STATE BANK OF INDIA vs GOVINDARAJ on 26 September 2024

: - O R D E R - :

1. This application is filed by the applicant bank under Section 19 of Recovery of Debts and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendant for recovery of a total sum of Rs.21,06,853/- (Rupees Twenty One Lakhs Six Thousand Eight Hundred and Fifty Three only) due in respect of Housing Loan facility together with further interest @8.50% per annum, with monthly rests from the date of application till the date of realization in full and for sale of schedule mentioned property together with costs of this application.

2. Brief facts of the case:- Defendant is borrower, who had approached Applicant Bank for sanction of “Housing Loan” facility to the tune of Rs.20,24,000/- during the year 2017. Applicant bank had sanctioned a sum of Rs.20,24,000/- on 29.11.2017 subject to terms and conditions as envisaged under Arrangement Letter dated 30.11.2017, Memorandum of Loan Agreement and Agreement to Mortgage. The defendant executed necessary security documents in favour of the applicant bank namely, Memorandum of deposit of title deeds dated 27.12.2017, confirmation letter dated 28.12.2017 and memorandum relating to deposit to title deeds dated 04.01.2018. Defendant had agreed to repay the principal amount along with interest as per the terms of the Arrangement Letter dated 30.11.2017. The applicant submits that subsequent to the disbursement of aforesaid “Housing Loan”, the defendant did not operate the account as per the terms and conditions and therefore, the account has become NPA on 29.06.2019. Inspite of effective / hectic follow up by the applicant, the defendant did not give any reply nor complied the demand of the Applicant Bank. The Bank alleged that there is a due of Rs. Rs.21,06,853/- as on 12.12.2019, payable by the defendant. Hence the present application.

3. Summons was ordered and the same was returned with remark as „No such person‟. Applicant bank had caused paper publication and filed proof thereof. Defendant remained absent and no written statement was also filed and hence was placed ex- parte on 26.05.2022 by the Ld. Predecessor.

4. Thereafter the bank examined Mr. B. Selvamurugesh, Assistant Manager as AW1, who deposed to the facts of the case.

5. Matter was heard.

6. With the available material evidence on record, the only point that arises for consideration in this application is:- Whether the applicant bank is entitled for the recovery of the amount claimed in the application from the defendant? If so, what relief?

7. Heard the Ld. Counsel for applicant bank. Perused the material evidence available on record.

8.0 Answer to the Point:-

8.1 To prove its claim, the applicant bank examined the above witness AW1 and got marked 13 documents, which are marked as Exhibits A-1 to A-13. The proof affidavit of the applicant bank remains unchallenged and the say of the witness AW1 remains unrebutted.

8.2 AW1 in his affidavit had reiterated the facts on oath and he relied on Exh.A1 to A13. Exh.A1 is the Sanction Letter dated 29.11.2017, Exh.A2 is Arrangement Letter dated 30.11.2017, Exh.A3 is the Memorandum of Loan Agreement for Home Loan dated 30.11.2017, Exh.A4 is the Agreement to Mortgage dated 30.11.2017, Exh.A5 is the Memorandum of deposit dated 27.12.2017, Exh.A6 is the Confirmation Letter dated 28.12.2017,. Exh.A7 is the registered Memorandum of deposit of title deeds dated 04.01.2018 bearing Doc No.67/2018, Exh.A8 is the Sale Agreement dated

17.11.2017, Exh.A9 is the Construction Agreement – Doc No.6737/2017 dated 17.11.2017, Exh.A10 is the Sale Deed executed by M/s Arihant Shelters (India) Limited in favour of Mr. V. Govindaraj, defendant herein vide Doc No.6742/2017 dated 13.12.2017, Exh.A11 is the Demand Notice under Section 13(2) of the SARFAESI Act dated 27.08.2019, Exh.A12 is the Statement of Account, Exh.A13 is the Authorisation Letter.

8.3 There is a corresponding entry in the accounts extract with regard to the loan amount sanctioned having been released under loan disbursement debit. The liability alleged in the application is proved by the documentary evidence at Exh.A12. The say of AW1 goes unrebutted. Therefore, on careful consideration of proof affidavit along with Exhibits filed on behalf of the applicant bank, the Tribunal is satisfied that the applicant bank has proved the OA claim against the defendants. Thus the point for determination is answered in the affirmative.

9. Though the prayer in the OA is for awarding the interest at 8.50% p.a. with monthly rests on the sum adjudged till the date of realization, it is to be noted that from the first date of hearing i.e., from 06.05.2020 till 20.10.2021, there has been no progression of the case due to Covid and the matter was taken up by the Ld. Predecessor on 20.10.2021. Likewise, there are other spells of no progression of the case from 02.08.2023 03.07.2024 and it is noted in the order sheet that the matter is re-posted for the various reasons. This Tribunal being vested with additional charge from 11.06.2024 has taken note of that the defendant cannot be held liable for the above periods to pay the interest on monthly rests basis. Therefore, considering that the transaction being a Housing Loan, this Tribunal is of the opinion that awarding future interest from the date of filing till the date of realization at 9% p.a. (S.I.) would meet the end of justice and accordingly the same is considered in awarding the reliefs. 9(a). For the reasons stated as above, that the applicant bank is entitled for Recovery of a total sum of Rs.21,06,853/- in respect Housing Loan facility together with further interest @ 9% per annum (simple) from the date of filing till the date of realization.

10. During the pendency of OA, applicant bank reported part satisfaction of OA claim, by way of sale of schedule mentioned property to the OA under SARFAESI Act. Accordingly, part satisfaction of sum of Rs.17,35,000/- was recorded on 12.09.2024 and documents concerning the property sold were ordered to be returned to applicant bank upon receiving proper affidavit from the bank to the effect that there are no legal impediments.

11. In the result, application is allowed granting recovery certificate as follows:

(a) The applicant bank is entitled for Recovery of a total sum of Rs.21,06,853/- (Rupees Twenty One Lakhs Six Thousand Eight Hundred and Fifty Three only) due in respect of Housing Loan facility together with further simple interest @ 9% per annum, from the date of application till the date of realization against the defendant.

(b) It is further ordered that any amount remitted or realized, if any, during the course of the proceedings, shall be given due credit to the loan account of the defendant.

(c) The sum of Rs.17,35,000/- realised by way of SARFAESI sale may be taken into account on the date of realisation at the time of preparation of DRC.

(d) The applicant bank is entitled for costs of this application.

12. The applicant bank is directed to file costs memo within two weeks of the receipt of this order.

13. Issue recovery certificate in favour of the applicant bank in terms of this final order.

14. Communicate a copy of the order to the parties concerned in terms of Rule 16 read with Rule 2(c) of DRT (Procedure) Rules, 1993.

Sd/-

(A.S. JAYACHANDRA)

PRESIDING OFFICER (In-charge) DRT-III, Chennai

(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this the 26th day of September, 2024) Annexure:-

1. List of Exhibits marked by Applicant

Exhibits marked by applicant bank Sl. No. Description of Documents Exhibit No.

1. Sanction Letter dated 29.11.2017 A-1

2. Arrangement Letter dated 30.11.2017 A-2

3. Memorandum of Loan Agreement for Home Loan dated 30.11.2017 A-3

4. Agreement to Mortgage dated 30.11.2017 A-4

5. Memorandum of Deposit dated 27.12.2017 A-5

6. Confirmation Letter dated 28.12.2017 A-6

7. Memorandum relating to Deposit of Title Deeds (Doc No.67/2018) dated 04.01.2018 A-7

8. Sale Agreement dated 17.11.2017 A-8

9. Construction Agreement – Doc No.6737/2017 dated 17.11.2017 A-9

10. Sale Deed executed by M/s Arihant Shelters (India) Limited in favour of V. Govindaraj – Doc No.6742/2017 dated 13.12.2017 A-10

11. Demand Notice under Section 13(2) of SARFAESI Act dated 27.08.2019 A-11

12. Statement of Account A-12

13. Authorisation Circular A-13

Sd/-

(A.S.JAYACHANDRA) PRESIDING OFFICER (In-charge) DRT-III, CHENNAI