CANARA BANK vs M.Chockalingam on 31 December 2021

FINAL ORDER

1. This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendants for recovery of a sum of Rs.39,15,763/- with interest @12.45% per annum with monthly rests from the

date of the OA till the date of realization in full along with costs of this application and for sale of schedule mentioned property.

2. The subject matter of the case is the Housing Loan availed by the defendants from the applicant bank. The facts of the case as stated in the OA, in brief, are as follows.

3. It is the case of the applicant that the defendant approached the applicant bank for sanction of a housing loan for purchase of Plot and construction of a house at S. No.484/1B2, Plot No.15, STP Sara Avenue, Vazhuvathur village more fully described in the schedule to the OA by loan application dated 13.11.2006 and considering the said request the applicant sanctioned a housing loan of Rs.9,00,000/- vide sanction memorandum dated 13.11.2006 repayable in 180 Equated Monthly Installments of Rs.9270/- each commencing from 14.11.2007.

4. It is also the case of the applicant that the defendants executed Housing Loan Guarantee agreement for Rs.9 lakhs on 13.11.2006. It is the further case of the applicant that the defendants deposited the title deeds of the schedule property with the applicant bank with an intention to create equitable mortgage over the same in favour of the applicant and executed letter evidencing deposit of title deeds dated 24.10.2006 and Memorandum of Deposit of Title Deeds dated 23.10.2006. It is further contended that the defendants also executed the acknowledgement of debt and security on various dates and the last being on 1.11.2018.

5. It is the further case of the defendants that after availing the loan, the defendants defaulted in repayment, failed and neglected to clear the outstanding dues and hence the loan account was classified as NPA on 4.3.2011. It is also contended that the applicant therefore caused a recall notice to the defendants on 10.6.2019 demanding a sum of Rs.39,15,763/- as on 10.06.2019.

6. It is the further 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 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.

7. Summons were taken out to the defendants and the same were served. As there was no representation on behalf of the defendants on 19.07.2021, they were 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 30.11.2021. The Ld. Counsel for Applicant Bank made his submissions on 21.12.2021 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-16 along with the proof affidavit. Exhibit A-1 is the loan application of the defendants dated 13.11.2006 requesting for sanction of housing loan. Exhibit A-2 is the sanction letter dated 13.11.2006 issued by the applicant sanctioning housing loan of Rs.9 lakhs to the defendants. Exhibit A-3 is the housing loan guarantee agreement dated 13.11.2006 executed by the defendants with guarantee covering letter. Exhibit A-4 is the Memorandum of Deposit of Title deeds executed by the 1st defendant dated 24.10.2006. Exhibit A-5 is the letter dated 23.10.2016 executed by the 1st defendant evidencing deposit of title deeds. Exhibits A-6 to A-12 are the acknowledgement of debt and security executed by the defendants on 24.12.2008, 10.112009, 08.11.2012, 24.02.2014, 05.11.2015, 31.10.2016 and 1.11.2018 respectively. Exhibit A-13 is the legal notice dated 11.6.2019 issued by the applicant to the defendants. Exhibit A-14 is the sale deed dated 11.9.2006 registered as Doc. No.5360 of 2006. Exhibit A-15 is the statement of accounts in respect of the loan account. Exhibit A-16 is the authorization letter authorizing Ms. Sowmya Mathew to institute and defend the claim on behalf of the applicant.

11. Exhibit A-1 evidences that the defendants approached the applicant by loan application dated 13.11.2006 for sanction of housing loan. Exhibit A-2 evidences that considering the request of the defendants the applicant vide its sanction

dated 13.11.2006 sanctioned housing loan of Rs.9 lakhs to the defendants. Exhibit A-3 evidences that the defendants had executed housing loan guarantee agreement on 13.11.2006. Exhibit A-4 and A-5 evidences that the 1st defendant had deposited the title deeds of the schedule property with the applicant and created equitable mortgage over the same in its favour on 23.10.2006. Exhibit A- 6 to A-12 evidences that the defendants had executed acknowledgement of debt and security in favour of the applicant on various dates. Exhibit A-13 evidences that after availing the housing loan, the defendants had defaulted in repayment, the loan account was classified as NPA and the applicant issued a legal notice recalling the entire loan amount due. Exhibit A-14 evidences that the schedule property is registered in favour of the defendants. Exhibit A-15, , the statement of accounts produced and certified under the Banker’s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendants under the loan account. It is also clear from the statement of accounts that penal interest is not capitalized. Further, Exhibit A-16 evidences that the Mrs. Sowmya Mathew is authorized by the applicant bank to institute and defend the claim of 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 subject loan is a housing loan and the interest rates have come down the Tribunal is inclined to reject the prayer for awarding interest with monthly rests and award simple interest and also 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.839 of 2019 stands allowed.

(b) Applicant is permitted to realize an amount of Rs.39,15,763/- with interest @12% p.a., simple from defendants jointly and severally, from the date of the OA till the date of its realization after deducting all the amounts received by them during the pendency of OA, and also by selling the schedule property 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 Accounts.

(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 Virtual Court, through Video Conference on this the 31st day of December, 2021)

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