INDIAN OVERSEAS BANK vs SHANAVAS B on 1 June 2017

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.14,46,991/- with further interest thereon @14.40% per annum with half yearly rests from the defendant and by sale of ‘A’ and ‘B’ schedule properties. BRIEF FACTS OF THE CASE

1. The defendant had approached the applicant bank in August, 2012 seeking to avail a loan for 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 had executed security documents on 16.08.2012. The aforesaid facility was collaterally secured by creation of equitable mortgage by deposit of title deeds in respect of an extent of 8.26 Ares comprising of 6.16 Ares in Re-Sy.No.359/4-2 and 2.10 Ares in Re-Sy.No.359/5-2-2 of Palamel Village, Mavelikara Taluk covered under sale deed No.1913/2012 belonging to the defendant. The original of the aforesaid sale deed was deposited with the applicant bank on 08.04.2013 and the defendant executed a confirmation letter dated 09.04.2013.

2. It is submitted by the applicant that the defendant had executed revival letter dated 31.12.2014 acknowledging the liability under the term loan account. Despite the undertaking made by the defendant that he would make repayment towards the loan promptly and regularly, he failed to do so. Consequently, the account was classified as NPA on 30.06.2015. The applicant through its Advocate issued a notice dated 28.01.2015 to the defendant demanding payment of the entire amount outstanding under the loan account. Despite receipt of the notice, the defendant failed to remit the amount. It is stated that as per the statement of account maintained by the bank, they are entitled to recover a sum of Rs.14,46,991/- under the subject loan account.

3. The defendant is duly served with summons. Though the defendant had entered appearance and sought adjournment for filing written statement, he did not file any written statement despite sufficient opportunity granted. Subsequently, he remained absent and was not represented and thus the defendant was set exparte on 10.11.2016.

4. The evidence on the side of the applicant bank consists of the proof affidavit of its Senior Manager, AW1 and Exts.A1 to A11.

5. 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:

6. The case of the applicant bank regarding recovery of the sum of Rs.14,46,991/- claimed as due under Ext.A11 statement of account relating to the agricultural term loan as on 21.09.2015 with further interest on the sum of Rs.14,40,641/- (after deducting the penal interest portion – Rs.6,350/-) at the contractual rate @12.40% per annum with half yearly rests plus penal interest @2% per annum from 22.09.2015 to 27.09.2015 together with pendente lite and post decree interest from the defendant and by sale of ‘A’ and ‘B’ schedule properties, is proved by the proof affidavit of its Senior Manager, AW1 and the evidence adduced by the applicant bank.

7. Having regard to the amount advanced, the interest and penal interest applied and the chronic default committed, I am of the view that the applicant bank is entitled to get interest pendente-lite and post-decree interest @12.40% per annum with half yearly rests.

ORDER

8. The OA is allowed with costs. The applicant bank is allowed to recover the sum of Rs.14,46,991/- (Rupees fourteen lakhs forty six thousand nine hundred and ninety one only) with further interest on the sum of Rs.14,40,641/- (Rupees fourteen lakhs forty thousand six hundred and forty one only) @12.40% per annum with half yearly rests plus penal interest @2% per annum from 22.09.2015 to 27.09.2015 and thereafter @12.40% per annum with half yearly rests from 28.09.2015 till realization and also its costs from the defendant and by sale of ‘A’ and ‘B’ schedule properties.

9. ‘A’ and ‘B’ schedules to the OA shall be appended to this order.

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

11. 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 PS, transcribed by her, corrected by me and then pronounced in the open court on this the 1st day of June, 2017]

(S.V.GOWRAMMA)

A P P E N D I X

Witness for Applicant: AW1: George Thomas, Senior Manager of the applicant bank.

Witness for Defendant(s): Nil

Exhibits on the part of the applicant

Ext.No. Date Particulars of documents

A1 11.08.2012 Credit sanction advice issued by the applicant sanctioning agricultural term loan of Rs.10 lakhs to the defendant. A2 16.08.2012 Demand promissory notice for Rs.10 lakhs executed by the defendant in favour of the applicant bank. A3 16.08.2012 Letter executed by the defendant in favour of the applicant bank. A4 16.08.2012 Letter of undertaking of installments executed by the defendant in favour of the applicant bank. A5 16.08.2012 Letter of authorization executed by the defendant in favour of the applicant bank. A6

16.08.2012 Letter of hypothecation (agricultural advances) executed by the defendant in favour of the applicant bank. A7

17.08.2012 Sale deed No.1913/2012 of Nooranad SRO. A8

09.04.2013 Letter executed by the defendant confirming the deposit of title deed with the applicant bank. A9

31.12.2014 Revival letter executed by the defendant acknowledging the liability under the term loan account. A10 28.01.2015 Copy of lawyer notice issued to the defendant calling upon him to pay the amount due. A10(a) 30.01.2015 Acknowledgment card signed by the defendant evidencing the receipt of Ext.A10 lawyer notice. A11 … Certified copy of the statement of account relating to the term loan.

Defendant’s Exhibits – Nil

(PRESIDING OFFICER)

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

Dated this the 1st day of June, 2017

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

T.A No.31/2016 (O.A No.461/2015) Between Indian Overseas Bank

…Applicant And Shanavas.B …Defendant

FINAL ORDER