STATE BANK OF INDIA vs RINJU K. JOHNS on 30 January 2017

FINAL ORDER

This Original Application has been filed on 11.02.2016 under Section 19(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 for recovery of a sum of Rs.40,61,405.31 with further interest on the sum of Rs.40,51,172.31 @13.30% per annum with monthly rests from the defendants jointly and severally and by sale of ‘A’ and ‘B' schedule properties.

BRIEF FACTS OF THE CASE

1. The defendants approached the applicant bank seeking financial assistance for the business of the 1st defendant as sole proprietor of M/s.Kangappadan Trades and considering their request, the applicant granted a cash credit limit of Rs.40 lakhs to the 1st defendant as per the terms and conditions contained in the letter of arrangement dated 21.06.2012. As security for repayment of the amount due under the aforesaid cash credit limit of Rs.40 lakhs, the 1st defendant executed an agreement of loan-cum-hypothecation in favour of the applicant on 21.06.2012 and thereby he hypothecated the stocks in trade of his business described in ‘A’ schedule to the OA. The 2nd defendant executed guarantee agreement in favor of the applicant bank on 21.06.2012.

2. The 2nd defendant deposited title deed of his property described in ‘B’ schedule to the OA with the applicant’s office at RASMECC Centre, Thrissur on 22.06.2012 and executed a memorandum on 22.06.2012 evidencing the intention and deposit of title deed with the applicant bank. The defendants executed a revival letter on 15.06.2015 acknowledging the liability under the cash credit account. As the repayments became irregular, the applicant caused to send a lawyer notice to the defendants on 14.10.2015 and despite receipt of the said notice, the defendants failed to liquidate the dues.

3. As per the accounts kept by the applicant bank, an amount of Rs.40,61,762.75 is due to the applicant under the cash credit account. The applicant applied a sum of Rs.10,233/- towards penal interest in the cash credit account and capitalized portion of the same would come to

Rs.357.44 and after deducting the said sum of Rs.357.44, the applicant is entitled to recover a sum of Rs.40,61,405.31.

4. It is stated in the proof affidavit filed by the applicant bank that subsequent to filing of the OA, the defendants have remitted a sum of Rs.60,000/- on 25.02.2016, Rs.3,99,500/- on 26.02.2016, Rs.2,00,00/- on 08.03.2016, Rs.1,00,000/- on 24.03.2016 and Rs.3,50,000/- on 22.04.2016 into the loan account.

5. The defendants were duly served with summons. But they neither appeared nor were they represented and thus the defendants were set exparte on 05.09.2016.

6. The evidence on the side of the applicant bank consists of the proof affidavit of its Chief Manager (AW1) and Exts.A1 to A13.

7. 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?

8. The case of the applicant bank regarding recovery of the sum of Rs.40,61,405.31 claimed as due under Exts.A10 and A11 statements of account relating to the cash credit limit as on 10.02.2016 together with interest pendente lite and post decree interest on the sum of Rs.40,51,172.31, less the aforesaid sum of Rs.60,000/-, Rs.3,99,500/-, Rs.2,00,00/-, Rs.1,00,000/- and Rs.3,50,000/- received by the applicant respectively on 25.02.2016, 26.02.2016, 08.03.2016, 24.03.2016 and

22.04.2016, from the defendants jointly and severally and by sale of ‘A’ and ‘B' schedule properties is proved by the proof affidavit of its Chief Manager, AW1 and Exts.A1 to A13. 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 interest pendente-lite and post-decree interest @13.30% per annum with monthly rests, as prayed for.

9. The applicant bank, therefore, is entitled to get a final order on the following lines:-

ORDER

10. OA is allowed with cost. The applicant bank is to recover the sum of Rs.40,61,405.31 (Rupees forty lakhs sixty one thousand four hundred and five and Paise thirty one only) with further interest on the sum of Rs.40,51,172.31 (Rupees forty lakhs fifty one thousand one hundred seventy two and Paise thirty one only) @13.30% per annum with monthly rests from 11.02.2016 till realization and also its costs, less the sum of Rs.60,000/-, Rs.3,99,500/-, Rs.2,00,00/-, Rs.1,00,000/- and Rs.3,50,000/- received by the applicant respectively on 25.02.2016, 26.02.2016, 08.03.2016, 24.03.2016 and 22.04.2016, from the defendants jointly and severally and by sale of ‘A’ and ‘B' schedule properties.

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

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

13. Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of the final order.

14. 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 30th day of January, 2017]

(S.V.GOWRAMMA)

A P P E N D I X Witness for Applicant: AW1: K.R.Venugopalan Nair, Chief Manager of the applicant bank.

Witness for Defendant(s): Nil

Exhibits on the part of the applicant

Ext.No. Date Particulars of documents

A1 21.06.2012 Letter of arrangement issued by the applicant bank. A2 21.06.2012 Agreement of loan-cum-hypothecation agreement executed by the 1st defendant in favour of the applicant bank. A3 21.06.2012 Guarantee agreement executed by the 2nd defendant in favour of the applicant bank. A4 22.12.2003 Sale deed No.7500/2003 of Thrissur SRO. A5 22.06.2012 Memorandum executed by the 2nd defendant evidencing the deposit of title deed with the applicant bank. A6

15.06.2015 Revival letter executed by the defendants acknowledging the liability under the cash credit account. A7

14.10.2015 Copy of lawyer notice issued to the defendants by the applicant bank calling upon them to pay the amount due. A8

… Postal acknowledgment card signed by the 1st defendant evidencing the receipt of Ext.A7 lawyer notice. A9

… Postal acknowledgment card signed by the 2nd defendant evidencing the receipt of Ext.A7 lawyer notice. A10 … Certified copy of the statement of account relating to the cash credit limit. A11 … Statement showing the accrued unapplied interest under the cash credit account. A12 … Certificate showing the period and rate of interest applied in the cash credit account from time to time. A13 … Statement showing the penal interest charged in the cash credit account and capitalisation value thereof.

Defendants’ Exhibits – Nil (PRESIDING OFFICER)

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

Dated this the 30th day of January, 2017

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

T.A No.555/2016 (O.A No.150/2016) Between State Bank of India …Applicant And Rinju.K.Johns & another

…Defendants

FINAL ORDER