PUNJAB NATIONAL BANK vs VELU on 3 December 2024

: - O R D E R - :

1. This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendants for recovery of a total sum of Rs.23,84,610/- (Rupees Twenty Three Lakhs Eight

Four Thousand Six Hundred and Ten only) due in respect of Housing Loan facility together with further interest @10.75% per annum (along with penal interest @ 2% p.a.) 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:- 2.1 Applicant bank submitted that the defendants originally availed Housing Loan from United Bank of India, Tiruvallur Branch. As per the Government Notification, the said bank merged with Punjab National Bank and the said loan account is transferred to Punjab National Bank, Circle SASTRA Centre, Chennai North, represented by its Chief Manager, which is a centralized branch created for the purposes of recovery.

2.2 First and second defendants approached Applicant Bank and submitted an application for Housing Loan on 17.12.2024. Applicant bank had sanctioned a sum of Rs.17,82,000/- including Insurance Premium vide Sanction Intimation Letter dated 06.03.2015. The defendants executed necessary security documents in favour of the applicant bank on 06.03.20215, namely, Agreement under United Housing Loan Scheme, Letter of Guarantee, Demand Promissory Note, Memorandum evidencing deposit of title deeds and Letter of Lien. As per the said agreement, defendants have agreed to repay the loan in 234 monthly installments along with interest @ 10% p.a. floating. It is alleged that the 1st and 2nd defendants deposited the title deeds of the schedule property by a registered

Memorandum of Deposit of Title Deeds dated 10.03.2015 bearing Doc No.742/2015 before Sub Registrar, Avadi in favour of the applicant. It is further alleged that the defendants executed continuing security and created an equitable mortgage over the property which is described in the schedule to OA, for due repayment of the above said loans. The applicant bank submits that the first defendant had executed a Demand Promissory Note on 31.07.2018 confirming the balance outstanding at rs.18.09.544/- as on 31.07.2018 in respect of the Housing Loan Account. The applicant further submits that the defendants were irregular in repayment of the dues and therefore, the account has become NPA on 31.03.2018 The applicant bank issued a Recall Notice dated 07.03.2018 to repay the balance outstanding in respect of the Housing Loan facility. The defendants received the notice. Inspite of effective / hectic follow up by the applicant, the defendants did not give any reply nor complied the demand of the Applicant Bank. It is alleged that the defendants are liable to pay a sum of Rs.23,84,610/- in respect of Housing Loan facility as on 31.05.2021 as per the Statement of Accounts. Hence the present application.

3. Summons was ordered to defendants 1 and 2 by the Ld. Predecessor and the same returned as „unclaimed‟. Applicant bank had caused paper publication of notice and filed proof thereof. Defendants 1 and 2 remained absent and no written statement was also filed and hence were placed ex-parte on 28.04.2022 by the Ld. Predecessor.

4. Thereafter the bank examined Mr. S. Srinivasan 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 defendants? 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 15 documents, which are marked as Exhibits A-1 to A-15. 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 re-iterated the facts on oath and he relied on Exh.A1 to A15. Exh.A1 is the Housing Loan Application dated 17.12.2014 submitted by the Defendants, Exh.A2 is Sanction Letter along with Terms and Conditions dated 06.03.2015 issued by the applicant bank, Exh.A3 is the Agreement for Housing Loan dated 06.03.2015, Exh.A4 is the Letter of Guarantee dated 06.03.2015, Exh.A5 is the Demand Promissory note dated 06.03.2015, Exh.A6 is the Memorandum evidencing deposit of title deeds dated 06.03.2015, Exh.A7 is the Letter of Lien dated 06.03.2015, all executed by defendants 1 and 2, Exh.A8 is the Memorandum of deposit of title deeds executed by defendants in favour of applicant bank, registered as Document No.2892/2015 before SRO, Avadi dated 10.03.2015, Exh.A9 is the Sale Deed in favour of defendants registered as Document No.743/2015 dated 23.01.2015 before SRO, Avadi, Exh.A10 is the Construction Agreement dated 23.01.2015, Exh.A11 is the Demand Promissory Note dated 31.07.2018 executed by the defendants, Exh.A12 is the Recall Letter dated 07.03.2018 issued by the applicant bank, Exh.A13 is the Demand Notice issued by the applicant bank under Section 13(2) of the SARFAESI Act dated 12.04.2018. Exh.A14 is Possession Notice issued by applicant bank dated 05.03.2019 and Exh.A15 is statement of account.

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.A15. 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 10.75% p.a. (along with 2% penal interest) with monthly rests on the sum adjudged till the date of realization, considering that the transaction being 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 ends of justice and accordingly, the same is considered in awarding the reliefs, especially keeping in mind the period of Covid Pandemic ensued crippling the financial activity.

10. For the reasons stated as above, that the applicant bank is entitled for Recovery of a total sum of Rs.23,84,610/- in respect of Housing Loan facility together with further interest @9% per annum (simple) from the date of filing till the date of realization.

11. During the pendency of OA, applicant bank reported part satisfaction of OA claim, by way of sale of schedule mentioned property to the OA. Heard on the “Part Satisfaction Memo” dated 11.11.2024 and the same is endorsed by the Chief Manager of the bank.

12. Perused the noting of the Registry which shows that the bank has realized a total sum of Rs.11,75,000/- on 13.08.2024 by selling the OA Schedule mentioned property under SARFAESI Act. The documents pertaining to these properties are prayed to be returned. Since the defendants remained ex-parte, the note of the Registry is accepted and documents may be returned to applicant bank upon receiving proper affidavit from the bank to the effect that there are no legal impediments.

13. 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.23,84,610/- (Rupees Twenty Three Lakhs Eight Four Thousand

Six Hundred and Ten only) due in respect of Housing Loan facility together with further interest @ 9% per annum (simple), from the date of application till the date of realization against the defendants.

b. It is further ordered that the above part amount realized during the course of the proceedings, shall be given due credit to the loan account of the defendants, on the respective dates of realisation. c. The sum of Rs.11,75,000/- realised by way of SARFAESI sale be taken into account on the date of realisation at the time of preparation of DRC. The applicant bank to furnish the balance recoverable to the Recovery Officer in terms of the above. d. The applicant bank is entitled for costs of this application.

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

15. 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)

(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this the 03rd day of December, 2024) Annexure:-

1. List of Exhibits marked by Applicant

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

1. Housing Loan Application dated 17.12.2014 A-1

2. Sanction Letter dated 06.03.2015 along with Terms and Conditions issued by applicant bank A-2

3. Agreement for Housing Loan executed by the Defendants dated 06.03.2015 A-3

4. Letter of Guarantee executed by the Defendants dated 06.03.2015 A-4

5. Demand Promissory Note executed by the Defendants dated 06.03.2015 A-5

6. Memorandum evidencing deposit of title deeds executed by the Defendants dated 06.03.2015 A-6

7. Letter of Lien executed by the Defendants dated 06.03.2015 A-7

8. Memorandum of deposit of title deeds executed by the Defendants – Doc No.2892/2015 before SRO, Avadi dated 10.03.2015 A-8

9. Sale Deed Registered as Document No.743/2015 before SRO, Avadi dated 23.01.2015 A-9

10. Agreement for Construction dated 23.01.2015 A-10

11. Demand Promissory Note executed by defendants in favour of the applicant bank dated 31.07.2018 A-11

12. Recall Letter issued by the applicant bank to the defendants dated 07.03.2018 A-12

13. Demand Notice issued by the applicant bank to the defendants under Section 13(2) of the SARFAESI Act, 2002 dated 12.04.2018 A-13

14. Possession Notice issued by the applicant bank dated 05.03.2019 A-14

15. Statement of Accounts A-15

Sd/-

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