CANARA BANK vs SAI SREEPRAKASH CAD SOLUTIONS PVT LTD 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. 51,69,181.18 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 hypotheca.

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 company with defendants 2nd and 3rd as Directors has availed following facilities from the applicant: SL No. Credit Facility Amount

1.

2. Term loan Working capital Rs. 29,96,000/- Rs. 10,00,000/-

4. 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. It is stated that the 2nd defendant and her mother Loganayaki had executed personal guarantee. It is also noted that after the death of Loganayaki, 3rd defendant was inducted as a Director after the death of her mother who was the former Direction and also executed personal guarantee with 2nd defendant.

5. Apart from execution of the necessary loan documents, hypothecation over the Machineries was marked as being the security for repayment of the loan. It is further stated that an adhoc cash credit facility of Rs.1,14,386/- was sanctioned to 1st defendant.

6. 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 same being declared as NPA on 01.10.2020.

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 had on 19.04.2021 caused to issue a legal 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 the defendants failed to enter appearance they were set exparte on 08.09.2022.

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 A19 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 OA 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 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 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. 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.412/2023 stands allowed. ii) Applicant is permitted to recover the total amount due of Rs.51,69,181.18 (Rupees Fifty One Lakhs Sixty Nine Thousands One hundred Eighty One and Eighteen only) with future and pendentelite interest @12.95% p.a. compounded monthly rests from the date of filing of the TA till realization from the defendants and also by sale of hypothecated machineries after giving credit to all the amount recovered and received during the pendency of the TA.

iii) A Recovery Certificate is to be drawn and issued to the recovery officer to enable recovery of the amount as per the above terms. iv) 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