24.11.2015. The summons issued to the defendant is duly served and service of summons was completed as per the regulations. The defendant has filed Vakalath on 28.06.2016. Though Vakalath is filed defendant neither appeared nor filed any written statement and he chose to abstain from the proceedings.

7. The evidence on the side of the applicant bank consists of the proof affidavit of its Senior Manager and Principal Officer, AW1 and Exhibits A1 to A11 is 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.**


5T.A.No.1292/2016 (OA No.463/2015)**Reasons:-**

9. The evidence of the applicant bank by way of proof affidavit of Senior Manager and Principal Officer AW1 reiterates the facts pleaded in the OA and the affidavit is corroborated by the above referred Exhibits A1 to A11 which clearly establishes the case of the applicant bank to allow the present OA. Added to this, the non filing of written statement by the defendant inspite of filing Vakalath appears to be intentional without any bonafide reasons and it appears that he did not contest the matter as he 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 defendant is directed to pay a sum of Rs.14,46,988/- (Rupees Fourteen lakhs forty six thousand nine hundred and eight eight only) together with future interest @12.40% per annum with half yearly rests from 22.09.2015 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' 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 'A' and 'B' 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.

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 1^st day of May, 2018]*


**APPENDIX**

Witness for Applicant:

AW1: George Thomas, Senior Manager and Principal Officer of the applicant bank.

Witness for Defendant(s): • Nil

**Exhibits on the part of the applicant**

<table border="0"> <thead> <tr> <th style="text-align: left;"><u>Ext.No.</u></th> <th style="text-align: left;"><u>Date</u></th> <th style="text-align: left;"><u>Particulars of documents</u></th> </tr> </thead> <tbody> <tr> <td>A1</td> <td>11.08.2012</td> <td>Credit sanction advice issued by the applicant to the defendant.</td> </tr> <tr> <td>A2</td> <td>16.08.2012</td> <td>Demand promissory notice executed by the defendant in favour of the applicant bank.</td> </tr> <tr> <td>A3</td> <td>16.08.2012</td> <td>Letter executed by the defendant in favour of the applicant bank.</td> </tr> <tr> <td>A4</td> <td>16.08.2012</td> <td>Letter of undertaking repayment in installments executed by the defendant in favour of the applicant bank.</td> </tr> <tr> <td>A5</td> <td>16.08.2012</td> <td>Letter of authorization executed by the defendant in favour of the applicant bank.</td> </tr> <tr> <td>A6</td> <td>16.08.2012</td> <td>Letter of hypothecation (agricultural advances) executed by the defendant in favour of the applicant bank.</td> </tr> <tr> <td>A7</td> <td>17.08.2012</td> <td>Sale Deed No.1908/2012 of Nooranad SRO.</td> </tr> <tr> <td>A8</td> <td>09.04.2013</td> <td>Letter executed by the defendant confirming the deposit of title deed with the applicant bank.</td> </tr> <tr> <td>A9</td> <td>28.01.2015</td> <td>Office copy of lawyer notice issued to the defendant calling upon him to pay the outstanding amount.</td> </tr> <tr> <td>A9(a)</td> <td>-</td> <td>Acknowledgement card evidencing the receipt of lawyer notice.</td> </tr> <tr> <td>A10</td> <td>16.05.2015</td> <td>Revival letter executed by the defendant.</td> </tr> <tr> <td>A11</td> <td></td> <td>Computerized statement of accounts in respect of the agricultural term loan for the period from 16.08.2012 to 21.09.2015.</td> </tr> </tbody> </table>

Defendant's Exhibits - Nil

**A SCHEDULE**

Standing crops, future crops in 8.28 Ares of land situated at Re.Sy.No.359/3-2 of Palamel Village, Mavelikara Taluk, Alappuzha District.

**B SCHEDULE**

<table> <tbody> <tr> <td>District</td> <td>:</td> <td>Alappuzha</td> </tr> <tr> <td>Sub District</td> <td>:</td> <td>Nooranad</td> </tr> <tr> <td>Taluk</td> <td>:</td> <td>Mavelikara</td> </tr> <tr> <td>Village</td> <td>:</td> <td>Palamel</td> </tr> <tr> <td>Old. Sy.No.</td> <td>:</td> <td>359/1,1/7, 1/5</td> </tr> <tr> <td>Block No.</td> <td>:</td> <td>20</td> </tr> <tr> <td>Resurvey No.</td> <td>:</td> <td>359/3-2</td> </tr> <tr> <td>Extent</td> <td>:</td> <td>8.28 Ares</td> </tr> </tbody> </table>

**DESCRIPTION OF PROPERTY**

A part and parcel of land having a total extent of 8.28 Ares in Re.Sy.No.359/3-2, Palamel Village, Alappuzha District, Mavelikara Taluk, obtained by the defendant under Sale Deed No.1908/2012, Sub Registrar Office, Nooranad, together with all rights of the defendant therein and more specifically described in the schedule thereunder.

**BOUNDARIES**

<table> <tbody> <tr> <td>East</td> <td>:</td> <td>Property of Kadamankulathil Melethil</td> </tr> <tr> <td>North</td> <td>:</td> <td>Property of Mr.George.</td> </tr> <tr> <td>West</td> <td>:</td> <td>Pathway</td> </tr> <tr> <td>South</td> <td>:</td> <td>Properties of Thachanamkottu Melethil</td> </tr> </tbody> </table>

[

**IN DEBTS RECOVERY TRIBUNAL-II, KERALA AT ERNAKULAM**

Dated this the 1^st day of May, 2018

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

T.A.No.1292/2016 (OA.No.463/2015)

**Between**

Indian Overseas Bank Pandalam Branch. ....Applicant

**And**

Naushad.E ....Defendant

**FINAL ORDER**