INDIAN OVERSEAS BANK vs PYARI RAJA on 11 September 2017

FINAL ORDER

This Original Application is 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.14,46,988/- from the defendant with further 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 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 security documents on 16.08.2012. The aforesaid facility was secured by hypothecation of standing crops and future crops in 8.26 Ares of land in Re.Sy.No.359/1 and 359/2 of Palamel Village, Mavelikara Taluk described in ‘A’ schedule to the OA and the loan was further collaterally secured by mortgage of immoveable property by deposit of title deeds in respect of a total extent of 8.26 Ares of land in Re.Sy.No.359/1 and 359/2 of Palamel Village, Mavelikara Taluk covered under Sale Deed No.1911/2012, Nooranad SRO belonging to the defendant described in ‘B’ schedule to the OA. 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.

3. It is submitted by the applicant that despite the undertaking made by the defendant did not adhere to repay the said loan of Rs.10 lakhs in 20 equal half yearly installments of Rs.85,450/- commencing from 30.09.2014. Consequently, the account was classified as NPA on 30.06.2015. The applicant caused the issuance of legal notice through its Advocate on 28.01.2015 to the defendant demanding payment of the entire amount outstanding due under the loan account. In the response to the aforesaid lawyer notice, defendant through his Advocate replied vide letter dated 07.02.2015, raising false and frivolous claims. Despite receipt of the notice, the defendant failed to remit the amount. The defendant had executed revival letter dated 01.01.2015 acknowledging the liability under the term loan account. As per the statement of account maintained by the applicant bank, they are entitled to recover a sum of Rs.14,46,988/- under the subject loan account.

4. 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 02.11.2015. 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 23.06.2016. Though Vakalath is filed no written statement is filed nor the defendant was represented and the defendant chose to remain absent.

5. The evidence on the side of the applicant bank consists of the proof affidavit of its Senior Manager and Principal Officer, AW1 and Exhibit A1 to A12 are marked on the side of applicant and closed their side of evidence.

6. 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:-

7. 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 A12 which clearly establishes the case of the applicant bank to allow the present OA. Added to this, the non filing of written statement of defendant in spite of filing Vakalath 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.

8. In view of the above, the present OA is to be allowed with costs as sought by the applicant bank. 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) @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;

(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 person and 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 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.

9. 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 11th day of September, 2017]

(S.V.GOWRAMMA) Presiding Officer

A P P E N D I X

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

Ext.No. Date Particulars of documents

A1 11.08.2012 Credit sanctions 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.1911/2012 of Nooranad SRO. A8

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

28.01.2015 Office copy of lawyer notice issued to the defendant calling upon him to pay the amount due. A10 07.02.2015 Reply notice issued by the defendant. A11 01.01.2015 Revival letter executed by the defendant. A12

Computerized statement of account in respect of the agricultural term loan for the period from 16.08.2012 to 21.09.2015.

Defendant’s Exhibits – Nil (PRESIDING OFFICER)

A SCHEDULE

Standing crops, future crops in 8.26 Ares of land situated at Re.Sy.No.359/1 and 359/2 of Palamel Village, Mavelikara Taluk, Alappuzha District.

B SCHEDULE

District

: Alappuzha

Sub District : Nooranad

Taluk

: Mavelikara

Village

: Palamel

Old. Sy.No. : 359/1-7, 359/1-5

Block No.

:

Resurvey No. :

Extent

: 6.86 Ares 1.40 Ares DESCRIPTION OF PROPERTY A part and parcel of land having a total extent of 8.26 Ares comprised of 6.86 Ares in Re.Sy.No.359/1 and 1.40 Ares in Re.Sy.No.359/2, Alappuzha District, Mavelikara Taluk, Palamel Village obtained by the defendant under Sale Deed No.1911/2011, Sub Registrar Office, Nooranad, together with all rights of the defendant therein and more specifically described in the schedule thereunder. BOUNDARIES

East : Property of Kadaman Kulath

North : Pathway

West : Property of Thachanamkottu Melethil

South : Property of Thachanamkottu Melethil [PRESIDING OFFICER]

IN DEBTS RECOVERY TRIBUNAL-II, KERALA AT ERNAKULAM

Dated this the 11th day of September, 2017

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

Between Indian Overseas Bank

…Applicant Pandalam Branch. And Pyari Rajan …Defendant

FINAL ORDER