Union Bank of India vs A. Kuppan 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.33,17,332/- from the date of filing of the application till the date of realization in full along with costs of this application and for selling schedule mentioned properties in the following manner: - (a) A sum of Rs.2,78,378/- together with interest at the rate of 10.75% per annum with monthly rests from defendants 1, 2 and 5, being the amount due under CCCK Account ; (b) A sum of Rs.65,717/- together with interest at the rate of 11.75% per annum with monthly rests, from defendants 1, 2 and 8, being the amount due under AGDL Account;

(c) A sum of Rs.35,094/- together with interest at the rate of 11.75% per annum with monthly rests from defendants 1, 2 and 7 being the amount due under AGDL Account;

(d) A sum of Rs.29,38,143/- together with interest at the rate of 12% per annum with monthly rests from defendants 1, 2 and 8 being the amount due under CKFM Account;

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 is the borrower, the 2nd defendant is the wife of the 1st defendant, defendants 3 and 4 are father and brother of the 1st defendant and defendants 5 to 8 are the guarantors for the loan facility availed by the 1st defendant.

(b) The 1st defendant, an agriculturist, approached the erstwhile Corporation Bank for grant of credit facilities for agricultural operations and availed Crop Loan of Rs.1,50,000/- during 2005 against hypothecation of crops and guarantee of the 5th defendant. The said facility was renewed / reviewed / enhanced from time to time and lastly in the year 2011.

(c) The CCCK Limit – Crop Loan was enhanced to Rs.1,85,000/- on 6.10.2007 and to Rs.2,50,000/- on 13.12.2011 and the 1st defendant executed necessary loan and security documents on 06.10.2007 and 13.12.2011 respectively. The 5th defendant executed guarantee agreements thereby guaranteeing due repayment of the credit facility availed by the 1st defendant.

The defendants executed acknowledgement of debts on 7.9.2010 and 02.04.2013 acknowledging their liability under the said facility.

(d) The 1st defendant approached the applicant for grant of loan for laying pipe lines in the agricultural lands and the applicant considering the said request sanctioned a sum of Rs.1,67,000/- to the 1st defendant. The 1st defendant as borrower and the 8th defendant as a guarantor executed necessary loan documents on 5.1.2008. The defendant executed acknowledgement of debt on 4.1.2011 and 4.11.2013 acknowledging their liability under the said facility.

(e) The 1st defendant approached the applicant for grant of loan for purchasing paddy harvester and the applicant considering the said request sanctioned a sum of Rs.19,00,000/- to the 1st defendant. The 1st defendant as borrower and the 6th defendant as a guarantor executed necessary loan documents on 10.06.2011. The defendant executed acknowledgement of debt on 01.04.2014 acknowledging their liability under the said facility.

(f) The defendants 1 and 3 deposited the title deeds of their property more fully described in Schedule ‘A’ to the OA on 13.11.2006 with an intention to create equitable mortgage over the same and confirmed the same by executing Memorandum of Deposit of Title deeds dated 13.11.2006 registered as Doc. No.1538 of 2006, SRO, Anniyur. Defendants 1, 2 and 4 deposited the title deeds of their property more fully described in Schedule ‘B’ to the OA with the applicant on 9.7.2009 with an intention to create equitable mortgage over the same and

confirmed the same by executing Memorandum of Deposit of Title deeds dated 9.7.2009 registered as Doc. No.1078 of 2009, SRO, Anniyur.

4. It is further stated that even though the defendants had obliged to repay the amount promptly and regularly, they failed to do so resulting in default in repayment and hence the loan 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 defendants to get the account regularized or to pay back the amount. The applicant issued a notice on 23.02.2015 calling upon the defendants to clear the outstanding dues evincing no reply from the defendants.

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 11.09.2017.

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-67 and got the same marked in evidence. Exhibits A-40, A-49, A-50, A-58, A-

60, A-61 and A-64 being photocopies were marked subject to proof and relevancy.

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 an agricultural loan availed by the defendants and the applicant has claimed interest at contractual rates till the time of filing of the application and the interest rates have also considerably come

down, this Tribunal is inclined to reject the prayer of the applicant for award of interest with monthly rests and award the pendent lite and future interest at simple and 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 and the defaults committed by the defendants, which the applicant is entitled to realize. Hence, TA is disposed off 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 the schedule properties and other assets of the defendants: - (a) TA No.776 of 2023 stands allowed.

(b) Applicant is permitted to realize an aggregate sum of Rs.33,17,332/- from the defendants in the following manner: -

(i)

annum (simple) from defendants 1, 2 and 5 jointly and severally, being the amount due under CCCK Account ;

(ii) A sum of Rs.65,717/- together with interest at the rate of 9% per annum (simple), from defendants 1, 2 and 8 jointly and severally, being the amount due under AGDL Account;

(iii) A sum of Rs.35,094/- together with interest at the rate of 9% per annum (simple) from defendants 1, 2 and 7 jointly and severally being the amount due under AGDL Account;

(iv) A sum of Rs.29,38,143/- together with interest at the rate of 9% per annum (simple) from defendants 1, 2 and 8 jointly and severally being the amount due under CKFM Account;

(c) The schedule mentioned properties are to be proceeded against and sold and if the sale proceeds are not found sufficient to cover the amount due and payable to the Applicant Bank, the defendants 1, 2, 4 to 8 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