KARNATAKA GRAMIN BANK vs SRI. RACHANA GOUDA on 30 January 2024

:FINAL ORDER:

The Transferred Application (TA) is filed on 02.07.2016 by Applicant Bank under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993, against the defendant to recover a sum of Rs.12,26,460/- with further interest thereon from the date of filing the Application till realization from the defendants. BRIEF FACTS OF THE CASE:

2. The Applicant submits that the application is filed within the period of limitation as prescribed under Section 24 of the Recovery of Debt Due to Banks and Bankruptcy Act 1993, and the subject recovery claim falls within the jurisdiction of this Hon’ble Tribunal.

3. The case of the Applicant Bank is that the Defendant No. 1 is the borrower and the Defendant Nos. 2 to 4 are the Guarantors. The Defendant Nos. 3 & 4 are wife and son of the Defendant No.1. The Defendant No.1 being an agriculturalist has approached the Applicant Bank seeking Loan for construction of Godown in the Schedule Property. The Defendant Nos. 2 to 4 have offered personal guarantee for the due repayment of the loan by the Defendant No.1.

4. It is submitted that The Defendant No. 1 has submitted Loan Application dated 25.08.2004. The Applicant Bank considered the proposal of the Defendant No.1 and sanctioned Term Loan of Rs.6,31,000/- (Rupees

Six Lakhs Thirty One Thousand only) for the purpose of constructing a rural godown vide sanction Memorandum dated 21.09.2004 and agreed to repay the loan in 11 yearly installments of Rs. 36,400/- (Rupees Thirty Six Thousand Four Hundred Only) and to pay interest and other charges separately as and when due. At the time of availing the loan, the Defendant No.1 has agreed to pay interest at the rate of 11% p.a. compounded half yearly and penal interest of 2% p.a. on the overdue amount.

5. The Defendant No. 1 again approached the Applicant Bank seeking Crop loan of Rs.29,000/- (Rupees Twenty Nine Thousand only) for the purpose of cultivating Tur crop and other allied crops and submitted Loan Application dated 30.06.2009. the applicant bank sanctioned Crop Loan of Rs.29,000/- (Rupees Twenty Nine Thousand only) for the purpose of growing Tur crop and other allied crops. The Defendant No. 1 has availed the Crop Loan of Rs.29,000/- (Rupees Twenty Nine Thousand only) and utilized the same for growing the Tur crop. The crop loan was tenable for Three years from the date of sanction subject to annual review by the Applicant Bank. The Defendant No. 1 has agreed to repay the loan within Twelve months from the date of disbursement or 18 months in case of annual yielding crops or marketing of the produce, whichever is the earlier. Under the Agreement, the Defendant No. 1 has agreed to pay interest at 7% p.a. compounded half yearly and penal interest of 2% p.a. on the overdue amount.

6. The Defendant No.1 has executed Letters of Revival dated

20.09.2007, 30.08.2010 & 28.07.2013; The Defendant No.2 has executed Letters of Revival dated 20.09.2007 & 22.07.2010; The Defendant No.3 has executed Letters of Revival dated 20.09.2007, 22.07.2010 & 18.06.2013; The Defendant No.4 has executed Letters of Revival dated 28.09.2007, 22.07.2010 & 18.06.2013 in favour of the Applicant Bank in respect of the Rural Godown Loan.

7. The Defendant No.1 has executed Letters of Revival dated 20.09.2007, 30.08.2010 & 28.07.2013; The Defendant No.2 has executed Letters of Revival dated 20.09.2007 & 22.07.2010; The Defendant No.3 has executed Letters of Revival dated 20.09.2007, 22.07.2010 & 18.06.2013; The Defendant No.4 has executed Letters of Revival dated 28.09.2007, 22.07.2010 & 18.06.2013 in favour of the Applicant Bank in respect of the Rural Godown Loan.

8. The defendant executed necessary loan documents in favour of the applicant bank as security for the due repayment of the loans, interest, cost and charges, and various loan documents in respect of loans in favour of the applicant bank.

9. The Applicant Bank submits that the Defendants, after availing the said facilities, failed to repay the loan amount and committed default. The loan account was classified as NPA. The default in repayment continued and there was no positive response from the defendants. Hence, the applicant bank has issued Legal notice dated 24.03.2011. Hence, this Original Application (OA) has been filed to recover the dues from the defendants.

10. After the filing of the OA, summons was sent to the Defendant Nos.1 to 3 through Registered Post with Acknowledgment Due and returned unserved to Defendant Nos.1, 3 and 4 with postal shara, “Not in station”; defendant No.2 with postal shara “Addressee Died”. Hence, summons through substitute service was taken and the Applicant Bank published on 29.12.2018 in two daily leading newspapers, “Indian Express” in English Newspaper and “Kannada Prabha” in Kannada Newspaper. When OA was taken up on 10.07.2023 even after giving sufficient time, there was no appearance or representation from the defendants No.1,3 and 4; hence, Defendant Nos.1,3 and 4 were placed exparte on 10.07.2023. The defendant No.2 is deceased, the counsel for the applicant filed a memo dated 28.03.2021 reporting that Defendant No.2 has no Legal heirs. Heard the submissions of Applicant Bank and perused the records.

8. To prove the case of the Applicant Bank, Mr. Naresh Kumar Reddy, Manager and PA Holder, has filed his Affidavit by way of evidence and same was considered as evidence of AW.1 and marked as Ex.A1, the list of Document came to be marked as Ex.A2 and documents came to be marked as Ex.A3 to A29. As the defendants remained ex-parte, the OA claim remains unchallenged. There is no contra evidence available on record to repudiate the claim of the Applicant Bank.

9. Having regard to the amount advanced, the interest applied, the conduct and operations in the account and the default committed, this Tribunal comes to the conclusion that the applicant bank is entitled to a final order on the following terms.

: O R D E R:

10. The OA is allowed with costs,

(a) The applicant bank is allowed to recover from Defendants jointly, severally and personally a Rs.12,26,460/- (Rupees Twelve Lakhs Twenty Six Thousand Four Hundred Sixty only) out of the said amount Rural Godown Loan liability of Rs.11,65,978/- carries interest at the rate of 15.5% p.a. compounded half yearly from the date of the Application till the date of the realization payable by the Defendants. The Defendant No.1 alone is liable to pay balance Crop loan liability of Rs.60,482/- which carries interest at the rate of 13.50% p.a. compounded half yearly from the date of the Application till the date of the realization.

(b) In the event of failure of the defendants to pay the aforesaid amount, the bank is at liberty to recover the amount by sale of the schedule mentioned property in the OA;

(c) Schedule mentioned property in the OA shall be appended to this final order;

(d) If the sale proceeds of the schedule mentioned mortgaged/hypothecated properties are not sufficient to satisfy the dues as ordered above, the applicant bank is at liberty to sell the personal assets of the defendants (both movable and immovable) to recover the balance dues as required under law; (e) The applicant bank shall file the latest memo of calculation of OA amount together with interest, costs etc., to be paid by the defendants duly considering the amounts, if any, paid by the defendants and/or amount realized by sale of assets etc., during the intervening period after the filing of the OA, enabling the Registry to prepare Recovery Certificate for the amount to be paid by defendants to the applicant bank.

(f) The applicant bank shall file memo of costs within ten days from the date of this final order.

(g) Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of the final order.

11. A copy of this order be communicated to the parties concerned. [Dictated to the (PR), transcribed by her, corrected and signed by me on this the 30th of January, of 2024]

Sd/- (S.V. GOWRAMMA) PRESIDING OFFICER DRT-II, BENGALURU

ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Mr. Naresh Kumar Reddy, Manager of the applicant bank Exhibits on the part of the Applicant:

Exhibit Nos. Particulars of Documents Date A1 Applicant Evidence

A2 List of Documents.

A3 Loan Application submitted by the Defendant No.1 in respect of Rural Godown Loan 25.08.2004 A4 Sanction memorandum issued by the Applicant Bank. 21.09.2004 A5 Loan Agreement for Agricultural Loan executed by the Defendant No.1 in favour of the Applicant Bank. 29.09.2004 A6 Simple Mortgage Deed executed by the Defendant No.1 in favour of the Applicant Bank. 29.09.2004 A7 Letter of Guarantee executed by the Defendant Nos.2 to 4 in favour of the Applicant Bank. 29.09.2004 A8 Loan Application submitted by the Defendant No.1 in respect of Crop Loan. 30.06.2009 A9 Loan Agreement for Agricultural Loans executed by the Defendant No.1 in favour of the Applicant Bank. 30.06.2009 A10 To A20 The 11 Nos. of Letters of Revival executed by the Defendants in respect of Rural Godown Loan. 20.09.2007 (3Nos.,) 28.09.2007 22.07.2010 (3 Nos.,) 30.08.2010 18.06.2013 (2 Nos.,) 28.07.2013 A21 &

Two Nos. of Letters of Revival executed by the Defendant No.1 in respect of Crop Loan. 28.05.2012 15.05.2015 A23 Letter of balance confirmation executed by the Defendant No.1 in favour of Applicant Bank. 28.07.2013 A24 &

The Office Copy of the Legal Notice & Branch notice issued to the Defendants. 24.03.2011

A26 &

The Office Copy of the Letter issued by the Applicant Bank and Letter submitted by the Defendant No.1 29.05.2015 A28 &

The Two Nos. of Certified Accounts Extract of the Defendant No.1 relating to the Loans - A18 Loan Agreement for Agricultural Loan executed by the Defendant No.1 in favour of the Applicant Bank.

Witness Examined for the Defendants: -Nil - List of Documents Exhibited for the Defendants: -Nil -

SCHEDULE PROPERTY

The Defendant No.1 is the owner of Plot No.216 measuring 22 Feet X 100 Feet situated at Sangwar Village, Yadgiri Taluk, Yadgiri District and bounded on: East by: Busappa S/o Gokulappa House; West by: Open Site; North by: Govt. Primary School; South by: Defendant No.1’s House

Sd/- (S.V. GOWRAMMA) PRESIDING OFFICER DRT-II, BENGALURU