INDIAN OVERSEAS BANK vs KARTHIK on 10 December 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.36,16,986/- (Rupees Thirty Six Lakhs Sixteen Thousand Nine Hundred and Eighty Six only) due under Housing Loan Facility repayable together with interest at the rate of 11.95% per annum with monthly rests from the date of application till the date of realization in full and for sale of schedule mentioned property along with costs of this application.

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2. Originally the application was filed before DRT-II, Chennai, assigned OA No.897/2019, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.897/2019 stood transferred to this Tribunal and renumbered as TA No.1150/2023.

3. Brief facts of the case:- The sole defendant approached the applicant bank for a Housing Loan of Rs.20 Lakhs by way of his application dated 05.01.2011 The same was sanctioned on 14.01.2011 under Subha Gruha Housing Scheme for purchase of a Flat. It is the allegation that the entire loan amount was availed by the defendant on 18.01.2011 and the defendant executed Demand Promissory Note, Letter of Undertaking to repay in instalments and also Housing Loan agreement. The loan was to be repaid in 117 equal monthly instalments of Rs. 25,740 /- per month commencing from April, 2011.

4. It is alleged that the defendant had deposited the title deeds on 03.03.2011 in token of having obtained the loan and the same was deposited with an intention to create equitable mortgage, which is also registered vide Document No.1506/2011 dated 03.03.2011, before the Sub Registrar, Virugambakkam

5. It is further alleged that the defendant was irregular in payments and the account is classified as NPA on 01.01.2013.

6. Applicant bank also submits that there was a case registered with CBI in RC No.16A 2013 CBI / ACB Chennai and certain documents were seized by the CBI for investigation.

7. Summons was ordered to sole defendant by the Ld. Predecessor 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 TA No.1150 /2023(E) 3

statement was also filed and hence was placed ex-parte on 15.07.2021 by the Ld. Predecessor.

8. IA No.1142/2022 was filed by applicant bank to dispense with production of original documents and to adduce secondary evidence on the ground that the same were handed over to Inspector of Police, Anti Corruption Branch, Shastri Bhavan, Chennai by Proceeding No.Rc.No.16A 2013 CBI/ACB/Chennai dated 08.11.2013 and the same was allowed by the Ld. Predecessor on 07.07.2022 subject to condition of replacing the same with the originals at the earliest.

9. The applicant bank examined Mrs. Soumyashree Rout, Manager / Constituted Attorney as AW-1 and deposed to the facts of the case. Ex A-1 to Ex A- 10 filed by applicant bank were taken on record and marked as secondary evidence.

10. During the course of hearing, applicant bank wanted to rely on the additional evidence and had filed IA No.12026//24 praying to mark photocopies of additional documents as Exh A-11 to A-17. Ld. Counsel submitted that if the additional evidence is not accepted, the case of the applicant bank would be jeopardized. Applicant bank filed additional proof affidavit of Ms. R. Ramya. She is examined as AW-2 and the additional documents are taken on record and marked as Exh.A11 to Exh.A17.

11. Applicant bank had filed additional proof affidavit of Ms. R. Ramya, Senior Manager of applicant bank dated 15.10.2024 submitting therein that upon request of defendant, Housing Loan of Rs.20 Lakhs was sanctioned, which was availed by defendant after duly executing loan and security documents in favour of applicant bank on 18.01.2011. It is also deposed that thereafter, as defendant committed TA No.1150 /2023(E) 4

default in repayment, loan account became NPA on 01.01.2013. It is further submitted that by routine inspection, it was found out that this defendant along with other home loan borrowers, with the help of the then Senior Manager and Builders had committed fraud and obtained loans. Upon complaint given by Chief Regional Manager to SP, Anti Corruption Wing, CBI on 20.04.2013 vide letter dated ROII/VIGI/86/2012-2013, CBI had registered the case vide FIR No.RC/16A/2013 (RC MAI 2013 A0016 CBI ACB) dated 20.04.2013 and all the original documents were seized by CBI on 08.11.2013 from the branch and the case is still pending before CBI. It is further submitted that subsequent to filing of OA, applicant bank had sent request letters dated 24.03.2022 and 09.05.2022 requesting CBI authorities to provide certified copies of documents pertaining to the Housing Loans. Applicant bank had enclosed copies of complaint dated 20.04.2013, FIR dated 22.08.2013 and request letters dated 24.03.2022 and 09.05.2022, Proof of disbursement of loan amount and request letter by defendant for transfer of loan amount to SB Account of builder, in support of their contentions.

12. 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?

13. Heard the Ld. Counsel for the applicant. Perused the OA averments and the evidence available on record.

14. Answer to the point:- 14.1 To prove its claim, the applicant bank examined the above witnesses - AW1

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and got marked 10 documents and AW2 and got marked 7 documents respectively. The proof affidavit of the applicant bank remains unchallenged and the say of the witnesses AW1 and AW2 remains unrebutted. 14.2 AW1 in her affidavit had re-iterated the facts on oath and she relied on Exh.A1 to A10. Exh. A1 is the Application by Defendant dated 05.01.2011, Exh.A2 is the Sanction Letter by applicant bank dated 14.01.2011, Exh.A3 is the Demand Promissory Note for Rs.20 Lakhs dated 18.01.2011 executed by the Defendant, Exh.A4 is the Letter of undertaking and repayment executed by the Defendant dated 18.01.2011, Exh.A5 is the Housing Loan Agreement executed by the Defendant dated 18.01.2011 , Exh.A6 is the Memorandum of Deposit of Title Deeds executed by the Defendant dated 03.03.2011, Exh.A7 is Statement of Account, , Exh.A8 is Sale Agreement executed between Mr. Veeraraghavan and Mr. Karthik, the borrower herein dated 20.09.2010, Exh.A9 is the Construction Agreement between Mr. K.arthik and M/s Vishnuram Builders dated 20.09.2010, Exh.A10 is the Sale Deed in favour of Mr. Karthik - Regd Doc No.199/2011 dated 18.01.2011. 14.3 AW2 in her affidavit had re-iterated the facts on oath and she relied on Exh.A11 to A17. Exh.A11 is the Complaint by applicant bank’s Head Office dated 20.04.2013, Exh.A12 is the FIR Copy by CBI /ACB dated 22.08.2013, Exh.A13 is the Request Letter by applicant bank dated 24.03.2022 to The Inspector of Police, CBI Anti Corruption Branch, Exh.A14 is the Request Letter by applicant bank dated 09.05.2022 to The Inspector of Police, CBI Anti Corruption Branch, Exh.A15 is the Proof of SB Account belonging to the defendant, Exh.A16 is the Address proof of defendant, Exh.A17 is Request letter by defendant to the applicant for TA No.1150 /2023(E) 6

disbursement of loan amount to the builder dated 08.02.2011.

15. This Tribunal has carefully perused the pleadings and also evidence available on record. The allegations found in the OA goes unrebutted. Defendant remained ex-parte. The say of AW1 and AW2 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 defendant. Thus the point for determination is answered in the affirmative.

16. For the reasons stated as above, that the applicant bank is entitled for Recovery of a total sum of Rs.36,16,986/- in respect of Housing Loan facility. As far as the interest lis pendens and future interest is concerned, the same is to be considered in the light of the following circumstances:

(a) This being a Housing Loan, which rate of interest varies from time to time, cannot be lost sight of; (b) The averments in the OA itself says that there has been some kind of defalcation of funds or fraud having been committed with the help of the then Senior Manager and the builders, for which the defendant cannot be saddled with future interest at the contractual rates.

(c) There has been delay in disposal of the case for nearly five years for various reasons. This Tribunal being vested with additional charge from 11.06.2024 has taken note of that the defendant is not responsible for the delay in disposal of the case.

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17. For the above reasons, it is just and necessary that the interest from the date of filing of the OA till the date of realisation on the sum adjudged shall be at the rate of 9% (simple)

18. 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.36,16,986/- (Rupees Thirty Six Lakhs Sixteen Thousand Nine Hundred and Eighty Six only) due under Housing Loan facility together with further interest @ 9% per annum (simple) from the date of application till the date of realization against the defendant.

(b) It is further ordered that in case of default of payment by the defendant, the applicant bank is entitled to sell the schedule mentioned property in terms of the order in para (a) supra and appropriate the sale proceeds towards the amount due.

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

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

(e) Schedule mentioned in the OA shall form part of this final order

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

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

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21. 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 10th day of December, 2024)

Annexure:-

1. List of Exhibits marked by Applicant

2. Detailed Schedule of Immovable Property.

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

AW-1

1. Application by Defendant dated 05.01.2011 A-1

2. Sanction Letter by Applicant Bank dated 14.01.2011 A-2

3. Demand Promissory Note for Rs.20 Lakhs by Defendant dated 18.01.2011 A-3

4. Letter of Undertaking and repayment dated 18.01.2011 A-4

5. Housing Loan Agreement dated 18.01.2011 A-5

Memorandum of deposit of title deed dated 03.03.2011 A-6

Statement of Accounts A-7

Sale Agreement executed between Mr. Veeraraghavan and Mr. Karthik the borrower herein dated 20.09.2010 A-8

Construction Agreement executed between Mr. Karthik and M/s. Vishnuram Builders dated 20.09.2010 A-9

10. Sale Deed in favour of Mr. Karthik - Regd. Doc No.199/2011 dated 18.01.2011 A-10

AW-2

Complaint by Applicant’s Head Office dated 20.04.2013 A-11

12. FIR Copy by CBI/ACB dated 22.08.2013 A-12

Request letter by applicant bank to the Inspector of Police, CBI, ACB dated 24.03.2022 A-13

Request letter by applicant bank to the Inspector of Police, CBI, ACB dated 09.05.2022 A-14

Proof of SB account belonging to defendant A-15

Address proof of defendant A-16

Request letter by the Defendant dated 08.02.2011 A-17

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

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10.12.2024

Schedule of immovable property All that piece and parcel of land & building bearing Flat No. 4, First Floor, measuring 1080 sq.ft., along with 7.46% (328.240 sq.ft.,) undivided share out of 1 Ground and 2000 sq.ft. at land bearing Plot No. 3/164, HIG at Maduravoyal TNHB Colony, Ganga Nagar, comprised in T.S. No.179, Part Block No. 3, Maduravoyal Village, Ambattur Taluk, Thiruvallur District, situated within the Sub – Registration District of Virugambakkam, Registration District of Chennai bounded on:` North by : TNHB Plots South by : TNHB Plots East by : 50 feet road West by : Private land The property lies in the Sub- Registration District of Virugambakkam, Registration District of South Chennai.

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