M/s. Encore Asset Reconstruction Company Pvt. Ltd. vs Mr. P.V.R.S. Manikumar on 4 March 2025

1. Mr. P.V.R.S. Manikumar

Sole Proprietor

M/s Kumar Constructions

No.6, Jamalia Nagar

Perambur High Road

Chennai – 600 012

2. Mrs. P. Bhuvaneswari

W/o P.V.R.S. Manikumar No.6, Jamalia Nagar

Perambur High Road

Chennai – 600 012

3. Mrs. P. Sathakeerthi

No.6, Jamalia Nagar

Perambur High Road

Chennai – 600 012

(Since dead represented by LRs

the defendant No.1 as above)

4. Mr. S. Sathyanarayana

S/o S. Koteeswara Rao

221/B, Thiruvenkatapuram Village

Ponneri Taluk, Chingleput District

5. Kothapettah Co-operative House Building Society 16-2-805, Shamkesar Bazaar Hyderabad – 500 036

…Defendants

Counsel on Record / Appeared

Applicant by

: Ld. Senior Counsel Mr. Jayesh Dolia for M/s Aiyar and Dolia Defendant No.1 to 3 by: Defendant No.1 Party in person Defendant No.4 & 5 : Ex-parte F I N A L O R D E R

“Debt is a temporary solution to a permanent problem.” – Suze Orman (From 101 Debt Quotes in Appletoo.us/debtquotes) – This quotation aptly fits into this case .

1. This Original Application (OA) filed under Section 19 of the RDDB & FI Act, 1993 is filed in the year 1997. It has taken more than two and a half decades to be adjudicated by this final order. 2.0 The applicant bank – Indian Bank now having assigned the debt in favour an ARC mentioned above had filed the suit against five defendants seeking recovery of a sum of Rs.6,62,43,064.98p. Relief of decree is sought jointly and severally against defendants 1 to 3 along with interest on OD-1 facility. It also seeks the second relief against defendants 1, 3 and 4 jointly and severally for a sum of Rs.65338144.42 along with interest on OD-II facilities and also the consequential reliefs.

2.1 The brief facts are the 1st defendant being the Proprietor of M/s Kumar Constructions was given credit facilities to a business project in Hyderabad and the bank had sanctioned secured OD facilities on 25.03.1987 of Rs.50 lakhs. 1st defendant availed the same and executed a covering letter and Demand Promissory Note dated 26.03.1987 agreeing to pay the interest as mentioned. 1st defendant executed irrevocable power of attorney in favour of the applicant bank dated 17.02.1987 authorising the bank to collect and draw the receivable bills from the 5th defendant for which request was made by the bank. 2.2 2nd defendant by executing a continuing guarantee deed dated 28.03.1987 for the facilities enjoyed by the 1st defendant and further assured that any acknowledgement of debt would automatically renew the guarantee, thus agreed to the liability of 1st defendant. 2.3 The 1st defendant had also offered collateral securities on the properties situated in Guduvancherry, Pralayambakkam and Uppalam and executed the Memorandum of Confirming the Deposit of Title deeds on 03.08.1987. 2.4 The initial OD facilities was enhanced at the request of the 1st defendant by executing covering letter dated 28.07.1988, renewal letter and a promissory note for Rs.93 lakhs along with letter of lien all dated 28.07.1988. The OD facility thus enhanced to Rs. 93 lakhs. The mortgage was extended on the properties for the enhanced limits also. In addition to the securities, 1st defendant further created the mortgages by depositing the title deeds on 29.07.1988 pertaining to the properties mentioned in Kolur and Annamalaicherri villages of Chengalpet district. 2.5 Further, in addition to the above securities, the 3rd defendant also created collateral security in the property situtated in Annamalaicherri village on 28.07.1988 and deposited the title deeds confirming the same in writing on 29.07.1988. 2.6 Again the 1st defendant approached the bank on 12.06.1989 for the OD facility of Rs.80 lakhs, now referred to as OD-II and availed the same on 15.6.1989, for which the covering letter, demand promissory note for Rs.80 lakhs, letter of lien and the guarantee agreement by the third defendant all dated 15.6.1989 were executed. The 1st defendant had further offered the collateral security on the immovable property situated in Perambur, Chennai and deposited the title deeds on 16.06.1989, for which he executed a Memorandum of Deposit of Title deeds on 17.6.1989. The 3rd defendant also had executed the documents evidencing deposit of title deeds in writing dated 17.06.1989. The 1st defendant had in writing extended the Memorandum of Title deeds on the properties on 19.06.1989. Similarly, 3rd defendant also executed extending the securities to the OD-II by writing on 19.06.1989.

2.7 Defendants 1 and 3 had executed the acknowledgement of debt on 21.2.1991.

2.8. At the request of 1st defendant, the OD facility-II was enhanced to Rs.140 lakhs on 24.4.1991, for which the letter of renewal, letter of continuity, promissory note for Rs.140 lakhs, stamped letter of lien all dated 24.04.1991 were executed. 2.9 3rd defendant had executed guarantee agreement to the enhanced limits on 24.4.1991. The defendants 1, 3 and 4 had in writing on 30.05.1991 extended the equitable mortgage over all their respective properties to the loans obtained. The details of mortgages are also detailed in the plaint. 2.10 The defendant No.1 had acknowledged the debt by letters dated 22.06.1993 and 23.03.1996 for OD –I facility. 2.11 Defendants 1 and 3 acknowledged the debt by their letters dated 22.06.1993 and 23.03.1996 for OD-II facility. 2.12 It is alleged that the 1st defendant did not stick to the repayment schedule and the repeated reminders went futile. The progress of the project was not reported. Thus, the loans were recalled. Legal notice dated 26.02.1996 is issued by the applicant bank.

2.13. It is alleged that the defendants 1, 2 and 3 are jointly and severally liable to pay the loan accounts concerning OD-I facility and the defendants 1, 3 and 4 are liable to discharge the liability arising under OD-II facility. The applicant submits that the balance along with interest up to 13.03.1997 on OD-I facility is Rs.6,62,43,064.98p. The applicant submits that the balance along with interest up to 13.03.1997 on OD-II facility is Rs.6,53,38,144,42p. Hence the OA for the total recovery of Rs.13,15,81,209.40p along with interest as agreed. (The OA pleadings have interpolations, overwritings after application of correcting fluid.) 3.0 Version of Defendants 1 to 3. 3.1 Initially, defendants 1 to 4 were placed ex-parte on 23.06.1999 and so recorded on 19.07.1999. But D1 to D4 had filed an IA to set aside the ex-parte order in IA No.1997 of 1999, which was allowed by the Ld. Predecessor on 30.08.1999. Consequently, the defendants 1 to 3 had filed the written statement jointly. 3.2 In their joint written statement filed defendants 1 to 3 contended that the single application concerning the properties by different persons on different dates cannot be entertained since Section 67A of the T.P. Act is not applicable.

3.3 The signatures of these defendants were taken by the bank officials without their knowledge and made up documents, which are not registered. Hence the OA be dismissed. It is also contended that the OA is barred by limitation. 3.4 It is found in the WS that in the year 1985, 1st defendant took up a project at Hyderabad of the defendants No.5. There were many difficulties in the implementation of the project and the internal bickering among the members of 5th defendant Society, were serious and the cost of construction shot up. The society did not consider the escalation of cost. The 1st defendant already utilized Rs.93 lakhs advanced by the bank and spent his money also. 3.5 It is also pleaded that there was a split in the housing society of defendant No.5. The Society had offered payment of Rs.93 lakhs to the bank in the year 1989 itself and the bank refused the payment. Thus the defendant had lost Rs.93 lakhs advanced by the bank along with his investment of Rs.267 lakhs. Thus the defendant abandoned the project in the year 1989 since he suffered losses to the tune of Rs.360 lakhs. The bank failed to settle the matter with the 5th defendant when it offered Rs.93 lakhs by way of DD, which was rejected. 3.6 As regards, the Perambur project sanctioned by CMDA, which limited to G+2, the 1st defendant constructed three more floors without

CMDA sanction. The applicant bank is a privy to this fact and it advanced in respect of the sanctioned and unsanctioned plans. The bank was kind enough to sanction the limits without CMDA approval. In total Rs.140 lakhs. These project was completed with the own funds of the defendant. 3.7 However, it is submitted that the extra floors came under the ruling of the Hon'ble High Court reported in 2006 (4) CTC 483 and quashed all the orders of the regularization of such buildings, which was upheld by the Hon'ble Supreme Court. Thus the financing by the bank to the unauthorized construction is void and unenforceable. 3.8 It is alleged that the bank had failed to carry out the obligations under tri-partite agreement by not accepting the payments of Rs.93 lakhs by the 5th defendant. Thus the applicant bank itself is responsible for the damages caused to the business of the defendants. 3.9 The officials of the bank maliciously prevented the settlement offers made by the defendants. The demolition ordered by CMDA, resulted in the non-realisation of the value of the assets as expected. 3.10 It is also contended that as per the sanction letter dated 27.03.1987 at Para 4, the bank directed replacement of collateral security as the bank would not accept third party collaterals. In order to

fulfill this condition, defendant No.1 had borrowed the amounts and purchased the three properties with registration Nos.1610 and 2398 of 1987 and 203 of 1988, all of SRO, Purasawalkam. 3.11 Many signatures on various documents were obtained from the family members while sanctioning the loan. The 1st defendant further admits having obtained a loan from the bank for construction of 58 flats including 30 unapproved flats, which were subsequently mortgaged to the bank with a view to keeping the loans of private financiers alive. The defendants are under the threat of private financiers. Apart from the bank loan, the defendants have the liability of Rs.140 lakhs to the suppliers of building material and labour contract. Since the bank had floated an advertisement in the newspapers for public auction, the creditors of the defendants started needling these defendants and is facing several cases. The situation is because of the bank having adopted unreasonable attitude. He admits that the bank has financed Rs.233 lakhs for both the projects. Though the losses were suffered, 1st defendant offered to settle the account under One Time Settlement for Rs.185 lakhs after disposing his properties. The properties were undervalued. It is also submitted that the 1st defendant was able to find willing purchaser on as is where is basis. The agricultural lands would fetch Rs.10 lakhs if permitted to be sold. By a letter dated 23.01.2006

defendant requested AGM to consider the One Time Settlement for Rs.185 lakhs but there was no response. 3.12 2nd defendant is the wife of 1st defendant and not connected with the loan. She has not signed any document. These defendants pray for an order to decree the OA at Rs.185 lakhs. 3.13 Though there is an additional written statement filed on record, the application to file the additional written statement was dismissed by an order dated 16.7.2010, which was upheld by the Hon'ble DRAT and Hon'ble High Court also in W.P. 15092/2011 dated 3.12.2018. Version of D4 and D5 4.0 From the pleadings it is seen that D4 has not filed the written statement though the ex-parte order was set aside by the order dated 30.08.1999. 5.0 D5 was placed ex-parte on 22.06.1999 by the Ld. Predecessor. However, the WS of D5 is found on record. 5.1 The defendant No.5 submits that it is a Society registered under A.P. Co-operative Societies Act and it has taken up the construction of houses for its Members. For that purpose the Members would pay in advance in installments or in one lumpsum. This defendant was not aware about the loan transaction of 1st defendant till it received the legal notice from the applicant bank on 26.12.1996, which was replied by a reply notice dated 26.1.1997. The 5th defendant had not placed any orders with defendant No.1 for construction and the contesting defendant is no way concerned with the sanction of the loan. It is denied for want of knowledge concerning the allegation that the applicant bank was empowered to receive the payment bills of defendant No.1 drawn on this defendant. The bank never requested the 5th defendant to make the payment. The 5th defendant never entrusted any construction activity to the 1st defendant. Therefore raising of any bills does not arise. No bills were raised on this defendant. No work was entrusted to the 1st defendant and no amounts are payable. Therefore, it is prayed that the OA be dismissed against this defendant. 6.0 The contours of the case 6.1 From the order sheet dated 11.9.1998 (as available from the record), it is seen that the defendants were placed ex-parte, which order was set aside. As far back as 1999 itself, the defendants had proposed to settle the matter for Rs.3.5 crores and the matter was kept for reporting the settlement by 29.12.1999. Further, there is a noting on 29.1.2000, the defendants had offered Rs.4.75 crores and the same was being considered by the bank.

6.2 There was an attempt by the bank to sell the properties in IA No.1864/2000, which was allowed by the Tribunal on 23.5.2002. Sale process was initiated. There was a single bidder for Item No.4 and the Ld. PO felt that the amount quoted was not adequate by its order dated 3.1.2003. The Recovery Officer was directed to visit the property of the defendant for fresh valuation. The recovery proceedings were sought to be stayed by the defendants by filing the IAs in the year 2003. There was an appeal before the DRAT, which is noted in the order sheet dated 16.12.2003. Later appeal was dismissed and by 3.3.2004 order shows that further the RO was directed to call for the tenders. An interim order was obtained in W.P. No.3925/2004 as noted in the order sheet dated 18.03.2005. Again a submission was noted on behalf of the bank that the defendants after obtaining the stay approached the bank for One Time Settlement Rs.217 lakhs. The stay granted by the Hon'ble High Court continued. Later it was reported by the defendants that their offer of OTS was rejected as noted in the order sheet dated 3.3.2006 and further it is seen from the order sheets that some more tenders have been called for in the year 2006 for selling the property. 6.3 On 18.05.2006, the Ld. Predecessor notes that one G. Irudhayaraj had deposited 25% of the bid amount. It is also seen in the order sheet dated 11.12.2006 that fresh sealed tender from the public was ordered.

6.4 By the order dated 8.1.2007, one IA No.675/2006 was filed by the defendants directing the applicant to accept Rs.185 lakhs as One Time Settlement, which was disposed on the same day with a direction to the defendants to approach the bank. However, auction was directed to be continued. 6.5 It seems that in the month of July 2007, interim stay by the Hon'ble DRAT was obtained and thereafter W.P. 3925/2004 was filed and the matter was stayed by the Hon'ble High Court. It seems records were also sent to the Hon'ble High Court. 6.6 After disposal of the WP, the Ld. Predecessor took up the matter for evidence of the bank and WS of Defendant No.4 by the order dated 11.3.2008. 6.7 Order sheet dated 16.6.2008 reveals that records were awaited from the Hon'ble High Court. 6.8 In the year 2008, one Record Clerk Mr. Subramani’s name frequently appears in the order sheet and he was also directed to put up the records with bundle (order sheet 17.8.2008). An order to send the Special Messenger to the Hon'ble High Court with a request letter to transmit the records is seen from the proceedings dated 07.11.2008. On

1.1.2009, it is seen that the records are traced and as directed not placed. 6.9 Order sheet dated 20.1.2009 shows that the counsel for the bank was directed to give the explanation for the photocopies filed as observed by the AR. 6.10 On 17.02.2009, the original documents were not found and only photocopies were filed along with the PA. 6.11 On 20.03.2009, one Manikumar from defendant’s side objected to marking of the photocopies. In the meantime, certain IAs were filed to bring in the addition written statement by the defendants. Ultimately, the additional written statement was not allowed and litigation was taken up to the Hon'ble High Court in W.P. No.15092/2011, which was disposed on 3.12.2018, after the orders of Hon'ble DRAT. 6.12 There is a noting by the Ld. Predecessor on 5.6.2013 as under: - “Representing Counsel Mr. Muthusubramaniam present for the applicant bank and Mr. Munusamy, Counsel for the third party. Since the matter is stayed by the Hon'ble High Court. In the meantime the original title deeds are either misplace or missing from the custody of the bank or the Tribunal. Directions were given to Mr. Subramani, Record Clerk on 7.11.2008 to give a full report. The Registry is directed to place the report, if any, filed by the Record Clerk as directed for verification of the Presiding Officer. For further proceedings call on 12.8.2013”

6.13 One more important note in the order sheet dated 11.11.2013 also calls for attention as under: -

“Nodal Officer of the applicant present. He submitted that the matter is pending before High Court and the entire file of the DRT is also sent to High Court. Counsel for impleading petitioner submitted that he has moved an application to implead. Since the file is with High Court, nothing can be taken up for further proceedings. For further proceedings call on 03.02.2014.”

6.14 On 25.11.2014 the Ld. PO had also noted that the documents are missing and the matter is pending before the Hon'ble High Court. On 9.12.2015, there is one more noting that the entire bundle is with the Hon'ble High Court yet to be transmitted. This continued till 30.05.2016. 6.15 On 28.2.2017 it is noted that stay granted by the Hon'ble High Court is still pending. Only on 8.6.2018, the Ld. Predecessor noted that the order is not pronounced by the Hon'ble High Court. On 4.10.2018, the Ld. Predecessor that since stay granted has not been extended beyond six months the parties were directed to be ready for the next hearing date. Only on 4.12.2018, it was intimated that the writ petition filed by the defendant is dismissed by the Hon'ble High Court. 6.16 It is gathered from the case file that the defendant No.1 had also approached the Hon'ble Supreme Court of India in S.L.P. No.29258 and 29259 of 2019 and the same was dismissed by the Hon'ble Supreme Court vide order dated 17.12.2019. 6.17 Records have been received by the Tribunal on 24.1.2019. Matter was taken for enquiry on IA No.157/2012.

6.18 Counter Proof Affidavit is stated to have been filed as noted in the order sheet dated 4.3.2019, but, the opportunity was closed for having not filed by an order dated 7.3.2019. 6.19 By an order dated 9.4.2019 allowing IA 254/2019, the Counter Proof Affidavit was allowed. DW-1 was examined on 24.4.2019 and certain documents are marked. 6.20 The orders in IA 546/2019 is challenged before the Hon'ble DRAT as noted in the order sheet dated 12.7.2019. 6.21 Between 31.3.2020 till 14.12.2020, the matter was being reposted for orders. By an order dated 22.1.2021, the matter was reopened for hearing for clarifications and thereafter the matter was reposted or kept for clarifications till 12.07.2022. 6.22 In the year 2022, one Suryashankar, Advocate appearing for the impleading applicant prayed for disposal of IA 157/2012. He was directed to file the original title deeds along with the parent deeds so that the IA could be disposed of and three weeks time was granted. However, since the said impleading applicant did not file the title deeds despite several opportunities the said IA 157/2012 was dismissed as lacking merits by an order dated 26.9.2022.

6.23 Thereafter, the file was again transferred to DRT-II from DRT-I owing to the change in territorial and pecuniary jurisdiction. The matter was pending before DRT-II, by which time one ARC had filed an application for substituting its name before DRT-II on 3.5.2023. The Ld. Predecessor had allowed the substitution of ARC vide order dated 31.8.2023. Then the matter was being adjourned and kept for orders by 28.6.2024 as per the order sheet dated 21.5.2024 and on 28.6.2024 the matter was adjourned by 28.8.2024 and for administrative reasons the Ld. Predecessor could not pass the orders. 6.24 Thereafter, in deference to the orders of the Hon'ble High Court in CRP 4357/2024 the matter was advanced from 4.2.2025 to 26.11.2024 and directed the matter to be listed on 5.12.2024. 6.25 On 5.12.2024, the defendant No.1 informed this Tribunal that defendant No.3 expired on 7.11.2021 and he was directed to take steps. The defendants 4 and 5 were also asked to be served by the bank by affixture intimating the next date of hearing. In the open court on 5.12.2024 defendant No.1 filed an IA seeking directions to one Padmakumar, executive of the substituted applicant directing him to produce certain documents. This IA was disposed noting that the documents sought to be produced and the relevancy thereof or non- production of the same would be dealt in disposing the TA.

6.26 However, on 17.01.2025, D4 and D5 after publications of summons were again placed ex-parte by an order dated 17.01.2025. It is noted that the deceased defendant No.3 is already represented by the LR, who is defendant No.1 being already on record there is no further need to take steps consequent to the death of defendant No.3. 6.27 On 28.01.2025, the defendants 1 and 2 have filed another IA and the said IA was disposed on the same day, which sought for framing of additional issues. Another IA was filed seeking permission to cross examine AW-1 and the same was dismissed on that day itself and posted this matter for arguments by 5.2.2025. The matter was heard on 5.2.2025 and Ld. Counsel for the bank submitted that the written arguments are already filed. D1 and D2 have also filed their written arguments. D3 since dead is represented by his LR defendant No.1, who is already on record. D4 and D5 remained ex-parte. 6.28 It is pertinent to note that the Hon’ble DRAT in the order dated 15.10.2019, while upholding the denial of cross-examination sought by the defendants had noted the following: “In view of the fact that both parties have filed their Proof Affidavits and Counter Proof Affidavits and matter is more than 20 years old, it appears that this delay has been caused on account of some stay orders by this Tribunal or Hon’ble High Court. Ultimately, fact remains that more than 20 years old O.A. needs to be adjudicated.”

7.0 Evidence on Record 7.1 On behalf of the Original Applicant Bank, the witness AW-1, J. Appaswamy had filed the affidavit in the capacity of Senior Manager. He has reiterated the plaint averments. He has spoken to of the documents at Ex. A1 to A126. 7.2 The proceeding sheet dated 19.7.1999 in Old No. OA 477/1997, there is a note as follows (Page No.1 of the bundle of the photocopies of the order sheets): - “The def remain ex-parte. The a/bank filed PA. Exh A1 to A24 were marked. For orders 30.8.99” Further, the proceedings were taken up on 30.8.1999 and it is noted “The def filed IA/1997/99 to set aside exparte order. The IA was allowed. For reporting settlement or final settlement by 29.11.99”. 7.3 It is relevant to note that though the applicant had spoken to about the Exhibits A-1 to A-126, the exhibits A1 to A24 were only marked and the exhibits from A25 to A126 are not filed on record (it is also confirmed from the status report furnished in the case in OA No.182/2007 (old No. OA 447/2007) dated 5.11.2009 furnished by the office for consideration to the Ld. PO, who had fixed the matter for orders in the year 2009). 7.4 The witness AW-1 had reiterated the plaint allegations in his affidavit and relied on the following documents: -

Ex. A1 – Sanction letter dated 25.3.1987.

Ex. A2 – Covering letter dated 26.03.1987.

Ex. A3 – Demand Promissory Note for Rs.50 lakhs dated 26.3.1987.

Ex. A4 – GPA executed by D1 dated 17.2.1987.

Ex. A5 – Guarantee Agreement by D2 dated 28.3.1987.

Ex. A6 – Covering letter dated 28.7.1988 for enhanced OD.

Ex. A7 – Renewal letter dated 28.7.1988

Ex. A8 – Promissory Note for Rs.93 lakhs dated 28.7.1988.

Ex. A9 – Letter of lien dated 28.7.1988.

Ex. A10 – Further sanction letter dated 12.6.1989

Ex A11 – Covering Letter dated 15.6.1989.

Ex. A12 – Promissory note for Rs.80 lakhs dated 15.6.1989

Ex. A13 – Letter of lien dated 15.6.1989. Ex. A14 – Agreement of guarantee by 3rd defendant dated 15.6.1989. Ex. A15 – Acknowledgement of debt by D1 and D3 dated 21.2.1991.

Ex. A16 – Renewal letter dated 24.04.1991 Ex. A17 – Letter of continuity (single) executed by D3 dated 24.04.1991

Ex. A18 – Promissory note for Rs.140 lakhs dated 24.04.1991

Ex. A19 – Stamped letter of lien dated 24.04.1991

Ex. A20 – Agreement of guarantee by D3 dated 24.04.1991 Ex. A21 – Letter acknowledging deposit of title deeds dated 03.08.1987.

Ex. A22 – Letter of extension dated 29.7.1988

Ex. A23 - Letter of extension dated 19.6.1989

Ex. A24 - Letter of extension dated 19.6.1989 Except these documents no other documents viz., the sale deeds from Ex. A25 to A33, A37 to A41, Letter acknowledging deposit of title deeds at A-42 and further documents of sale deeds described at Ex. A45 to A62, A-64 to A66, A69 to A75 and Ex. A82 to 84, A87, A90 to A92, A95 to A102, A105 to A109, A112 to A114 are not filed. The non-filing of the original documents by the applicant bank finds a reference in the office note dated 5.11.2009 in OA 182/2007 and also the office note dated 16.8.2019.

7.5 This witness though sought to be cross-examined by the defendants, such a request was declined and the order of the Tribunal in IA 546/2019 was upheld by the Hon’ble DRAT as discussed above. The same was challenged by D1 in W.P. No.30879/2019 and 30972/2019. The Hon’ble DB of the Madras High Court had dismissed the writ petitions holding that the proceedings before the Tribunal is summary in nature and the opportunity to cross-examination declined by the DRT and DRAT was upheld. 7.6 The above orders of the Hon’ble DB was further taken up before the Hon’ble Supreme Court in SLP No.29258 & 59 of 2019 and the said SLP was dismissed vide order dated 17.12.2019. 7.7 Thus the say of AW-1 with regard to the transaction and execution of documents at A1 to A24 goes unrebutted. Evidence of Defendant 8.1 In the Counter Proof Affidavit of PVRS Manikumar, 1st defendant, who is the Proprietor of M/s Kumar Constructions deposes that he is involved in the construction of business of 1st defendant and he had denied the averments in the affidavit of AW-1 as false. It is also deposed that defendants 2 and 3 are his wife and mother respectively and they do not have any transactions with the bank. He admits having taken up the civil works with the 5th defendant at Hyderabad. He relies on Ex. R-1 the sanction letter issued by the 5th defendant. It is admitted that during the compliance of sanction letter wherein the third party collateral security be given in place of personal security, certain documents were obtained by the bank. It is also his case that the 5th defendant Society disintegrated and the 5th defendant offered to pay Rs.93 lakhs in the year 1989 to the bank as full and final settlement and the bank remained indifferent. 8.2 It is also sworn that the bank has misused the photocopies of the agricultural land and projected as though the original title deeds of the properties belonging to defendants 1 and 3 and is pleading a case of deposit of title deeds. He admits additional amount of Rs.43 lakhs was sanctioned for the Hyderabad housing project thus totalling to Rs.93 lakhs. He also admits having applied for the second housing loan at Perambur. D1 admits that all the original title deeds are with him in the affidavit at Para 9 of CPA dated 3.3.2019. He also deposes that the original documents were given to the perusal of the Hon’ble High Court in W.P. 15092/2011 and among these some properties were sold by him. These documents were returned by the Hon’ble High Court after perusal. It is deposed by him that the OA is filed in the 1997 after six years from the date of loan transaction i.e., 24.4.1991 and the same is time barred. It is his contention that certain properties belonging to third parties situated at Manali New Town were mortgaged and the same is totally ignored by the bank. 8.3 After filing of this Counter Proof Affidavit the applicant bank had not filed any rebuttal evidence. Additional Counter Proof Affidavits were not permitted by an order dated 25.3.2019. The defendant No.2 in person was examined on 24.4.2019 and Exhibits D1 to D11 were marked, which were objected to by the applicant bank and the witness discharged. Between 24.4.2019 and 2.5.2019, the applicant bank had not sought for producing any rebuttal evidence nor any rebuttal affidavit is filed by the applicant bank. On 24.4.2019, the Ld. Predecessor noted that Witness is discharged and had also given an opportunity for filing additional PA, if any. On 2.5.2019, the matter was kept for hearing on the IAs and on 7.5.2019, application is filed by the defendants seeking recalling of AW-1 for cross examination, which was ultimately ended in dismissal of the prayer of defendant upheld conclusively. 8.4 The Ld. Predecessor by an order dated 31.7.2019 had noted as under: - “Counsel for applicant and defendants present. At this stage Ld. Counsel for the defendants once again stated that the ExA1- A124 stated to have marked or in fact not available in the file, as per the proceedings of the Tribunal dated 07.11.2008. Ld. Counsel for the applicant refuted the said contention and invited the attention of the Tribunal to the proceeding dated 19.7.1999 and submitted that the Exhibits were marked on 19.07.1998. It appears that these above Exhibit’s are not available in the file and the record is not reconstructed as of now. In the circumstances Registry is directed to put a note as to whether the ExA1-A124 is said to have been marked on 19.07.1998 are available or not in the file. Nextly, whether the additional documents if any are marked, if so on what date? By 20.08.2019. Call on 26.08.2019.”

9.0 Points for determination

With the above available pleadings, evidence and the long drawn proceedings for nearly three decades, the following points arise for determination in this OA.

(i) Whether the applicant bank is entitled for recovery of the OA sum as pleaded and against which defendants?

(ii) Whether the applicant bank is eligible to seek a decree for enforcement of the money by sale of the properties mentioned in Schedule A1 to A-3 mortgaged to secure the OD facility of (i) & (ii) as pleaded?

(iii) What relief? Heard the Ld. Senior Counsel for the Applicant and Defendant No.1 in person for the contesting defendants. 10.1 Contentions of the Applicant Bank 10.2 The latest arguments submitted in writing by the Ld. Counsel for the Applicant is dated 20.11.2023. The crux of the submissions are that

the defendants obtained two OD facilities and the OA is filed. The Ld. Counsel submits that the Ld. Predecessor had on 17.7.1999 noted that the defendants offered to pay Rs.4.55 crores towards the claim of Rs.31,15,81,209.40. This proposal was not accepted by the bank. 10.3 In the letter dated 24.4.2003, the 1st defendant addressing to the CMD of the bank had submitted that he is not in a position to generate the funds to extent of Rs.375 lakhs and on the advertisement to sell the properties by the bank, no order is passed by the Tribunal. The agricultural lands offered as collateral securities is beset with several practical and legal problems with tenant cultivators and encroachments. It is pointed out that the Hon'ble DRAT in MA 192/2003 dated 8.1.2004 confirmed the order of the Tribunal in allowing the bank to bring the mortgaged property for sale. The Ld. Counsel for the applicant submits that in the written statement the defendants admitted the claim and submitted to a decree for a sum of Rs.1.85 crores. It is submitted that in the letter dated 28.8.2007 the defendant clearly admitted that the other properties secured to the amounts advanced by the bank for the above failed projects are the agricultural lands situated in Guduvancherry, Kolluru, Uppalam, Annamalaicherry, Pralayambakkam and Perlavepathur villages of Ponneri Taluk and submitted that the properties were grossly undervalued realizable value.

10.4 The applicant bank further contends that while dealing with WP 3925/2004 all the records were called by the Hon'ble High Court and subsequently retransmitted. The original documents marked are not available. The contention of the defendant that the agricultural lands in Ponneri Taluk were never offered as collateral security is an afterthought and be disallowed. 10.5 It is the contention that while negotiating for OTS defendants candidly admitted the mortgage created in respect of agricultural properties. Contentions of the Defendants 11.1 The Contesting Defendants 1 and 2 have filed voluminous written submissions with photocopies of certain documents. It is admitted in the written arguments that the bank had financed Rs.2.33 crores for two projects and agricultural lands at Manali of third party was offered as a collateral security. The third party collateral securities were that of Loganayaki, Bhuvaneswari (not D2), Andal Ammal and Selvamani. There was earlier loan of Kalyan Brick Fields and Kumar Constructions which was adjusted. The third party properties had to be replaced with his personal property, and the photocopies of 13 properties including the house at Perambur High Road were given to the bank to replace the properties of third parties and the bank allowed the defendant 1 to operate the Secured Overdraft for Rs.2.33 crores without insisting for the replacement of personal properties in place of the third party properties. 11.2 It is his contention that the photocopies of the other thirteen properties were given to the bank to obtain the legal opinion and the valuation thereof. 11.3 It is contended that the Hyderabad project failed and the Society offered to pay Rs.93 lakhs which was not taken by the bank and Chennai project failed. The detailed written statement is urged by repetition in the written arguments. 11.4 However, it is contended that the bank failed to produce the original title deeds concerning the third party situated in Manali. 11.5 The bank had tried to sell the Perambur property without any title deeds and the bidder backed out since the bank did not have the original documents. In W.P. 3925/2024 the bank claimed the loan at Rs.1.90 crores, whereas the loan amount is Rs.2.33 crores. 11.6 It is his contention that while marking the documents, Ex. A1 to A24 were only marked. The rest of the documents were not marked by the Tribunal since they were photocopies. The contention of the bank that they were either stolen or misplaced cannot be believed. The photocopies are being misused by the bank. The 13 properties were never mortgaged. 11.7 It is submitted that out of the five defendants only two survive and the Society. The defendants pray for dismissal of the OA.

12. Answers to the points for determination:

(i) Whether the applicant bank is entitled for recovery of the OA sum as pleaded and against which defendants? 12.1 The OA was filed by M/s Indian Bank. The Ld. Predecessor by an order dated 31.8.2023 had allowed M/s Encore Asset Reconstruction Company to be substituted in the place of applicant bank, while disposing IA 747/2023. Therefore, the present substituted ARC would step into the shoes of the original applicant. 12.2 The applicant bank has sought for two reliefs for recovery of Rs.662,43,064 against defendants 1 to 3 for the OD facility (i) along with interest at the rate of 24.25% per annum with quarterly rests. Likewise, similar relief is sought for recovery of Rs.653,38,144.42 towards the OD facility-II with interest. 12.3 As noted supra, it is very significant and relevant to the contentions of the defendants 1 to 3 jointly filed. This Tribunal finds the unambiguous, clear and heralded admissions in the written statement with regard to the sanctions of the loan by the bank as under: -

(i) In Para 12, at line 3, there is a clear cut admission “the bank has financed only Rs.233 lakhs for both the projects”. In line 6, it is found “the first defendant offered to pay further 185 lakhs to the bank as OTS after disposing all the properties including that of his family members”

(ii) In Para 14 of the WS after submitting the losses incurred by the defendants in both the projects, it is specifically mentioned that “the agricultural lands which were given as additional security to the bank may fetch only Rs.25 lakhs. In fact most of the lands are under encroachments”

(iii) In Para 15, line 3, it is categorically mentioned by defendants that “as the agricultural lands given as collateral security would fetch about Rs.10 lakhs if permitted to be sold, this defendant will be able to pay the bank Rs.185 lakhs if the bank is willing to agree One Time Settlement for the amount”.

(iv) The prayer in the written statement is to dismiss the OA or in the alternative to pass an order of adjudication decreeing the sum of Rs.1,85,00,000/- in favour of the Indian Bank, which the 1st defendant would pay in full discharge of the loan amount as agreed in the One Time Settlement. 12.4 The above parts of admission culled out from the written statement mentioned above, would lead to the only conclusion that the defendants 1 to 3 have tacitly admitted the liability. If there had been no loan transactions, the defendants 1 to 3 would have never made such admissions in the written statement though such admissions have a rider to the effect that the signatures were obtained on blank papers. Further, from Para 2 of the written statement it is submitted that the transaction relates to number of mortgages belonging to different persons. Considering the tacit admissions, the loan transactions having not been denied especially as pleaded in the OA with regard to the OD facility-I and II, the liability of defendants 1 to 3 is to be understood in the context of the evidence placed on record, which is not denied. 12.5 As noted earlier while noting the evidence, it is evidently seen that the testimony of AW-1 as regards the sanction of loan, OD-I and OD-II facilities is not specifically denied in the written statement, except stating that the signatures were obtained on blank papers. In the written submissions filed by the very defendants along with the written statement, read conjointly clearly proves the case of the bank in so far as having availed the loan for the project at Hyderabad of Defendant

No.5. It is found from the written arguments of the defendants that the defendant No.1 had to abandon the project in the year 1989 itself since it has become unviable which was very well known to the bank (Para 12 of the written submissions dated 9.3.2023. 12.6 The major contention of the defendants 1 to 3 is that Ex A3, A8 A12 and A18 being the Promissory Notes dated 26.3.1987, 28.7.1988, 15.6.1989 and 24.9.1991 respectively for the amounts of Rs.50 lakhs, Rs.93 lakhs, Rs.80 lakhs and Rs.140 lakhs are all time barred. The same is also reiterated in Para 27 of the written arguments dated 5.2.2025. 12.7 In the original note sheet file bearing No.115 on the outer wrapper it is to be seen that as far back as 3.7.1999 itself, it is noted as under: - “OA 477/1997 dated 3.7.1999 Call on 19.7.1999. The suit claim is for Rs.13,15,81,209.40p. The defendant had given a proposal for Rs.3.5 crores. The matter is taken up for consideration today by bank authorities. Call on 19.7.1999”. Thereafter, there is one more important noting in the special drive sitting by the Ld. PO. “OA 477/1997 dated 3.7.1999 The Counsel for applicant bank represents that suit claim is for Rs.13,50,81,209.40p. The defendant have given a pro 4,75,00,000 and being considered.” The matter was kept for reporting the settlement dated 11.5.2000.

12.8 It is pertinent to note that the defendants have not pleaded in the written statement that the claim is time barred. Had it been the case, the defendants would have taken such a plea in the written statement. Therefore, only for the sake of arguments if such a defence is taken the same cannot be entertained. 12.9 The Ld. Senior Counsel appearing for the applicant points out to the written synopsis of their arguments at Page 4 as under: - “The first defendant sent a letter dated 24.4.2003 addressed to the Chairperson and Managing Director of Indian Bank and marked a copy to the Secretary, Banking, Government of India and the Registrar, DRT-II Chennai which contains the following admissions / averments: …6. I am under severe financial difficulty and I am not in a position to raise or generate funds to the extent of Rs.375 lakhs. Whereas on your publishing an advertisement in the newspaper dated 11/12/2002 for the sale of immovable properties mortgaged to you despite no order has been passed by the Hon'ble DRT.” 12.10 This Tribunal finds force in the arguments of the Ld. Counsel for the bank that the defendants cannot plead the limitation as a defence in view of the above admissions. Furthermore, in the OA at Para 4 it is pleaded by the bank that “All the loan documents were executed at Madras on 26.3.87 and subsequently it was renewed and enhanced on 28.7.88 and again on 15.6.89 a fresh secured overdraft was availed and on 21.2.91 and 22.6.93 the Respondents Acknowledged their liability and the letter acknowledging the liability were executed by the Respondents on 23.3.96 and hence within limitation”

12.11 The Written Statement is carefully perused. The contention of the defendants is that the bank has obtained the signatures in blank initially and filled up the different dates to save the limitation. Having taken such a contention in the written statement, it is quite ununderstandable as to how the defendants proposed to settle the matter which is a time barred debt by offering twice the lumpsum amounts after the filing of the case. Furthermore, the defendants having taken up a contention is obligated to prove this averment by cogent evidence. On the other hand, the applicant having produced the photocopies of the acknowledgment of debts at Pages 73 to 78 of OA paper book all dated 22.6.1993, concerning OD Account No.130, 171(2 separate folios) of Hyderabad Project, Perambur Project bears the attestation by the bank. These are all signed by defendants (first two by defendant No.1 and the last one by defendant No.3). 12.12 Suffice to say that the defendant who takes up a contention to believe his version that the signatures were obtained on blank papers is obligated to prove the same by adducing the cogent evidence. Except the self serving testimony of the defendants, this burden is not discharged by the defendant No.1 by establishing that the signatures were obtained in advance on blank papers. On the other hand the bank has filed certain documents dated 24.02.2023 though photocopies (Dy.

No.1166/2023) showing that the bank had written letters enclosing the format of AOD to defendant No.1 requesting him to sign the documents. The same are seen from Page 5 to 12. There are unsigned papers sent by the bank. The documents filed along with the OA duly attested bears the signatures of defendants 1 and 3 as discussed above, though the applicant bank having not produced the AODs mentioned in the OA but only having filed the photocopies, the contention of the defendant is not convincing that the debt is time barred in view of the admissions and offers of One Time Settlement which is discussed in the preceding paragraphs. Therefore, the contention of the defendants that the debt is time barred falls to the ground and this Tribunal is of the considered opinion that the applicant bank had established the case for recovery of the money. While going through the records this Tribunal comes across the original letter addressed to the Chief Manager of the Bank by the defendant No.1 dated 28.12.2004, in which it is clearly seen that the same is addressed to the DRT Registrar proposing to settle the account under OTS. 12.13 The second aspect of Point No.(i) for determination is with regard to the liability.

Liability 12.14 The prayer in the OA is for the recovery of a sum of Rs.6,62,43,064.98p against defendants 1 to 3 concerning OD-I facility. The second relief is for recovery of a sum of Rs.6,53,38,144.42p on OD- II facility against defendants 1, 3 and 4. Ex D5 dated 28.3.1987 executed by D2, Ex. A14 dated 15.6.1989 executed by D3 and Ex. A17 dated 24.4.1991 executed by D3 and further by the defendant at Ex A20 dated 24.4.1991 are relied and produced in photocopies. 12.15 At the cost of repetition, the documents relied by the applicant bank is confined to Ex. A1 to A24 only. After perusal of the stipulation No.13, in the guarantee letter, the nature of the guarantee is a continuing one and therefore the liability of defendants 1 to 3 cannot be overlooked. No relief can be granted against defendant No.4 in view of he being neither the borrower nor the guarantor. The only allegation found in Para 5.10 of the OA against D4 is that he has mortgaged the property on 16.6.1989 for properties described in the schedule A-3(a) &

(b) for the secured OD. The mortgages are not proved on record. 12.16 The defendant No.3 expired on 7.11.2021. On 5.12.2024, it is submitted that defendant No.1 is the only the surviving legal heir of defendant No.3. The factum of death of D3 is not reported till 5.12.2024.

12.17 The applicant was directed to take steps. It was noted that D3 is survived by the LR who is D1 on record. The applicant has not enquired to bring other LRs on record, hence D1 is taken as the only surviving LR of Defendant No.3. In view of the above no liability can be fixed on deceased defendant No.3, who is survived by defendant No.1, Shri P.V.R.S. Mani Kumar, the Proprietor of Kumar Constructions. 12.18 Thus the liability survives only against defendants No.1 and 2. No specific prayer of liability is found from the record as against defendant No.5, who has no liability of any sort. Answer to Point No.(ii) for consideration :

(ii) Whether the applicant bank is eligible to seek a decree for enforcement of the money by sale of the properties mentioned in Schedule A1 to A-3 mortgaged to secure the OD facility of (i) & (ii) as pleaded? 12.19 To answer this point for consideration, it is relevant that the applicant bank relies on the pleadings concerning the mortgages executed. The applicant bank has marked only the documents at Ex A1 to A24 as being discussed time and again. Various sale deed documents and the acknowledgement of deposit of title deeds and letters of extension are all pleaded and connected to the Exhibits as mentioned from Ex. A25 to A114. Needless to say that these documents are not produced and marked on record. The office note is also discussed in the foregoing paragraphs regarding the missing documents from the record and the present case is filed in the 1997. There is a status report of the Section Officer dated 25.2.2016 submitting that: “The case was initially filed before this Tribunal and numbered as OA 477/1997 and transferred to DRT-II (Index sheet at Flag A) on jurisdictional grounds during 2001 and numbered as OA 261/2001. During 2007 the same has been transferred back to DRT-I (Index sheet of DRT-II at Flag B) and numbered as OA 182/2007. On 18.12.2012 Hon'ble High Court vide order in WP No.15092/2011 filed by PVRS Mani Kumar (to quash the order in IA 197/2008 dated 16.7.2008 issued by this Tribunal) directing the Tribunal to file status report in repect of filing of original title deeds. On 20.12.2012 Hon'ble High Court directed the Tribunal to forward all the material records in OA 182/2007. On 21.12.2012 this Tribunal forwarded the case file and related documents to Hon'ble High Court. There were hearings before the Hon'ble High Court and the case not listed before the Hon'ble High Court for more than 2 years.

2. A copy of report of the then AR (Flag C) of this Tribunal and unsigned copy of the report of the then Registrar (Flag D) of this Tribunal may please be seen.

3. As per their report, there were 2 volumes of original documents transferred by the Tribunal whereas there were 3 volumes of original documents transferred by DRT-II, Lr. AR further opined that documents available with DRT-I is certified copies of documents only. Hence applicant bank should have the knowledge of the title documents.

Now the bundle is before the Hon'ble High Court.” 12.20 Be that so, in the Counter Proof Affidavit, the defendant No.1 had made the following testimony:

(a) At Para 9 it is submitted that all original title deeds are with him.

(b) At Para 13, he has averred that during the proceedings before the Hon'ble High Court in W.P. 15092/2011, the original title deeds of some of the properties among these which have already been sold by us had also been produced by me and the Hon'ble High Court after perusal of the same was pleased to return those original title deeds back to me then and there with a direction to me to furnish a copy of those documents to applicants bank, which was also complied then and there. In support of this contention the defendants No.1 relied on Exhibit R-2. In the said Exhibit R2 which is a true copy of the affidavit filed by this defendant No.1 in W.P. No.15092/2011 he has averred that the documents A1 to A24 in the present relate to his correspondence and Ex A25 to A126 were the title deeds were only the Xerox copies. He also pointed out the docket entry of the Ld. Predecessor in DRT-I dated 19.7.1999 which is already discussed above. Ex. R2 only shows that the documents are the photocopies filed by the bank. 12.21 The above contention of the defendant No.1 in the counter proof affidavit is not disputed by the applicant bank by any rebuttal evidence. However, it is seen from the allegations of the bank that the contesting defendants executed the documents towards equitable mortgage by depositing of title deeds is not proved on record by any cogent evidence.

12.22 Ex R3, a photocopy of the letter dated 9.10.1997 addressed by M/s Elizabeth Thomas Education and Welfare Trust to the defendant No.1 thanking for the generous gift of 25 acres of land vide the gift deed would be registered soon after the return of the President and Managing Trustee shows that these properties were gifted by this defendant No.1 and Ex R4 is the copy of the gift deed dated 8.12.1997 and another gift deed dated 9.1.1998 is produced at Ex R5. 12.23 These gift deeds are seemingly dubious since these are executed after filing of the OA but alas the applicant bank did not produce the original title deeds and the original Memorandum of Deposit of Title deeds to establish their case. The applicant had not taken any steps despite the information brought to their knowledge as far back as 9.3.2023 in the notes for submission filed by the defendants, which copies were received by the applicant. It was expected of the applicant to have taken steps to summon the original documents lying with the said Trust as contended by the defendants in their written arguments dated 9.3.2023 and also to have established that there was a prior equitable mortgage by way of deposit of title deeds in favour of the bank. Apart from the above, the applicant bank could have atleast produced the encumbrance certificates to have established the creation of mortgage by way of deposit of title deeds. The applicant has not chosen to find out the encumbrances from the concerned, for period from the date of filing of the suit till the alleged registration of gift deeds dated 8.1.1998 and 9.1.1998. However, this Tribunal with the available documentary evidence on record, cannot come to the conclusion that the Ex A25 to A126 are proved on record for want of the documents which were not filed. Therefore, applicant bank cannot be permitted to enforce the decree by selling the alleged mortgaged properties. Thus the point for determination at No.(ii) is thus answered accordingly. Answers to Point No.(iii)

(iii) What relief? 12.24 For the foregoing discussions, the applicant bank had established the case for the recovery of money as prayed for against defendants 1 and 2. The defendant No.3 expired and is survived by the defendant No.1 as the sole legal heir. 12.25 This Tribunal had given a very serious thought with regard to the grant of interest. In the caption “contours of the case” the progression of the case which has taken several turns are already discussed. The matter was being transferred from one Tribunal to another. There has been no orders pronounced despite reserving the matter for orders on 19.7.1999 itself. It is also seen that thereafter there was an endeavor by

the Tribunal to sell certain properties for which steps were taken. Somehow the same did not fructify. The matter travelled to DRAT and then writ petitions. There was an One Time Settlement offer which was not accepted by the bank right from 1997 to 2006. There is a noting by the Ld. PO who awaited the records from the Hon'ble Court and such a noting is dated 1.9.2008. The records were received on 1.1.2009 but not traced. From 4.11.2010 till 19.5.2011 the case was being reposted. Again from 31.1.2011 till 1.8.2011 the matter was reposted. There was a stay order in WP No.15092/2011 as noted in the order sheet dated 21.9.2011. On 5.6.2013, the Ld. PO noted that “since the matter is stayed by the Hon'ble High Court, in the meantime the original title deeds are either misplaced or missing from the custody of the bank or the Tribunals. Directions were given to furnish a report”. Third parties tried to intervene to get themselves impleaded. On 14.6.2016, the applicant filed a memo enclosing the order of the Hon'ble High Court. There was an enquiry regarding missing of documents as noted in the order sheet dated 31.8.2016 and the stay by the Hon'ble High Court continued as noted in the order sheets dated 31.10.2016, 31.12.2016, 28.2.2017, 31.3.2017, 14.6.2017, 14.7.2017 and 15.11.2017, 10.01.2018. On 4.10.2018, the Ld. Predecessor noted that since the stay granted earlier has not been extended beyond six months he directed the matter to be listed for hearing. Only on 4.12.2018, it is reported that writ petition was dismissed. Thus for decades there was no progress in the case. It is seen on 7.2.2019, i.e., after almost 20 years the Counsel for the Applicant Bank submitted that there is no additional affidavit to be filed and the affidavit dated 19.7.1999 be treated as proof affidavit. Thereafter the matter revolved on IAs by the defendants. The opportunity granted to file CPA was again closed on 7.3.2019. Again IAs were filed for additional CPA. The defendant was examined as DW-1 only on 24.4.2019. There were change in the Counsels by the defendants in the year 2019. On 27.1.2020, the Ld. Predecessor felt that though reserved for orders the matter required suo moto hearing. The matter was kept for orders between 10.3.2020 till 22.1.2021 for several dates for pronouncement of orders but again it was reopened suo moto on 22.1.2021 for clarification. Between 4.10.2021 till 12.7.2022 the case was being reposted (may be COVID period). In the year 2002, the IA filed by the impleading applicant was pressed and the same was dismissed on 25.8.2022. Again, the matter was transferred from DRT-I to DRT-II vide notification dated 4.10.2022. The principles of natural justice were followed by the transferee court and in the meantime the assignment of debt was brought to the knowledge of the Ld. Predecessor on 24.5.2023. During 2024, the order could not be pronounced though reserved for orders on 28.6.2024 and the matter was reopened. There is a direction by the Hon'ble High Court dated 6.11.2024 which this Tribunal noted. It was only reported on 5.12.2024 about the death of the parties and the defendants filed certain IAs, which were disposed of. When the matter was finally kept for written arguments by an order dated 28.1.2025, the same were filed and the same is also perused. 12.26 The Hon'ble DRAT in its order dated 15.10.2019 has noted “In view of the fact that both the parties have filed their proof affidavits and counter proof affidavits and the matter is more than 20 years old, it appears that this delay has been caused on account of some stay orders by this Tribunal or Hon'ble High Court” 12.27 For the above circumstances which went beyond the control by any human agency, the saddling of interest on the defendants from the date of OA till realization for a long period of 1997 to 2025 would be unjustified. Hence the lis pendens interest is denied. Hence the OA stands disposed of by the following:

ORDER

(a) OA is partly allowed.

(b) Defendants 1 and 2 are directed to pay jointly and severally a total sum of Rs.13,15,81,209.40p towards the OD-I and II facilities to the applicant within 30 days from the date of communication of this order, failing which the defendants 1 and 2 shall pay interest at the rate of 9% per annum till date of realization from today.

(c) All the pending IAs, if any, stand closed.

(d) The claim against D3 stands abated.

(e) The claim against D4 and D5 stands dismissed.

(f) Recovery Certificates against D1 and D2 only be issued accordingly.

(g) Any amounts realized by the applicant be adjusted to the present recovery ordered.

(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 4th day of March, 2025) LIST OF EXHIBITS MARKED THROUGH AW-1 (all photocopies) S. No. Date Description of Documents Exhibit Nos.

1. 25.03.1987 Sanction letter of applicant bank A-1

2. 26.03.1987 Covering Letter A-2

3. 26.03.1987 Demand Promissory Note for Rs.50 lakhs

A-3

4. 17.02.1987 Irrevocable Power of Attorney executed by 1st defendant A-4

5. 28.03.1987 Agreement of guarantee executed by 2nd defendant A-5

6. 28.07.1988 Covering letter executed by 1st defendant A-6

7. 28.07.1988 Letter of renewal executed by 1st defendant A-7

8. 28.07.1988 Demand Promissory Note for Rs.93 lakhs executed by 1st defendant A-8

9. 28.07.1988 Letter of Lien executed by 1st defendant A-9

10. 12.06.1989 Sanction of applicant – Overdraft facility of Rs.80 lakhs A-10

11. 15.06.1989 Covering letter by 1st defendant A-11

12. 15.06.1989 Demand Promissory Note for Rs.80 lakhs. A-12

13. 15.06.1989 Letter of Lien by 1st defendant A-13

14. 15.06.1989 Agreement of guarantee by 3rd defendant A-14

15. 21.02.1991 Acknowledgement of debt by defendant Nos.1 and 3 A-15

16. 24.04.1991 Letter of renewal A-16

17. 24.04.1991 Letter of continuity (single) A-17

18. 24.04.1991 Demand Promissory Note for Rs.140 lakhs A-18

19. 24.04.1991 Stamped letter of lien and set off from borrowers A-19

20. 24.04.1991 Agreement of guarantee by 3rd defendant A-20

21. 03.08.1997 Letter acknowledging deposit of title deeds. A-21

22. 29.07.1988 Letter of extension A-22

23. 19.06.1989 Letter of extension A-23

24. 19.06.1989 Letter of extension A-24 Exhibits A-25 to A-126 are neither filed nor marked, albeit finding reference in the proof affidavit.

LIST OF EXHIBITS MARKED THROUGH DW-1 S. No. Date Description of Documents Exhibit Nos.

1. 27.03.1987 Sanction letter – SOD-1 – for Rs.50 lakhs D-1

2. 03.08.2013 Copy of affidavit filed in W.P. No.15092/2011. D-2

3. 09.10.1997 Letter issued by M/s Elizabeth Thomas Education & Welfare Trust, Chennai to the 1st defendant D-3

4. 08.01.1988 Gift deed by 1st defendant to M/s Elizabeth Thomas Education & Welfare Trust, Chennai for 12.675 acres. D-4

5. 09.01.1988 Gift deed by 1st defendant to M/s Elizabeth Thomas Education & Welfare Trust, Chennai for 12.51 acres. D-5

6. 18.06.1994 OTS proposal by the 1st defendant D-6

7. 20.03.2002 OTS acceptance letter issued by applicant bank D-7

8. 04.04.2002 Extension letter submitted by 1st defendant seeking extension of time D-8

9. 06.05.2009 Public notice issued by applicant bank in Tamil daily “Dina Thanthi” D-9

10. 16.05.2009 Public notice issued by the 1st defendant in Tamil daily “Dina Thanthi” D-10

11. 19.05.2019 Follow up letter issued by 1st defendant to claimant seeking One Time Settlement without prejudice. D-11

SCHEDULE OF PROPERTIES Though described in the OA at Schedules A-1 to A-3, the same are not mentioned since nothing survives for the reliefs sought at Para 3 of the reliefs, which are declined by this order.