CANARA BANK vs SRI DHANDAPANI AND CO 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 defendants for recovery of a sum of Rs.27,01,381.28p together with interest at the rate of 13.85% 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 by proceeding against the schedule mentioned property.

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 1st defendant is a Proprietorship firm represented by 2nd defendant as its Proprietor and the 3rd defendant as the guarantor and mortgagor to the loan transaction had availed the credit facility. The 1st defendant by its loan application dated 15.05.2017 approached the applicant for grant of credit facility to meet out the working capital requirements and the applicant considering the said request vide sanction dated 2.6.2017 sanctioned Secured Overdraft Limit of Rs.20 lakhs to the defendant. The 1st defendant represented by 2nd defendant executed necessary loan documents on 2.6.2017 and the 3rd defendant executed guarantee agreement on 2.6.2017 thereby guaranteeing due repayment of the credit facility availed by the 1st defendant. The 3rd defendant deposited the title deeds of her property with the applicant bank on 12.05.2017 with an intention to create equitable mortgage over the same and confirmed the same by executing Memorandum of Deposit of Title deeds dated 1.6.2017 registered as Doc. No.550 of 2017.

4. It is further stated that even though the defendant had obliged to repay the amount promptly and regularly, but had failed to do so resulting in default in repayment and hence the account was classified as NPA on 12.09.2018.

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 defendants to get the account regularized or to pay back the amount. It is stated that as no repayment was forthcoming despite repeated requests, the applicant issued legal notices on 02.11.2018 and 25.07.2019 but the defendants did not come forward to clear the outstanding dues.

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. The defendants remained absent and hence were called absent and set ex-parte on 27.01.2020.

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-11 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 defendants?

(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 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 defendants and their 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 business 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.632 of 2022 stands allowed.

(b) Applicant is permitted to realize an aggregate amount of Rs.27,01,381.28p with future and pendentelite interest @12% p.a., simple from the defendants jointly and severally, 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 schedule properties and other assets of the defendants.

(c) If the sale proceeds are not found sufficient to cover the amount due and payable to the Applicant Bank, the defendants 2 and 3 are 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