UNION BANK OF INDIA vs P.Sangeetha 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.31,66,448/- with interest @10% 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 defendants approached the applicant for sanction of a housing loan for purchase of a flat more fully described in the schedule to the OA by loan application dated Nil and the applicant considering the said request sanctioned housing loan of Rs.29,00,000/- to the defendants by its sanction letter dated 4.3.2015. It is contended that the said sum is repayable in 300 equated monthly installments of Rs.26,352/- every month.

4. It is also the case of the applicant that the defendants executed Housing Loan Agreement on 6.3.2015 thereby agreeing to the terms and conditions of sanction. It is also contended that the defendants executed Demand Promissory Note dated 06.03.2015 for a sum of Rs.29,00,000/-.

5. It is the further case of the applicant that the 1st defendant mortgaged the property purchased by registered sale deed dated 9.3.2015 registered as Doc. No.2537 of 2015 in favour of the applicant by way of deposit of title deeds on 27.3.2015. Further, the 1st defendant executed Memorandum of Deposit of Title deeds dated 27.03.2015 registered as Doc. No.3649 of 2015 on the file of SRO, Selaiyur.

6. It is the case of the applicant that after availing the credit facility the defendants defaulted in repayment and failed to clear the outstanding dues despite repeated demands / requests and did not come forward to clear the outstanding dues and hence the loan account was classified as NPA on 31.01.2019.

7. It is also 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 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 defendants. Summons to the 1st defendant returned with endorsement „no such person‟ at one of the addresses and with endorsement “Unclaimed” in the other address. Similarly summons to the 2nd defendant returned with endorsement “Left” at one of the addresses and with endorsement “Unclaimed” in the other address. Since the notice returned as „unclaimed‟ the service was held sufficient. As there was no representation on behalf of the defendants on 26.08.2019, they were set ex-parte on that day.

Applicant Bank filed Proof Affidavit along with 9 documents, which were marked as Ex. A-1 to A-9 on 26.10.2021. The Ld. Counsel for Applicant Bank made his submissions on 17.12.2021 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 defendants?

(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-9 along with the proof affidavit. Exhibit A-1 is the Loan application dated Nil submitted by the defendants requesting for grant of housing loan for purchase of schedule property. Exhibit A-2 is the sanction letter of the applicant dated 4.3.2015 sanctioning housing loan of Rs.29 lakhs to the defendants. Exhibit A-3 is the Demand Promissory Note dated 6.3.2015 for a sum of Rs.29 lakhs executed by the defendants. Exhibit A-4 is the housing loan agreement dated 6.3.2015 executed by the defendants in favour of the applicant. Exhibit A-5 is the Memorandum of Deposit of Title deeds dated 27.3.2015 executed by the 1st defendant. Exhibit A-6 is the sale deed dated 9.3.2015 in

favour of the 1st defendant registered as Doc. No.2537 of 2015. Exhibit A-7 is the encumbrance certificate bearing No.4845 dated 28.04.2015. Exhibit A-8 is the Simple Debit Balance Confirmation dated 9.8.2018 executed by the defendants. Exhibit A-9 is the statement of accounts in respect of the loan account.

12. Exhibit A-1 evidences that the defendants approached the applicant for sanction of housing loan for purchase of flat more fully described in the schedule to the OA. Exhibit A-2 evidences that the applicant considering the request of the defendants sanctioned housing loan of Rs.29 lakhs by its sanction letter dated 4.3.2015. Exhibit A-3 and A-4 evidences that the defendants executed necessary loan document in favour of the applicant on 6.3.2015. Exhibit A-5 to A-7 evidences that the 1st defendant deposited the title deeds of the property more fully described in the schedule to the OA with the applicant bank with an intention to create equitable mortgage over the same in favour of the applicant and confirmed the same by executing Memorandum of Deposit of Title deeds on 27.3.2015. Exhibit A-8 evidences that the applicant executed Simple Debit Balance Confirmation on 9.8.2018 thereby confirming the amount dues. Exhibit A-9, 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 both the loan accounts. It is also clear from the statement of accounts that penal interest is not capitalized. .

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 and 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.

14. 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 of the applicant for award of interest with monthly rests and award simple interest and at reduced rates.

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.511 of 2019 stands allowed.

(b) Applicant is permitted to realize an amount of Rs.31,66,448/- with interest @10% 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.

16. 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