STATE BANK OF INDIA vs Mr. N. Anandan 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.76,69,031/- with further interest at the rate of 9.70% 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 properties.

2. The subject matter of the case is the “Home Loan facility” availed by the defendants from the erstwhile State Bank of Mysore, which got merged with the applicant bank pursuant to the notification of the Reserve Bank of India with effect from 1.4.2017.

3. It is the case of the applicant that the defendants approached the erstwhile State Bank of Mysore for grant of housing for construction of a building and considering the said request the erstwhile bank by its sanction dated 19.12.2015 sanctioned Home Loan of Rs.65,60,000/- and Home Loan Insurance Cover of Rs.5,18,545/- to the defendants. It is also the case of the applicant that to secure the said loan facility, the defendants executed various loan documents on 19.12.2015 in favour of the erstwhile State Bank of Mysore viz., Memorandum of Loan Agreement for Home Loan, Agreement to mortgage, Confirmation Letter, Mortgage by deposit of title deeds. It is the further case of the applicant that the defendants deposited the title deeds of the property with the erstwhile State Bank of Mysore with an intention to create equitable mortgage over the same and confirmed the same by executing confirmation letter dated 19.12.2015 and thereafter executed Memorandum of Deposit of Title deeds dated 31.12.2015 registered as Doc. No.10908/2015 on the file of SRO, Katpadi and also executed another Memorandum of Deposit of Title deeds dated 4.3.2016 registered as Doc. No.1774/2016 on the file of SRO, Katpadi.

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 1.6.2017.

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 the same were served on the defendants. The defendants were initially represented by Ld. Counsel. As the defendants did not choose to file the written statement, the chance for filing written statement was closed on 15.12.2021. Applicant Bank filed Proof Affidavit along with 13 documents, which were marked as Ex. A-1 to A-13, however, Exhibits A-7 to A-11 were marked subject to proof. As there was no representation on behalf of the defendants continuously and on 26.5.2022 the defendants were set ex-parte on that day. The Ld. Counsel for Applicant Bank made his submissions on 04.08.2022 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-13 along with the proof affidavit. Exhibit A-1 is the circular of the Reserve Bank of India dated 20.3.2017 regarding merger of State of Bank of Mysore with State Bank of India. Exhibit A-2 is the sanction letter of the State Bank of Mysore dated 19.12.2015 sanctioning the Home Loan and Loan for Insurance cover to the defendants. Exhibit A-3 is the Memorandum of Loan Agreement for Home Loan dated 19.12.2015 executed by the defendants. Exhibit A-4 is the Agreement to Mortgage dated 19.12.2015 executed by the defendants. Exhibit A-5 is the confirmation letter dated 19.12.2015 executed by the defendants. Exhibit A-6 is the Mortgage by deposit of title deeds dated 19.12.2015 executed by the defendants. Exhibit A-7 is the Memorandum of Deposit of Title deeds dated 31.12.2015 executed by the defendants registered as Doc. No.10905/2015, SRO, Katpadi. Exhibit A-8 is the Memorandum of Deposit of Title deeds dated 4.3.2016 executed by defendants registered as Doc. No.1774/2016, SRO, Katpadi. Exhibit A-9 is the sale deed dated 31.12.2015 executed by V. Ponnusamy in favour of Mr. Anandan registered as Doc. No.10907/2015, SRO, Katpadi. Exhibit A-10 & A-11 are the statement of accounts in respect of the loan accounts along with certificates under Bankers’ Book Evidence Act. Exhibit A-12 is the certificate under Banker’s Book Evidence

Act. Exhibit A-13 is the Authorisation Circular of the applicant bank dated 31.8.2005.

10. Exhibit A-1 evidences that the erstwhile State Bank of Mysore got merged with the applicant pursuant to the circular of the Reserve Bank of India with effect from 1.4.2017 and hence the applicant is entitled to file the application. Exhibit A-2 evidences that at the request of the defendants the erstwhile State Bank of Mysore sanctioned Home Loan of Rs.65,60,000/- and Home Loan Insurance Cover of Rs.5,18,545/- to the defendants vide its sanction dated 19.12.2015. Exhibit A-3 to A-5 evidences that the defendants executed various loan and security documents in favour of erstwhile State Bank of Mysore on 19.12.2015. Exhibit A-5 to A-9 evidences that the defendants are the owners of the schedule mentioned properties and they deposited the title deeds with the erstwhile State Bank of Mysore with an intention to create equitable mortgage over the same and confirmed the same by executing letter dated 19.12.2015 and also executed Memorandum of Deposit of Title deeds dated 31.12.2015 and 4.3.2016 registered as Doc. No.10908/2015 and 1774/2016 respectively. Exhibit A-10 and A-11 & -12, 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-13 evidences that the deponent of the proof affidavit is authorized to initiate and defendant the case on behalf of the applicant.

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 Home Loan availed by the defendants, this Tribunal is of the view that the pendent lite interest can be awarded at reduced rates.

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.232 of 2019 stands allowed.

(b) Applicant is permitted to realize a sum of Rs.76,69,020/- with further interest at the rate of 9% 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 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 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