CITY UNION BANK LIMITED vs SRI VENAKTESHWARA TRADERS on 29 December 2023

ORDER

1. The above Transfer Application is filed Under Section 19 of the Recovery of Debt and Bankruptcy Act seeking recovery of Rs.1,70,83,882/- with further interest from the date of filing of the TA and by allowing the same to be recovered from the defendants jointly and severally and also by sale of schedule mentioned properties.

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

3. The case of the Applicant can be encapsulated as follows:

4. The 1st defendant a proprietary concern represented by its proprietor, 2nd defendant and 3rd defendant is the wife of 2nd defendant had applied for and availed a Secured Overdraft and Term Loan for Rs. 80,00,000/- and 55,00,000/- respectively.

5. It is also stated that the above facilities were availed after execution of necessary loan documents by defendants obliging themselves to repay the amount promptly and regularly, without fail.

6. Apart from execution of the necessary loan documents, the 2nd and 3rd defendants had created security by way of equitable mortgage over the schedule mentioned properties.

7. Even though the defendants had obliged themselves to repay the amount promptly and regularly, they failed to do so resulting defaults in the account and the OD and Term loan being declared as NPA on 30.11.2020, however due to Covid-19 moratorium, the same was declared only on 31.03.2021.

8. 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 05.05.2021 and 28.04.2021 caused to issue a demand notice requiring repayment of the amounts due in the accounts.

9. 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 amount due in the account with further interest and cost.

10. Even though the defendants entered appearance, they failed to file reply statement and subsequently failed to appear, resulting them set exparte on 13.03.2023.

11. 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 A26 and got the same marked as evidences.

12. 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.

13. The case put forth by the applicant in the Application remains unrebutted. The evidence tendered by the applicant remains uncontroverted and undisputed. 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 stated in the TA is outstanding in the account, which the applicant is entitled to get recovered from the defendants and their assets. The claim of the applicant is well within the period of limitation and there is no Capitalization of penal interest.

14. In view of the finding as entered above.

i) TA No.281 of 2022 stands allowed.

ii) Applicant is permitted to recover the total amount of Rs.1,70,83,882/- (Rupees One Crore Seventy Lakhs Eighty Three Thousands Eight Hundred and Eighty Two only) with future and pendentelite interest @12.25% p.a. with monthly rests from the date of filing of the TA till realization from the defendants after giving credit to all the amount recovered and received during the pendency of the TA.

iii) The schedule property 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 amount 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.

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 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