PUNJAB NATIONAL BANK vs Mrs. M. Manimala 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 defendant for recovery of a sum of Rs.64,28,680/- with further interest at the rate of 8.60% per annum with monthly rests plus 2% penal interest from 1.3.2019 till the date of realization in full along with costs of this application and for sale of schedule properties.

2. The subject matter of the case is the “Housing Loan” availed by the defendant from the applicant bank.

3. It is the case of the applicant that the defendant vide two separate applications dated 4.10.2016 requested the applicant for sanctioning housing for purchase of flats and considering the said request the applicant sanctioned a sum of Rs.26,50,000/- to the defendant for purchase of the property more fully described in Schedule I to the OA. It is also the case of the applicant that to secure the said loan the defendant executed Housing Loan Agreement dated 29.11.2016 thereby agreeing to repay the loan in 336 equated monthly installments of Rs.22,196/- commencing from December 2016. It is the further case of the applicant that the defendant deposited the title deeds of the Schedule I property with the applicant bank with an intention to create equitable mortgage over the same and confirmed the same by executing Memorandum of Deposit of Title deeds dated 29.11.2016 registered as Doc. No.13251/2016 on the file of SRO, Guduvancherry.

4. It is also the case of the applicant that at the request of the defendant by loan application dated 4.10.2016, the applicant bank sanctioned second housing loan of Rs.28,30,000/- to the defendant for purchase of Schedule II property and the defendant executed necessary loan documents in favour of the applicant undertaking to repay said loan in 324 equated monthly installments of Rs.22605.32p commencing from March 2017. It is also stated that the defendant deposited the title deeds of the Schedule II property with the applicant bank with an intention to create equitable mortgage over the same and confirmed the same y executing Memorandum of Deposit of Title deeds dated 1.3.2017 registered as Doc. No.1791/2017 for Rs.27,00,000/- and further Memorandum of Deposit of

Title deeds dated 3.3.2017 registered as Doc. No.1961/2017 on the file of SRO, Guduvancherry for additional sum of Rs.1,30,000/-.

5. t is the case of the applicant that the defendant 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 applicant classified the loan account as NPA on 09.03.2018 and issued the demand notice under Section 13(2) of the SARFAESI Act on 09.03.2018 calling upon the defendant to clear the outstanding dues, however, the defendant did not come forward to clear the dues.

6. It is the case of the applicant that after availing the loan, the defendant was 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.

7. Summons were taken out to the sole defendant and the same returned with endorsement “ Left” and the defendant served notice by substituted service by way of paper publication. As there was no representation on behalf of the defendant on 22.07.2021 the defendants were called absent and set ex-parte on that day. Applicant Bank filed Proof Affidavit along with 16 documents, which were marked as Ex. A-1 to A-16 on 27.06.2022, however Exhibit A-14 was marked subject to proof and relevancy. The Ld. Counsel for Applicant Bank made his submissions on 3.8.2022 and thereafter the matter stood till this date for passing final orders.

8. The following issues arise for consideration in the matter: - (a) Whether the applicant had succeeded in proving the liability of the defendant?

(b) What order as to cost of the proceedings need be passed?

These issues are considered together.

9. Heard the Ld. Counsel for the applicant, perused the OA averments and the records placed before the Tribunal.

10. The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-16 along with the proof affidavit. Exhibit A-1 is the Loan Application submitted by the defendant dated 4.10.2016 for purchase of Schedule-I property to the OA. Exhibit A-2 is the Loan application dated 4.10.2016 submitted by the defendant for purchase of Schedule II property to the OA. Exhibit A-3 is the Agreement for housing loan dated 29.11.2016 for a sum of Rs.26.50 lakhs. Exhibit A-4 is the Construction Agreement dated 29.11.2016 in respect of Schedule I property between the builder and the defendant registered as Doc. No.13249/2016. Exhibit A-5 is the Sale deed dated 29.11.2016 in favour of the defendant registered as Doc. No.13250/2016. Exhibit A-6 is the Letter dated 03.01.2017 confirming the deposit of title deeds with the applicant bank. Exhibit A-7 is the Memorandum of Deposit of Title deeds dated 29.11.2016

executed by the defendant registered as Doc. No.13251/2016. Exhibit A-8 is the Agreement for housing loan for Rs.28.30 lakhs dated 27.2.2017. Exhibit A-9 is the Construction Agreement dated 1.3.2017 between the defendant and the builder registered as Doc. No.1789/2017 on the file of SRO, Guduvancherry. Exhibit A-10 is the sale deed dated 1.3.2017 in favour of the defendant in respect of the Schedule II property registered as Doc. No.1790/2017, SRO, Guduvancherry. Exhibit A-11 is the Memorandum of Deposit of Title deeds dated 1.3.2017 executed by the defendant in favour of the applicant registered as Doc. No.1791/2017 on the file of SRO, Guduvancherry. Exhibit A-12 is the Memorandum of Deposit of Title deeds dated 3.3.2017 executed by the defendant in favour of the applicant registered as Doc. No.1961/2017 on the file of SRO, Guduvancherry. Exhibit A-13 is the recall notice dated 26.12.2017 issued by the applicant. Exhibit A-14 is the demand notice dated 9.3.2018 issued by the applicant under Section 13(2) of the SARFAESI Act. Exhibit A-15 and A-16 are the statement of accounts in respect of both housing loan accounts along with certificates under Bankers’ Book Evidence Act.

11. Exhibit A-1 to A-7 evidences that at the request of the applicant vide loan application dated 4.10.2016, the applicant bank sanctioned first housing loan of Rs.26.50 lakhs to the defendant and the defendant executed necessary loan document on 29.11.2016. It also evidences that the defendant deposited the title deeds of her property more fully described in Schedule I to the OA with the applicant bank and created equitable mortgage over the same by executing Memorandum of Deposit of Title deeds dated 29.11.2016 registered as Doc.

No.13251/2016 on the file of SRO, Guduvancherry. Exhibit A-8 to A-12 evidences that at the request of the defendant dated 4.10.2016, the applicant sanctioned the second housing loan of Rs.28.30 lakhs to the defendant for purchasing the property more fully described in Schedule II to the OA. It also evidences that the defendant deposited the title deeds of her property more fully described in Schedule II to the OA with the applicant and created equitable mortgage over the same and confirmed the same by executing Memorandum of Deposit of Title deeds dated 1.3.2017 and 3.3.2017 registered as Doc. No.1791/2017 and 1961/2017 respectively on the file of SRO, Guduvancherry. Exhibit A-13 evidences that the defendant defaulted in repayment and hence the applicant issued a recall notice on 26.12.2017 to the defendant calling upon the defendant to clear the outstanding dues. Exhibit A-14 evidences that as the defendant did not come forward to clear the dues the applicant classified the loan account as NPA on 9.3.2018 and issued the demand notice dated 26.12.2017 under Section 13(2) of the SARFAESI Act. Exhibit A-15 and A-16, the statement of accounts in respect of both 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.

12. 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 defendant. Point is answered accordingly.

13. In view of the fact that the loan availed by the defendant being housing loan and the interest rates have come down the Tribunal is of the view that pendent lite interest can be awarded at reduced rate and also proceeds to reject the prayer for grant of penal interest.

14. 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.572 of 2019 stands allowed.

(b) Applicant is permitted to realize a sum of Rs.64,28,680/- with further interest at the rate of 8% per annum (simple) from the date of filing of the OA till date of realization from the defendant, after deducting all the amounts received by them during the pendency of OA, and also by selling the schedule mentioned properties and other assets of the defendant.

(c) If the sale proceeds are not found sufficient to cover the amount due and payable to the Applicant Bank, the defendant is personally liable for all such amounts due.

(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.

15. 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