SOUTH INDIAN BANK vs JOSEPH AUGUSTHY on 31 July 2017

**FINAL ORDER**

The 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.11,41,680/- with interest at the rate of 11.20% per annum with yearly rests on Rs.11,06,027/- and penal interest at 2% from the date of application till realization from the defendants and by sale of OA 'A' and 'B' schedule properties.

**BRIEF FACTS OF THE CASE**

1. 1. The applicant is The South Indian Bank Ltd., a banking company registered under the Companies Act, 1913 and governed by the provisions of the Banking Regulation Act (Central Act X of 1949) having its Registered and Head Office at Thirissur and branches at various places throughout India including one at Kattappana, Idukki. The Manger has filed the present application who is duly constituted Attorney having authority to act for and on behalf of the bank.

2. It is the case of the applicant that on 26.02.2011 applicant had sanctioned Kisan Cash Credit (Overdraft) for a sum of Rs.49,950/- to the 1^st defendant after executing necessary loan document regarding the terms and conditions of loan facility. Thereafter on 02.07.2012 the said facility was enhanced to Rs.84,000/- vide sanction letter dated 02.07.2012 and necessary loan documents were executed. Further on 17.08.2013 at the request of the 1^st defendant, the applicant has sanctioned Kisan Cash Credit (Overdraft) facility of Rs.7,80,000/-. The 1^st defendant agreed to repay the said facility with interest at the rate of Base Rate of the applicant plus Spread per annum with yearly rests. The terms and conditions of the sanction were accepted by defendants 1 and 2 by affixing their signature.

3. As a security for the credit facility 1^st defendant on 17.08.2013 executed a demand promissory note agreeing to repay the amount of Rs.7,80,000/- with interest at the rate of interest mentioned thereon. The 1^st defendant had also executed Loan cum Hypothecation agreement, hypothecating the mixed crops standing in 3.94 ares in Sy.No.1/1 of Kalkoonthal Village as described in OA 'A' schedule property. On 17.08.2013 2^nd defendant had executed an Agreement of Guarantee agreeing among others guaranteeing repayment of the amount due under the credit facility extended to 1^st defendant in case of default. The credit facility was further secured by deposit of title deed pertaining to the OA 'B' schedule property having an extent of 3.94 Ares of land in Sy.No.1/1 of the Kalkoonthal Village, Udumbanchola Taluk, Iddukki District. By letter dated 19.08.2013 1^st defendant acknowledged and confirmed the deposit of title deeds.

4. It is submitted by the applicant that the defendant failed and neglected to repay the loan as per the terms and conditions specified in the loan agreement despite of requests made by the applicant. Hence the applicant classified the account as NPA as on 31.03.2015. Thereafter applicant had issued registered notice on 20.07.2015 calling upon the defendants to regularize the account. As defendants failed to comply with the demands, applicant issued notice on 24.08.2015 recalling the credit facility and also issued a notice invoking the guarantee on 24.08.2015. Inspite of repeated demands through notices defendants have not clear the dues. Hence the applicant was constrained to file the original application for recover of amount due to it. As per the statement of account maintained by the applicant bank, a sum of Rs.11,41,680/- is due to the applicant from the defendant as on 11.08.2016 under the Kisan Cash Credit (Overdraft) facility.

5. The applicant bank has taken out the summons as directed by the Tribunal and has filed the proof of service on 14.10.2016. The summons issued to the defendants was duly served on them. Inspite of service of summons, the defendants neither appeared nor were they represented and they chose to remain absent and hence they were declared ex-parte on 27.02.2017.

6. The evidence on the side of the applicant bank consists of the proof affidavit of its Manager, AW1 and Exhibit 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?***

Findings:

**Point No.1: In affirmative**

**Point No.2: As per order**

**Reasons:-**

8. The affidavit by way of evidence of Manager AW1 reiterates the facts pleaded in the OA and the affidavit is corroborated by the above referred Exhibits A1 to A13 which clearly establishes the case of the applicant bank to allow the present OA. Added to this, the absence of defendants inspite 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.

9. 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**

10. The OA stands allowed with costs.

(a) The defendants are directed to pay to the applicant bank a sum of Rs.11,41,680/- [Rupees Leven Lakhs forty one thousand six hundred and eighty only] with interest @ 11.20% per annum with yearly rests on Rs.11,06,027/- [Rupees Leven lakhs six thousand and twenty seven only] from 12.08.2016 till the date of realization; (b) In the event of failure of the defendants to pay the aforesaid amount, the bank is at liberty to sell the OA 'A' and 'B' schedule properties and the sale proceeds be appropriated towards the claim amount as required under law;

(c) In the event of non-realization of the OA claim amount despite the sale of the schedule 'A' & 'B' properties referred above, the bank is at liberty to proceed against the person and other properties of the defendants, as required under law;

- (d) Schedule 'A' & 'B' properties shown in the OA shall become part and parcel of the final order and Recovery Certificate of present OA;

- (e) The applicant bank shall file memo of costs within seven days from the date of this final order;

- (f) 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 31^st day of July, 2017]*


PRECEDING OFFICER

7TA.12/2017 (OA No.484/2016)**APPENDIX**Witness for Applicant:

AW1: Naveen Joseph Sam Manager of the applicant bank.

Witness for Defendant(s): Nil

**Exhibits on the part of the applicant**

<table border="1"> <thead> <tr> <th><u>Ext.No.</u></th> <th><u>Date</u></th> <th><u>Particulars of documents</u></th> </tr> </thead> <tbody> <tr> <td>A1</td> <td>17.08.2013</td> <td>Sanction intimation letter</td> </tr> <tr> <td>A2</td> <td>17.08.2013</td> <td>Demand Promissory Note</td> </tr> <tr> <td>A3</td> <td>17.08.2013</td> <td>Loan cum Hypothecation Agreement.</td> </tr> <tr> <td>A4</td> <td>17.08.2013</td> <td>Agreement of guarantee executed by the 2^nd defendant in favour of the applicant.</td> </tr> <tr> <td>A5</td> <td>12.05.1977</td> <td>Patta No.6739.</td> </tr> <tr> <td>A6</td> <td>15.07.2013</td> <td>Possession Certificate.</td> </tr> <tr> <td>A7</td> <td>12.07.2013</td> <td>Tax paid receipt No.4674838.</td> </tr> <tr> <td>A8</td> <td>19.08.2013</td> <td>Letter issued by the 1^st defendant to the applicant confirming the deposit of title deed.</td> </tr> <tr> <td>A9</td> <td>20.07.2015</td> <td>Letter issued by the applicant to 1^st defendant.</td> </tr> <tr> <td>A10</td> <td>24.08.2015</td> <td>Letter issued by the applicant to 1^st defendant.</td> </tr> <tr> <td>A11</td> <td>24.08.2015</td> <td>Letter issued by the applicant to 2^nd defendant.</td> </tr> <tr> <td>A12</td> <td></td> <td>Statement of Account</td> </tr> <tr> <td>A13</td> <td></td> <td>Statement of account showing the accrued interest.</td> </tr> </tbody> </table>

Defendants' Exhibits - Nil


8TA.12/2017 (OA No.484/2016)SCHEDULE -A PROPERTY

All sorts of mixed crops under hypothecation in 3.94 Acres in Sy. No. 1/1 of the Kalkoonthal Village; Udumbanchola Taluk, Idukki District.

SCHEDULE -B PROPERTY

(PattaNo.6730 in LA No. 755/75 & Release Deed No. 1620/2013)

District	: Idukki
Sub District	: Nedumkandam
Taluk	: Udumbanchola
Village	: Kalkoonthal
Kara	: Ezhukumvayal
Panchayat	: Vathikudy
Tenure	: Pandaravaka
Sy.No.	: 1/1
Extent	: 3.94 Acres (159.45 Ares)

Description of the Property.

An extent of 3.94 Acres (159.45 Ares) of land in Sy.No.1/1 of the Kalkoonthal Village, Udumbanchola Taluk, Idukki District and residential building No. 18/386 of Nedumkandam Panchayath having a plinth area of 650 Sq. Ft. together with all rights appurtenant thereto belonging to the 1^st Defendant.

9TA.12/2017 (OA No.484/2016)Boundaries (as per Title Deed)Plot No. 1

East : Property of Kannanchira Korah South : Pathway West : Property of Thelliyl Xavier North : Thodu

Plot No. 2

East : Property of Kappalumackal George South : Thodu West : Property of Mattamundel Kunju North : Property of Kunnathu Kochukutty

**IN DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM**

Dated this the 31^st day of July, 2017

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

TA.12/2017 (OA No.484/2016)

**Between**

The South Indian Bank Ltd., Kattappana Branch.

...Applicant

**And**

Mr.Joseph Augusthy & another

...Defendants

**FINAL ORDER**

FILED 2017 JUL 31 [RECEIVING OFFICER]