KARUR VYSYA BANK vs Aruldoss on 27 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. 1,23,56,989.77(Rupees One Crore Twenty Three Lakhs Fifty Six Thousand Nine Hundred Eighty Nine and Seventy Seven Paisa only) due in the credit facility of Ware House loan availed by the 1st defendant.

2. The above TA 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.86,23,000/- and Rs.37,60,000/- was availed by 1st defendant and the 2nd and 3rd defendant stood as guarantors for the credit facilities . It is also stated that the facility is secured by pledge of stocks held in Tamil Nadu Ware House Corporation.

4. It is further contended that, since the price of the commodity offered as security fallen below the purchase cost, the 1st defendant requested the applicant to grant further time and offered to provide additional security. It is also stated that in consequential to the same the defendants 4 to 6 and 8 offered to provide additional security and executed deed of personal guarantee for the facilities on 30.3.2017. Apart from the 7th defendant had executed personal guarantee and offered collateral security by mortgage of scheduled properties. It is also admitted that the mortgage is created by 7th defendant through his power agent, the 5th defendant.

5. The Applicant further contents that despite availing the credit facility by obliging to pay back the amount, the defendants failed in compliance of the same. It is also admitted that the 1st defendant liquidated the stocks and remitted a sum of Rs.26,29,760/- to the credit of the Ware Housing Loan on 9.3.2016 and a further sum of Rs.5,77,549.44. Apart from the above the defendants failed in making the full repayment and the efforts of the Applicant to make the defendants pay back the amount failed, forcing the Applicant to file this Application.

6. Defendant entered appearance and filed their reply statement, admitting the availment of the credit facilities. The defendant had disputed the NPA classification and also contended that the collaterals were procured by deception. The amount claimed as due is also disputed by the defendants.

7. The Applicant let in evidence through AW1, filed proof affidavit in conforming with pleading and got marked Ext A1 to A24. Despite granting sufficient opportunity no counter proof affidavit was filed by the defendants.

8. Heard, the following issues arise for consideration: -

(i) Whether the Applicant had proved the TA claim?

(ii) What orders are to be passed? Both these issues are decided together.

9. The Applicant evidence remains un-rebutted and hence proved. The documents produced by the Applicant are found to be admissible and are sufficient to prove TA claim. Even though there is nothing on evidence to fasten personal liability on the original guarantors after the creation of additional security of guarantees of 4 to 8 and mortgage by 7th defendant, the non denial of the liability in the reply statement tantamount to admission and in view of the above, this Tribunal is of the view that the defendants 2 and 3 are admitting the personal liability in lieu of the guarantee. 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.

10. Since the TA claim is arrived at by calculating interest at the agreed rate, which this Tribunal considers on the higher side, pendente lite and future interest is awarded at simple rate, that too at a lower rate. This is more so as the facility is connected with agricultural activity.

11. In view of the above, the following order is passed: - (a) TA No.511 of 2023 stands allowed.

(b) Applicant is permitted to recover an amount of Rs.14,75,947.27p (Rupees Fourteen Lakhs Seventy Five Thousand Nine Hundred Forty Seven and Twenty Seven Paisa only).with future and pendente lite interest @ 8% from the date of filing of the OA/TA till realization from the defendants jointly, severally and personally and also by proceedings against their assets, including the scheduled mortgaged property, after giving credit to all the amount recovered and received during the pendency of the OA/TA. I 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.

12. 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 the Open court, this the 27th day of March, 2024)

Sd/-

(T.RAJESH)

PRESIDING OFFICER

DRT-II, CHENNAI