BANK OF BARODA vs PRABHU P B on 9 February 2024

FINAL ORDER

The present Original Application (OA) is filed on 22-06-2020 under section 19 of the Recovery of Debts due to Banks and Financial Institutions Act 1993 for recovery of a sum of Rs.4,35,33,723/- (Rupees Four Crore Thirty Five Lakhs Thirty Three Thousand Seven Hundred and Twenty Three Only) with further interest thereon from the date of filing till realization from defendants.

2. The application filed is within the period of limitation as prescribed under Section 24 of the Recovery of Debts Due to Banks and Financial Institutions Act 1993 and the subject recovery claim falls within the jurisdiction of this Tribunal.

Brief facts of the case:

3. The Defendant No.1 as Borrower and Defendant No.2 as Guarantor application dated 25.05.2017 requested for Housing loan of Rs 4.31 crore from the Applicant Bank. That the Applicant Bank after considering application of the Defendants sanctioned Housing loan of Rs 4.31 crore (Rupees Four Crore Thirty One Lakh only) for takeover of Housing loan liability from Deutsche Bank AG on the terms conditions and security as set out in the Sanction Letter dated 30.06.2017.

4. The Defendant No.1 has executed a Demand Promissory Note dated 01.07.2017, for Rs.4,31,00,000/- promising to repay the loan amount together with interest @ 8.65% p.a. (Floating) with monthly rests. That the Defendant No.1 has executed a Letter of Repayment dated 01.07.2017 wherein, they have undertaken to repay the amount as detailed in the said Letter of Repayment at 8.65% p.a. with monthly rests and also authorized the Applicant Bank to charge additional or penal rate of interest or further interest

5. The Defendant No.1 has executed a Articles of Agreement dated 01.07.2017 inter-alia acknowledging the said loan and agreeing to repay the same together with interest in 163 equated monthly instalment (EMI) of Rs.4,50,350/- commencing from 31.07.2017. The Defendant No.1 has also agreed to pay interest at 8.65% p.a. (floating) and penal interest of 2% p.a. on the defaulted EMIs or at rates as decided by the Applicant Bank in its sole discretion from time to time over and above the interest charged in the said account. The Defendant has further agreed to utilize the loan for takeover of liability thereon and mortgage the house property to the Applicant Bank as prime security towards repayment of the loan.

6. The Defendant No. 2 has executed a Letter of Guarantee dated 01.07.2017. The Defendant No.1 has executed a Memorandum of Deposit of Title Deeds in favour of the Applicant Bank on 18.07.2017, mortgaging Residential Land and Building. The said security is also a collateral security for the OCC limit of Rs.5 Crore availed by M/s. Nisargalaya Drug Unit (P) Ltd with the Applicant Bank.

7. The Defendants have failed and neglected to pay to the Applicant Bank the principal and interest which fell due in respect of the loan. The Defendants have also committed some other defaults in terms of the loan agreement. In view of the continued default on the part of the Defendants in repayment of the outstanding dues, the Applicant Bank has classified the loan account as NPA as on 31.07.2019.

8. The Applicant Bank issued Demand Notice on 02.08.2019, calling upon the defendants to repay the entire loan liability of Rs.4,07,43,968/- (Rupees Four Crore Seven Lakh Forty Three Thousand Nine Hundred Sixty Eight Only) as on 31.07.2019 along with further interest from 01.08.2019 under Housing Loan Account No. 111808351000246, within 60 days from the date of the Notice. However, there is no response to the Notice from the Defendants.

9. That in view of the defaults committed by Defendant No. 1, the Applicant Bank issued Demand Notice to Defendant No. 2 (Guarantor) on 02.08.2019 calling upon him to repay the entire loan liability of Rs.4,07,43,968/-(Rupees Four Crore Seven Lakh Forty Three Thousand Nine Hundred Sixty Eight Only) as on 31.07.2019 along with further interest from 01.08.2019 under Housing Loan Account No. 111808351000246, and penal interest @ 2% p.a. compounded monthly on the outstanding liability, within 60 days from the date of the Notice.

10. After the filing of the OA, summons was sent to the Defendants No.1 and 2 by RPAD, on 02.02.2021, Postal cover returned with shara “Insufficient Address”. Hence, summons through substitute service was taken and the Applicant Bank published the summons to the Defendants in two daily leading newspapers kannada daily Newspaper “Kannada Prabha ’’ and English Daily ‘’The New Indian Express” on 07.08.2022. When OA was taken up on 17.01.2023, even after giving sufficient time, there was no appearance or representation from the defendants, hence, Defendants No.1 & 2 was placed ex-parte on 17.01.2023.

Heard the submissions of Counsels and perused the records.

11. To prove the case, Mr.Bhima Aroli, being the Chief Manager, has filed Affidavit by way of evidence and same was considered as evidence of AW.1 and marked as Ex.A1, the list of Documents came to be marked as A3 to A11. 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.

12. Having regard to the amount advanced, the interest applied, documents executed, the conduct and operations in the loan 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:

13. The OA is allowed with costs,

(a) The Applicant bank is allowed to recover from defendants a sum of Rs.4,35,33,723/- (Rupees Four Crore Thirty Five Lakhs Thirty Three Thousand Seven Hundred Twenty Three Only) as on 30.04.2020 under the Housing Loan Account No. 111808351000246, as debt due with further interest from 01.05.2020 at 8.70% per annum (Floating) and @ 2% Penal Interest with monthly rests from the date of application till the date of realisation.

(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 properties in the OA;

(c) Schedule mentioned properties in the OA shall be appended to this final order; (d) If the sale proceeds of the schedule mentioned 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 movables and immovables) 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.

14. A copy of this order be communicated to the parties concerned. [Dictated to the (GS), transcribed by her, corrected and signed by me on this the 09th day February 2024].

Sd/-

PRESIDING OFFICER

DRT-II, BENGALURU

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK:

AW-1: Its Chief Manager, Sri. Durgesh Chandra Roy, of the Applicant Bank.

Exhibits on the part of the Applicant:

Sl.No Particulars Exhibits

01. Sanction Letter dated 30.06.2017 A3

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

SCHEDULE A IMMOVABLE PROPERTIES MORTGAGED TO THE APPLICANT BANK STANDING IN THE NAME OF DEFENDANT NO.1

All that piece and parcel of the Residential Land and Building in property bearing Site No.9 and 10 carved out of converted Sy.No.14, presently coming

02. Demand Promissory Note for Rs.4.31Crore executed by Defendant No.1 dated 01.07.2017 A4

03. Letter of Repayment executed by Defendant No.1 dated 01.07.2017 A5

04. Articles of Agreement executed by Defendant No.1 dated 01.07.2017 A6

05. Letter of Guarantee executed by Defendant No.2 dated 01.07.2017 A7

06. Memorandum of Deposit of Title Deeds executed by Defendant No.1 dated 18.07.2017 A8

07. Demand Notice issued to Defendant No 1 U/s 13(2) of SARFEASI Act 2002, dated 02.08.2019 A9

08. Demand Notice issued to Defendant No 2 U/s 13(2) of SARFEASI Act 2002, dated 02.08.2019

A10

09. Copy of the statement of account certified under Bankers’ Book of Evidence Act., showing the outstanding liabilities under the Housing Loan Account No. 111808351000246 A11

under an administrative jurisdiction of BBMP having Khata No.205-2048/9 (PID No.2048/1038/09) and Khata No.206-1058/10 (PID No.2336/1058/10) situated at Dasarahalli Village, K R Puram Hobli, Bangalore East Taluk, admeasuring 10000 sq.ft with built up area of 2337.05 sq. ft and bounded by Site No.9

East to West 100 feet and North to South 50 feet East: Road West: Private Property North: Private Property South: Site No.10 Site No.10

Measuring East to West 100 feet and North to south 50 feet and bounded by: East: Road West: Private Property North: Property No.9 South: Site No.11 Sd/- PRESIDING OFFICER

DRT-II, BENGALURU