Bank of Baroda vs Mrs. G. Manjula 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.74,25,707/- comprising of a sum of Rs.24,30,335/- together with interest at the rate of 12.20% per annum with half yearly rests being the amount due under Vijaya Kisan Card Loan Account and a sum of Rs.49,95,372/- together with interest at the rate of 12.20% per annum with half yearly rests being the amount due under Agricultural Term Loan Account 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.

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

3. It is the case of the applicant that the 1st defendant approached the erstwhile Vijaya Bank by submitting Loan Application dated Nil received by the applicant on 2.4.2012 seeking to grant credit facility of Rs.8,50,000/- under Kisan Credit Card Loan and the erstwhile Vijaya Bank vide its sanction letter dated 11.4.2012 sanctioned Kosan Credit Loan limit of Rs.8,50,000/- to the 1st defendant. It is stated that the 1st defendant executed various loan documents on 12.4.2012 viz., Demand Promissory Note for Rs.8,50,000/-, Letter of repayment, Loan Agreement cum Hypothecation deed and Memorandum of Agreement for Agricultural Loans. It is also stated that the 2nd defendant executed letter of guarantee on 12.04.2013 thereby guaranteeing due repayment of the credit facility availed by 1st defendant. It is stated that the defendants failed to operate the loan account in terms of sanction and committed default and therefore the applicant several reminders including the reminder dated 14.12.2017, but in vain and hence the loan account was classified as NPA on 12.8.2014. It is stated that the defendants executed acknowledgement of liability dated 30.4.2014 and 14.11.2016 thereby acknowledging their liability under the above loan account.

4. It is also the case of the applicant that at the request of the 1st defendant the erstwhile Vijaya Bank vide sanction letter dated 11.4.2012 sanctioned Agriculture Term Loan of Rs.19,50,000/- to the 1st defendant and the 1st defendant executed various loan and security documents on 12.04.2012 viz., Demand Promissory Note for Rs.19,50,000/-, Letter of Repayment, Loan Agreement cum Hypothecation Agreement, Memorandum of Agreement for Agricultural Loans. It is stated that the 2nd defendant executed letter of guarantee on 12.4.2012 thereby guaranteeing due repayment of the said credit facility.

5. It is the further case of the applicant that the 2nd defendant deposited the title deeds of the property more fully described in Schedule ‘A’ to the OA with the erstwhile Vijaya Bank with an intention to create equitable mortgage over the same and confirmed the same by executing Memorandum of Deposit of Title deeds dated 29.3.2012 confirming security for the loans availed by defendants 1 and 2 and one Mr. Sekar, Mrs. Senthamarai and Mrs. Revathi. It is stated that the 2nd defendant had deposited the title deeds concealing the prior sale deed executed by her for disposing of the Schedule ‘A’ property om favour of third parties. It is also stated that the said fact came to the knowledge of the applicant only on receipt of a complaint dated 29.4.2015 from the purchasers of the property from the 2nd defendant and subsequently the applicant had filed a police complaint on 03.07.2015.

6. It is the case of the applicant that the 3rd defendant deposited the title deeds of the property more fully described in Schedule ‘B’ to the OA with an intention to create equitable mortgage over the same and confirmed the same by executing Memorandum of deposit dated 15.4.2014 duly confirming the said deposit of title deeds as a security for the loans sanctioned by the applicant to the defendants 1 to 3 and one Mr. Raghuraman, N. Govindarajan, Rajesh, Mrs. Priyanka, Mrs. Sathya, Naveen Kumar, Sekar, Mrs. Udhayakumari, Mrs. Revathi and Mrs. Senthamarai. It is stated that the applicant is reserving its rights to file separate applications for the recovery of the dues in the loans availed by Mr. Raghuraman, N. Govindarajan, Mrs. Akilandeswari, Mr. Rajesh, Mrs. Jeevitha, Mrs. Priyanka, Mrs. Sathya, Mrs. Udhayakumar, Mrs. Jeevitha, Mr. Naveen Kumar, Mr. Sekar, Mrs. Reavathi and Mrs. Senthamarai.

7. It is stated that the defendants failed to operate the loan account in terms of sanction and committed default and therefore the applicant several reminders including the reminder dated 15.12.2017, but in vain and hence the loan account was classified as NPA on 12.8.2014. It is stated that the defendants executed acknowledgement of liability dated 30.4.2014 and 14.11.2016 thereby acknowledging their liability under the above loan account.

8. It is also stated that the applicant craves leave of this Tribunal for appropriation of sale proceeds of the Schedule ‘B’ property towards the dues of Mr. Raghuraman, N. Govindarajan, Mrs. Akilandeswari, Mr. Rajesh, Mrs. Priyanka, Mrs. Sathya, Mrs. Jeevitha, Mr. Naveen Kumar, Mr. Sekar, Mrs. Udhakumari, Mrs. Revathi and Mrs. Senthamarai.

9. 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. It is stated that despite repeated requests the defendants did not come forward to clear the outstanding dues.

10. 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.

11. Summons were taken out to the defendants and the same were served. As there was no representation on behalf of the defendant continuously and on 05.07.2022 the defendants were called absent and set ex-parte on that day. Applicant Bank filed Proof Affidavit along with 25 documents, which were marked as Ex. A-1 to A-25 on 25.04.2023, however Exhibits A-20 and A-21 were marked subject to proof and relevancy. The Ld. Counsel for Applicant Bank made his submissions on 05.06.2023 and thereafter the matter stood till this date for passing final orders.

12. 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.

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

14. The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-25 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 defendant. It is clear from the statement of accounts that penal interest is not capitalized.

15. 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.

16. 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 interest can be awarded at reduced rates.

17. 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.87 of 2022 stands allowed.

(b) Applicant is permitted to realize an aggregate sum of Rs.74,25,707/- from the defendants jointly and severally 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) 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