Canara Bank vs K. Ganesan on 27 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 defendants seeking issuance of a Recovery Certificate for recovery of a sum of Rs.13,24,399/- together with interest at the rate of 14.20% per annum with monthly rests from the date of filing of the OA till the date of realisation along with costs of the application and for sale of schedule mentioned 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 at the request of the defendants 1 and 2 vide Loan Application dated 28.02.2006, the applicant vide sanction dated 28.02.2006 sanctioned Agricultural Term Loan of Rs.4,40,000/- and to secure the said facility the defendants 1 and 2 executed various loan documents on 28.02.2006.

4. The defendants deposited the title deeds of the documents more fully described in Schedule „B‟ & “C” to the OA on 24.02.2006 with an intention to create equitable mortgage over the same and confirmed the same by executing letter evidencing deposit of title deeds dated 27.02.2006. It is stated that the repayment of the instalments towards the loans by the defendants were very irregular and inspite of several requests the defendants failed to regularize the account. It is also stated that the 1st defendant failed to deposit the certificate of registration of tractor with the applicant bank and is still in the custody of 1st defendant.

5. It is also stated that the 1st and 2nd defendants jointly executed an acknowledgement of debt cum security letters dated 19.09.2008, 26.08.2011 and 24.06.2014, wherein they acknowledged the liabilities.

6. It is the case of the applicant that the defendants committed default in repayments and failed to regularize the loan accounts despite repeated request and hence the loan account was classified as NPA on 08.02.2016.

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 were served. As there was no representation on behalf of the defendant on 15.05.2019, the defendant was called absent and set ex-parte on that day. Applicant Bank filed Proof Affidavit along with 11 documents, which were marked as Ex. A-1 to A-11 on 23.06.2023. The Ld. Counsel for Applicant Bank made his submissions on 20.07.2023 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-11 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 defendants 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 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.394 of 2023 stands allowed.

(b) Applicant is permitted to realize a sum of Rs.13,24,399/- together with interest at the rate of 8% per annum (simple) from the defendants jointly and severally, 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 mentioned property and other assets of the defendants.

(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.

(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.

17. 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 27th day of September, 2023) Sd/- (T. RAJESH) PRESIDING OFFICER DRT-II, CHENNAI