STATE BANK OF INDIA vs Mrs. Ranjani Subramanian on 30 August 2022

FINAL ORDER

1. This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 against the defendantsfor recovery of a sum of Rs.7,12,85,973/- with further interest at the rate of 11.45% per annum with monthly rests from the date of filing of the OA till the date of realization in full along with costs of this application and for sale of schedule mentioned property.

2. The subject matter of the case is the “Term Loan facility” availed by the defendants from the applicant.

3. It is the case of the applicant that the defendants approached the applicant bank for grant of credit facility and considering the said request the applicant by its sanction letter dated 14.9.2017 sanctioned Personal Loan (Term Loan) of Rs.7,00,00,000/- subject to terms and conditions. It is also the case of the applicant that the defendants having availed the facility executed various loan and security documents on 14.9.2017 viz., Arrangement Letter and Agreement of Loan. It is also the case of the applicant that the defendants deposited the title deeds of their property more fully described in the schedule to OA with the applicant on 18.9.2017 with an intention to create equitable mortgage over the same in favour of the applicant and confirmed the same by executing letter dated 19.9.2017.

4. It is the case of the applicant that the defendants having availed the credit facility defaulted in repayments and failed to regularize the loan account despite repeated demands and also failed to comply with the terms and conditions of sanction and therefore the loan account was classified the case a NPA on 14.05.2019. It is also stated that as the defendants did not come forward to clear the outstanding dues despite repeated demands the applicant invoked the provisions of the SARFAESI Act and issued the demand notice dated 15.05.2019 under Section 13(2) of the Act calling upon the defendants to clear the outstanding dues but the defendants did not come forward to clear the dues.

5. It is the case of the applicant that after availing the loan, the defendants were irregular in remitting the loan amount. The efforts of the applicant bank to make the defendants settle the loan did not yield any result, and hence the applicant approached this Tribunal seeking issuance of a Recovery Certificate allowing recovery of the amount due in the account.

6. Summons were taken out to the defendants and thesame were returned with endorsement “Door Locked”. However, the defendants were represented by Ld. Counsel. As the defendants did not choose to file the written statement, the chance for filing written statement was closed on 26.11.2021. Applicant Bank filed Proof Affidavit along with 8 documents, which were marked as Ex. A-1 to A- 6 and as Exhibit A-8 is part of Exhibit A-7 both the documents are marked together as Exhibit A-7 and Exhibit A-9 is marked as Exhibit A-8 on 24.6.2022. As there was no representation on behalf of the defendants continuously and on 24.6.2022 the defendants were set ex-parte on that day. The Ld. Counsel for Applicant Bank made his submissions on 29.7.2022 and thereafter the matter stood till this date for passing final orders.

7. 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.

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

9. The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-8 along with the proof affidavit. Exhibit A-1 is the Sanction Letter dated 14.9.2017 issued by the applicant sanctioning the Term Loan of Rs.7,00,00,000/- to the defendants. Exhibit A-2 is the Arrangement Letter dated 14.9.2017 executed between the applicant and the defendants. Exhibit A-3 is the Agreement of Loan dated 14.9.2017 executed by the defendants. Exhibit A-4 is the letter dated 19.9.2017 executed by the defendants confirming the deposit of title deeds of the schedule property with the applicant on 18.9.2017 with an intention to create equitable mortgage over the same. Exhibit A-5 is the Sale deed dated 29.6.2018 executed by M. Natarajan in favour of Mrs. Ranjani Subramanian registered as Doc. No.31/2006. Exhibit A-6 is the demand notice dated 15.5.2019 issued by the applicant under Section 13(2) of the SARFAESI Act. Exhibit A-7 is the statement of accounts along with certificates under Bankers’ Book Evidence Act. Exhibit A-8 is the Authorisation letter of the applicant authorizing the deponent of the affidavit to file the application and prosecute the same on behalf of the applicant.

10. Exhibit A-1 evidences that at the request of the defendants the applicant sanctioned a Term Loan (Personal Loan) of Rs.7,00,00,000/- to the defendants on 14.9.2017. Exhibit A-2 and A-3 evidences that the defendants availed the said facility and executed the loan documents on 14.9.2017. Exhibit A-4 and A-5 evidences that the schedule property is owned by the 1st defendant and the defendants deposited the title deeds with the applicant on 18.9.2017 with an intention to create equitable mortgage over the same in favour of the applicant and confirmed the same by letter dated 19.9.2017. Exhibit A-6 evidences that the defendants defaulted in repayment and hence the loan account was classified as NPA and the applicant invoking the provisions of the SARFAESI Act issued the demand notice dated 15.5.2019 under Section 13(2) of the SARFAESI Act calling upon the defendants to clear the entire outstanding dues. Exhibit A-7, the statement of accounts in respect of the loan accounts produced and certified under the Banker’s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendant. It is clear from the statement of accounts that penal interest is not capitalized. Exhibit A-8 evidences that the deponent of the affidavit is authorized to file the OA and prosecute the same.

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

12. In view of the fact that the instant loan is a Term Loan availed by the defendants, this Tribunal is not inclined to interfere with the interest rate claimed by the applicant.

13. 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.866 of 2019stands allowed.

(b) Applicant is permitted to realize a sum of Rs.7,12,85,973/- with further interest at the rate of 11.45% per annum with monthly restsfrom the date of filing of the OAtill date of realization from the defendants jointly and severally, after deducting all the amounts received by them during the pendency of OA, and also by selling the schedule property and 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 under the Loan Account.

(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.

14. 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 PS, transcribed by him, corrected, signed and pronounced by me in Open Court on this the 30th day of August, 2022) Sd/- (T. RAJESH) PRESIDING OFFICER DRT-II, CHENNAI