INDIAN BANK vs SRI GANESH BUILDERS AND PROMOTERS on 29 August 2025

FINAL ORDER

1. The Application is filed under Section 19 (1) of the Recovery of Debts And Bankruptcy Act, 1993 seeking for issuance of a Recovery

Certificate for an aggregate sum of Rs.39,03,438/- comprising a sum of Rs.13,59,522/- with interest @9.90% p.a. with monthly rests being the amount due under Retail Cash Credit Loan (A/c No.50294335198) and a sum of Rs.25,43,916/- with interest @8.80% p.a. with monthly rests being the amount due under Retail Term Loan (A/c No.50374024706) from the date of TA till the date of its realization.

2. The subject matter of the case is the Retail Cash Credit Loan availed by the defendants from the Applicant Bank.

3. It is the case of the applicant that the 1st defendant is a Proprietorship concern, represented by 2nd defendant as its Proprietor and further that the defendants 2 and 3 are the guarantors to the loan transaction. It is stated that the 1st defendant represented by the 2nd defendant approached the applicant bank by loan application dated 12.08.2015 for grant of cash credit facility of Rs.10 lakhs. It is also stated that the applicant considering the said request vide its sanction dated 17.08.2015 sanction Cash Credit Facility of Rs.10 lakhs and the defendants executed the loan and security documents on 17.8.2015. It is further stated that the defendants 2 and 3 executed guarantee agreement on 17.8.2015 thereby guaranteeing due repayment of the credit facility availed by the 1st defendant. It is stated that the defendants 2 and 3 acknowledged the debt on 27.11.2018.

4. It is also the case of the applicant that the 2nd defendant approached the applicant vide loan application dated 02.02.2017 requesting for grant of car loan and the applicant vide its sanction letter dated 03.02.2017 sanctioned car loan of Rs.25,00,000/- for purchase of BMWXI SDRIVE 20D EAT LA BS IV bearing registration No.TN-02 BH-4466. It is stated that the 2nd defendant executed loan and security documents on 03.02.2017 and the 3rd defendant executed guarantee agreement on 03.02.2017 thereby guaranteeing due repayment of the loan availed by the 2nd defendant. It is stated that the 2nd defendant acknowledged the debt on 27.11.2018.

5. It is the further case of the applicant that the defendants defaulted in repayment and hence the loan accounts were classified as NPA by the applicant on 13.12.2018 and 22.10.2018 and the applicant issued the demand notice on 29.01.2019 and 16.05.2019 calling upon the defendants to clear the outstanding dues. The defendants despite receipt of the same did not come forward to clear the outstanding dues, hence the present OA is filed for recovery of its dues.

6. Summons was taken out to the defendants and the same was returned unserved and hence the defendants were served with notice by way of substituted service by causing paper publication. As there was no representation on behalf of the defendants continuously and on 14.12.2023 the defendants were called absent and placed ex-parte on that day. Applicant Bank filed Proof Affidavit along with 20 documents, which were marked as Ex. A-1 to A-20 on 22.05.2024; however, Exhibit A-18 was marked subject to proof and relevancy. The Ld. Counsel for Applicant Bank made his submissions on 07.08.2025 and thereafter the matter stood till this date for passing final orders.

7. 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.

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

9. The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-20 along with the proof affidavit. The documents produced in evidence are all found admissible. 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 Cash Credit Loan and Car Loan, this Tribunal is not inclined to interefere with the interest claimed by the applicant.

12. In view of the afore mentioned 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, TA is disposed off in the following manner: - (a) TA No.804 of 2023 stands allowed.

(b) Applicant is entitled for a Recovery Certificate as against defendants 1 to 3, for a total sum of Rs.13,59,522/- together with further interest at the rate of 9.90% p.a. with monthly rests on the amount as determined above and remained unpaid in the Retail Cash Credit Loan A/c No.50294335198) from the date of this OA till the date of its realization along with costs.

(c) Applicant is entitled for a Recovery Certificate as against defendants 2 and 3, for a total sum of Rs.25,43,916/- together with further interest at the rate of @8.80% p.a. with monthly rests on the amount as determined above and remained unpaid in the Car Loan A/c No.50374024706) from the date of this OA till the date of its realization along with costs.

(d) It is further ordered that any amount remitted by defendants or realized by the applicant bank during the pendency of this OA shall be given due credit to the respective loan accounts of the defendants on the respective dates.

(e) It is made clear that the defendants 2 and 3 are personally liable for all such amounts due as ordered above.

(f) 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.

(g) 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. Sd/-

(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 29th day of August, 2025)

EXHIBITS MARKED BY APPLICANT BANK S. No. Date Description of documents Exhibit No.

1. 12.08.2015 Loan Application (Retail CC Limit) submitted by 1st defendant represented by 2nd defendant A-1

2. 17.08.2015 Sanction Letter issued by the applicant bank A-2

3. 17.08.2015 DPN for Rs.10,00,000/- executed by the defendants 1 & 2. A-3

4. 17.08.2015 Acknowledgement of Debt, admitting receipt of the Sanction Letter. A-4

5. 17.08.2015 General letter of Hypothecation applicable in case individual and proprietorship firms. A-5

6. 17.08.2015 Letter of Guarantee executed by 2nd and 3rd defendants guaranteeing the repayment of the above loan availed. A-6

7. 27.11.2018 Form of acknowledgement of debt. A-7

8. 27.11.2018 Letter of promise to pay outstanding dues. A-8

9. 02.02.2017 Loan Application (Car Loan) by 2nd defendant A-9

10. 03.02.2017 Sanction Letter issued by the applicant bank A-10

11. 03.02.2017 Promissory Note for Rs.25,00,000/-. A-11

12. 03.02.2017 Letter waiving presentment of Pro-note. A-12

13. 03.02.2017 Agreement of medium term loan. A-13

14. 03.02.2017 Letter of Guarantee executed by 3rd defendant. A-14

15. 27.11.2018 Letter of promise to pay the outstanding dues. A-15

16. 27.11.2018 The letter of Acknowledgement of debt for car loan. A-16

17. 29.01.2019 Final Recall Notice issued by the applicant A-17

18. 16.05.2019 Demand Notice issued by the applicant A-18

19. Statement of account (Retail CC Limit). A-19

20. Statement of account (Car Loan). A-20

Sd/-

DESCRIPTION OF PROPERTY

NIL Sd/-