CANARA BANK vs SRI. DAVALASAB H. DESAI on 19 February 2024

FINAL ORDER

The present Original Application (OA) is filed on 31-03-2022 under section 19 of the Recovery of Debts due to Banks and Financial Institutions Act 1993 for recovery of a sum of Rs.53,64,891/-(Rupees Fifty Three Lakhs Sixty Four Thousand Eight Hundred and Ninety One 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 Defendants Nos.1 and 2 are the agriculturists who have borrowed loan from the Applicant Bank. The 3rd Defendant is the guarantor to the loan. An amount of Rs.6,15,000/- was availed by the 1st and 2nd defendants on 28.10.2005 for purchase of tractor which was used for agricultural purposes. The loan was sanctioned @ 10 % interest p.a & had to be repaid in 9 years, in yearly instalments of Rs. 68,500 /- and last year installment of Rs.67,000/- each with interest. Repayments were to start from 01.07.2006. The tractor purchased out of bank finance was hypothecated to the bank. The 1st and 2nd defendant have also executed an agreement for the agricultural advance & accepted the contractual rate of interest & other terms & conditions of repayment of the loan and 3rd defendant has guaranteed the repayment of this loan. The documents were executed with regard to this loan: Application cum appraisal form along with Sanction Note on 24.10.2005 by 1st and 2nd Defendants. Registered Simple Mortgage Deed executed by 1st and 2nd defendants on 11.10.2005 mortgaging the B schedule properties. Acknowledgement of amount availed dated 28.10.2005 by defendants, Agreement for agricultural advances by 1st and 2nd Defendants on 28.10.2005, Deed of guarantee for agricultural advances along with a covering letter executed by 3rd Defendant on 28.10.2005, Quotation for tractor by Pragathi Agro Engineering on 20.10.2005,

4. Letter of revival executed by 1st and 2nd defendants on 22.10.2008, 29.09.2011, 02.08.2017, Acknowledgment of debt and Security executed by 1st and 2nd defendants on 05.09.2014, Acknowledgment of debt and Security executed by 1st and 2nd defendants on 27.03.2020.

5. The Applicant Bank sanctioning the loan, the 1st and 2nd defendants have mortgaged agricultural lands which is more fully described in schedule B on 11.10.2005. The defendants are liable to repay the loan dues and also liable to pay an additional 2% interest over & above the normal rate of interest in case of default. The rate of interest is subject to variation from time to time

6. The Defendants has failed and neglected to pay to the Applicant Bank the liability under the aforesaid loan including interest in terms of the

Agreement. The Defendants has also committed some other defaults in terms of the loan agreements. In view of the continued default on the part of the Defendants in repayment of the outstanding dues. Calling upon the Defendants to repay the outstanding balance. However, there was no positive response from the defendants. Hence, this Original Application (OA) has been filed to recover the dues from the defendants.

7. After the filing of the OA, summons was sent to the Defendants Nos.1 to 3 by Applicant Bank by RPAD on 08.06.2022, duly served Acknowledgement produced, when OA was taken up on 11.09.2023, even after giving sufficient time, there was no appearance or representation from the defendants, hence, Defendants Nos. 1 to 3 was placed ex-parte on 11.09.2023.

Heard the submissions of Counsels and perused the records.

8. To prove the case, Mr. Sunil Ganapat Metre, aged about 34 years, Senior Manager of the Applicant Bank, has filed Affidavit by way of evidence and same was considered as evidence of AW.1 and marked as Ex.A1, and documents came to be marked as Ex.A3 to A15. 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, 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:

10. The OA is allowed with costs, a) The Applicant bank is allowed to recover from defendants jointly or severally to pay a sum of Rs.53,64,891/-(Rupees Fifty Three Lakhs Sixty Four Thousand Eight Hundred And Ninety One only) being the amount claimed in the application together with future interest at 13.45% for the loan plus 2% penal interest from the date of the application till realization with yearly interests.

(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.

11. 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 19th day of February 2024]

Sd/- PRESIDING OFFICER DRT-II, BENGALURU

ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK:

AW-1: Sri.Sunil Ganapat, Senior Manager of the Applicant Bank.

Exhibits on the part of the Applicant:

SL. NO PARTICULARS DATE Exhibits

1. Application cum appraisal form along with sanction note by 1st and 2nd Defendants. 24.10.2005 A3

2. Registered

simple mortgage deed executed by 1st and 2nd defendants 11.10.2005 A4 & A5

3. Acknowledgement of amount availed 28.10.2005 A6

4. Agreement for agricultural advances by 1st and 2nd Defendants 28.10.2005 A7

5. Deed of guarantee for agricultural advances along a covering letter executed by 3rd Defendant 28.10.2005 A8 & A9

Quotation for tractor by pragathi agro engineering 20.10.2005 A10

7. Letter of revival executed by 1st and 2nd defendants 22.10.2008 A11

8. Letter of revival executed by 1st and 2nd defendant 29.09.2011 A12

9. Acknowledgment of debt and Security executed by 1st and 2nd defendants 05.09.2014 A13

10. Letter of revival executed by 1st and 2nd defendants 02.08.2017 A14

11. Acknowledgment of debt and Security executed by 1st and 2nd defendants 27.03.2020 A15

Witness Examined for the Defendants: -Nil –

List of Documents Exhibited for the Defendants: -Nil –

1. SCHEDULE “A” : Hypothecation of Tractor

SCHEDULE ‘B’

I. Agricultural Land belonging to 1st and 2nd defendants bearing Sy.No.114/1+2A, situated at Neeralagi Village and Post, Gadag Taluk & District measuring 4.36 Acres and bounded on:

East by

: Land of Ibrahimpur Irappa West by

: Land of Vanageri Manjunath North by : Land of Ibrahimpur Yallappa South by : Land of Andavva Angadi

II. Agricultural Land belonging to 1st and 2nd defendants bearing Sy.No.197/2, situated at Neeralagi Village and Post, Gadag Taluk & District measuring 2.34 Acres and bounded on:

East by

: Land of Masagi Mahadevappa West by

: Bleri Road North by : Land of Fakeerasab South by : Land of Abbigeri Davalasabha

III. Agricultural Land belonging to 1st and 2nd defendants bearing Sy.No.203/2A/1, situated at Neeralagi Village and Post, Gadag Taluk & District measuring 8.06 Acres and bounded on:

East by

: Land of kariyappa Abbigeri West by

: Land of Ningappa Yallappa Umachagi North by : River South by : Road Sd/- PRESIDING OFFICER DRT-II, BENGALURU