DBS BANK LIMITED vs Ms Akbar Stores 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. 25,67,142.83 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 by sale of the schedule mentioned properties.

2. The above original application is fled 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 represented by 2nd defendant , its proprietor as the borrower and 3rd and 4th defendants being the guarantors had applied for and availed Lakshmi Business Credit for Rs. 20,00,000/- from the erstwhile Lakshmi Vilas Bank which later renewed by enhancing for Rs.25,00,000/-.

4. It is also stated that the above facilities were availed after execution of necessary loan documents by defendants obliging 1st defendants to repay the amount promptly and regularly, without fail.

5. 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. Over and above the execution of the necessary loan documents, hypothecation over the assets book debts, equipments, machinery and fixture were marked as being the security for repayment of the loan

6. Even though the defendants had obliged to repay the amount promptly and regularly, they failed to do so resulting defaults in repayment of loans and the same being originally declared as NPA on 29.08.2019.

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 request, the applicant 18.10.2019 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 amount due in the account with further interest and cost.

9. Even as the defendants failed to enter appearance, they were set exparte on 01.07.2022.

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 A43 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 against the defendants? 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 as defendants remain exparte. The evidence tendered by the applicant remains uncontroverted and undisputed. The evidences put forth by the applicant were found admissible. From the statement of 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 schedule mentioned property). The claim of the applicant is well within the period of limitation and there is no Capitalization of penal interest. Since the interest as sought for is awarded and the interest claimed is on the higher side, prayer for penal interest is declined.

13. In view of the finding as entered above i) TA No.224/2023 stands allowed. ii) Applicant is permitted to recover an amount of Rs. 25,67,142.83/- (Rupees Twenty Five Lakhs Sixty Seven Thousands One Hundred and Forty Two and Paise Eighty Three only) with future and pendentelite interest @ 13.50 % 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 mentioned 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 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.

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