FEDERAL BANK vs reji george on 2 June 2017

FINAL ORDER

The applicant bank has filed Original Application [OA] on 28.10.2015 under Section 19(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 for recovery of a sum of Rs.12,13,398.60 due under the Federal Housing Loan (hereinafter referred to as FHS) account with future interest @ 12.30% per annum with monthly rests on Rs.12,02,751/- from the date of application till realization in full from the defendants jointly and severally and by sale of „A‟ schedule property.

BRIEF FACTS OF THE CASE

1. The applicant is a Banking Company constituted under the Companies Act, 1956 having its Registered office at Alwaye, Kerala and a branch amongst other places at Adoor in Pathanamthitta District, Kerala. The applicant is represented by its Chief Manager.

2. The 1st defendant is the principal borrower and 2nd defendant is the guarantor to the credit facility availed by the 1st defendant and 1st defendant is the husband of the 2nd defendant. In the year 2012, 1st defendant approached the applicant bank for a FHS facility of Rs.25,00,000/- [Rupees Twenty Five Lakhs only] for construction of house. At the request of the 1st defendant the applicant bank granted a FHS loan of Rs.25,00,000/- [Rupees Twenty Five Lakhs only]. The 1st defendant agreeing to the terms and conditions of sanction executed the loan agreement agreed to repay the loan amount with interest @10.45 per annum with monthly rests calculated on the daily balance outstanding in the account and also undertook to pay interest @ 2% or at such other rates as may be prescribed by the RBI from time to time in case he default in repayment of any instalment of loan or any amount payable under the terms of agreement or commits breach of any of the terms and conditions of the agreement.

3. The loan was to be repaid within a period of 171 months in equated monthly installments of Rs.30,451/- each until the entire loan together with interest is repaid in full. The first of such installment was to be paid within 9 months from the date of the disbursement of the housing loan and the subsequent installments on the same date of the subsequent months. The 1st defendant has executed On Demand Promissory Note for Rs.25,00,000/- on 02.11.2012, Security Delivery Notice dated 02.11.2012 and the FHS agreement dated 02.11.2012. The loan is secured by equitable mortgage of the OA schedule “A” property by deposit of title deeds on 02.11.2012 i.e., Sale Deed No.3132/2009 dated 07.11.2009 of SRO, Adoor and the 1st defendant have confirmed the deposit of title deeds by letter of confirmation on 03.11.2012.

4. The 2nd defendant who is the wife of the 1st defendant has stood has guarantor to the credit facility availed by the 1st defendant and has executed guarantee agreement dated 03.11.2012 agreeing for repayment and discharge of demand of Rs.25,00,000/- and all interest, banking and other charges and expenses due and payable by the 1st defendant and outstanding in the books of the Bank and also agreed that the liability under the guarantee would cease only on payment of the amount guaranteed.

5. On 11.08.2015 the 1st defendant executed Balance Confirmation letter for the FHS loan account confirming the balance outstanding in the account as on 10.08.2015.

6. It is stated by the applicant that the defendants defaulted in repayments in the loan account and applicant bank request the 1st defendant to regularize the account, but he did not repay the installments/regularize the account. Therefore applicant has issued demand notice dated 04.01.2014 under Section 13(2) of the SARFAESI Act, 2002. On 09.10.2015 applicant has also caused lawyer notice calling upon them to pay the entire amount due under the loan account. Nonetheless, the defendants have not taken any steps to settle the dues. As per the statement of account maintained with the applicant bank, an amount of Rs.12,13,992/- is due from the defendants. The amount claimed in the OA is Rs.12,13,398.60, which is the amount outstanding after deducting the effect of capitalization of penal interest.

7. The summons issued to defendants were duly served on them. The defendants neither appeared nor were they represented and they chose to remain absent and hence they were declared ex- parte on 27.09.2016.

8. The evidence on the side of the applicant bank consists of the proof affidavit of its Chief Manager and Principal Officer, AW1 and Exts.A1 to A12.

9. 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:-

10. The evidence of applicant bank is adduced by its Chief 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 A12 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 appears to be 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. In view of the above, the present OA is to be allowed with cost as sought by the applicant bank.

O R D E R

(a) The OA stands allowed with cost. The defendants jointly and severely are directed to pay to the applicant bank a sum of Rs.12,13,398.60 (Rupees twelve lakhs thirteen thousand three hundred and ninety eight and sixty paise only) with interest on the sum of Rs.12,02,157.60 (Rupees twelve lakhs two thousand one hundred fifty seven and sixty paise only) @10.30% per annum monthly rests from 28.10.2015 till the date of realization and also its costs.

(b) In the event of failure of the defendants to pay the OA amount, the bank is at liberty to sell the OA „A‟ schedule property of the defendants and the sale proceeds be appropriated towards the OA amount as required under law.

(c) Schedule „A‟ property shown in the OA shall become part and parcel of the final order of the OA and Recovery Certificate of present OA.

(d) The applicant bank shall file memo of costs within seven days from the date of this final order.

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

11. 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 2nd day of June, 2017]

(S.V.GOWRAMMA)

A P P E N D I X Witness for Applicant: AW1: Thomas Augustine, 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 02.11.2012 Demand Promissory Note. A2 02.11.2012 Security Delivery Letter. A3 02.11.2012 Federal Hosing Scheme Agreement. A4 11.10.2012 Agreement of Guarantee. A5 07.11.2009 Sale Deed No.3132/2009 of SRO Adoor. A6

03.11.2012 Letter Confirming deposit of title deed. A7

11.08.2015 Balance confirmation letter. A8

04.01.2014 Demand notice under Section 13(2) of SARFAESI Act. A9

09.10.2015 Lawyer notice. A10

Statement of Account of Federal Housing Loan. A11

Statement showing penal interest and capitalized penal interest charged in Federal Housing Loan account. A12

Statement showing varying rate of interest applied in Federal Housing Loan.

Defendants‟ Exhibits – Nil

(PRESIDING OFFICER)

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

Dated this the 2nd day of June, 2017

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

T.A No.913/2016 (OA No.513/2015)

Between Federal Bank Ltd. …Applicant Branch: Adoor And Reji George & another …Defendants

FINAL ORDER