UNION BANK OF INDIA vs Mr L Arunraj And Other on 6 December 2024

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.18,90,092/- (Rupees Eighteen Lakhs Ninety Thousand and Ninety Two only) due in respect of Term Loan facility together with further interest @8.70% per annum with monthly rests from the date of application till the date of realization in full and for costs of this application.

Order in IA No.330/2019

2. IA No.330/2019 is taken up. This is an application filed by applicant bank to carry out the amendment in the cause title, concerning the description of Defendant No.1 ‘C. Arunraj’ instead of ‘L. Arunraj’. Heard the Ld. counsel and perused records. Defendants remained ex-parte in this matter. Considering the averments that mis-description is only a typographical error which the bank wants to correct, IA No.330/2019 is allowed, in the ends of justice.

3. Brief facts of the case:- 3.1 The First defendant approached applicant bank for financial assistance for purchase of Volkswagen – Jetta Comfortable TDI[D]. Applicant bank had sanctioned a sum of Rs.18,00,000/- in Loan Account No.412306520001512 under Union Miles Scheme. The first defendant agreed to repay the loan in 84 equated monthly installments each amounting to Rs.28,687/- per month, together with interest at the rate of 8.70% p.a. commencing from November, 2017 ending on November, 2024. The 2nd defendant stood as guarantor for the repayment of loan availed by the 1st defendant. The 1st defendant hypothecated the said vehicle in favour of applicant bank for repayment of dues as set out in the repayment schedule. The defendants executed necessary security documents in favour of the applicant bank on 06.10.2017, namely, Demand Promissory Note for Rs.18 lakhs, Hypothecation of Vehicles Agreement, Interest Agreement (for MCLR Loans), Letter of Confirmation, Letter of undertaking from the borrower executed by 1st defendant, Letter of undertaking from the guarantor and Letter of Guarantee executed by 2nd defendant in favour of applicant bank. The applicant further allege that the defendants did not repay the loan amount as per the agreed terms and conditions set out in the agreement. It is submitted that applicant bank had lodged a Police Complaint before the Office of the Inspector (Crime), F3, Nungambakkam, Chennai – 34 vide CSR No.461/2018 dated 18.09.2018 against the 1st defendant and M/s JMD Automobiles for defrauding the bank. It is further submitted that applicant bank tried to contact the defendants and tried to persuade them for repayment of the loan. Inspite of effective / hectic follow up by the applicant, the defendants did not have any intention to repay the loan. Hence the loan account has become NPA on 30.06.2018. The applicant bank issued a Recall Notice dated 25.12.2018 to repay the arrears amount together with future interest. It is alleged that the defendants are liable to pay a sum of Rs.18,90,092/- as on 01.12.2018 as per the Statement of Accounts. Hence the present application.

4. Summons was ordered to defendants 1 and 2 by the Ld. Predecessor and the same returned as ‘insufficient address’. 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 31.03.2022 by the Ld. Predecessor.

5. Thereafter the bank examined Mr. Satyendra Kumar, Senior Manager as AW1, who deposed to the facts of the case.

6. Matter was heard.

7. 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?

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

9. Answer to the Point:-

9.1 To prove its claim, the applicant bank examined the above witness AW1 and got marked 9 documents, which are marked as Exhibits A-1 to A-9. The proof affidavit of the applicant bank remains unchallenged and the say of the witness AW1 remains unrebutted.

9.2 AW1 in his affidavit had re-iterated the facts on oath and he relied on Exh.A1 to A9. Exh.A1 is the Demand Promissory Note for Rs.18 lakhs dated 06.10.2017 executed by 1st defendant, Exh.A2 is Hypothecation of Vehicles

Agreement dated 06.10.2017 executed by 1st defendant, Exh.A3 is the Interest Agreement (for MCLR Loans) dated 06.10.2017 executed by 1st defendant, Exh.A4 is the Letter of Confirmation dated 06.10.2017 executed by 1st defendant, Exh.A5 is the Letter of Undertaking executed by the 1st defendant, Exh.A6 is the Letter of Guarantee dated 06.10.2017 executed by the 2nd defendant, Exh.A7 is the Letter of Undertaking from Guarantor dated 06.10.2017 executed by the 2nd defendant, Exh.A8 is the Legal Notice dated 25.12.2018, Exh.A9 is the Statement of account.

9.3 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.A9. 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.

10. For the reasons stated as above, that the applicant bank is entitled for Recovery of a total sum of Rs.18,90,092/- in respect of Term Loan facility together with further interest @ 8.70% per annum with monthly rests from the date of filing till the date of realization.

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.18,90,092/- (Rupees Eighteen Lakhs Ninety Thousand and Ninety Two only) due in respect of Term Loan facility together with further interest @ 8.70% per annum with monthly rests, from the date of application till the date of realization against the defendants.

b. It is further ordered that any 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 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)

(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this the 06th day of December, 2024) Annexure:-

1. List of Exhibits marked by Applicant

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

AW-1

1. Demand Promissory Note for Rs. 18.00 Lakhs executed by the 1st Defendant dated 06.10.2017 A-1

2. Hypothecation of Vehicles Agreement for Rs. 18.00 lakhs executed by the 1st Defendant dated 06.10.2017 A-2

3. Interest Agreement (For MCLR Loans) executed by the 1st Defendant dated 06.10.2017 A-3

4. Letter of Confirmation executed by the 1st Defendant dated 06.10.2017 A-4

5. Letter of undertaking from the Borrower/s executed by the 1st Defendant A-5

Letter of Guarantee executed by the 2nd Defendant for Rs. 18.00 Lakhs dated 06.10.2017 A-6

Letter of undertaking from Guarantors executed by the 2nd Defendant dated 06.10.2017 A-7

Legal Notice dated 25.12.2018 A-8

Statement of Account for Loan Account No. 412306520001512 along with Certificate under Bankers Book of Evidence Act dated 01.12.2018 A-9

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