INDIAN OVERSEAS BANK vs Kandhavel Rajaram 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 defendants for recovery of a sum of Rs.45,13,531/- with further interest at the rate of 11.50% per annum with monthly rests 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 defendants from the applicant bank.

3. It is the case of the applicant that the defendants approached the applicant for grant of housing loan for purchase of the schedule mentioned property and considering the said request the applicant vide its sanction dated 29.3.2012 sanctioned housing loan of Rs.23,50,000/- to the defendants repayable in 300 equated monthly installments of Rs.23,890/- commencing from 28.4.2012. It is also the case of the applicant that to secure the said limit the defendants executed various loan and security documents on 29.3.2012 viz., Demand Promissory Note for a sum of Rs.23,50,000/-, Term Loan Agreement for Housing Loan and Agreement for repayment.

4. It is also the case of the applicant that the 2nd defendant deposited the title deeds of the schedule mentioned property with the applicant on 10.5.2012 with an intention to create equitable mortgage over the same in favour of the applicant bank.

5. It 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 issued a recall notice through its lawyer on 19.9.2018 calling upon the defendants to clear the outstanding dues, however, as the defendants did not come forward to clear the dues.

6. 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.

7. Summons were taken out to the sole defendants and the same returned with endorsement “Insufficient Address”, and hence were served with notice by substituted service by causing paper publication. As there was no representation on behalf of the defendants continuously, the defendants were called absent and set ex-parte on 09.05.2019. Applicant Bank filed Proof Affidavit along with 27 documents, which were marked as Ex. A-1 to A-27 on 01.07.2022, however Exhibit A-6 to A-13, A-16 to A-20, A-24, A-25 and A-27 were marked subject to proof and relevancy. The Ld. Counsel for Applicant Bank made his submissions on 08.08.2022 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 defendants?

(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-27 along with the proof affidavit. Exhibit A-1 is the Sanction Letter dated 29.3.2012 issued by the applicant bank. Exhibit A-2 is the Demand Promissory Note dated 29.3.2012 for a sum of Rs.23,50,000/- executed by the defendants. Exhibit A-3 is the Term Loan Agreement for housing loan dated 29.3.2012 executed by the defendants. Exhibit A-4 is the Agreement for repayment dated 29.3.2013 executed by the defendants. Exhibit A-5 is the Memorandum of Deposit of Title deeds dated 11.4.2012 executed by the 2nd defendant. Exhibit A-6 is the Agreement for sale executed between Union Carbide employee’s Co-operative housing building society and Mr. K. Madhavan. Exhibit A-7 is the sale deed executed by Union Carbide employee’s Co-operative housing building society in favour of Mr. K. Madhavan registered as Doc. No.3649/1985. Exhibit A-8 is the Sale deed executed by Mr. K. Madhavan in favour of K. Ananda Doss and Mrs. P. Prasanna registered as Doc. No.1685/1990. Exhibit A-9 is the General Power of Attorney executed by Mrs. P. Prasanna and two others in favour of Mr. R. Prabhakaran registered as Doc. No.1473/2010. Exhibit A-10 is the sale deed registered as Doc. No.10669/2010 executed by Mrs. P. Prasanna, Mr. P. Pramodh and Mrs. P. Deepa in favour of Mr. A. Jayakumar. Exhibit A-11 is the death certificate dated 31.07.1997 in respect of Mr. Ananda Doss. Exhibit A-12 the legal heirship certificate dated 2.9.1997 of Mr. Ananda Boss. Exhibit A-13 is the Extract from Town Survey

Land Register dated 10.11.2011. Exhibit A-14 is the Agreement of sale dated 23.2.2012 between Mr. A. Jayakumar and Mrs. S. Durga. Exhibit A-15 is the Construction Agreement dated 23.2.2012 between M/s RK and JK Builders and Mrs S. Durga. Exhibit A-16 to A-20 are the encumbrance certificates dated 17.9.2010 for the period 1.1.1978 to 31.12.1986; 15.9.2010 for the period from 1.1.1987 to 13.9.2010; 13..01.2011 for the period from 1.1.2010 to 12.1.2011; 7.10.2011 for the period from 13.01.2011 to 27.02.20111; 02.02.2012 for the period from 28.2.2011 to 01.02.2012 respectively. Exhibit A-21 is the Sale deed dated 28.3.2012 in favour of Mrs. S. Durga registered as Doc. No.2020/2012. Exhibit A-22 is the revival letter dated 28.3.2015. Exhibit A-23 is also the revival letter dated 28.3.2017. Exhibit A-24 is the legal notice dated 19.9.2018 issued by the applicant alongwith returned covers. Exhibit A-25 is the statement of accounts in respect of the loan account. Exhibit A-26 is the certificates filed under Bankers’ Book Evidence Act. Exhibit A-27 is the Authorisation Letter / Power of Attorney issued by the applicant.

11. Exhibits A-1 to A-4 evidences that at the request of the defendants for grant of housing loan for purchase of the schedule mentioned property the applicant vide its sanction letter dated 29.3.2012 sanctioning housing loan of Rs.23,50,000/- to the defendants. It also evidences that the defendants executed necessary loan and security documents. Exhibit A-5 evidences that the 2nd defendant deposited the title deeds of the schedule property with the applicant on 11.5.2012 with an intention to create equitable mortgage over the same in favour of the applicant. Exhibits A-6 to A-21 evidences that the schedule mentioned property is owned by the 2nd defendant and is empowered to create equitable mortgage over the same. Exhibit A-22 and A-23 evidences that having availed the loan the defendants executed necessary loan accounts and also revived the loan and security created by the defendants to secure the said limits. Exhibit A-24 evidences that the defendants defaulted in repayments and hence the applicant issued legal notice dated 19.9.2018 calling upon the defendants to clear the outstanding dues. Exhibit A-25 and A-26, the statement of accounts in respect of loan account produced and certified under the Banker’s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendants. It is clear from the statement of accounts that penal interest is not capitalized. Exhibit A-27 evidences that the applicant had granted power of attorney to its officer to represent the applicant.

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 defendants. Point is answered accordingly.

13. In view of the fact that the loan availed by the defendants being housing loan and the interest rates have come down, this Tribunal is of the opinion that the pendent lite interest can be awarded at reduced rates.

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.95 of 2019 stands allowed.

(b) Applicant is permitted to realize a sum of Rs.45,13,531/- with further interest at the rate of 10% per annum (simple) from the date of filing of the OA till 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 mentioned properties 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.

(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