CANARA BANK vs MR.M. Sathrack on 29 December 2023

FINAL ORDER

1. This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 against the defendant for recovery of an aggregate sum of Rs.33,94,881.95p comprising a sum of Rs.27,03,014.30p together with interest at the rate of 13% per annum with monthly rests being the amount due under Loan Account No.6021-791-0001526 and a sum of Rs.6,91,867.65p together with interest at the rate of 12% per annum with monthly rests from the date of filing of the application till the date of realization in full along with costs of this application and for schedule of properties..

2. The above Original Application is filed before DRT-I Chennai and stood transferred to this Tribunal and renumbered as above.

3. The case of the applicant can be encapsulated as follows: - The defendant carrying on business in the name and style M/s Sara Travels approached the erstwhile Syndicate Bank with loan application dated 10.06.2015 for grant of loan of Rs.45,00,000/- for purchase of 10 Tata Indica Vista cars for its business and considering the said request the applicant vide sanction dated 18.06.2015 sanctioned a Term Loan of Rs.45,00,000/- to the defendant repayable in 58 equated monthly installments of Rs.1,02,718/- per month commencing from 31.8.2015 to 31.05.2020. It is stated that the defendant purchase 10 cars viz., TN-22 DA 2187, TN-22 DA-2193, TN-22 DA-2266, TN-22 DA-2281, TN-22 DA-2244, TN-22 DA-2169, TN-22 DA-2140, TN-22 DA-2163, TN-22 DA-2227 and TN-22 DA-2125 and hypothecated them in favour of the applicant. It is stated that again at the request of the defendant on 12.1.2016 the applicant sanctioned another loan of Rs.6,50,000/- to the defendants repayable in 48 equated monthly installments of Rs.18,200/- per month from 31.1.2017 and ending by 31.12.2020. The defendant executed necessary loan and security documents on 31.1.2017. As the defendant failed and neglected to regularize the loan account the applicant issued legal notice on 30.11.2017 and seized 8 of the hypothecated vehicles and sold them in public auction on 26.9.2018 and the credited the sale proceeds to the loan account.

4. It is further stated that even though the defendant had obliged to repay the amount promptly and regularly, but failed to do so resulting in default in repayment and hence the account was classified as NPA.

5. It is contended by the applicant that 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 defendant to get the account regularized or to pay back the amount

6. It is also the case of the applicant that despite repeated reminders and requests the defendant failed to make the repayment forcing the applicant to file this OA seeking recovery of the amount due in the account with further interest and costs.

7. It is the further case of the applicant that the defendant remained absent and hence set ex-parte on 10.02.2020.

8. The applicant had let in evidence through AW-1, who had sworn to a Proof Affidavit in terms of the pleading in the OA and also produced Exhibits A-1 to A-29 and got the same marked in evidence.

9. Heard the Ld. Counsel for the Applicant and considered the contentions as taken in the OA in the light of documentary evidence and proof affidavit.

10. The following issues arise for consideration in this matter: -

(i) Whether the applicant had succeeded in proving the OA claim as against the defendant?

(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 defendant remained ex-parte. 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 OA is outstanding in the account, which the applicant is entitled to get recovered from the defendant and his assets. 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 fact that the subject loan is a term loan and the applicant has charged interest at contractual rates till the date of filing and further as the interest rates have come down the Tribunal is inclined to reject the interest with monthly rests and award simple interest at reduced rates.

13. In view of the afore mentioned discussions, the only conclusion this Tribunal can draw is that the applicant had clearly proved the disbursement of the loan, which the applicant is entitled to realize. Hence, TA is disposed off in the following manner: -

(a) TA No.557 of 2022 stands allowed.

(b) Applicant is permitted to realize an aggregate amount of Rs.33,94,881.95p with future and pendentelite interest @10% p.a., simple from the defendant personally and their assets, from the date of filing of the OA till realization, after deducting all the amounts received by them during the pendency of OA, and also by selling the hypotheca (Vehicle bearing Registration Nos.TN-22 DA-2193 and TN-22 DA-2163) and other assets of the defendant.

(c) It is made clear that the defendant is personally liable for all such amounts due under the Loan Accounts.

(d) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 7 days from the date of the order.

(e) The Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of this final 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 PS, transcribed by him, corrected, signed and pronounced by me in Open Court, on this the 29th day of December, 2023)

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