State Bank of India vs Mr. K. Arulrajan 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.30,95,429/- due in the Agricultural Term loan availed by the 1st defendant for which the 2nd defendant stood as a guarantor.

2. This application is originally filed before DRT-I and stood transferred to this Tribunal and got renumbered as above.

3. It is also stated that the facility is secured by mortgage of schedule properties and hypothecation of tractor. The Applicant further contends that despite availing the credit facility by obliging to pay back the amount in nine yearly installments of Rs.66,667/- each, the defendants failed in compliance of the same and all the efforts of the Applicant to make the defendants pay back the amount failed forcing the Applicant to file this Application as the account is classified as NPA on 29.7.2015. It is also stated that a legal notice was also issued on 22.1.2018.

4. Summons was taken out to the 2nd defendant returned unserved as “deceased” a memo was filed by the applicant to the effect that 1st defendant is the surviving legal representative of deceased 2nd defendant. Since there was no representation the 1st defendant was called absent and set exparte on 22.1.2020.

5. The Applicant let in evidence through AW1, filed proof affidavit conforming with pleading and got marked Exhibits A-1 to A-12.

6. Heard the Ld. Counsel for the Applicant and considered the contentions as taken in the OA in the light of documentary evidence and proof affidavit.

7. The following issues arise for consideration in this matter: -

(i) Whether the applicant had succeeded in proving the OA claim as against the defendants?

(ii) What orders are to be passed?

Both these issues are gone into and decided together.

8. The Applicant’s 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. Hence the Applicant is to be found entitled for the TA claim. The TA claim is made within limitation and there is no capitalization of penal interest.

9. Since the TA claim is arrived at calculating interest at the agreed rate and as the facility is for agricultural purpose pendente lite and future interest is awarded at reduced rate of 9% simple.

10. 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 and the defaults committed by the defendants, which the applicant is entitled to realize. Hence, TA is disposed off in the following manner: - (a) TA No.336 of 2023 stands allowed.

(b) Applicant is permitted to realize an aggregate sum of Rs.30,95,429/- (Rupees Thirty lakhs ninety five thousand four hundred twenty nine only) together with interest at the rate of 9% simple per annum from the defendants jointly and severally from the date of filing of the application till the date of realization in full along with costs of this application and for sale of the schedule properties and other assets of the defendants.

(c) If the sale proceeds are not found sufficient to cover the amount due and payable to the Applicant Bank, the defendants are personally liable for all such amounts due under the Loan Accounts.

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

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

11. 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 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