PUNJAB NATIONAL BANK vs SHUHAIB M.H on 19 August 2017

FINAL ORDER

This Original Application has been filed by the applicant under Section 19(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 for recovery of a sum of Rs.34,97,523.02 with future interest @ 9.6% per annum due from the defendant under the Housing Loan Account No.435700NC00004318 and a sum of Rs.5,55,059.34 with future interest @ 10.1% per annum due from the defendant under the Over Draft Account No.4357009900000292 and by sale of OA ‘A’ schedule property. BRIEF FACTS OF THE CASE:-

1. The applicant is a bank constituted under Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 having its Registered Office at No.7, Bhikaji Cama Place, New Delhi and Branch among other places at Kuruppam Road, Thrissur. The Senior Manager of the applicant bank is authorized to sign and verify this application and represent the bank in these proceedings

2. The defendant approached the applicant bank for a housing loan facility for a sum of Rs.25,60,000/-. The applicant bank after satisfying about his repayment capacity sanctioned housing loan facility for a sum of Rs.25,60,000/- on 31.12.2012 for construction of a new house vide sanction letter dated 31.12.2012.

3. The defendanthas executed an agreement of housing loan agreeing to the terms conditions of repayment to repay the loan amount in 240 equal monthly installments of Rs.25,559/- each giving a moratorium period of 12 months for commencing the repayment.

4. The housing loan was secured by the mortgage of the property having an extent of 2.73 ares in Survey No.220/1 pt of Chiramanangad Village, Thalapilly Taluk, covered by Sale Deed No.3478/2012 of Akkikavu Sub Registrar favoring the applicant bank which is described in Schedule “A’ in the OA. Further the title deeds of schedule ‘A’ property is deposited by deposit of title deeds with an intention to create equitable mortgage on 31.12.2012. The defendant has confirmed the deposit of title deeds by executing the letter evidencing deposit of tile deeds on 01.01.2013. Thereafter the applicant has disbursed the loan amount.

5. While enjoying the housing loan facility, at the request of defendant, he was sanctioned an over draft facility with a limit of Rs.5,00,000/- and the defendant has executed an agreement of over draft facility on 28.05.2013 agreeing to repay and extended the mortgage in respect of the schedule ‘A’ property to the OA, for the limit covered under the over draft facility availed.

6. After availing the financial facilities and after the expiry of moratorium period, the defendant failed to commence the repayment towards loan accounts. During the inspections by the officials of the applicants it came to the knowledge that no construction took place.

7. It is stated by the applicant that the defendant did not adhere to the terms and conditions of the sanction from the beginning and the repayment fell overdue. Therefore, the applicant issued notice dated 12.05.2014 to defendant to repay the loan amount, since there was no response, the applicant was constrained to issue lawyer notice on 24.05.2014 calling upon the defendant to clear the entire liability, but the defendant failed to regularize the loan accounts. Therefore, the housing loan account as well as the overdraft account was classified as NPA on 30.09.2014 and the loan was recalled vide recall notice dated 14.10.2014.

8. After the classification of the account as NPA, the applicant initiated SARFAESI proceedings by issuing 13[2] notice. The defendant did not settle the liability and the bank proceeded further and has taken symbolic possession and put the property to sale which did not materialize for want of bidder. Therefore the applicant bank has filed the present OA for recovery of a sum of Rs.34,97,523.02 with future interest @ 9.6% per annum under the Housing Loan Account bearing No.435700NC00004318 and a sum of Rs.5,55,059.34 with future interest @ 10.1% per annum under the Over Draft Account bearing No.4357009900000292 as on 01.12.2015.

9. The applicant bank has taken out the summons as directed by the Tribunal and has filed the proof of service on 13.01.2016. The summons issued to the defendant was duly served on him. Inspite of service of summons defendant neither appeared nor he is represented by a counsel and he chose to remain absent and hence he was declared ex- parte on 20.09.2016.

10. The evidence on the side of the applicant bank consists of the proof affidavit of its Senior Manager, AW1 and Exhibits A1 to A14 are marked on the side of applicant and closed their side of evidence.

11. 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?

Findings:

Point No.1: In affirmative Point No.2: As per order

Reasons:-

12. The evidence of the applicant bank by way of proof affidavit of Senior Manager, AW1 reiterates the facts pleaded in the OA and the affidavit is corroborated by the above referred Exhibits A1 to A14 which clearly establishes the case of the applicant bank to allow the present OA. Added to this, the absence of defendant inspite of service of summons appears to be intentional without any bonafide reasons and it appears that he remained absent as he admitted the entire case of the applicant as sought for in the present OA. In view of the above the present OA is to be allowed with costs as sought by the applicant bank.

13. 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:-

O R D E R

14. The OA stands allowed with costs.

(a) The defendant is directed pay a sum of Rs.34,97,523.02 (Rupees Thirty four lakhs ninety seven thousand five hundred twenty three and paise two only) under the Housing Loan Account No.435700NC00004318 with further interest on the sum of Rs.34,20,854.67 (Rupees Thirty four lakhs twenty thousand eight hundred fifty four and paise sixty seven only) @ 9.6% per annum with monthly rests from 02.12.2015 till the date of realization; (b) The defendant is directed pay a sum of Rs.5,55,059.34 (Rupees Five lakhs fifty five thousand fifty nine and paise thirty four only) under the Over Draft Account No.4357009900000292 with further interest on the sum of Rs.5,43,167.84 (Rupees Five lakhs forty three thousand one hundred sixty seven and paise eighty four only) @ 10.1% per annum with monthly rests from 02.12.2015 till the date of realization;

(c) In the event of failure of the defendant to pay the aforesaid amounts, the bank is at liberty to sell the OA ‘A’ schedule property and the sale proceeds be appropriated towards the claim amount as required under law; (d) In the event of non-realization of the OA claim amount despite the sale of the OA schedule property, the bank is at liberty to proceed against the person and other properties of the defendant, as required under law; (e) Schedule ‘A’ property shown in the OA shall become part and parcel of the final order and Recovery Certificate of present OA; (f) The applicant bank shall file memo of costs within seven 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.

15. 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 19th day of August, 2017]

(S.V.GOWRAMMA) Presiding Officer

A P P E N D I X Witness for Applicant: AW1: Bhanu Saranya, 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 31.12.2012 Sanction Letter of the applicant for grant of Housing Loan Facility. A2 31.12.2012 Agreement for Housing Loan executed by the defendant in favour of the applicant. A3 01.01.2013 Letter evidencing deposit of title deeds executed by the defendant in favour of the applicant. A4 26.12.2012 Sale Deed No.3478/2012 of Akkikavu Sub Registry executed by Satheesan in favour of Shuhaib, pertaining to schedule 'A’ property. A5 28.05.2013 Agreement for Over Draft facility executed by the defendant in favour of the applicant. A6

28.05.2013 Draft letter of continuity executed by the defendant in favour of the applicant extending the mortgage in respect of schedule ‘A’ property. A7

12.05.2014 Office copy of default notice issued by the applicant to the defendant. A8

24.05.2014 Office copy of lawyer notice issued by the applicant to the defendant. A9

14.10.2014 Office copy of the recall notice issued by the applicant to the defendant. A10

Extract of Housing Loan Account No.435700NC00004318 maintained by the defendant with the applicant duly certified under Banker’s Book of Evidence Act. A11

Statement of account showing the calculation of unapplied interest and penal interest charged in the housing loan account. A12

Extract of Over Draft Account No.4357009900000292 maintained by the defendant with the applicant duly certified under Banker’s Book of Evidence Act. A13

Statement of account showing the calculation of unapplied interest and penal interest charged in the Over Draft Account.

A14 05.06.2015 General Power of Attorney issued by applicant in favour of Bhanu Saranya.

Defendant Exhibits – Nil

[PRESIDING OFFICER]

SCHEDULE ‘A’ State : Kerala

District : Thrissur

Sub District : Akkikavu

Taluk : Thalappilly

Village : Chiramanangad

Tenure : Jenmom

Survey No. : 220/1 pt.

Extent : 2.73 Ares

DESCRIPTION OF PROPERTY

All that pieces and parcels of land admeasuring 2.73 Ares in Survey No.220/1 pt. of Chiramanangad Village, Thalappilly Taluk, covered by Sale Deed No.3478/2012 of Akkikavu Sub Registry. BOUNDARIES North : Property of Sunil Kumar

East : Private pathway leading to the property

West : Plot No.13 owned by Rafeek

South : Private pathway.

[PRESIDING OFFICER]

IN DEBTS RECOVERY TRIBUNAL-2, KERALA ATERNAKULAM

Dated this the 19th day of August, 2017

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

Between Punjab National Bank, Represented by its Senior Manager.

…Applicant

And

Shuhaib M.H

…Defendant

FINAL ORDER