CANARA BANK vs A.G.Anthony on 31 January 2019

ORDER

1. This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendant for recovery of a sum of Rs.30,33,181/- due under Farm Machinery Loan and a sum of Rs.94,395/- due under KCCS facility together with interest at 14.20% and 9% per annum with half yearly interest and penal interest at 2% per annum from the date of filing of the application till the date of realization in full, for sale of the schedule mentioned properties, along with costs of this application.

2. Brief facts of Application are as follows: 2.1 The applicant bank submits that the defendant approached the applicant bank for sanction of a Farm Machinery Loan to the tune of Rs.6.55 lakhs for purchase of the following and submitted an application for Agriculture Credit on 14.12.2005 along with requisite proforma invoices.

a) Bajaj Tempo Model 400 Balwan Dlx 35 HP D1 Engine Tractor

b) Feeding Box cultivator 9 Ton

c) Hole Digger

d) Rotovator

e) 5 ton two wheeler tractor trailor 2.2 Accordingly, the applicant bank sanctioned the Farm Machinery Loan of Rs.6.55 lakhs under Loan Account No.1266856016094 vide Sanction Memorandum dated 14.12.2005. The defendant availed the said loan and executed Memorandum of agreement for Agricultural Loans on 17.12.2005 for a sum of Rs.6.55 lakhs in favour of the applicant bank, as security. The loan has to be repaid in 18 half yearly instalments, at Rs.37,000/- for 17 instalments and Rs.26,000/- for the 18th instalment together with interest at 10.75% per annum with half yearly rests. 2.3 It is submitted that the defendants purchased Bajaj Tempo and other accessories from and out of the loan advanced by the applicant. The defendant also executed particulars of vehicles/machinery, etc. on 23.12.2005 giving details on hypothecated vehicles and its accessories. In addition, the defendant had also hypothecated the aforesaid tractor and trailer purchased from and out of the above said loan. 2.4 In order to further secure the aforesaid loan, the defendant had deposited the title deeds relating to his properties mentioned in the schedule on 14.12.2005 as a collateral security and created an equitable mortgage in favour of the applicant bank and confirmed the same vide his letter evidencing deposit of title deeds dated 15.12.2005.

2.5 It is submitted that the defendant again approached the applicant for a Kisan Credit Card Scheme Limit of Rs.31,000/- for various requirements connected with farming with an application dated 25.2.2006. The applicant considered the same and sanctioned the said KCCS Limit of Rs.31,000/- vide Memorandum of Sanction of Kisan Card Limit dated 25.2.2006 under Loan Account No.1266840016499. The defendant availed the said facility and executed an Agreement and Deed of Hypothecation for Kisan Credit Card on 25.2.2006 in favour of the applicant as security. The defendant had undertaken to repay the said facility with interest at 8.50% per annum with half yearly rests. The defendant had extended his mortgage to KCCS facility also and executed letter dated 25.2.2006. 2.6 It is submitted that since the beginning of availing of Farm Machinery Loan, repayments by the defendant in both accounts were literally ‘nil’. All the efforts taken out by the applicant bank to make the defendant repay the loan instalments had failed despite several personal visits and requests made by the applicant bank. However, the defendant had acknowledged the liability of debt and security on 10.11.2008, 10.12.2008, 9.10.2011, 5.12.2011, 6.11.2013, 4.12.2014 and 11.12.2014. Thereafter, the accounts were classified as NPA on 15.11.2017 and the loans were recalled. However, the defendant did not come forwardto clear the dues. Hence, the present TA.

3. Defendant remained exparte.

4. Point for consideration: Whether the applicant bank is entitled for the amount claimed in the application from the defendant? If so, at what rate of interest?

5. Point Whether the applicant bank is entitled for the amount claimed in the application from the defendant? If so, at what rate of interest? 5.1 To prove its claim, the applicant bank filed proof affidavit through its Manager along with 29 documents, which are marked as Ex.A1 to A29. The proof affidavit of the applicant bank remain unchallenged and unrebutted. Therefore, on careful consideration of the material placed before the Tribunal, coupled with the proof affidavit filed on behalf of the applicant bank, I am satisfied that the applicant bank has successfully proved the TA claim against the defendant. Hence, it is held that the applicant bank is entitled for a Recovery Certificate for a sum of 30,33,181/- due under Farm Machinery Loan and a sum of Rs.94,395/- due under KCCS Facility together with pendent lite and future interest at 9% per annum (simple) from the date of filing of the application till the date of realization in full. Point is answered accordingly.

6. For the reasons stated as above, it is held that the applicant bank is entitled for a Recovery Certificate against the defendant for a sum of 30,33,181/- due under Farm Machinery Loan and a sum of Rs.94,395/- due under KCCS Facility together with pendent lite and future interest at 9% per annum (simple) from the date of filing of the application till the date of realization in full, for sale of the schedule mentioned properties along with costs of this application.

7. In the result, application is allowed as under:

(a) The applicant bank is entitled to recover a sum of 30,33,181/- due under Farm Machinery Loan and a sum of Rs.94,395/- due under KCCS Facility together with pendent lite and future interest at 9% per annum (simple) from the date of filing of the application till the date of realization in full, from the defendant.

(b) It is further ordered that in case of default of payment by the defendant, the applicant bank is entitled to sell the schedule mentioned properties and adjust the sale proceeds towards the amount due.

(c) If the sale proceeds are not found sufficient to cover the amount due and payable to the applicant bank, the defendant is personally liable for all such amounts due.

(d) 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 defendant.

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

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

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

10. 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. (Dictated to stenographer (SN), transcribed by him, corrected, signed and pronounced by me in the Open Court, this 31st day of January, 2019) Sd/- (N.V.BADARINATH) PRESIDING OFFICER DRT-I, CHENNAI