FEDERAL BANK vs K. SURESH KUMAR on 1 July 2017

FINAL ORDER

The applicant bank has filed Original Application [OA] on 15.06.2015 under Section 19(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 for recovery of a sum of Rs.16,97,486.02 (Rupees Sixteen Lakhs Ninety Seven Thousand Four Hundred and Eighty Six and Paisa Two only) due under the FHOD account with further interest @20.50% per annum with monthly rests on an amount of Rs.16,53,921.56 [Rupees Sixteen Lakhs Fifty Three

Thousand Nine Hundred and Twenty One and Fifty Six Paisa only] from the date of application till realization in full from the defendants jointly and severally, and by sale of ‘A’ schedule property to the OA. BRIEF FACTS OF THE CASE

1. The 1st and 2nd Defendants are husband and wife who approached the applicant bank in the year 2007 seeking financial assistance of Rs.5,00,000/- for renewing their home. The 2nd defendant is the co-obligant to the loan availed by the 1st defendant. The applicant bank sanctioned a Federal Home Overdraft Facility of Rs.5,00,000/- on 14.012.2007. The defendants availed the said facility on 14.12.2007 agreeing to repay the loan amount in 120 monthly installments of Rs.7,915/- with interest and charge commencing from 14.01.2008, further agreed to pay the interest at the rate of 14.50% p.a with monthly rest or at such rate prescribed by RBI/from Bank time to time. In case of default to make the repayment, the bank was entitled to charge additional interest at such rates fixed by RBI.

2. The defendants executed demand promissory notice, security delivery letter and agreement of Federal Home Overdraft on 14.12.2007. The credit facility is collaterally secured by deposit of original Sale Deed No.4692/2007 dated 17.10.2007 of SRO Wadakkanchery. The defendants have confirmed the deposit of title deeds by executing the letter evidencing deposit of tile deeds on 14.12.2007.

3. The defendants did not adhere to the terms and conditions of the sanction from the beginning and the repayment fell overdue and the applicant initiated SARFAESI proceedings by issuing 13[2] notice dated 10.09.2009. As the defendant did not settle the liability asper the demand, the applicant bank has filed the present OA. As per the statement of account maintained by the applicant bank, an amount of Rs.17,35,680.68 (Rupees Seventeen Lakhs Thirty Five Thousand Six Hundred Eighty and Sixty Eight Paisa Only) is due from the defendants. The amount claimed in the OA is Rs.16,97,486.02, which is the amount outstanding after deducting the effect of capitalization of penal interest. The amount for which future interest claimed is Rs.16,53,921.56/- which the amount outstanding less penal interest.

4. After filing of the OA, the applicant has taken out summons on defendants as directed by the Tribunal. The summons was duly served on defendants and the 2nd defendant has entered appearance and has filed Vakalath, but none represented for the 1st defendant who is none other than the husband of the 2nd defendant. Though vakalat is filed none represented for the 2nd defendant nor the 2nd defendant appeared and they remained absent to the proceedings.

5. The evidence on the side of the applicant bank consists of the proof affidavit of its Chief Manager, AW1 and Exts.A1 to A9.

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?

7. The evidence of applicant bank is adduced by its Manager AW1. The affidavit by way of evidence reiterates the facts pleaded in the OA and the affidavit is corroborated by the above referred Exhibits A1 to A9 which clearly establishes the case of the applicant bank to allow the present OA. Added to this, the absence of defendants in spite of service of summons and after filing vakalat is intentional without any bonafide reasons and it appears that they remained absent as they admitted the entire case of the applicant as sought for in the present OA.

8. 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

(a) The OA is allowed with costs.

(b) The defendants jointly and severally are directed to pay a sum of Rs.16,97,486.02 (Rupees Sixteen Lakhs Ninety Seven Thousand Four Hundred and Eighty Six and Paisa Two only) with future interest on the sum of 15,77,532.24 (Rupees Fifteen Lakhs Seventy Seven Thousand Five Hundred Thirty Two and Twenty Four Paisa only) @18.50%

per annum with monthly rests from 13.10.2015 till realization and also its costs from the defendants and by sale of ‘A’ schedule property to the OA.

(c) in the event of failure of the defendants to pay the OA amount, the bank is at liberty to sell the OA ‘A’ property belonging to the defendants and the sale proceeds be appropriated towards the OA amount as required under law; (d) in the event of non-realization of the OA amount, in spite of sale of the OA ‘A’ schedule property referred above, the bank is at liberty to proceed against the person and other properties of the defendants as required under law.

(e) ‘A’ schedules property 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.

8. 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 July, 2017]

(S.V.GOWRAMMA) Presiding Officer

A P P E N D I X Witness for Applicant: AW1: Sandeep P Sasi , Manager of the applicant bank.

Witness for Defendant(s): Nil

Exhibits on the part of the applicant

Ext.No. Date Particulars of documents

A1 14.12.2007 Demand Promissory Note for Rs.5,00,000/- executed by defendants 1 and 2 in favour of the applicant. A2 14.12.2007 Security Delivery Letter executed by defendants 1 and 2 in favour of applicant. A3 14.12.2007 Agreement for Federal Home Over Draft Facility. A4 17.10.2007 Sale Deed No.4692/2007 of SRO Wadakkanchery. A5 15.12.2007 Letter confirming deposit of title deed A6 10.09.2009 Office copy of the Demand Notice issued to the defendants 1 and 2 A7

Statement of account of Federal Home Over Draft A8

Statement showing impact of capitalization in Federal Home Over Draft. A9

Statement showing varying rates of interest charged in the account.

Defendants’ Exhibits – Nil

(PRESIDING OFFICER)

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

Dated this the 1st day of July, 2017

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

Between

Federal Bank Ltd.,

Regd. Office: Aluva,

Branch:Wadakkancherry,

Thrissur District. …Applicant And

K.Suresh Kumar

& another

…Defendants

FINAL ORDER