KARNATAKA BANK LIMITED vs GURULINGA B.N on 6 April 2023

FINAL ORDER

The Application was originally filed before the Debts Recovery Tribunal-1, Bangalore under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act 1993 on 11.08.2016 and numbered as OA 1707/2016, seeking recovery a sum of Rs.68,96,952/- (Rupees sixty eight lakh ninety six thousand nine hundred and fifty two only) with further interest thereon and costs from the Defendants.

2. Subsequently, in view of the Government of India Notification & Official Gazette dated 30.01.2017, the case was transferred to this Tribunal and renumbered as TA.1340/2017. Brief facts of the case:

Term Loan

3. The case of the Applicant Bank is that the Defendant Nos.1 & 2 as Borrower and Defendant No.3 as Guarantor of the property had availed loan from the bank. That Smt. Malathi, the Defendant Nos.2 is deceased and is represented by her Legal Heirs Mr. Gurulinga B.N. (Defendant No.1).

4. During the month of July 2013, the Defendant Nos.1 & 2 approached the applicant bank for availing credit facility a Term Loan for Rs.66,00,000/- for the purpose of purchase of House Property. After considering the request the applicant bank sanctioned the Term Loan of Rs.66,00,000/- (Rupees sixty six lakh only) vide sanction order dated 08.08.2013 bearing A/c. No. 1117001600218601. The loan was repayable in equated monthly installment of Rs.76,055/- commencing from 14.09.2013, together with interest @ 11.25% p.a. compounded monthly rest and also to pay overdue interest @ 3% p.a. in case of any default in payment, rising or falling with base rate of interest fixed by the applicant bank from time to time.

5. The Defendant No.1 has purchased the house property and the amount of loan has been paid to the Vendor of the said property by name Smt. Damayanthi which was paid by two demand drafts bearing Nos.009203 and 009204 both dated 14.08.2013 for a sum of Rs.33,00,000/- each totally amounting to Rs.66,00,000/- and the pursuant to sanction of credit facility and by way of security for repayment of the loan he mortgage the house property bearing No.126- A, (PID No. 22-4-126-A), 4th main road, 4th block, Rajajinagar, Bengaluru in favour of the applicant bank.

6. The Defendants executed necessary loan documents in favour of the applicant bank including the Memorandum of Deposit of Title Deeds dated 14.08.2013, the mortgage property was more fully described in the 1st schedule of the OA and also executed Consent Letter and Declaration dated 14.08.2013 in favour of the applicant bank.

7. The Applicant Bank submits that the Defendants, after availing the said loan, failed to repay the loan amount and committed default. The bank issued a loan Recall Notice on 07.08.2015 and 27.06.2016 calling upon the defendant to repay the entire outstanding loan amount. After receiving the Recall Notice, Defendant No.1 has sent a reply dated 30.07.2016 claiming that certain family members of his vendors has filed a suit O.S.No.8802/2015. However, there was no positive response from the Defendants. Hence, this Original Application (OA) has been filed to recover the dues from the Defendants.

8. After the filing of the OA, summons was sent to the Defendants 1 to 3. Defendant Nos.1 has entered appearance through counsel Sri. M.A. Rajendra by filling Vakalath, but did not file the written statement in spite of opportunity, hence Written Statement of Defendants Nos.1 was closed on 18.01.2023. The 2nd defendant is deceased and defendant NO.1 is the legal heirs of Defendant No.2, however no vakalat is filed for Defendant No.2 . The summons sent to Defendant No.3 through Registered Post with Acknowledgment Due returned unserved with postal shara “Addressee Left”. Hence, summons through substitute service was taken and the Applicant Bank published in two daily leading newspapers, “The New Indian Express” in English Newspaper and “Sumyukta Karnataka” in Kannada Newspaper. When OA was taken up on 18-01-2023, even after giving sufficient time, there was no appearance or representation from the defendants; hence, Defendant No. 3 were placed exparte on 18-01-2023.

Heard the submissions of Applicant Bank and perused the records.

9. To prove the case of the Applicant Bank, Sri. Aravinda M S/o Sri. Manjunatha, Senior Branch 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 Ex.A2 and documents came to be marked as Ex.A-3 to A-16. As the defendants remained ex-parte and defendant did not contest the case by filing written statement, the OA claim remains unchallenged. There is no contra evidence available on record to repudiate the claim of the Applicant Bank.

10. 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:

11. The OA is allowed with costs,

(a) The applicant bank is allowed to recover from Defendants Nos.1 to 3 are jointly, severally to pay a sum of Rs.68,96,952/- (Rupees sixty eight lakh ninety six thousand nine hundred and fifty two only) together with current and future interest @ 13.75% p.a. with monthly rests from 11.08.2016 and till the dated of 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 TA shall be appended to this final order; (d) 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.

12. A copy of this order be communicated to the parties concerned. [Dictated to the (CS), transcribed by him, corrected and signed by me on this the 6thday of April, 2023].

Sd/- PRESIDING OFFICER DRT-II, BENGALURU

ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Sri. Sri. Aravinda M S/o Sri. Manjunatha, Senior Branch Manager of Applicant Bank.

Exhibits on the part of the Applicant:

Sl. No. Particulars of Documents Exhibit Nos.

Applicant Evidence A-1

List of Documents A-2

Sanction Order dated 08.08.2013 issued by Bank to Defendants. A-3

Term Loan Agreement dated 14.08.2013 executed by Defendants in favour of Applicant Bank. A-4

Memorandum of Deposit of Title Deeds dated 14.08.2013 by Defendants in favour of Applicant Bank. A-5

Consent Letter dated 14.08.2013 from Defendant Nos. 1 and 2 to the Applicant Bank. A-6

Consent Letter dated 14.08.2013 from Defendant No. 3 to the Applicant Bank. A-7

Declaration dated 14.08.2013 by Defendant Nos.1 & 2 to the Applicant Bank. A-8

Declaration dated 14.08.2013 by Defendant Nos.3to the Applicant Bank. A-9

Statement of Account relating to Term Loan Account of Defendant No.1 A-10

Recall Notice dated 07.08.2015 issued by Bank to Defendants. A-11

Returned Envelope relating to dispatch of recall notice dated 07.08.2015 on the Defendant No.1 A-12

Returned Envelope relating to dispatch of recall notice dated 07.08.2015 on the Defendant No.3 A-13

Demand Notice dated 05.12.2015 under Section 13 (2) of the Securitization Act issued by Applicant to Defendants. A-14

Recall Notice dated 27.06.2016 issued by Applicant Bank to Defendants. A-15

Reply dated 30.07.2016 from Defendant No.1 to Bank. A-16

Witness Examined for the Defendants:-Nil – List of Documents Exhibited for the Defendants:- Nil - SCHEDULE-I DESCRIPTION OF THE PROPERTY MORTGAGED BY DEFENDANT NO.1

All that piece and parcel of the Immovable property with residential building constructed on the site bearing Municipal NO.126-A, PID No.22- 4-126-A, situated at 4th main, 4th block, Rajajinagar, Bangalore, within the limits of Bruhat Bangalore Mahanagara Palike, measuring East to West: 41 feet; North to South: 29 feet; totally measuring 1189 sqft and Bounded as follows.

East by: Road, West by: H.No. 123-B North by: H.No.125-B South by: H.No.126-B

Sd/- PRESIDING OFFICER DRT-II, BENGALURU