M/s. Kotak Mahindra Bank Limited vs M/s. Pro Visual Audio Private Ltd on 28 March 2024

ORDER

1. The above Transfer Application is filed under section 19 of the Recovery of Debts and Bankruptcy Act seeking recovery of Rs.14,91,90,339/- (Rupees Fourteen Crores Ninety One Lakhs Ninety Thousand Three Hundred Thirty NineOnly)with further interest from the date of filing of the TA and by allowing the same to be recovered from the defendants jointly and severally and also by sale of schedule mentionedproperties.

2. The above original application is filed before the DRT-I and stood transferred to this Tribunal and renumbered as above.

3. The case of the Applicant Bank can be encapsulated as follows: The 1st defendant, a Private Limited Company being the borrower and defendants 2 to 5 being the guarantors had applied for and availed the followingfacilities from the Applicant Bank.

SL NO Credit Facility Amount

1.

2.

3.

4. Term Loan Cash Credit Letter of Credit Treasury Rs.3,50,00,000.00 Rs.7,00,00,000.00 Rs.1,50,00,000.00 Rs.50,00,000.00

4. It is also stated that theabove facilities were availed after execution of necessary loan documents by the defendants obliging themselves to repay the amounts promptly and regularly, without fail.

5. Apart fromexecution of the necessary loan documents, the 2nddefendant had created security by way of equitable mortgage over theSchedule B - mentioned properties and also executed an agreement of hypothecation of future and current assets and movables.

6. Even though the defendants had obliged themselves to repay the amount promptly and regularly, they failed to do so resulting in defaults in the accounts and the same being declared as NPA on 29.08.2018.

7. The Applicant Bank’s officials had on many occasions approached the defendantsrequesting them to regularize the accounts and despite the same, no effort was made by the defendants to get the accounts regularized over to pay back the amount. Even as no repayment was made despite repeated requests, theApplicant Bankhad caused to issue a demand notice dated 26.12.2018 requiring repayment of the amounts due in the account, which was followed by a possession notice dated 03.04.2019.

8. It is also the case of the Applicant Bank that despite repeated reminders and requests, the defendantshad failed to make the repayment forcing the Applicant Bank to file this TA seeking recovery of the amounts due in the account with further interest and cost.

9. As the defendants failed to entered appearance, they were called absent and were set exparte on12.05.2022.

10. The Applicant Bank had let in evidence through AW1 who had sworn to a Proof Affidavit in terms of the pleadings in the TA and also produced Exhs. A1 to A17and got the same marked in evidence.

11. Heard the counsel for the Applicant Bank and considered the contention as taken in the TA in the light of documentary evidence and proof affidavit.

The following issues arise for consideration in this matter. i) Whether the Applicant Bank had succeeded in proving the TA claim? ii) What orders are to be passed? Both these issues are gone into and decided together.

12. The case put forth by the Applicant Bank in the Application remains unrebutted as defendants remain exparte. The evidence tendered by the Applicant Bank remains uncontroverted and undisputed. The evidence put forth by the Applicant Bank were found admissible. From the statement of accounts as produced by the Applicant Bank, it is evident that the amount as claimed in the TA is outstanding in the accounts, which the Applicant Bank is entitled to get recovered from the defendants and their assets (including the schedulementioned properties).However, during the pendency of TA, the Applicant Bank filed a Part satisfaction memo stating that an amount of Rs.15,34,00,000/- is recovered by selling the entire property listed in Schedule B and the claim of the Applicant Bank is well within the period of limitation and there is no Capitalization of penal interest.Taking into consideration the fact that Applicant Bank had arrived at the TA claim by calculating interest at agreed rate and the same is not interfered with and also taking note of the fact that the rate of interest claimed is on the higher side, this Tribunal is inclined to allowpendentelite and future interest at reduced rate.This is more so as the property is already sold and the amounts are appropriated. Prayer for monthly rests is declined.

13. In view of the finding as entered above i) TA No: 762of2022 stands allowed. ii) Applicant Bank is permitted to recover anamount of Rs.14,91,90,339/-(Rupees Fourteen Crore Ninety One Lakhs Ninety Thousand Three Hundred Thirty Nine only)with future and pendentelite interest @12%p.a. (simple) from the date of filing of the TA till realization from thedefendants personally and their assets (including the hypothecated assets under Schedule A) after giving credit to all the amounts recovered and received during the pendency of the TA including the amount recovered by the part satisfaction recorded on 03.08.2023. iii) A Recovery Certificate is to be drawn and issued to the Recovery Officer to enable recovery of the amounts as per the above terms.bhg iv) Applicant Bank is allowed to realize cost of the proceedings for which cost memo is to be filed in 7 days’ time from the date of receipt of the copy of the order.

14. 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. (Dictated to PA-2, transcribed by him, corrected, signed and pronounced by me in the Open Court, this 28th day of March, 2024)

Sd/-

(T. RAJESH)

PRESIDING OFFICER DRT–II, CHENNAI