M/S CANARA BANK vs Mr. KISHORE T KHANNA on 29 July 2025

FINAL ORDER

1. This application is filed by the applicant bank under Section 19 of the 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 sum of Rs.24,63,213.88p together with further interest @7.45% per annum with monthly rests from the date of application till the date of its realization in full plus overdue interest @2% per annum.

2. Brief facts of the case as per the Original Application are as follows: - (a) The defendants approached the applicant in the year 2011 for grant of housing loan and the applicant considering the said request sanctioned housing loan of Rs.25,00,000/- vide its sanction letter dated 28.11.2011 and the loan amount was disbursed on 30.11.2011. The defendants executed Loan Agreement on 29.11.2011, Authorisation Letter dated 01.12.2012 and Letter evidencing deposit of title deeds dated 24.02.2012.

(b) The defendants defaulted in repayment and failed to regularize the loan account despite repeated demands. The applicant bank classified the loan account as NPA on 07.02.2021. As no payment was forthcoming, the applicant bank issued a legal notice dated 19.11.2021 calling upon the defendants to pay a sum of Rs.24,16,073.88p being the dues as on 08.10.2021. The said notices returned unserved with endorsement “Left”.

(c) The applicant bank was therefore constrained to file the present OA for recovery of its dues from the defendants.

3. Summons was ordered and the same were served on the defendants. As there was no representation on behalf of the defendant on 20.01.2023, the defendants were placed ex-parte on that day.

4. Thereafter, the applicant examined Mr. A. Arul Prakasam, Authorised Officer of the bank as AW-1, who deposed to the facts of the case and marked 15 documents and the same were marked as Exhibits A-1 to A-14 on 30.05.2024. Exhibit A-15 being part of Exhibit A-14 are marked together as Exhibit A-14.

5. During the pendency of the case, the applicant bank filed a part satisfaction memo in Dy No.3865 of 2024 dated 16.04.2024 stating therein that the applicant has realized a sum of Rs.22,60,000/- by sale of the mortgaged property. The said memo was taken on record and part satisfaction of the OA claim for a sum of Rs.22,60,000/- was recorded vide proceedings of this Tribunal dated 30.05.2024 and Exhibit A-11 was ordered to be released to the applicant upon proper acknowledgement.

6. The applicant bank was heard on 17.07.2025.

7. 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?

8. Heard the Ld. Counsel for the applicant bank. Perused the material evidence available on record.

9. To prove its claim, the applicant bank examined the above witness AW-1 and got marked 14 documents, which are marked as Exhibits A-1 to A-14.

10. The proof affidavit of the applicant bank remains unchallenged and the deposition of the witness AW-1 remains unrebutted.

11. AW-1 in his affidavit had reiterated the facts on oath and he relied on Exhibits A-1 to A-14. Exhibit A-1 is the tripartite agreement between Vijay Shanti Builders Ltd., and Kishore T. Khanna dated 13.10.2011. Exhibit A-2 is the Housing Loan forwarding letter dated 20.10.2011. Exhibits A-3 is Loan Sanction Letter dated 28.11.2011. Exhibit A-4 is the Housing Loan Agreement dated 29.11.2011. Exhibit A-5 is the Loan disbursement letter dated 30.11.2011. Exhibit A-6 is the link letter of defendants dated 30.11.2011. Exhibit A-7 is the Authorisation letter of the applicant dated 30.11.2011. Exhibit A-8 is the Authorisation letter of the applicant dated 01.12.2011. Exhibit A-9 is the undertaking cum authority letter by the applicant. Exhibit A-10 is the standing instruction dated 30.11.2011. Exhibit A-11 is the sale deed dated 30.11.2011 executed in favour of the defendants registered as Doc. No.12282/2011 on the file of SRO, Tiruporur. Exhibit A-12 is the Letter evidencing deposit of title deeds dated 24.02.2012. Exhibit A-13 is the legal notice dated 19.11.2021 issued to the defendant. Exhibit A-14 is the statement of accounts along with certificate under Bankers’ Book Evidence Act.

12. 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 Exhibit A-14. The say of AW-1 goes unrebutted. 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.

13. Though the prayer in the OA is for awarding the interest at 7.45% per annum on the sum adjudged till the date of realization plus overdue interest of 2%, it is to be noted that the claim of the applicant bank includes the rate of interest and other charges payable as per the contract. The Tribunal already held that the applicant bank is entitled for the amount claimed in the OA. As already stated, the Tribunal has awarded contractual rate of interest as claimed by the applicant bank till the date of filing the OA and in view of the fact that the subject loan being a housing loan and the lending rate had considerably come down, the Tribunal is of the view that the defendants are entitled for a reduced rate of interest and the applicant is not entitled for the overdue interest claimed. Therefore, under these circumstances, the Tribunal is of the opinion that awarding future interest from the date of filing till the date of realization @ 7% p.a. simple would meet the ends of justice and accordingly the same is considered in awarding the relief.

14. For the reasons stated as above, the applicant bank is entitled for recovery of a total sum of Rs.24,63,213.88p together with further interest @7% per annum (simple) from the date of filing till the date of realization.

15. In the result, the application is allowed granting recovery certificate as follows:- (a) The applicant bank is entitled for recovery of a total sum of Rs.24,63,213.88p together with further interest @7% per annum (simple) from the date of application till the date of its realization against the defendants. The defendants are jointly and severally, personally liable for all such amounts due.

(b) 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.

(c) The sum of Rs.22,60,000/- realised by sale of the mortgaged property shall be taken into account on the date of realisation at the time of preparation of DRC.

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

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

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

18. 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/-

(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 29th day of July, 2025) EXHIBITS MARKED BY APPLICANT BANK S. No. Description of documents Exhibit No.

1. Tripartite Agreement between Vijay Shanti Builders Ltd., and Kishore T. Khanna dated 13.10.2011. A-1

2. Housing Loan forwarding letter dated 20.10.2011 A-2

3. Loan sanction letter dated 28.11.2011 A-3

4. Housing Loan Agreement dated 29.11.2011 A-4

5. Loan Disbursement Letter dated 30.11.2011 A-5

6. Link letter of defendants dated 30.11.2011 A-6

7. Authorisation letter dated 30.11.2011 A-7

8. Authorisation letter dated 01.12.2011 A-8

9. Undertaking cum authority letter A-9

10. Standing instruction dated 30.11.2011 A-10

11. Sale deed dated 30.11.2011 executed in favour of the defendants. A-11

12. Letter evidencing deposit of title deeds dated 24.02.2012. A-12

13. Legal notice dated 19.11.2021 issued to the defendants. A-13

14. Statement of accounts along with certificate under Bankers’ Book Evidence Act. A-14

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DESCRIPTION OF PROPERTY NIL Sd/-