DEUSTCHE BANK vs M/s.Meenakshi Rajeswari Rice Mill on 31 December 2021

ORDER

1. This application is filed by the applicant bank under Section 19(1) of Recovery of Debts due and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) to issue a recovery certificate for a sum of Rs.16,33,352.18p, due as on 17.10.2018 under Business Instalment Loan together with interest thereon @12.85% p.a. and all other applicable overdue charges against the defendants jointly and severally from 17.10.2018 till the date of realization in full along with costs of this application.

2. The facts of the case as stated in the OA, in brief, are as follows:- The defendants approached the Applicant Bank seeking for a Business Term Loan and the applicant after considering the same sanctioned the said loan facility to the tune of Rs.20.00 lakhs under Loan Account Number 250031262230019. The Defendants have agreed to the terms and conditions of the loan facility and executed the loan agreement dated 31.3.2017. The defendants 2 and 3 stood as guarantors and executed a personal guarantee dated 31.3.2017. It is further submitted that as per the stipulated terms and conditions of the said loan agreement, the defendants were bound to repay the aforementioned loan amount along with interest at 12.75% per annum in 36 equated monthly instalments of Rs.67147/- each, which would commence from 5.5.2017 and end at 5.4.2020.

3. It is further submitted that the defendants failed to adhere to the terms and conditions of the loan agreement and defaulted in paying the legitimate dues on the respective dates. Hence, the applicant bank issued a legal notice dated 23.8.2018 demanding a sum of

Rs.15,82,121.74 as on 5.8.2018 along with interest with effect from the date of the said notice, till realization. Since the said legal notice did not evoke any response from the defendants the present OA before this Tribunal.

4. Summons were taken out to the defendants and the summons sent to D2 and D3 returned with remarks ‘unclaimed’ and therefore the service of summons to D2 and D3 held sufficient. Summons sent to D1 returned with remarks “left’, hence, service of summons through paper publication was ordered and taken out. Thereafter also D1 did not choose to appear. Therefore, the defendants called absent and set exparte on 11.3.2020. The Ld. Counsel for Applicant Bank filed proof affidavit and Exhibits A1 to A12 were marked and thereafter the applicant counsel made his submissions on 21.12.2021 and thereafter the matter stood to this date for passing final orders.

5. The following issues arise for consideration in the matter: - (a) Whether the applicant had succeeded in proving the liability of the defendants?

(b) What order as to cost of the proceedings need be passed?

These issues are considered together.

6. Heard the Ld. Counsel for the applicant, perused the OA averments and the record placed before the Tribunal.

7. The evidence of the applicant is led by AW1 who has produced the documents Exhibit A1 to A12 along with the proof affidavit. Exhibit A-1 is the certified copy of Certificate of Establishment of Place of Business in India dated 20.9.1991. Ex.A2 is the certified copy of License No.BOM-41 issued by the RBI dated 5.4.1988. Ex.A3 is the Certified Copy of Power of Attorney dated 19.3.2019. Ex.A4 is the original Loan Application Form dated 21.3.2017. Ex.A5 is the original Loan Agreement dated 31.3.2017. Ex.A6 is the original personal guarantee executed by the 2nd defendant dated 31.3.2017. Ex.A7 is the original personal guarantee executed by the 3rd defendant dated 31.3.2017. Ex.A8 is the original legal notice dated 23.8.2018. Ex.A9 is the original returned cover of the legal notice with respect to 1st defendant dated 5.9.2018. Ex.A10 is the original returned cover of the legal notice in respect of 2nd defendant. Ex.A11 is the original proof of service of the legal notice with respect to 3rd defendant. Ex.A12 is the statement of accounts duly certified dated 17.10.2018.

8. The proof affidavit of the applicant bank remained unchallenged and unrebutted. Therefore, on a careful consideration of proof affidavit along with Exhibits filed on behalf of the applicant bank, besides the material placed before the Tribunal, this Tribunal is satisfied that the applicant bank has successfully proved the OA claim against the defendants. Point is answered accordingly.

9. 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, OA is disposed off in the following manner: - (a) OA No.738 of 2019 stands allowed.

(b) Applicant is permitted to realize a sum of Rs.16,33,352.18p together with interest thereon @12.85% p.a. (simple) against the defendants jointly and severally from 18.10.2018 till the date of realization in full, after deducting the amounts received or realised under SARFAESI Act or otherwise during the pendency of OA, from the defendants, and also by selling the 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 are personally liable for all such amounts due.

(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.

10. 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 Steno(SN), transcribed by him, corrected, signed and pronounced by me in Virtual Court, through Video Conference on this 31st day of December, 2021)

Sd/-

(T. RAJESH)

PRESIDING OFFICER

(i/c) DRT-I, CHENNAI