Bank of Baroda vs Mrs. S. Komala on 29 July 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.29,01,636/- comprising of a sum of 7,82,779/- together with interest at the rate of 11.45% per annum with monthly rests being the amount due under Cash Credit Hypothecation Loan Account No.302109411000001; a sum of Rs.16,62,511/- with interest at the rate of 11.45% per annum with monthly rests being the amount due under Loan Account No.302106211000047; a sum of Rs.4,56,346/- together with interest at the rate of 11.45% per annum with monthly rests being the amount due under Loan Account

No.302107761000001from the date of filing of the OA till the date of realization in full along with costs of this application.

2. The subject matter of the case is the “Cash Credit Hypothecation Limit” availed by the defendant from the erstwhile Vijaya Bank.

3. It is the case of the applicant that the sole defendant approached the erstwhile Vijaya Bank for grant of business loan and considering the said request the applicant bank sanctioned three Cash Credit Hypothecation Loans to the defendant. It is stated that the 1st loan of Rs.7,17,200/- was sanctioned on 14.1.2016 under Loan Account No.302109411000001 and the defendant

/ non priority sector advances and Agreement for Demand Cash Credit against Hypothecation of stocks and book debts.

4. It is also the case of the applicant that at the request of the defendant the applicant sanctioned the 2nd Cash Credit Hypothecation Loan of Rs.14,27,450/- on 23.2.2016 under Loan Account No.302106211000047 and the defendant

/ non priority sector advances, Agreement for Demand Cash Credit against Hypothecation of stocks and book debts, Letter of Access and Letter of Proprietorship.

5. It is the further case of the applicant that at the request of the defendant the applicant sanctioned third Cash Credit Hypothecation Loan of Rs.3,96,900/- on 11.03.2016 under Loan Account No.302107761000001 and the defendant

/ non-priority sector advances and Agreement for Demand Cash Credit against Hypothecation of Stocks and Book debts.

6. 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 loan account was classified the case a NPA. It is also stated that as the defendant did not come forward to the clear the outstanding dues the applicant issued a letter dated 6.10.2017 followed by a legal notice on 14.9.2018 calling upon the defendant to clear the outstanding dues.

7. 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 to 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.

8. Summons were taken out to the defendant and the summons sent to the sole defendant returned with endorsement “Intimation delivered” and hence the service was held sufficient. As there was no representation on behalf of the defendant on 05.02.2019 the defendant was set ex-parte on that day. Applicant Bank filed Proof Affidavit along with 21 documents, which were marked as Ex. A-1 to A-21 on 22.06.2022, however Exhibit A-21 was marked subject to proof. The Ld. Counsel for Applicant Bank made his submissions on 18.07.2022 and thereafter the matter stood till this date for passing final orders.

9. 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.

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

11. The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-21 along with the proof affidavit. Exhibit A-1 is the Demand Promissory Note dated 14.1.2016 executed by the defendant. Exhibit A-2 is the Letter of Repayment dated 14.1.2016 executed by the defendant. Exhibit A-3 is the Loan Agreement cum Hypothecation Agreement for priority / non-priority sector advances dated 14.1.2016 executed by the defendant. Exhibit A-4 is the Agreement for Demand Cash Credit against hypothecation of stocks and book debts dated 14.1.2016 executed by the defendant. Exhibit A-5 is the Demand Promissory Note dated 23.02.2016 executed by the defendant. Exhibit A-6 is the

Letter of Repayment dated 23.02.2016 executed by the defendant. Exhibit A-7 is the Loan Agreement cum Hypothecation Agreement for priority / non-priority sector advances dated 23.2.2016 executed by the defendant. Exhibit A-8 is the Agreement for Demand Cash Credit against hypothecation of stocks and book debts dated 23.2.2016 executed by the defendant. Exhibit A-9 is the Letter of Access dated 23.2.2016 executed by the defendant. Exhibit A-10 is the Letter of Proprietorship dated 23.2.2016 executed by the defendant. Exhibit A-11 is the Demand Promissory Note dated 11.3.2016 executed by the defendant. Exhibit A-12 Is the Letter of Repayment dated 11.3.2016 executed by the defendant. Exhibit A-13 is the Loan Agreement cum Hypothecation Agreement for priority / non priority sector advances dated 11.3.2016 executed by the defendant. Exhibit A-14 is the Agreement for Demand Cash Credit against Hypothecation of Stocks and Book debts dated 11.3.2016 executed by the defendant. Exhibit A-15 and A- 16 is the demand notice dated 6.10.2017 and the returned cover respectively. Exhibit A-17 is the legal notice dated 14.9.2018 calling upon the defendant for the repayment of loan. Exhibit A-18 to A-20 are the statement of accounts in respect of all the three loan accounts along with certificates under Bankers’ Book Evidence Act. Exhibit A-21 is the Power of Attorney issued to the officer of the applicant .

12. Exhibit A-1 to A-4 evidences that the defendant approached the applicant for grant of credit facility and the applicant sanctioned first Cash Credit Limit Hypothecation limit of Rs.7,17,200/- under Loan Account No.302109411000001 and the defendant to secure the said limit executed various loan documents on

14.01.2016. Exhibit A-5 to A-10 evidences that the defendant approached the applicant for grant of credit facility and the applicant sanctioned second Cash Credit Limit Hypothecation of Rs.14,27,250/- under Loan Account No.302106211000047 and the defendant executed various loan documents on 23.02.2016. Exhibit A-11 to A-14 evidences that the defendant approached the applicant for grant of credit facility and the applicant sanctioned third Cash Credit Limit Hypothecation of Rs.3,96,900/- under Loan Account No.302107761000001 and the defendant executed various loan documents on 11.03.2016. Exhibit A-15 and A-16 evidences that applicant issued a demand notice dated 6.10.2017 and the same returned unserved on 20.10.2017. Exhibit A-17 evidences that the defendants defaulted in repayment and failed to clear the outstanding dues despite repeated demands and hence the applicant issued a legal notice on 14.9.2018 calling upon the defendant to clear the outstanding dues. Exhibit A-18 to A-20, 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-21 evidences that the deponent of the affidavit has been authorised to filed the application and defend the claim on behalf of the applicant.

13. 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.

14. In view of the fact that the loan availed by the defendant being business loan and the defendant failed to comply with the terms and conditions of sanction the Tribunal is not inclined to interfere in the interest rate claimed by the applicant.

15. 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.845 of 2018 stands allowed.

(b) Applicant is permitted to realize a sum of an aggregate sum of Rs.29,01,636/- with further interest at the rate of 11.45% per annum with monthly rests from the defendant from the date of filing of the OA till date of realization, after deducting all the amounts received by them during the pendency of OA, and also by selling the other assets of the defendant.

(c) It is made clear that 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 29th day of July, 2022)

Sd/- (T. RAJESH) PRESIDING OFFICER DRT-II, CHENNAI