DBS Bank India Ltd., vs Mr. C. Senthil on 29 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 an aggregate sum of Rs.1,56,56,437/- 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 in the following manner: - (a) A sum of Rs.30,83,466.50p together with interest at the rate of 12.25% per annum with monthly rests being the amount due under Loan Account No.357.729.1175 from defendants 1 and 4; (b) A sum of Rs.26,80,642.50p together with interest at the rate of 12.25% per annum with monthly rests being the amount due under Loan Account No.357.729.1365 from defendants 1 and 2;

(c) A sum of Rs.2,38,400.50p together with interest at the rate of 12.25% per annum with monthly rests being the amount due under Loan Account No.357.729.1376 from defendants 1 and 2; (d) A sum of Rs.16,38,237.50p together with interest at the rate of 11.85% per annum with monthly rests being the amount due under Loan Account No.357.729.1541 from defendants 1 and 2; (e) A sum of Rs.15,83,520.50p together with interest at the rate of 11.85% per annum with monthly rests being the amount due under Loan Account No.357.729.1552 from defendants 1 and 2;

(f) A sum of Rs.6,39,863.50p together with interest at the rate of 11.85% per annum with monthly rests being the amount due under Loan Account No.357.728.2008 from defendants 1 and 2; (g) A sum of Rs.14,33,423.50p together with interest at the rate of 11.85% per annum with monthly rests being the amount due under Loan Account No.357.728.2012 from defendants 1 and 2; (h) A sum of Rs.19,48,733/- together with interest at the rate of 11.85% per annum with monthly rests being the amount due under Loan Account No.357.728.1855 from defendants 2 and 3;

(i) A sum of Rs.8,68,604 together with interest at the rate of 11.85% per annum with monthly rests being the amount due under Loan Account No.357.728.1870 from defendants 2 and 5; (j) A sum of Rs.15,41,545.50p together with interest at the rate of 11.85% per annum with monthly rests being the amount due under Loan Account No.357.728.2026 from defendants 1 and 3;

2. The subject matter of the case is the various credit facilities availed by the defendants from the applicant bank.

3. 13.01.2017. It is stated that the 4th defendant executed guarantee agreement with interest and the balance outstanding on date of filing is Rs.30,83,466.50p.

4. with interest and the balance outstanding on date of filing is Rs.26,80,642.50p.

5. with interest and the balance outstanding on date of filing is Rs.2,38,400.50p.

6. with interest and the balance outstanding on date of filing is Rs.16,38,237.50p.

7. with interest and the balance outstanding on date of filing is Rs.15,83,520.50p.

8. defendants 1 and 2 defaulted in repayments and hence the applicant issued recall notice dated 11.06.2018. Further, the applicant brought the pledged goods for sale on 11.6.2018 and realized a sum of Rs.4,54,725/- and adjusted the same to A/c No.357.728.2008 of the 2nd defendant. It is stated that as the 2nd defendant did not come forward to clear the outstanding dues, the applicant issued auction shortfall notice dated 16.07.2018 demanding the defendants to remit the balance amount together with interest and the balance outstanding on date of filing is Rs.6,39,863.50p.

9. defendants 1 and 2 defaulted in repayments and hence the applicant issued recall notice dated 29.05.2018. Further, the applicant brought the pledged goods for sale on 11.6.2018 and realized a sum of Rs.9,90,000/- and adjusted the same to A/c No.357.728.2012 of the defendant. It is stated that as the 2nd defendant did not come forward to clear the outstanding dues, the applicant issued auction shortfall notice dated 16.07.2018 demanding the defendants to remit the balance amount together with interest and the balance outstanding on date of filing is Rs.14,33,423.50p.

10. It is the case of the applicant that the 4th defendant approached the applicant vide sanction dated 14.03.2017 sanctioned a sum of Rs.28 lakhs and the 4th defendant executed necessary loan documents on 14.03.2017. It is stated that the 2nd defendant executed guarantee agreement dated 14.03.2017. The and adjusted the same to A/c No.357.729.1855 of the 1st defendant. It is stated that as the 1st defendant did not come forward to clear the outstanding and the balance outstanding on date of filing is Rs.19,48,733/-.

11. that the 5th defendant executed guarantee agreement dated 21.03.2017. The and adjusted the same to A/c No.357.729.1870 of the defendant. It is stated that as the defendants 2 and 5 did not come forward to clear the outstanding and the balance outstanding on date of filing is Rs.8,68,604/-.

12. It is the case of the applicant that the 3rd defendant approached the applicant vide sanction dated 21.02.2017 sanctioned a sum of Rs.21 lakhs and the 3rd and adjusted the same to A/c No.357.728.2026 of the defendant. It is stated that as the defendants 1 and 3 did not come forward to clear the outstanding and the balance outstanding on date of filing is Rs.15,41,545.50p.

13. It is also the case of the applicant that the paddy given as a security towards the repayments was stored in different warehouses situated at Kallakurichi. However, after default when the bank’s staff went to the above godowns they found most of the paddy bags were missing and hence the branch manager filed a complaint against defendants 1 to 3 before the Superintendent of Police, Villupuram on 02.03.2019 and the same is pending.

14. 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.

15. 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.

16. Summons were taken out to the defendants and the same were served. As there was no representation on behalf of the defendants on 21.10.2019 and hence were called absent and set ex-parte on that day. Applicant Bank filed Proof Affidavit along with 92 documents, which were marked as Ex. A-1 to A- 92 on 22.01.2020. As there was no representation on behalf of the applicant continuously and lastly on 21.08.2023, it was taken up as heard. Thereafter the matter stood till this date for passing final orders.

17. 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.

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

19. The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-92 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.

20. 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.

21. In view of the fact that the loan facility availed by the defendants is a Warehouse 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.

22. 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.753 of 2023 stands allowed.

(b) Applicant is permitted to realize a sum of Rs.1,56,56,437/- 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 properties and other assets of the defendants in the following manner: -

(i) A sum of Rs.30,83,466.50p together with interest at the rate of 8% per annum simple being the amount due under Loan Account No.357.729.1175 from defendants 1 and 4;

(ii) A sum of Rs.26,80,642.50p together with interest at the rate of 8% per annum simple being the amount due under Loan Account No.357.729.1365 from defendants 1 and 2;

(iii) A sum of Rs.2,38,400.50p together with interest at the rate of 8% per annum simple being the amount due under Loan Account No.357.729.1376 from defendants 1 and 2;

(iv) A sum of Rs.16,38,237.50p together with interest at the rate of 8% per annum simple being the amount due under Loan Account No.357.729.1541 from defendants 1 and 2;

(v) A sum of Rs.15,83,520.50p together with interest at the rate of 8% per annum simple being the amount due under Loan Account No.357.729.1552 from defendants 1 and 2;

(vi) A sum of Rs.6,39,863.50p together with interest at the rate of 8% per annum simple being the amount due under Loan Account No.357.728.2008 from defendants 1 and 2;

(vii) A sum of Rs.14,33,423.50p together with interest at the rate of 8% per annum simple being the amount due under Loan Account No.357.728.2012 from defendants 1 and 2;

(viii) A sum of Rs.19,48,733/- together with interest at the rate of 8% per annum simple being the amount due under Loan Account No.357.728.1855 from defendants 2 and 3;

(ix) A sum of Rs.8,68,604 together with interest at the rate of 8% per annum simple being the amount due under Loan Account No.357.728.1870 from defendants 2 and 5;

(x) A sum of Rs.15,41,545.50p together with interest at the rate of 8% per annum simple being the amount due under Loan Account No.357.728.2026 from defendants 1 and 3;

(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.

23. 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 29th day of September, 2023)

(T. RAJESH) PRESIDING OFFICER DRT-II, CHENNAI