STATE BANK OF INDIA vs Pratheep Kumar on 31 July 2023

FINAL ORDER

1. This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 against the defendantseeking issuance of a Recovery Certificate forrecovery of an aggregate sum of Rs.52,59,537/- comprising of a sum of Rs.44,53,187/- together with interest at the rate of 8.40% per annum with monthly rests being the amount due under Housing Loan, a sum of Rs.2,78,344/- together with interest at the rate of 8.40% per annum with monthly rests being the amount due under Housing Loan and a sum of Rs.2,79,016/- and Rs.2,48,990/- together with interest at the rate of

8.40% per annum with monthly rests being the amount due under SBI Suraksha Loan fromthe date of filing of this application till the date of realisation along with costs of the application and for sale of schedule properties.

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

3. It is the case of the applicant that the defendant approached the applicant bank by Loan Application dated 23.09.2016 for grant of housing loan for purchase of the schedule mentioned property and considering the said request the applicant vide sanction letter dated 27.9.2016 sanctioned “Housing Loan” of Rs.39,61,000/- subject to the terms and conditions envisaged in the Arrangement Letter date 30.09.2016. It is also the case of the applicant that the defendants executed the loan documents on 30.09.2016 viz., Memorandum of Loan Agreement for Home Loan granted to Public and Agreement to Mortgage. It is the further case of the applicant that the defendants deposited the title deeds of the property more fully described in the schedule „A‟ to the OA with the applicant bank with an intention to create equitable mortgage over the same and confirmed the same by executing confirmation letter dated 24.10.2016.

4. It is also the case of the applicant that the defendant by loan application 30.09.2016 approached the applicant for grant of Home Loan and considering the said request the applicant sanctioned a sum of Rs.35,39,000/- vide its sanction dated 30.09.2016 and the defendants executed the documents on 30.09.2016 viz., Arrangement Letter, Memorandum of Loan Agreement for

Home Loan granted to public, Agreement to mortgage and confirmation letter regarding deposit of title deeds and creation of equitable mortgage over the same. It is stated that the defendant executed Memorandum of Deposit of Title deeds dated 25.10.2016 registered as Doc No.5342/2016 on the file of SRO, Padappai with regard to Schedule „B‟ mentioned property in the OA.

5. It is the further case of the applicant that at the request of the defendant the applicant also sanctioned additional loan (SBI Suraksha Loan) of Rs.3,42,230/- to the defendant on 30.09.2016 and the defendant executed necessary documents on the same day to secure the said credit facility.

6. It is also the case of the applicant that the defendant violated the terms and conditions of sanction and committed default in repayments and failed to regularize the loan accounts despite repeated request and hence the loan account was classified as NPA on in accordance with the guidelines of the Reserve Bank of India and the applicant issued the demand notice under Section 13(2) of the SAFAESI Act on 04.04.2019. It is stated that despite repeated requests the defendants did not come forward to clear the outstanding dues.

7. It is the case of the applicant that after availing the loan, the defendants were irregular in remitting the loan amount. The efforts of the applicant bank to make the defendants to settle the loan did not yield any result, and hence the applicant approached this Tribunal seeking issuance of a Recovery Certificate allowing recovery of the amount due in the account.

8. Summons were taken out to the defendant and the same returned unserved and hence the defendant was served with notice by way of substituted service by causing paper publication. As there was no representation on behalf of the defendant continuously and on 17.12.2021 the defendant was called absent and set ex-parte on that day. Applicant Bank filed Proof Affidavit along with 28 documents, which were marked as Ex. A-1 to A-28 on 24.03.2023, however Exhibits A-8, A-9 A-17 to A-19 were marked subject to proof and relevancy. The Ld. Counsel for Applicant Bank made his submissions on 03.05.2023 and thereafter the matter stood till this date for passing final orders.

9. The following issues arise for consideration in the matter: - (a) Whether the applicant had succeeded in proving the liability of the defendant?

(b) What order as to cost of the proceedings need be passed?

These issues are considered together.

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

11. The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-28 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 defendant. 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 defendant. It is clear from the statement of accounts that penal interest is not capitalized.

12. 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.

13. It is stated by the applicant bank in the proof affidavit that subsequent to amicable settlement arrived at between the applicant and the defendants, the Housing Loan Account of Rs.2,78,344/- and the attending SBI Suraksha Loan of Rs.2,79,016/- was settled for a sum of Rs.5,29,274/- and the same was remitted by the defendant on 12.11.2021 and pursuant to the same the applicant has released the documents pertaining to the property i.e., Flat No.B-S3, „B‟ Block, Plot No. A, B and C, Mudichur Road, Mudichur, Chennai – 600 048 to the defendant. It also stated that the property Flat No.A-S1, „A‟ Block, Plot Nos. A, B and C, Mudichur Road, Mudichur, Chennai – 600 048 was sold under SARFAESI Act and a sum of Rs.27,30,000/-.

14. In view of the fact that the loan facility availed by the defendant is a housing loan and the applicant has claimed interest at contractual rate till the date of filing of the OA, this Tribunal is of the view that the pendente lite and future interest can be awarded at reduced rates.

15. 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, OA is disposed off in the following manner: -

(a) TA No.534 of 2022 stands allowed.

(b) Applicant is permitted to realize an aggregate sum of Rs.52,59,537/- from the defendant together with interest at the rate of 8% per annum (simple), from the date of filing of the OA till date of realization after deducting all the amounts received by them during the pendency of OA, and also by selling the schedule properties and other assets of the defendant

(c) It is made clear that the amount of 5,29,274/- remitted by the defendant and a sum of Rs.27,30,000/- realized by the applicant by sale of one of the schedule mentioned property be given credit to the loan account on their respective dates.

(d) 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 as ordered above.

(e) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 7 days from the date of receipt of the copy of the order.

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

15. 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 31st day of July, 2023) Sd/- (T. RAJESH) PRESIDING OFFICER DRT-II, CHENNAI