CANARA BANK vs Ramachandran R on 22 September 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 defendant seeking issuance of a Recovery Certificate for an aggregate sum of Rs.23,27,197/- comprising a sum of Rs.3,99,204/- with further interest at the rate of 13.45% per annum with half yearly rests being the amount due under Minor Irrigation Loan Account; a sum of Rs.69,004/- with further interest at the rate of 12.45% per annum with hay yearly rests being the amount due under Vehicle Loan Account; a sum of Rs.2,65,951/- with further interest at the rate of 9% per annum with half yearly rests being the amount due under KCCS facility and a sum of Rs.15,93,038/- together with interest at the rate of 14.20% per annum with half yearly rests plus 2% penal interest from the date of filing of the OA

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 and Vehicle Loan availed by the defendant from the Applicant Bank.

3. It is the case of the applicant that the defendant approached the application for grant of Minor Irrigation Loan of Rs.1,42,000/- by submitting application dated 30.01.2004 for the purpose of deepening the existing well, purchase and laying of pies etc., and considering the said request the applicant sanctioned a loan of Rs.1,42,000/- vide sanction dated 12.02.2004. It is also stated that at the request of the defendant the applicant had also sanctioned a vehicle loan of Rs.35,000/- on 12.02.2004. It is further stated that the defendant and his mother Mrs. Sivagnanam deposited the title deeds of the properties more fully described in Schedule ‘A’ to the OA on 11.02.2004 with an intention to create equitable mortgage over the same in favour of the applicant and confirmed the same by letter dated 12.02.2004. It is further stated that the defendant had executed necessary loan and security documents to secure the above facilities on 12.02.2014.

4. It is also the case of the applicant that at the request of the defendant the applicant sanctioned KCCS Limit of Rs.1,00,000/- on 22.04.2005 and the defendant executed necessary loan documents on 22.04.2005.

5. It is the further case of the applicant at the request of the defendant and his mother for grant of Farm Machinery Loan for purchase of tractor, the applicant vide sanction dated 08.10.2007 sanctioned a sum of Rs.4,00,000/- and the defendant executed necessary loan documents on 08.10.2007.

6. It is also stated that the defendant hypothecated the vehicles in favour of the applicant and the defendant along with his mother had extended the mortgage created earlier to secure the other facilities also by executing Memorandum of Deposit of Title deeds dated 24.09.2007 registered as Doc. No.1178/2007 on the file of SRO, Sirupakkam.

7. 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 requests. However, the defendant executed acknowledgement of debt and security on various dates and lastly on 17.06.2017.

8. It is the case of the applicant that after availing the loan, the defendant was irregular in remitting the loan amount. The efforts of the applicant bank to make the defendant 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.

9. Summons taken out to the defendant is served. As there was no representation on behalf of the defendant and on 13.06.2018, the defendant is called absent and set ex-parte on that day. Applicant Bank filed Proof Affidavit along with 47 documents, which were marked as Ex. A-1 to A-47 on 06.06.2023. The Ld. Counsel for Applicant Bank made his submissions on 07.07.2023 and thereafter the matter stood till this date for passing final orders.

10. 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.

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

12. The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-47 along with the proof affidavit. The documents produced in evidence are all found admissible. The proof affidavit of the applicant bank remained unchallenged and unrebutted. 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 defendants. It is clear from the statement of accounts that penal interest is not capitalized.

13. 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.

14. In view of the fact that the loan facility availed by the defendant is an agricultural 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.

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.784 of 2022 stands allowed.

(b) Applicant is permitted to realize an aggregate sum of Rs.23,27,197/- from the defendant together with interest at the rate of 9% per annum (simple), from the date of filing of 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 defendant is personally liable for all such amounts due under the Loan Account.

(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.

16. 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 22nd day of September, 2023) Sd/- (T. RAJESH) PRESIDING OFFICER DRT-II, CHENNAI