CANARA BANK (SYNDICATE BANK) vs Malliga on 8 September 2022

: - O R D E R - :

1. This application is filed by the applicant bank under Section 19 of Recovery of Debts due and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendants for recovery of a total sum of Rs.10,71,177/- in SOD/62557910007514 together with further compound interest

@11.00% per annum, with monthly rests, plus 2.00% penal interest from the date of application till the date of realization in full and for sale of schedule mentioned property along with costs of this application. Originally the application was filed before DRT-III, Chennai, assigned OA No.147/2018, and thereafter in pursuance to the notification from Ministry of Finance, DFS, dated 24.08.2018, OA No.147/2018 stood transferred to this Tribunal and renumbered as TA No.482/2018.

2. Brief facts of the case:- The defendant approached the bank for a loan of Rs.10,00,000/- on 24.01.2015 for purpose of business as Working Capital. The same was sanctioned by the applicant bank on 26.02.2015, for which the 2nd Defendant stood as guarantor. The defendants executed necessary security documents in favour of the applicant bank namely Composite hypothecation agreement by the 1st Defendant (Exh.A2), Guarantee Agreement executed by the 2nd Defendant (Exh. A3). The 1st Defendant handed over the title deeds of the properties to the applicant bank on 24.01.2015 with intent to create mortgage over the properties more fully described in the schedule hereunder (Exh.A5). The 1st defendant also executed a memorandum of deposit of title deeds and the same was duly registered (Exh.A7). The applicant submits that the defendants violated the terms of sanction including the repayment schedule and therefore, the account has become NPA on 20.08.2016. Inspite of effective/hectic follow up by the applicant, the defendants did not come forward to pay the overdues or regularize the loan account, hence the present application. The bank alleged that there is a due of Rs.10,71,177/- as on 11.12.2017, payable by the defendants. Hence the present application.

3. Summons was ordered and the same was returned with remark that ‘refused’. Defendants remained absent and no written statement was also filed and hence were placed exparte on 28.06.2018.

Thereafter the bank examined Mrs.S.Vaidehi as AW1 and closed their side. Matter was heard.

4. With the available material evidence on record, the only point that arises for consideration in this application is:- Whether the applicant bank is entitled for the recovery of the amount claimed in the application from the defendants?

If so, what relief?

5. Heard the Ld. Counsel for the applicant. Perused the OA averments and the evidence available on record.

6. Answer to the Point:-

To prove its claim, the applicant bank examined the above witness AW1 and got marked 18 documents, which are marked as Exhibits A-1 to A-10. The proof affidavit of the applicant bank remains unchallenged and the say of the witness AW1 remains unrebutted.

AW1 in his affidavit had re-iterated the facts on oath and she relied on Exh.A1 to A10. Exh.A1 is the Application of 1st Defendant for Working Capital for Secured Over Draft for Rs.10 Lakhs and Exh. A4 is the Receipt for Rs.10 Lakhs duly signed by the 1st Defendant. The composite hypothecation agreement is executed by the 1st Defendant found at Exh.A2. Exh.A3 is the Guarantee Agreement executed by the 2nd Defendant. Exh.A5 & A6 are the documents relating to the deposit of title deeds, which is duly registered before the competent authority. The original sale deed in favour of the 1st defendant is also produced at Exh. A7. The statement of account is at Exh. A10. There is a corresponding entry in the accounts extract with regard to the loan amount sanctioned having been released under loan disbursement debit. The liability alleged in the application is proved by the documentary evidence at Exh. A10. The say of AW1 goes unrubutted. Therefore, on careful consideration of proof affidavit along with Exhibits filed on behalf of the applicant bank, the Tribunal is satisfied that the applicant bank has proved the OA claim against the defendants. Thus the point for determination is answered in the affirmative.

7. For the reasons stated as above, that the applicant bank is entitled for Recovery of a total sum of Rs.10,71,177/- in SOD/62557910007514 together with further compound interest @11.00% per annum, with monthly rests, plus 2.00% penal interest till 19.12.2017. The applicant bank is also entitled for simple interest @6% p.a. on such sum from 20.12.2017 till the date of realization.

8. In the result, application is allowed granting recovery certificate as follows:

(a) The applicant bank is entitled for Recovery of a total sum of Rs.10,71,177/- in SOD/62557910007514 together with further compound interest @11.00% per annum, with monthly rests, plus 2.00% penal interest till 19.12.2017. The applicant bank is also entitled for simple interest @6% p.a. on such sum from 20.12.2017 till the date of realization against the defendants.

(b) It is further ordered that in case of default of payment by the defendants, the applicant bank is entitled to sell the schedule mentioned property in terms of the order in para (a) supra and appropriate the sale proceeds towards the amount due.

(c) It is further ordered that any amount remitted or realized, if any, during the course of the proceedings, shall be given due credit to the loan account of the defendants.

(e) The applicant bank is entitled for costs of this application.

9. The applicant bank is directed to file costs memo within two weeks of the receipt of this order.

10. Issue recovery certificate in favour of the applicant bank in terms of this final order.

11. Communicate a copy of the order to the parties concerned in terms of Rule 16 read with Rule 2(c) of DRT (Procedure) Rules, 1993.

-Sd/-

(A.S.JAYACHANDRA)

PRESIDING OFFICER

DRT-I, CHENNAI

(Dictated to PS, transcribed by him, corrected, signed and pronounced by me on this 8th day of September, 2022)