STATE BANK OF INDIA vs Saraswathy and Another 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 defendants’seeking issuance of a Recovery Certificate for recovery of an aggregate sum of Rs.36,08,003.34p comprising of following sums from the date of filing of this application till the date of realisation along with costs of the application and for sale of schedule properties: -

(i) A sum of Rs.24,86,111.90p together with interest at the rate of 9.20% per annum with monthly rests from 1st defendant being the amount due under home loan account;

(ii) A sum of Rs.9,07,429.44p together with interest at the rate of 9.20% per annum with monthly rests from defendants being the amount due under Home Equity Loan; and

(iii) A sum of Rs.2,14,462/- together with interest at the rate of 8.55% per annum with monthly rests from defendants being the amount due under SBI Suraksha Loan Account.

2. The subject matter of the case are various credit facilities availed by the defendants from the Applicant Bank.

3. It is the case of the applicant that the defendants approached the applicant bank by Loan Application dated 18.11.2013 for grant of housing loan for purchase of the schedule mentioned property and considering the said request the applicant sanctioned “Housing Loan” of Rs.25,00,000/- subject to the terms and conditions envisaged in the Loan Agreement dated 24.12.2013. It is also the case of the applicant that the defendants executed the loan documents on 24.12.2013 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 to the OA with the applicant bank with an intention to create equitable mortgage over the same and confirmed the same by executing Memorandum of Deposit of Title deeds dated 28.11.2014 registered as Doc. No.5889/2014 on the file of SRO, Konnur.

4. It is also the case of the applicant that the defendants by loan application 19.01.2015 approached the applicant for grant of Home Equity Facility and considering the said request the applicant sanctioned a sum of Rs.9,00,000/- vide its sanction dated 16.2.2015 and the defendants executed the Arrangement Letter and confirmation letter on 16.2.2015. It is stated that the defendants extended mortgage created earlier to secure this facility also by executing Memorandum of Deposit of Title deeds dated 17.02.2015 registered as Doc No.708/2015 on the file of SRO, Konnur.

5. It is the further case of the applicant that at the request of the defendants the applicant also sanctioned SBI Suraksha Loan of Rs.1,85,075/- to the defendants on 10.11.2014 and the defendants executed necessary documents on the same day to secure the said credit facility.

6. It is also the case of the applicant that the defendants 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 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 15.02.2017. 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 defendants and the same returned with endorsement “Insufficient Address / Left” and hence were served by way of substituted service causing paper publication. As there was no representation on behalf of the defendants continuously and on 28.08.2019, the defendants were called absent and set ex-parte on that day. Applicant Bank filed Proof Affidavit along with 18 documents, which were marked as Ex. A-1 to A-18 on 01.06.2022. The Ld. Counsel for Applicant Bank made his submissions on 05.09.2022 before DRT-I Chennai and on 15.6.2023 before this Tribunal subsequent to transfer 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 defendants?

(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-18 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 defendants. 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 defendants. 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. 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.

14. 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.317 of 2023 stands allowed.

(b) Applicant is permitted to realize an aggregate sum of Rs.36,08,003.34p in the following manner, 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 defendants: -

(i) A sum of Rs.24,86,111.90p from the defendants 1st defendant together with interest at the rate of 8% per annum (simple).

(ii) A sum of Rs.9,07,429.44p from the defendants jointly and severally together with interest at the rate of 8% per annum (simple).

(iii) A sum of Rs.2,14,462/- from the defendants jointly and severally together with interest at the rate of 8% per annum (simple)

(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 as ordered above.

(d) 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.

(e) 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