FEDERAL BANK vs THARUN G. KUMAR on 7 April 2017

FINAL ORDER

This Original Application has been 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.13,73,298.37 due under the term loan account with further interest @18.75% per annum with monthly rests on the sum of Rs.13,58,822.27 from the defendant and by sale of ‘A’ schedule property. BRIEF FACTS OF THE CASE

1. It is the case of the applicant that during February, 2002 the defendant approached the Kottayam Branch of the applicant bank seeking financial assistance for purchase of a Force Traveller 17 + D seater mini bus and the applicant bank sanctioned a term loan of

Rs.8.60 lakhs. The defendant availed the said facility on 24.02.2010 after executing demand promissory notice, security delivery letter and agreement of term loan on 24.02.2010. By executing the agreement of term loan, the defendant hypothecated the aforesaid vehicle bearing No.KL-05A-7906 with the applicant bank and further the defendant executed balance confirmation letter on 01.02.2013 confirming the balance outstanding as on 31.01.2013.

2. It is submitted by the applicant that the defendant failed and neglected to regularize the loan account in spite of issuance of letters and personal contacts made by the applicant bank. Hence the applicant was constrained to issue lawyer notice to the defendant on 16.11.2011 calling upon him to pay the amount due under the loan account. The applicant has also initiated proceedings under SARFAESI Act. As per the statement of account maintained by the applicant bank, an amount of Rs.13,73,298.37 is due from the defendant.

3. The defendant was duly served with summons. Though the defendant entered appearance and sought adjournment for filing written statement, he did not file any written statement and he chose to remain absent and as such, he was set exparte on 08.03.2016.

4. The evidence on the side of the applicant bank consists of the proof affidavit of its Chief Manager, AW1 and Exts.A1 to A8.

5. 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?

6. The case of the applicant bank regarding recovery of the sum of Rs.13,73,298.37 claimed as due under Ext.A6 statement of account relating to the term loan as on 26.06.2013 with interest pendente lite and post decree interest on the sum of Rs.13,55,229.37 (after deducting the penal interest portion i.e., Rs.13,73,298.37 – Rs.18,069/-) from the defendant and by sale of ‘A’ schedule property, is proved by the proof affidavit of its Chief Manager, AW1 and Exts.A1 to A8.

7. The evidence of AW1 coupled with documents clearly establish the case of the applicant bank and the same is not rebutted by the defendants. Having regard to the amount advanced, the interest applied and the default committed, I am of the view that the applicant bank is entitled to get interest pendente-lite and post- decree interest @16.75% per annum with monthly rests.

8. By considering all these aspects, I answer the point accordingly and proceed to pass the following.

ORDER

9. The OA stands allowed with cost. The defendant shall pay a sum of Rs.13,73,298.37 (Rupees thirteen lakhs seventy three thousand two hundred ninety eight and Paise thirty seven only) ) with further interest on the sum of Rs.13,55,229.37 (Rupees thirteen lakhs fifty five thousand two hundred and twenty nine and Paise thirty seven only) @16.75% per annum with monthly rests from 27.06.2013 till realization and also its costs from the defendant.

10. In the event of failure of the defendant to pay the OA amount, the applicant bank is at liberty to sell the ‘A’ schedule property and appropriate the sale proceeds towards the OA amount as required under law.

11. In the event of non- realization of the OA amount inspite of the sale of the ‘A’ schedule property referred above, the applicant bank is at liberty to proceed against the person and other properties of the defendant as required under law.

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 7th day of April, 2017]

(S.V.GOWRAMMA)

A P P E N D I X Witness for Applicant: AW1: Venugopalan Nair.K.P, 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 24.02.2010 Demand promissory notice for Rs.8.60 lakhs executed by the defendant in favour of the applicant bank. A2 24.02.2010 Security delivery letter executed by the defendant in favour of the applicant bank. A3 24.02.2010 Term loan agreement executed by the defendant in favour of the applicant bank. A4 01.02.2013 Balance confirmation letter executed by the defendant acknowledging the liability under the term loan account. A5 16.11.2011 Copy of lawyer notice issued to the applicant calling upon him to pay the amount due. A6

… Certified copy of the statement of account relating to the term loan. A7

… Statement showing the rate of interest applied in the term loan account. A8

… Statement showing the penal interest charged in the term loan account and capitalized portion thereof.

Defendant’s Exhibits – Nil

(PRESIDING OFFICER)

SCHEDULE ‘A’

Hypothecation of Force Traveller 17+D seater Mini Bus bearing Registration No.KL-05 AA 7906, Chassis No.MC1E4DAA9AP001046, Engine No.D18031175, Color: White.

(PRESIDING OFFICER)

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

Dated this the 7th day of April, 2017

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

T.A No.23/2016 (O.A No.328/2013) Between The Federal Bank Ltd.

…Applicant And Tharun.G.Kumar …Defendant

FINAL ORDER