STATE BANK OF INDIA vs Mrs. Goes Wynette 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 an aggregate sum of Rs.33,58,002/- comprising a sum of Rs.33,20,738.64p with further interest at the rate of 11.75% per annum with monthly rests being the amount due under Home Loan A/c No.62450204498 and sum of Rs.37,263.86p with further interest at the rate of 11.75% per annum with monthly rests plus 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 properties.

2. The subject matter of the case is the Home Loan facility availed by the defendant from the State Bank of Hyderabad which got merged with the applicant based on the circular issued by the Reserve Bank of India.

3. It is the case of the applicant that the approached the erstwhile State Bank of Hyderabad at its branch office in Pallikaranai Branch for grant of home loan vide her loan application dated 27.10.2015 and considering the said request the erstwhile State Bank of Hyderabad vide Arrangement Letter dated 30.12.2015 sanctioned Home Loan of Rs.29,85,000/- and Rs.59,000/- as additional loan towards SBI Life Insurance. It is stated that the defendant agreed to the terms and conditions of sanction and the loan is repayable in 240 equated monthly installments and executed various loan documents on 30.12.2015 viz., Arrangement Letter, Memorandum of Loan Agreement for Housing Loan, Mortgage deed, Letter confirming the deposit of the title deeds.

4. It is also the case of the applicant that the defendant deposited the title deeds of the OA schedule property with the erstwhile State Bank of Hyderabad with an intention to create equitable mortgage and confirmed the same by executing Memorandum of Deposit of Title deeds dated 30.12.2015 registered as Doc. No.19867 of 2015 on the file of SRO, Kundrathur.

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 hence the applicant classified the loan account as NPA.

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 defendant 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 was taken out to the defendant and the same returned with remarks “No such person” and hence was served with the notice by substituted service by causing paper publication. As there was no representation on behalf of the defendant on 23.11.2021 the defendant was called absent and set ex-parte on that day. Applicant Bank filed Proof Affidavit along with 10 documents, which were marked as Ex. A-1 to A-10 on 22.06.2022. The Ld. Counsel for Applicant Bank made his submissions on 29.07.2022 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-10 along with the proof affidavit. Exhibit A-1 is the Loan Application submitted by the defendant dated 27.10.2015. Exhibit A-2 is the Arrangement Letter dated 30.12.2015 issued by the applicant bank and accepted by the defendant. Exhibit A-3 is the Memorandum of Loan Agreement for home loan dated 30.12.2015 executed by the defendant. Exhibit A-4 is the Mortgage deed dated December 2015 executed by the defendant. Exhibit A-5 is the Letter confirming the deposit of title deeds dated 30.12.2015 executed by the defendant. Exhibit A-6 is the Memorandum of Deposit of Title deeds dated 30.12.2015 executed by the defendant registered as Doc. No.19867/2015 on the file of SRO, Kundrathur. Exhibit A-7 is the Construction Agreement dated 30.12.2015 executed between the builder and the defendant registered as Doc. No.19856 of 2015. Exhibit A-8 is the Sale deed dated 30.12.2015 in favour of the defendant registered as Doc. No.19857 of 2016, SRO, Kundrathur. Exhibit A-9 and A-10 are the statement of accounts in respect of the loan accounts along with certificates under Bankers’ Book Evidence Act.

11. Exhibit A-1 and A-2 evidences that the defendant approached the applicant for grant of housing loan for purchase of the schedule property by her loan application dated 27.10.2015 and considering the said request the applicant sanctioned Housing Loan of Rs.29,85,000/- vide Arrangement Letter dated 30.12.2015 subject to terms and conditions and the same is agreed to by the defendant. Exhibit A-3 to A-8 evidences that the defendant is the absolute owner of the schedule property and is empowered to create equitable mortgage over the same in favour of the applicant. It also evidences that the defendant had undertaken to create mortgage over the schedule property by executing mortgage deed during December 2015. It further evidences that the defendant deposited the title deeds of the property with the applicant on 30.12.2015 with an intention to create equitable mortgage over the same and confirmed the same by executing letter dated 30.12.2015 and also by executing the Memorandum of Deposit of Title deeds dated 30.12.2015 registered as Doc. No.19867/2015, SRO, Kundrathur. Exhibit A-9 and A-10, 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.

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.779 of 2019 stands allowed.

(b) Applicant is permitted to realize a sum of Rs.33,58,002.50p 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 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