UNION BANK OF INDIA vs SRI.S.R. PATELAPPA on 29 April 2025

ORDER

1. The present Application was originally filed before the Debts Recovery Tribunal-I, Bengaluru under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993 and numbered as OA 1919/2016, to seeking recovery of a sum of Rs.5,77,88,674/- due under the two Agricultural Term Loans availed by Defendants 1 and 2 from the erstwhile Corporation Bank, which got amalgamated with the Applicant herein.

2. Subsequently, owing to bifurcation of jurisdiction vide Government of India Gazette Notification dated 30.01.2017, the Application (OA) was transferred to this Tribunal and renumbered as TA No.2127/2017.

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Brief facts of the case:

3. The Applicant contends that two credit facilities of Rs.4,00,00,000 and Rs.80,00,000 respectively were availed by 1stdefendant and the 2nd defendant stood as guarantor. The facilities were availed for the purpose of construction of poultry shed and other infrastructure and also for establishment of a feed mill building respectively. It is also stated that the facility is secured by mortgage of A, B and C schedule properties and hypothecation of movables.

4. The Applicant further contents that despite availing the credit facility by obliging to pay back the amounts borrowed in a periodic manner, the defendants failed in complying with the terms and conditions of the loan and all the efforts of the Applicant to make the defendants pay back the amount including the issuance of demand notice failed forcing the Applicant to file this Application. The Applicant is also seeking an order to the 3rd defendant not to release the Terminal benefits of 1st defendant who had taken VRS from the office of 3rd defendant.

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5. The 1st and 2nd defendants filed their written statement contending that the bank cannot charge interest as claimed. It is also alleged that there is capitalization of penal interest. The 3rd defendant had filed their written statement stating that they are not necessary party to the OA.

6. The Applicant let in evidence through AW1, filed proof affidavit in conformity with the pleading and got marked Ext A1 to A28, which are listed and appended to the order. Even though the defendants 1 and 2 had filed their proof affidavit, no serious dispute as to availment of credit facility and liability to pay back the amount is raised by the defendants 1 and 2.

7. Heard the Ld. counsel for the applicant alone as the Defendants counsel failed to appear and address this Tribunal despite sufficient chances given. The following issues arise for consideration.

(a) Whether the Applicant had proved the OA claim?

(b) What orders are to be passed? Both these issues are decided together.

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8. The Applicant’s evidence remain un-rebutted and hence proved. The documents produced by the Applicant are found to be admissible and are sufficient to prove OA claim. The defendants failed to substantiate their defence put forth in their written statement. Hence the Applicant is found entitled for the OA claim. The OA claim is made within limitation. Since the facilities are availed for commercial purpose, this Tribunal is not interfering with the interest rate as claimed. However taking note of the fact that OA claim is arrived at by calculating interest at agreed rate, pendente lite and further interest is awarded at simple rate.

9. In view of the above, i. TA No.2127 of 2017 is allowed; ii. Applicant is permitted to recover an amount of Rs 5,77,88,674/- (Rupee Five Crore Seventy Seven Lakh Eighty Eight Thousand Six Hundred and Seventy Four only) with pendente lite and further interest @ 11.75% (simple) from the date of filing of the OA/TA till realization from the defendants jointly, severally and 6 TA 2127/2017

personally after giving credit to all the amounts recovered and received during the pendency of the OA/TA. iii. The schedule property to be proceeded against and sold to recover the loan amount due and if the sale proceeds are not sufficient, the defendants are liable personally and their other assets are liable to be proceeded against. iv. A Recovery Certificate is to be drawn and issued to the Recovery Officer to enable recovery of the loan amount due as per the above terms. v. Applicant is allowed to realize cost of the proceeding for which cost memo is to be filed in 7 days’ time from the date of receipt of a copy of the order. vi. Schedule to the OA be the schedule to Recovery Certificate. vii. Interim Application pending, if any, stands disposed of with this Final order.

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10. Communicate a copy of this order to the parties concerned in terms of Sec.19(21)(i) of the Recovery of Debts and Bankruptcy Act 1993 read with Rule 16 of DRT (Procedure) Rules 1993. (Dictated to my PS directly on the Computer, corrected and pronounced by me in the open Court on this the 29th day of April 2025)

Sd/- (T. RAJESH)

Witness Examined for Applicant bank:

AW-1: Shri B Suresh, Assistant General Manager Applicant Exhibits:

1. Exh.A3 – loan application

2. Exh.A4- Copy of the credit sanction

3. Exh.A5- Agreement of Term loan

4. Exh.A6- Letter of undertaking

5. Exh.A7- Guarantee agreement

6. Exh.A8- Memorandum of Deposit of Title deeds

7. Exh.A9 -Sale deed dated 05.06.2008

8. Exh.A10-Sale Deed dated 24.05.2008

9. Exh.A11-Sale deed Dated 30.10.2013 along with transition

10. Exh.A12-Deed of Simple mortgage dated 29.03.2014

11. Exh.A13-Memorandum of Deposit of title deeds dt.29.03.2014

12. Exh.A14-Sale Deed dated 25.03.1995

13. Exh.A15-Sale Deed dated 25.01.1995

14. Exh.A16-Sale Deed dated 25.01.1995

15. Exh.A17-Gift Deed dated 30.12.2002

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16. Exh.A18-Common deed of hypothecation of movables/ assets/debts dated 29.03.2014

17. Exh.A19-Common Deed of hypothecation of movables/assets/debts dated 29.03.2014

18. Exh.A20- Account Extract

19. Exh.A21- Application

20. Exh.A22- Credit Sanction intimation

21. Exh.A23- Agreement for Term Loan dated 15.12.2014

22. Exh.A24 -Guarantee Agreement dated 15.12.2014

23. Exh.A25-Common deed of hypothecation of movables/assets/debts dated 15.12.2014

24. Exh.A26-Common deed of hypothecation of crops/stocks dated 15.12.2014

25. Exh.A27-Account extract

26. Exh.A28-Notice dated 30.05.2016 u/s 13(2) r/w 13(3) of SARFAESI Act.

Sd/- (T. RAJESH)