Bank of Baroda vs M/s. Ambur Shoes on 29 December 2023

ORDER

1. The above Transfer Application is filed under section 19 of the Recovery of Debts and Bankruptcy Act seeking recovery of Rs.12,51,13,220.25 with further interest from the date of filing of the TA and also allowing the same to be recovered from the defendants jointly and severally and also by sale of the schedule mentioned properties.

2. The above original application is filed before the DRT-I and stood transferred to this Tribunal and renumbered as above.

3. The case of the applicant can be encapsulated as follows: The 1st defendant firm represented by 2nd and 3rd defendants had availed various credit facilities from the erstwhile Vijaya Bank and in lieu of the same had executed various loan documents. It is the case of the applicant that the defendants had availed the packing credit limit of Rs.75 lakhs which was enhanced to Rs.200 Lakhs and further to Rs. 350 Lakhs. The said facility was enhanced several times though lastly it was enhanced to Rs.1000 Lakhs with a sub limit of FDBP/FUDBP with a limit of Rs.300 Lakhs.

4. It is also stated that the above facilities were availed after execution of necessary loan documents by the defendants, obliging themselves to repay the amount promptly and regularly, without fail. However the defendants failed to comply with the terms. The packing credit limit of 9.38 crores was closed out of the term loan of Rs.8 crores which was sanctioned by the applicant and the overdue amounts is converted into a Funded Interest Term Loan for a period of 36 months.

5. Apart from execution of the necessary loan documents by the defendants, the 2nd defendant had created security by way of equitable mortgage over the schedule mentioned properties. Over and above the same, hypothecation over the stocks and book debts were marked as being the security for repayment of the loan. The securities as created above were extended to the modified credit limits availed by the defendants.

6. Even though the defendants had obliged themselves to repay the amount promptly and regularly, they failed to do so resulting in defaults in the account and the same being declared as NPA on 08.12.2017.

7. The applicant’s officials had on many occasions approached the defendants requesting them to regularize the account and despite the same, no effort was made by the defendants to get the account regularized over to pay back the amount. Even as no repayment was made despite repeated requests, the applicant had on 05.03.2018 caused to issue a demand notice requiring repayment of the amount due in the account.

8. It is also the case of the applicant that despite repeated reminders and requests, the defendants had failed to make the repayment forcing the applicant to file this TA seeking recovery of the amounts due in the account with further interest and cost.

9. Even though the defendants had filed vakalat no written statement filed and hence the Tribunal is forced to proceed exparte. Since erstwhile Vijaya Bank got amalgamated with Bank of Baroda, the latter was substituted in place of erstwhile Vijaya Bank in the TA.

10. The applicant had let in evidence through AW1 who had sworn to a Proof Affidavit in terms of the pleadings in the TA and also produced Exhibits A1 to A90 and got the same marked as evidence.

11. Heard the counsel for the applicant and considered the contentions as taken in the TA in the light of documentary evidence and proof affidavit. The following issues arise for consideration in this matter:

i) Whether the applicant had succeeded in proving the TA claim? ii) What orders are to be passed? Both these issues are gone into and decided together.

12. The case put forth by the applicant in the Application remains unrebutted. The evidence tendered by the applicant remains uncontroverted and undisputed, as no contra evidence is available from the side of the defendants. The evidences put forth by the applicant were found admissible. From the statement of accounts as produced by the applicant, it is evident that the amount as claimed in the TA is outstanding in the account, which the applicant is entitled to get recovered from the defendants and their assets (including the scheduled mentioned properties). The claim of the applicant is well within the period of limitation and there is no Capitalization of penal interest.

13. In view of the finding as entered above : i) TA No.82 of 2023 stands allowed. ii) Applicant is permitted to recover an amount of Rs. 12,51,13,220.25 (Rupees Twelve Crores Fifty One Lakhs

Thirteen Thousands Two Hundred Twenty and Twenty Five paisa only) with future and pendentelite interest @15.05% p.a. on 12,10,29,511.50 and @18.50% p.a. on 40,83,708.75, both with monthly rests from the date of filing of the TA till realization from the defendants and sale by hypothecated assets after giving credit to all the amounts recovered and received during the pendency of the TA including the amounts received from sale of schedule ‘C’ mentioned property. iii) The schedule ‘B’ properties to be proceeded against and sold and if the sale proceeds are not sufficient, the defendants and their other assets are liable to be proceeded against. iv) A Recovery Certificate is to be drawn and issued to the recovery officer to enable recovery of the amounts as per the above terms. v) Applicant is allowed to realize cost of the proceedings for which cost memo is to be filed in 7 days’ time from the date of receipt of the copy of the order.

14. 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 PA, transcribed by him, corrected, signed and pronounced by me in the Open Court, this 29th day of December, 2023)

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