Canara Bank vs M/s. Manimegalai Textiles on 28 March 2024

FINAL ORDER

1. The Application is filed under Section 19 (1) of the Recovery of Debt And Bankruptcy Act, 1993 seeking for issuance of a Recovery Certificate for Rs. 24,62,885/- due in the over draft facility availed by the 1st defendant, a partnership firm through 2nd and 3rd defendants; its partners.

2. The above OA was originally filed before DRT-I and got transferred to this Tribunal and renumbered as above.

3. The Applicant contends that a credit facilities of Rs. 5,00,000/- and KCC loan of Rs.1,00,000/- were availed by 1st defendant through defendants 2 and 3. It is also stated that the facility is secured by hypothecation of stocks, book debts machineries movables in the factory premises and also the hypothecation of crops.

4. The Applicant further contends that despite availing the credit facility by obliging to pay back the amount, the borrowers failed in compliance of the same and all the efforts of the Applicant to make the borrowers pay back the amount failed forcing the Applicant to file this Application.

5. Summons were taken out and as the defendants failed to appear they were set ex-parte on 20.5.2022.

6. The Applicant let in evidence through AW1, filed proof affidavit in conforming with pleading and got marked Ext A1 to A22.

7. Heard the counsel for the applicant 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 had succeeded in proving the OA claim.

(ii) What orders are to be passed?

Both these issues are gone into and decided together.

8. The Applicant evidence remained un-rebutted and hence proved. The documents produced by the Applicant are found to be admissible and are sufficient to prove the TA claim and hence the Applicant is to be found entitled for the TA claim. The OA claim is made within limitation and there is no capitalization of penal interest. Since the credit facility is for agricultural purpose and the OA claim is arrived at by calculating interest at agreed rate, pendente lite and future interest is awarded at 8% simple.

9. In view of the above, the following order is passed: - (a) TA No.905 of 2023 stands allowed.

(b) Applicant is permitted to recover an amount of Rs. 24,62,885/- (Rupees twenty four lakhs sixty two thousand eight hundred and eighty five only) with future and pendente lite interest @ 8% simple per annum from the date of filing of the OA/TA till realization, after giving credit to all the amount recovered and received during the pendency of the OA/TA, from the defendants jointly, severally and personally as against defendants and also by proceeding against their assets including the hypothecated assets.

(c) A Recovery Certificate is to be drawn and issued to the recovery Officer to enable recovery of the as per the above terms.

(d) Applicant is allowed to realize cost of the proceeding for which cost memo is to be filed in 7 days’ time from the date of receipt of the copy of the order.

10. Communicate a copy of the order to the parties concerned in terms of section 19(21)(i) of the RDB Act, read with Rule 6 of DRT (Procedure) Rules, 1993. (Dictated to PS, transcribed by him, corrected, signed and pronounced by me in Open Court, on this the 28th day of March, 2024)

Sd/- (T. RAJESH) PRESIDING OFFICER DRT-II, CHENNAI