Bank of Baroda vs S. Velvizhi, 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 an aggregate sum of Rs.38,36,775/- comprising of the amounts detailed below and in the following manner, from the date of filing of the application till the date of realization in full along with costs of this application and for sale of schedule mentioned properties: - (a) A sum of Rs.8,13,142/- together with interest at the rate of 15.25% per annum with monthly rests from defendants 1, 6 to 13 being the amount due under Loan Account No.16610600005941; (b) A sum of Rs.7,83,767/- together with interest at the rate of 15.25% per annum with monthly rests from defendants 2, 6 to 13 being the amount due under Loan Account No.16610600005948;

(c) A sum of Rs.8,13,321/- together with interest at the rate of 15.25% per annum with monthly rests from defendants 3, 6 to 13 being the amount due under Loan Account No.16610600005947; (d) A sum of Rs.6,50,498/- together with interest at the rate of 15.25% per annum with monthly rests from defendants 4, 6 to 13 being the amount due under Loan Account No.16610600005956;

(e) A sum of Rs.7,76,047/- together with interest at the rate of 15.25% per annum with monthly rests from defendants 5, 6 to 13 being the amount due under Loan Account No.16610600005958.

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: - (a) The 1st defendant approached the applicant bank for grant of jewel loan for agricultural activities on 25.02.2014 and the applicant sanctioned a sum of Rs.5,50,000/- on the same day and the 1st defendant executed necessary loan document on 25.02.2014. The said amount of was credited to the Savings Bank Account of the 1st defendant, which was subsequently withdrawn by the 1st defendant.

(b) The 2nd defendant approached the applicant bank for grant of jewel loan for agricultural activities on 25.02.2014 and the applicant sanctioned a sum of Rs.5,30,000/- on the same day and the 2nd defendant executed necessary loan document on 25.02.2014. The said amount of was credited to the Savings Bank Account of the 2nd defendant, which was subsequently withdrawn by the 2nd defendant.

(c) The 3rd defendant approached the applicant bank for grant of jewel loan for agricultural activities on 25.02.2014 and the applicant sanctioned a sum of Rs.5,50,000/- on the same day and the 3rd defendant executed necessary loan

document on 25.02.2014. The said amount of was credited to the Savings Bank Account of the 3rd defendant, which was subsequently withdrawn by the 3rd defendant.

(d) The 4th defendant approached the applicant bank for grant of jewel loan for agricultural activities on 26.02.2014 and the applicant sanctioned a sum of Rs.4,40,000/- on the same day and the 1st defendant executed necessary loan document on 26.02.2014. The said amount of was credited to the Savings Bank Account of the 4th defendant, which was subsequently withdrawn by the 4th defendant.

(e) The 5th defendant approached the applicant bank for grant of jewel loan for agricultural activities on 26.02.2014 and the applicant sanctioned a sum of Rs.5,25,000/- on the same day and the 5th defendant executed necessary loan document on 26.02.2014. The said amount of was credited to the Savings Bank Account of the 5th defendant, which was subsequently withdrawn by the 5th defendant.

(f) The jewels pledged by defendants 1 to 5 for jewel loan sanctioned and availed were later realized to be spurious and have no realizable value and the applicant therefore initiated criminal action against them.

(g) The defendants 6 to 13 who were beneficiaries of the loans availed by defendants 1 to 5 jointly created equitable mortgage over the schedule mentioned properties in favour of the applicant bank by deposit of title deeds on 26.03.2015, 27.03.2015 and 28.03.2015.

4. It is further stated that even though the defendants had obliged to repay the amount promptly and regularly, they had failed to do so resulting in default in repayment and hence the account was classified as NPA on 28.02.2015.

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 recall notice on 21.06.2018 to all the defendants but in vain.

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 02.11.2021.

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-43 and got the same marked in evidence. Though the documents A-1 to A-38 were Xerox copies from their originals, based on the affidavit filed by the applicant wherein it is stated that the original documents are in the custody of CBI and had also produced the acknowledgement for the said documents by the CBI.

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 jewel loan availed by the defendants in a fraudulent manner, this Tribunal is not inclined to interfere with the interest rate claimed by the applicant bank.

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 and

the defaults committed by the defendants, which the applicant is entitled to realize. Hence, TA is disposed off in the following manner: - (a) TA No.177 of 2023 stands allowed.

(b) Applicant is permitted to realize an aggregate sum of Rs.38,36,775/- comprising of the amounts detailed below and in the following manner, from the date of filing of the application till the date of realization in full along with costs of this application and for sale of schedule mentioned properties and other assets of the defendants: -

(i) A sum of Rs.8,13,142/- together with interest at the rate of 15.25% per annum with monthly rests from defendants 1, 6 to 13 being the amount due under Loan Account No.16610600005941;

(ii) A sum of Rs.7,83,767/- together with interest at the rate of 15.25% per annum with monthly rests from defendants 2, 6 to 13 being the amount due under Loan Account No.16610600005948;

(iii) A sum of Rs.8,13,321/- together with interest at the rate of 15.25% per annum with monthly rests from defendants 3, 6 to 13 being the amount due under Loan Account No.16610600005947;

(iv) A sum of Rs.6,50,498/- together with interest at the rate of 15.25% per annum with monthly rests from defendants 4, 6 to 13 being the amount due under Loan Account No.16610600005956;

(v) A sum of Rs.7,76,047/- together with interest at the rate of 15.25% per annum with monthly rests from defendants 5, 6 to 13 being the amount due under Loan Account No.16610600005958.

(c) If the sale proceeds are not found sufficient to cover the amount due and payable to the Applicant Bank, the defendants are personally liable for all such amounts due under the respective Loan Accounts.

(d) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 15 days from the date of receipt 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