IDBI BANK vs NARENDRA K A on 27 April 2023

FINAL ORDER

The present Transfer Application (OA) has been filed on 14.11.2019, under section 19 of the Recovery of Debts due to the Banks and Financial Institutions Act 1993 for recovery of a sum of Rs.58,05,103/- (Rupees fifty eight lakh five thousand one hundred three only) with further interest thereon and costs from the Defendants.

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

3. In the case of the Applicant Bank is that the 1st Defendant is a Proprietor of M/s. Skanda Enterprises as Borrower and Defendant No.2 as guarantor, had approached the Applicant Bank for financial assistance of Over Draft Loan Limit for sum of Rs.8,00,000/- for the purpose of business developments. After Considering the request of the Defendants, the applicant bank has sanctioned the Over Draft limit of Rs.8,00,000/- (Rupees eight lakh only) vide sanction letter dated 05.09.2012. The Defendant No.1 executed a Demand Promissory Note and Take Delivery Letter to Demand Promissory Note for Rs.8,00,000/- on 08.09.2012 promising to repay the amount together with interest @ 13.50% p.a. in favour of the applicant bank. The Defendants executed a Loan Cum Hypothecation Agreement on 08.09.2012 and Defendant No.1 & 2 executed a Guarantee Agreement and Undertaking dated 08.09.2012 in favour of the applicant bank.

3. (i). Further, the Defendant No.1 as Borrower and Defendant No.2 as guarantor. The defendants had approached the Applicant Bank for financial assistance of Enhanced Cash Credit Limit of Rs.20,00,000/- for the purpose of business developments. After Considering the request of the Defendants, the applicant bank has sanctioned the Enhanced Cash Credit limit of Rs.20,00,000/- (Rupees eight lakh only) vide sanction letter dated 31.07.2014. The Defendant No.1 executed a Demand Promissory Note and Take Delivery Letter to Demand Promissory Note for Rs.20,00,000/- on 01.08.2014 promising to repay the amount together with interest @ 12% p.a. in favour of the applicant bank. The Defendants executed a Loan Cum Hypothecation Agreement on 01.08.2014 and Defendant No.1 & 2 executed a Guarantee Agreement and Undertaking dated 01.08.2014 in favour of the applicant bank.

3. (ii). Further, the Defendant No.1 as Borrower and Defendant No.2 as guarantor, had approached the Applicant Bank for financial assistance of Renewal Cash Credit Limit of Rs.20,00,000/- for the purpose of business developments. After Considering the request of the Defendants, the applicant bank has sanctioned the Enhanced Cash Credit limit of Rs.20,00,000/- (Rupees eight lakh only) vide sanction letter dated 11.01.2016 in respect of the loan.

3. (iii). Further, the Defendant No.1 as Borrower and Defendant No.2 as guarantor, had approached the Applicant Bank for financial assistance of Enhanced Cash Credit Limit of Rs.25,00,000/- for the purpose of business developments. After Considering the request of the Defendants, the applicant bank has sanctioned the Enhanced Cash Credit limit of Rs.25,00,000/- (Rupees eight lakh only) vide sanction letter dated 06.02.2017. The Defendant No.1 executed a Demand Promissory Note and Take Delivery Letter to Demand Promissory Note for Rs.25,00,000/- on 06.02.2017 promising to repay the amount together with interest @ 10.80% p.a. in favour of the applicant bank. The Defendants executed a Loan Cum Hypothecation Agreement on 06.02.2017 and Defendant No.1 & 2 executed a Supplemental Guarantee Agreement and Undertaking dated 06.02.2017 in favour of the applicant bank.

3. (iv). Yet again defendants had approached the Applicant Bank for financial assistance of Enhanced Cash Credit Limit of Rs.30,00,000/- for the purpose of business developments. After Considering the request of the Defendants, the applicant bank has sanctioned the Enhanced Cash Credit limit of Rs.30,00,000/- (Rupees thirty lakh only) vide sanction letter dated 06.01.2018. The Defendant No.1 executed a Demand Promissory Note and Take Delivery Letter to Demand Promissory Note for Rs.35,00,000/- on 06.01.2018 promising to repay the amount together with interest @ 10.55% p.a. in favour of the applicant bank. The Defendants executed a Loan Cum Hypothecation Agreement on

06.01.2018 and Defendant No.1 & 2 executed a Supplemental Guarantee Agreement and Undertaking dated 06.01.2018 in favour of the applicant bank. Home Loan

4. The Defendant Nos.1 & 2 are Borrower, had approached the Applicant Bank for financial assistance of Housing Loan of Rs.15,00,000/- for the purpose of construction of House. After Considering the request of the Defendants, the applicant bank has sanctioned the House Loan of Rs.15,00,000/- (Rupees fifteen lakh only) vide sanction letter dated 28.12.2013. The loan carried floating rate of interest @ 10.25% p.a. and default rate of 5% p.a. and agreed to repaid in 180 equated monthly installments of Rs.16,349/- and to secure the loan by immovable property more fully described under Schedule in the OA. The Defendants executed a Home Loan Agreement and Power of Attorney dated 30.12.2013 in favour of the applicant bank. Top Up Housing Loan

5. The Defendant Nos.1 & 2 are Borrower, had approached the Applicant Bank for financial assistance of Top Up Housing Loan of Rs.15,00,000/- an application dated 22.03.2016 for the purpose of construction of House. After Considering the request of the Defendants, the applicant bank has sanctioned the Housing Loan of Rs.15,00,000/- (Rupees fifteen lakh only) vide sanction letter dated 27.04.2016. The loan carried floating rate of interest @ 9.60% p.a. and default rate of 5% p.a. and agreed to repaid in 180 equated monthly installments of

Rs.17,328/- and to secure the loan by immovable property more fully described under Schedule in the OA.

6. The Defendants executed necessary loan documents in favour of the applicant bank including as security for the due repayment of the loans, interest, cost and charges. Defendants executed Home Loan Agreement and Power of Attorney dated 28.04.2016 in favour of the applicant bank.

7. The Applicant Bank submits that the Defendants, after availing the said loans, failed to repay the loan amount and committed default. The Applicant bank issued a Demand Notice on 16.08.2019 under Sec.13(2) of SARFAESI Act, 2002 calling upon the defendants to repay the entire outstanding loan amount. The Defendants executed Acknowledgement of Debt and confirmation of Security Cum Revival Letters on 26.08.2013, 11.01.2016, 06.02.2017 and 06.01.2018. The default in repayment continued and there was no positive response from the defendants. Hence, this Original Application (OA) has been filed to recover the dues from the defendants. Due to bifurcation of territorial jurisdiction, the OA filed before DRT-I is transfer to DRT-2 assigned TA No.117/2019

8. After the filing of the TA, summons was sent to the Defendants through RPAD, the same is duly served to Defendant Nos.1 & 2 on 28.10.2020. Defendant Nos.1 entered appearance through counsel Sri. Sri. Karunakara by filling Vakalath, but did not file the written statement in spite of opportunity, hence Written Statement of Defendants Nos.1 was closed on 25.03.2022. When TA was taken up on 25.03.2022, even after giving sufficient time, there was no appearance or representation from the Defendant No.2; hence, Defendant No.2 was placed exparte on 25.03.2022.

Heard the submissions of Applicant Bank and perused the records.

9. To prove the case of the Applicant Bank, Sri. Manesh Kumar P S/o Late. K.N. Prabhakaran, 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-48. As the defendants remained ex-parte, the TA 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 TA is allowed with costs,

(a) The applicant bank is allowed to recover from Defendant Nos.1 & 2

Rs.58,05,103/- (Rupees fifty eight lakh five thousand one hundred three only) as on 31.10.2019 consisting of;

I. Rs.32,69,470/- (Rupees thirty two lakh sixty nine thousand four hundred and seventy only) under the CC A/c No. 036565110000016, as debt due with interest due thereon and further interest from 01.11.2019 interest @ 12.65% p.a. compounded monthly from 14.11.2019 till the date of realization.

II. Rs.12,71,449/- (Rupees twelve lakh seventeen thousand four hundred and forty nine only) under the Home Loan A/c No. 0365651000001236, as debt due with interest due thereon and further interest from 01.11.2019 interest @ 10.50% p.a. compounded monthly from 14.11.2019 till the date of realization.

III. Rs.13,18,184/- (Rupees thirteen lakh eighteen thousand one hundred and eighty four only) under the Housing Loan A/c No. 03656751000002196, as debt due with interest due thereon and further interest from 01.11.2019 interest @ 11.15% p.a. compounded monthly from 14.11.2019 till the date of realization.

(b) In the event of failure of the Defendants to pa y the aforesaid amount, the bank is at liberty to recover the amount by sale of the schedule mentioned property in the TA;

(c) If the sale proceeds is not sufficient to satisfy the dues as ordered above, the applicant bank is at liberty to proceed against the personal assets of the Defendants (both movable and immovable) to recover the balance dues as required under law; (d) The applicant bank shall file the latest memo of calculation of TA 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 TA, 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 27thday of April , 2023].

Sd/- PRESIDING OFFICER DRT-II, BENGALURU

ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Sri. Sri. Manesh Kumar P S/o Late. K.N. Prabhakaran, 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 Letter dated 05.09.2012 A-3

Demand Promissory Note for Rs.8,00,00/- & DPN delivery letter dated 08.09.2012 A-4

Loan/Facilit-Cum Hypothecation Agreement dated 08.09.2012 A-5

Undertaking Letter dated 08.09.2012 A-6

Guarantee Agreement dated 08.09.2012 A-7

Undertaking Letter by Guarantor dated 08.09.2012 A-8

Sanction Letter dated 26.09.2013 A-9

Sanction Letter dated 31.07.2014 A-10

Demand Promissory Note for Rs.20,00,000/- & DPN delivery letter dated 01.08.2014 A-11

Supplemental Hypothecation Agreement dated 01.08.2014 A-12

Common Undertaking Letter dated 01.08.2014 A-13

Common Guarantee Deed dated 01.08.2014 A-14

Undertaking Letter by Guarantor dated 01.08.2014 A-15

Sanction Letter dated 11.01.2016 A-16

Sanction Letter dated 31.07.2014 A-17

Demand Promissory Note for Rs.25,00,000/- & DPN delivery letter dated 06.02.2017 A-18

Supplemental Hypothecation Agreement dated 06.02.2017 A-19

Supplemental Guarantee Agreement dated 06.02.2017 A-20

Sanction Letter dated 06.01.2018 A-21

Demand Promissory Note for Rs.30,00,000/- & DPN delivery letter dated 06.01.2018 A-22

Supplemental Hypothecation Agreement dated 06.01.2018 A-23

Supplemental Guarantee Agreement dated 06.01.2018 A-24

Home Loan application dated 19.11.2013 A-25

Home loan Sanction dated 28.12.2013 A-26

Home loan Agreement dated 30.12.2013 A-27

Power of attorney dated 30.12.2013 A-28

Home Loan Application dated 22.03.2016 A-29

Home loan Sanction dated 27.04.2016 A-30

Home loan Agreement dated 27.04.2016 A-31

Memorandum of Entry in the Matter of Deposit of Title Deeds dated 10.09.2012 A-32

Memorandum of Deposit of Title Deeds dated 30.12.2013 A-33

Deed of further charge on the Mortgaged land dated 01.08.2014 A-34

Memorandum of entry in the matter of Deposit of Title Deeds dated 02.08.2014 A-35

Memorandum of Deposit of Title Deeds dated 28.04.2016 A-36

Memorandum of Deposit of Title Deeds dated 06.02.2017 A-37

Memorandum of Deposit of Title Deeds dated 06.01.2018 A-38

Declaration and undertaking in the matter of mortgage by Way of Deposit of Title Deeds on 28.04.2016 A-39

Declaration and undertaking in the matter of mortgage by Way of Deposit of Title Deeds on 06.02.2017 A-40

Declaration and undertaking in the matter of mortgage by Way of Deposit of Title Deeds on 06.01.2018 A-41

Revival Letter dated 26.08.2013 A-42

Revival Letter dated 11.01.2016 A-43

Revival Letter dated 06.02.2017 A-44

Revival Letter dated 06.01.2018 A-45

The statement of account certified under Banker’s Book of Evidence Act Cash Credit Account NO.0365651100000161 A-46

The statement of account certified under Banker’s Book of Evidence Act Cash Credit Account NO.0365651100001236 A-47

The statement of account certified under Banker’s Book of Evidence Act Cash Credit Account NO.0365671500002196 a-48

Witness Examined for the Defendants:-Nil –

List of Documents Exhibited for the Defendants:- Nil –

SCHEDULE-I Movable assets Hypothecated to the Applicant Bank Standing in the name of Defendant No.1- M/s. Skanda Enterprises First charge by way of hypothecation of entire stock raw materials, semi finished goods consumables stores and other movables including book debts etc., SCHEDULE-II Immovable property in the name of Defendant No.1- Mortgaged to the Applicant Bank.

All the piece and parcel of the Residential House in Site No.107( Property ID No.1516006027001), Khatha No.223/2011-12, M R No.42/2013-14, Sy. No. 18, situated at Biranahalli Village, Sathyamangala Gram Panchayat, Kasaba Hobli, Hassab Taluk & District, measuring 960.00 sq.ft. and bounded by:

East By : Site No.106 West By : Road and Site No.137 North By : Road and Site No.89 South By : Site No.108.

Sd/- PRESIDING OFFICER DRT-II, BENGALURU