CANARA BANK vs Babu Sekar 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 defendants jointly and severally for recovery of a sum of Rs.16,57,717/- due in respect of Term Loan together with interest at 14.20% per annum with half yearly rests from the date of filing of the application till the date of realization in full, for sale of the schedule mentioned properties belonging to defendants 1 and 2, along with costs of this application.

2. Brief facts of Application are as follows: 2.1 The applicant bank submits that the defendants 1 and 2, who are agriculturists, had approached the applicant bank for a Term Loan of Rs.3,75,000/- for purchase of a MF branded LMV Tractor and other farm implements with a loan application on 19.4.2005. Accordingly, the applicant bank considered the said request of the defendants and granted a Term Loan of Rs.3,75,000/- to defendants 1 and 2 under Loan Account No.1773856006299. 2.2 It is submitted that the defendants availed the said loan of Rs.3.75 lakhs and executed Memorandum of Agreement for Agricultural Loans on 23.4.2005 in favour of the applicant as security. The defendants had undertaken to repay the said loan in 5 half yearly instalments of Rs.37,500/- together with interest at 10.75% per annum compounded half yearly. The 1st defendant had purchased MF branded LMV Tractor from and out of the loan advanced by the applicant bank. 2.3 It is stated that the 3rd defendant guaranteed the due repayment of the loan availed by the defendants 1 and 2 and had executed Guarantee Covering Letter cum Guarantee Agreement on 23.4.2005 in favour of the applicant bank. The defendants 1 and 2 had also deposited the title deeds relating to their properties morefully described in the schedule of the TA on 19.4.2005 and created an equitable mortgage in favour of the applicant bank and confirmed the same vide their letter dated 23.4.2005. 2.4 It is submitted that defendants 1 and 2 from the beginning of availing of the Term Loan, had been repaying intermittently. All the efforts taken out by the applicant bank to make the defendants 1 and 2 to repay the loan instalments had failed. However, the 1st defendant had acknowledged the debt and security on 20.3.2008 and on 6.6.2013. 2.5 Since the defendants did not repay the loan dues, the Term Loan account has been categorized as NPA on 30.9.2015 and the same has since been recalled. However, the defendants did not come forward to clear the dues. Hence, the present TA. It is stated that since the vehicle has been worn out with the passage of time, no relief is sought for sale of the vehicle, being Tractor.

3. Defendants remained exparte.

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

5. Point Whether the applicant bank is entitled for the amount claimed in the application from the defendants? If so, at what rate of interest? 5.1 Toprove its claim, the applicant bank filed proof affidavit through its Manager along with 13 documents, which are marked as Ex.A1 to A13. 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 defendants. Hence, it is held that the applicant bank is entitled for a Recovery Certificate for a sum of Rs.16,57,717/- 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 defendants jointly and severally for a sum of Rs.16,57,717/- 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 Rs.16,57,717/- 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 defendants jointly and severally.

(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 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 defendants are 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 defendants.

(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