M/s HDFC Bank Limited vs FJ Skid Packs on 31 July 2025

FINAL ORDER

1. This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 against the defendants seeking issuance of a Recovery Certificate for recovery of a sum of Rs.35,95,573.73p with further interest at the rate of 9.26% per annum from the 06.04.2021 till the date of realisation along with costs of the application and for sale of schedule mentioned property.

2. The subject matter of the case is the vehicle loan availed by the defendants from the Applicant Bank.

3. It is the case of the applicant that the 1st defendant is a Partnership firm represented by defendants 2 and 3 as its Partners. It is also the case of the applicant that the defendants approached the applicant vide loan application dated 02.06.2018 for grant of vehicle loan to an extent of Rs.43,03,569/- under the product name “ARC Auto Loan” for purchase of Mercedes Benz C220 CDI and considering the said request the applicant sanctioned a loan of Rs.43,89,805/- vide its sanction under Loan Account No.57885941 and the same was repayable in 60 Equated Monthly Installments from 07.07.2018 to 07.06.2023. It is stated that the applicant had disbursed an amount of Rs.43,86,080/- being the amount less other agreed charges. However, due to COVID-19 pandemic the period was extended to 69 monthly installments of Rs.89,805/- commencing from

07.07.2018 to 07.03.2024. It is stated that the defendants executed Agreement for Auto Loan dated 08.06.2018 and also agreed to hypothecate the vehicle in favour of the applicant thereby creating charge over the equipment in favor of the applicant for repayment of the amount due under the said loan account. The defendants purchased Mercedes Benz C220 CDI bearing Engine No.65192134522760 and Chassis No.WDD2050026L034910 registered as TN-59 CF-7566..

4. It is the further case of the applicant that the defendants after availing the facility was highly irregular in repayment and defaulted in repayments. It is stated that the defendants failed and neglected to regularize the loan account despite repeated requests and demands and hence the applicant issued legal notice dated 08.04.2021 and the same returned with endorsement “Intimation given” on 17.04.2021. Despite the same the defendants did not come forward to clear the outstanding dues, hence the present OA is filed for recovery of its dues.

5. Summons was taken out to the defendants 1 to 3 and the same was returned unserved with postal endorsement “Unclaimed and intimation delivered”. As there was no representation on behalf of the defendants 1 to 3 continuously and on 15.09.2022 the defendants were called absent and placed ex-parte on that day. Applicant Bank filed Proof Affidavit along with 11 documents, which were marked as Ex. A-1 to A-11 on 10.01.2024, however, Exhibits A-1 and A-4 being photocopies were marked subject to proof and relevancy. The Ld. Counsel for Applicant Bank made his submissions on 23.07.2025 and thereafter the matter stood till this date for passing final orders.

6. The following issues arise for consideration in the matter: - (a) Whether the applicant had succeeded in proving the liability of the defendants?

(b) What order as to cost of the proceedings need be passed?

These issues are considered together.

7. Heard the Ld. Counsel for the applicant, perused the OA averments and the record placed before the Tribunal.

8. The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-11 along with the proof affidavit. The documents produced in evidence are all found admissible. Exhibit A-1 is the Board Resolution of the applicant dated 16.04.2022. Exhibit A-2 is the Loan Application dated 02.06.2018 submitted by the defendants. Exhibit A-3 is the Loan Agreement dated 08.06.2018 executed by the defendants. Exhibit A-4 is the Notice sent by the applicant’s counsel to the defendants dated 08.04.2021. Exhibit A-5 to A-7 are the returned covers of the Lawyer’s notice. Exhibit A-8 is the statement of accounts dated 05.04.2021. Exhibit A-9 is the Summary of accounts dated 05.04.2021. Exhibit A-10 is the Repayment schedule. Exhibit A-11 is the certificate under Bankers’ Book Evidence Act.

9. The proof affidavit of the applicant bank remained unchallenged and rebutted. Therefore, on careful consideration of proof affidavit along with exhibits filed on behalf of the applicant bank, besides the material placed before the Tribunal, the Tribunal is satisfied that the applicant bank has successfully proved the OA claim against the defendants. Further, the statement of accounts in respect of the loan account produced and certified under the Banker’s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendants. It is clear from the statement of accounts that penal interest is not capitalized.

10. In view of the foregoing, it is clearly evident that the application filed by the applicant bank is well within the period of limitation and this Tribunal possesses the territorial and pecuniary jurisdiction to entertain this OA.

11. In view of the fact that the loan facility availed by the defendants is a vehicle loan and the applicant has claimed interest at contractual rate till the date of filing of the OA, this Tribunal is of the view that the pendente lite interest can be awarded at reduced rates.

12. In view of the aforementioned discussions, the only conclusion this Tribunal can draw is that the applicant had clearly proved the disbursement of the loan, which the applicant is entitled to realize. Hence, OA is disposed off in the following manner: - (a) TA No.166 of 2022 stands allowed.

(b) Applicant is permitted to realize an aggregate sum of Rs.35,95,573.73p with further interest @8% per annum (simple) from the date of filing of the application till the date of realization in full, from the defendants jointly and severally after deducting all the amounts received by them during the pendency of OA.

(b) It is ordered that in case of default by defendants to pay the amount adjudged, applicant bank is entitled to sell the schedule mentioned property to answer the claim of Recovery Certificate and appropriate the sale proceeds towards amount due.

(d) If the sale proceeds are not found sufficient, after defraying expenses of such sale for the payment of all such amounts, the defendants 2 and 3 are personally liable for the deficiency of adjudged amount with interest and costs until realization.

(e) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 15 days from the date of receipt of the copy of the order.

(f) The Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of this final order.

13. Communicate a copy of the order to the parties concerned in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

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(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 31st day of July, 2025)

EXHIBITS MARKED BY APPLICANT BANK

S. No. Description of documents Exhibit No.

1. Board Resolution of the Applicant Bank dated 16.4.2022. A-1

2. Loan application dated 02.06.2018 submitted by the defendants. A-2

3. Loan Agreement dated 08.06.2018 executed by the defendants. A-3

4. Notice dated 08.04.2021 sent by the applicant’s counsel to the defendants A-4

5. Returned Cover dated 17.04.2021 A-5

6. Returned Cover dated 17.04.2021 A-6

7. Returned Cover dated 17.04.2021 A-7

8. Statement of Accounts dated 05.04.2021 A-8

9. Summary of Accounts dated 05.04.2021 A-9

10. Repayment schedule dated 08.06.2018 A-10

11. Certificate under Banker’s Book Evidence Act A-11

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DESCRIPTION OF PROPERTY

Mercedes Benz C220 CDI, bearing Engine No.65192134522760 and Chassis No.WDD2050026L034910 as Registration No.TN-59 CF-7566.

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