ENCORE ASSET RECONSTRUCTION COMPANY PVT. LTD (ASSIGNOR : ALLAHABAD BANK) vs SRI. H E GRISHAPPA on 28 February 2025

FINAL ORDER

1. The present Transfer Application in (short) TA has been filed under section 19 of Recovery of Debts and Bankruptcy Act 1993 for 2 TA/661/2017

seeking issuance of Recovery Certificate against the defendants for Rs.1,14,50,996/- (Rupees One Crore Fourteen Lakh Fifty Thousand Nine Hundred and Ninety Six Only) with further interest thereon from the date of filing the Application till realization from the Defendants.

2. It is the case of the applicant that, after filing of the present OA, the lender bank namely Allahabad bank assigned the loan accounts of the defendants together with the hypothecated movables the brief particulars of which are stated in the OA, mortgaged immovable properties which are more fully described in schedule A of the OA and Guarantees obtained to secure the loan facilities to Encore Asset Reconstruction Pvt. Ltd. The defendant No.1 carries on business and under the name and style of C.G. Electronics, a proprietary concern of defendant No.1, the defendant No.2 is the guarantor for the credit facilities availed by defendant No.1. The defendants have availed credit facilities under various schemes of the applicant bank purpose of business activity. The details of the credit facilities sanctioned are tabulated as under: Sl. No. Particulars of credit facility Loan limit (amount in Rupees) Date of sanction

Cash credit facility 10.00 lakhs 15.05.2009

Term loan for purchase of Car 7.00 lakhs 09.02.2010

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Term loan against rent receivables 75.00 lakhs 18.01.2014

3. It is also the case of the applicant that, in view of the above financed the defendants have executed necessary loan documents apart from the creation of security interest by way of mortgage over the Schedule properties.

4. It is further contended that, despite availing the credit facilities, agreeing to service the loan accounts promptly and regularly, the defendants failed in complying the same, resulting in default in repayment and consequentially turning the loan account as NPA.

5. In the above circumstances, the applicant approached this Tribunal by filing this OA seeking issuance of Recovery Certificate for the amount due in the account.

6. After filing of the OA, summons was sent to the Defendant through RPAD, the same was duly served to Defendants No.1 and 2 and have filed vakalath through counsel. Though sufficient opportunity is given to the defendants but not chosen to file the written statement within stipulated time and hence filed IA.No.189/2020 a petition to recall the Order dated 29.01.2019 and this Tribunal vide order dated 15.02.2022 dismissed the IA.

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7. The applicant let in evidence through AW-1, who filed Proof Affidavit reiterating the contentions taken in the OA and also produced Exhibits A3 to A24 and got the same marked in evidence.

8. Heard the Ld. Counsel for the Applicant and considered the contentions as taken in the OA in the light of documentary evidence and proof affidavit.

9. The following issues arise for consideration in this matter: i) Whether the applicant had succeeded in proving the OA claim as against the defendants? ii) What order are to be passed?

Both these issues are gone into and decided together.

10. The case put forth by the applicant in the Application remains unrebutted as defendants remained exparte. The evidence tendered by the applicant remains uncontroverted and undisputed. The evidences put forth by the applicant were found admissible and are sufficient to prove availment of credit facility as stated in the OA, creation of security interest as claimed by the applicant bank and the defaults committed in the account. The liability of the defendants and the claim of the amount due is also 5 TA/661/2017

proved by the above documents. The claim of the applicant is well within the limitation.

11. During the course of the proceedings, the applicant bank has filed Report on sale of the mortgaged properties of Defendants was sold in an auction held on 02.09.2019 pursuant to sale notice dated 31.07.2019 issued to the defendants. The immovable property more fully described in Schedule –A – I was sold for sale consideration of Rs.2,27,00000/- and Schedule –A- II was sold for sale consideration of Rs.1,13,00000/-. The Report on sale of mortgaged immovable properties described in schedule A-I and A- II of OA filed by the applicant on 10.09.2024 is taken on record.

12. Hence in view of the above finding which cover both the issues raised in this manner, this Tribunal is of the view that TA is liable to be allowed.

13. Taking into consideration the facts that the credit facility is availed for business purpose and also that OA claim is arrived at by calculating interest at the agreed rate, this Tribunal in view of the TA can be allowed with a reduced to simple.

14. In the result, TA.No.661/2017 stands allowed,

i) The applicant is allowed to recovery an aggregate sum 6 TA/661/2017

of Rs.1,14,50,996/- (Rupees One Crore Fourteen Lakhs Fifty Thousand Nine Hundred and Ninety Six only) consisting of:

a) Rs.12,92454.14 (Rupees Twelve Lakhs Ninety Two Thousand Four Hundred Fifty Four and Fourteen Paise only) with interest at 11.20% per annum under Cash Credit Limit A/c.No.50013914043;

b) Rs.4,57,541.32 (Rupees Four Lakh Fifty Seven Thousand Five Hundred Forty One and Thirty Two Paise only) with interest at 11.95% per annum under Vehicle Loan A/c.No.50026188605 and

c) Rs.97,00,970.05 (Rupees Ninety Seven Lakh Nine Hundred Seventy and Five Paise only) with interest at 14.70% per annum under ALL bank rent scheme from the date of filing OA till the realization, after giving credit to all the amount recovered and received during the pendency of the OA including the sum of Rs.3.40 Crore realized by way of sale of schedule A-I and A-II properties on the respective date.

ii) If the sale proceeds are not found sufficient to cover the amount due and payable to the applicant bank, the defendants jointly, severally and personally and other their assets are liable for all such amounts due under the loan accounts.

iv) The applicant bank is allowed cost of the proceeding 7 TA/661/2017

which applicant to file cost memo within 7 days from the date of receipt of the order.

v) The Recovery Certificate to be drawn in terms of this order and transferred to Recovery for execution.

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 the Stenographer (PR), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 28th Day of February 2025]. Sd/- (T. RAJESH) PRESIDING OFFICER

ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Sri. Padma Kumar S, Director of the applicant. Exhibits on the part of the Applicant: Annexure Particulars A1 Applicant Evidence A2 List of Documents A3 Application for sanction of loan dated 15.05.2009 (C.C. Limits of Rs.10.00 Lakhs) by the Defendant No.1

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A4 Application for sanction of loan dated 05.02.2010 (vehicle loan of Rs.7.00 Lakhs) by the Defendant No.1 A5 Application for sanction of loan dated 16.01.2014 (All Bank rent of Rs.75.00 Lakhs) by the Defendant No.1 A6 Letter of sanction dated 15.05.2009 (C. C. Limits of Rs.10.00 Lakhs) by Applicant Bank. A7 Letter of sanction dated 20.05.2013 (renewal of C.C. limits) by Applicant Bank A8 Letter of sanction dated 09.02.2010 (vehicle loan of Rs.7.00 Lakhs) by Applicant Bank. A9 Letter of sanction dated 18.01.2014 (All Bank rent Rs.75.00 lakhs) by applicant bank A10 Agreement of hypothecation dated 19.05.2009 (C.C. limit) by defendant No.1 A11 Agreement of Hypothecation dated 09.02.2010 (Vehicle loan) by defendant No.1 A12 Agreement of Term loan cum Hypothecation dated 27.01.2014 by defendant No.1 A13 Deed of Guarantee dated 19.05.2009 (C.C. Limits) by defendant No.2 A14 Deed of Guarantee (Vehicle loan) dated 09.02.2010 by defendant No.2 A15 Deed of Guarantee dated 27.01.2014 (All Bank rent Rs.75.00 lakhs) by defendant No.2 A16 Memorandum of deposit of title deeds dated 19.05.2009 by defendant No.1

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A17 Supplemental Memorandum dated 10.06.2010 by defendant No.1 A18 Memorandum of Deposit of Title Deeds dated 03.02.2010 by defendant No.2 A19 Supplemental Memorandum of deposit of title deeds dated 30.01.2013 by defendant No.1 and 2 A20 Letter of confirmation dated 27.01.2014 in respect of Equitable Mortgage by defendant No. A21 Statement of account No.50013914043 (C.C. limits) A22 Statement of account No.50026188605 (Vehicle loan) A23 Statement of account No.50188249176 (ALL Bank rent loan) A24 Certificate under Banker book of Evidence Act

Sd/- (T. RAJESH) PRESIDING OFFICER