Indian Overseas Bank vs M/s.K.P.K. Blue Metals, 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.23,73,557/- 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 hypothecated machines also by proceedings against their assets.

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 2nd defendant as the proprietor the 1st defendant, a proprietary concern had approached the applicant requesting for a Term Loan for Rs.25,00,000/- for the purchase of Jaw Crusher Machine and the same was sanctioned and disbursed. It is also stated that another Term Loan for Rs.15,00,000/- was also availed for the purchase of Generator Set.

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. Apart from execution of the necessary loan documents, hypothecation over the Jaw Crasher

Machine and Generator Set was created as being the security for repayment of the loans.

5. 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 23.06.2017.

6. 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 22.02.2018 caused to issue a demand notice requiring repayment of the amount due in the accounts.

7. 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.

8. Even as the defendants failed to enter appearance, they were set exparte on 02.01.2020.

9. 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 A21 and got the same marked as evidence.

10. 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.

11. 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 (including the schedule mentioned machines). The claim of the applicant is well within the period of limitation and there is no Capitalization of penal interest.

12. In view of the finding as entered above i) TA No.563 of 2023 stands allowed. ii) Applicant is permitted to recover an amount of Rs.23,73,557/- (Rupees Twenty Three Lakhs Seventy Three Thousand Five Hundred Fifty Seven only) with future and pendentelite interest @10.95% p.a. with monthly rest on 14,36,859/- and at 11.20% p.a. with monthly rest on 9,36,698/-, both with overdue interest @ 2% from the defendants after giving credit to all the amounts recovered and received during the pendency of the TA and also by proceedings against their assets, including hypothecated machines. 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.

13. 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