TH KARUR VYSYA BANK LTD vs MRS.SEEMA KRISHNAN on 28 July 2022

FINAL ORDER

1. The applicant has filed the present OA under Section 19 of Recovery of Debts Due to Banks and Financial Institutions Act 1993, on 24-06-2014 before the Debt Recovery Tribunal-I (DRT- I), Bangalore and numbered as OA No.921/2014, seeking recovery of sum of Rs. Rs.93,37,705.39 (Rupees ninety three lakh thirty seven thousand seven hundred and five and paise thirty nine only) with further interest thereon from the date of institution of the OA till realization from defendant Nos. 1, 2 & 3 jointly and severally and to direct Defendant No.4 to deliver vacant possession of the schedule property to applicant bank.

2. Owing to bifurcation of jurisdiction vide Government of India Gazette Notification dated 30-01-2017, the application was transferred to this Tribunal and re-numbered as TA No.2080/2017.

3. 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.

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Brief facts of the case:

4. The case of the Applicant Bank is that the Defendant Nos.1,2& 3 are the borrowers. The Defendants approached the Applicant Bank for sanction of housing loan. The Defendant Nos.1, 2 & 3 stood as guarantor to each other for loan availed by Defendants. The bank sanctioned the following loans on 31.07.2007 :-

a) Defendant No.1 availed an amount of Rs.14,18,000/- with

84 installments and it was also agreed to pay penal interest @ 2%p.a. in case of default.Defendant Nos.1 to 3 acknowledged the sanction terms & conditions and signed the Sanction Communication dated 31.07.2007. Defendant No.1executed Term Loan Agreement dated 31.07.2007 and Defendants 2 & 3 executed Guarantee Agreement on 31.03.2007. Defendant No.1 alongwith Affidavit dated 31.07.2007 deposited the title deeds pertaining to Item No.1 of the OA schedule property with intent to create equitable mortgage as security for the repayment of the Housing Loan availed by her.

b) Defendant No.2 availed an amount of Rs.12,18,000/- with

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144 installments and also agreed to pay penal interest @ 2% p.a. in case of default. Defendants 2 & 4 entered into an Agreement to sell the property (Item No.2 of OA Schedule) for a sale consideration of Rs.19,80,000/-. To meet part of the sale consideration, this loan has been availed by Defendant No.2. Defendants 1, 2 & 3 acknowledged the Sanction terms and signed the Sanction communication dated 31.07.2007. Further, Defendant No.2 executed Term Loan Agreement dated 31.07.2007 and Defendant Nos.1 & 3 executed Guarantee Agreement dated 31.07.2007. To secure the loan, Defendant deposited the original title deeds of Item No.2 property with intent to create equitable mortgage in favour of the applicant bank.

c) Defendant No.3 availed Housing Loan of Rs.14,18,000/-with

144 installments and also agreed to pay penal interest @ 2%p.a. in case of default. Defendant Nos.2 & 4 entred into an Agreement to sell dated 25.06.2007 for sale of item No.3 of OA schedule property for a sale consideration of Rs.19,80,000/-. To meet part of the sale consideration, this loan was availed by Defendant No.3. Defendant Nos.1, 2 & 3 acknowledged the sanction terms and signed the Sanction 5 TA No. 2080/2017

communication dated 31.07.2007. In respect of this loan, Defendant no.3 executed Term Loan Agreement dated 31.07.2007 and the Defendants 1 & 2 executed Guarantee Agreement dated 31.07.2007. As security, Defendant Nos.1 & 2 executed Guarantee Agreement dated 31.07.2007 and the Defendant No.3 deposited the original title deeds of Item No.3 property of the OA schedule with intent to create equitable mortgage in favour of the applicant bank.

5. The Applicant Bank submits that the Defendants, after availing the credit facilities, failed to repay the loan amount and committed default. The loan accounts of Defendant Nos.1, 2 & 3 were classified as Non Performing Asset (NPA) on 30.01.2009. Applicant Bank issued Demand Notice dated 17.07.2009 u/s.13(2) of the SARFAESI Act 2002 to the Defendants to pay the outstanding loan amount. As the borrowers neglected to repay the loan amount, applicant bank initiated measures under Section 14 of the said Act and obtained orders from the competent authority.

6. The properties were occupied by some 3rd parties and also they have filed appeals u/s.17 of SARFAESI Act to prevent the applicant bank in fraudulent manner by misusing the provisions of law. Hence, Smt. Girija has also been added as party.

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7. After the filing of the TA, Summons sent to the Defendants through RPAD, and the same retuned unserved. Thereafter, summons was published in two leading newspapers- “New Indian Express” and “Kannada Prabha” on 11.04.2019, by way of substitute service. When the OA was taken up on 09.02.2022, even after giving sufficient time, there was no appearance or representation from the defendant Nos.1,2 & 4; hence, defendant Nos.1, 2 & 4 were placed exparte on 09.02.2022. The 3rd defendant filed statement of objections.

The statement of objections filed by the Defendant No.3, in brief:-

8. The Defendant No.4 and her husband coupled with his henchmen designed the ploy not only to cheat and defraud this Defendant but also the institutions of the nature of applicant bank. The applicant bank sift peddle to the criminal acts committed by Defendant No.4 and led the issue come before this Hon’ble Court. Had the bank taken stringent action against the errant Defendant No.4, it would have realized its due long time back. The sale proceeds were misused by Defendant No.4 and other persons including her husband Mr Basavaraju.

8.1 The alleged transaction between Defendant Nos.1 & 2 with the Defendant No.4 is also an act for the convenience of Defendant 7 TA No. 2080/2017

No.4. Defendant Nos.1 & 2 are not even available even to the Bank to understand the correct position. The 3rd Defendant being a lady, did not have courage to check the action of 4th Defendant, her husband and other people involved in the transaction.

8.2 It is surprising that the Defendant No.4 who executed the registered deed and taken the value of the property, filing frivolous suits and petitions before Courts and Tribunals with dishonest intention to harass this Defendant and also cause hardship to recover the dues for the applicant bank. Though the bank has initiated proceedings under the SARFAESI Act as early as 17.07.2009, till date, could not conclude the recovery by disposing of the property.

8.3 It is believed that there was an enquiry initiated by applicant bank, action has been initiated against some of its officers. But it is surprising for the bank of the stature of the applicant bank to show its helpless situation in taking action against the 4th Defendant. That being the case, how a helpless lady the 3rd Defendant can retaliate against the 4th Defendant. The 3rd Defendant approached the bank requesting them to sell the property to recover its dues even before the initiation of action under the SARFASI Act. The 3rd Defendant is not benefitted in any manner in the alleged sale and loan transaction and some unscrupulous persons have taken 8 TA No. 2080/2017

advantage of the innocence of this Defendant and put her to hardship and inconvenience. The 3rd Defendant denies all other allegations made against her which are not specifically traversed in the Statement of Objections filed by her.

Heard and perused the records.

9. To prove the case of the Applicant Bank, its Senior Branch Manager, Sri.A.R. Dinesh Kumar, S/o. Sri. N.Ramanathan filed Evidence Affidavit, the 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 the documents came to be marked as Ex.A3 to A30.

10. Defendant No.3 filed Statement of Objections that the Defendant No.4 and their men cheated this Defendant as well as applicant bank. It is alleged that applicant bank is not able to take stringent action against the Defendant No.4 to realize its dues. There is no objection regarding the availing of loan, execution of documents and creation of equitable mortgage over the schedule properties. Further, the Defendant No.3 failed lead any evidence to disprove the OA claim made by applicant bank. The other Defendants remained ex parte. Therefore, in the absence of any contra-evidence, the OA claim made by the applicant bank remains unchallenged and stands proved.

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11. As far as the Defendant No.4 is concerned, the applicant bank has already proceeded under Section 14 of the SARFAESI Act to take physical possession of the property before the competent forum and hence is added as a formal party and there is recovery claim is made against the Defendant No.4.

12. Having regard to the amount advanced, documents executed, 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 :

13. The TA is allowed with costs,

(a) The applicant bank is allowed to recover from defendant Nos.1, 2 & 3 jointly and severally, an aggregate sum of Rs.93,37,705.39/- (Rupees ninety three lakh thirty seven thousand seven hundred and five and paise thirty nine only) consisting of:- i) Rs.32,54,721.11p in respect of Housing Loan availed by Defendant No.1; ii) Rs. 28,66,995.67 in respect of Housing Loan availed by Defendant No.2; 10 TA No. 2080/2017

iii) Rs. 32,15,988.61 in respect of Housing Loan availed by Defendant No.3 with further interest @ 14.25% p.a. with quarterly rests from the date of institution of the Original Application (24.06.2014) till the date of realization from the defendant Nos.1,2 & 3; (b) In the event of failure of the Defendants to pay the TA aforesaid amount, the bank is at liberty to recover the amount by sale of Item Nos.1, 2 & 3 of the schedule mentioned mortgaged properties in the TA;

(c) Schedule mentioned property in the TA shall be appended to this final order; (d) If the sale proceeds of the schedule mentioned mortgaged properties are not sufficient to satisfy the dues as ordered above, the applicant bank is at liberty to proceed against the personal assets of the defendant Nos.1,2 & 3 (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 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 11 TA No. 2080/2017

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.

14. A copy of this order be communicated to the parties concerned. (Dictated to the Stenographer, after its transcription and necessary corrections, signed by me on this 28th Day of July, 2022)

Sd/- PRESIDING OFFICER DRT-II, BENGALURU

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Sri.A.R. Dinesh Kumar, S/o. Sri.N. Ramanathan, Senior Branch Manager of Applicant Bank.

Exhibits on the part of the Applicant:

Exhibit Nos. Particulars of Documents A1 Evidence Affidavit A2 List of Documents A3 Sanction Communication issued to Defendant No. 1 dated 31.07.2007. A4

dated 31.07.2007

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A5 Guarantee Agreement executed by Defendant Nos. 2 & 3 dated 31.07.2007 A6 Affidavit submitted along with original title deeds by defendant no.1 dated 31.07.2007 A7

A8 Sale Deed executed bearing No.1296 by Defendant No.4 in favour of Defendant No.1 dated 31.07.2007 A9 Sanction Communication issued to Defendant No.2 dated 31.07.2007 A10 Term Loan agreement executed by Defendant No.2 dated 31.07.2007 A11 Guarantee Agreement executed by Defendant Nos. 1 and 3 dated 31.07.2007 A12 Affidavit submitted along with original title deeds by defendant No.2 dated 31.07.2007 A13

A14 Sale Deed bearing doc. No.1297 executed by Defendant No.4 in favour of Defendant No.2 dated 31.07.2007 A15 Sanction Communication issued to Defendant No.3 dated 31.07.2007 A16 Term Loan agreement executed by Defendant No.3 dated 31.07.2007 A17 Guarantee agreement executed by Defendant Nos.1 and 2 dated 31.07.2007 A18

A19

A20 Sale deed bearing doc. No.1298 executed by Defendant No.4 in favour of defendant No.3 dated 31.07.2007 A21 Demand notice issued under SARFAESI Act on account of housing loan of Ms. Seema Krishnan dated 17.07.2009 A22 Demand Notice issued under SARFAESI Act on account of housing loan of Mr. Yogesh Kumar dated 17.07.2009 A23 Demand Notice issued under SARFAESI Act on account of housing loan of Ms. HR Jyothi dated 17.07.2009 A24 Possession notice of Item No.1 property of the 13 TA No. 2080/2017

schedule dated 08.07.2010 A25 Possession notice of Item No.2 property of the schedule dated 12.09.2009 A26 Possession notice dated 12.01.2010 A27 CMM orders dated 13.04.2010 and 19.04.2010 A28 Copy of statement of account in account bearing No.1317779000000235 A29 Copy of statement of account in account bearing No.1317779000000249 A30 Copy of statement of account in account bearing No.1317779000000224

Witness Examined for the Defendants : Nil List of Documents Exhibited for the Defendants : Nil SCHEDULE Item No.1

the Survey No.10:1 of Venkatla Village, Yelahanka Hobli, Bangalore North Taluk, and subsequently converted from and including the 2nd floor of the built up area of the building measuring 700 sq. feet in all built using jungle wood and red oxide flooring and all rights, privileges and appurtenances thereto:

East to West : 30 Feet North to South : 40 Feet

Bounded by: East : Site No.203 West : Road

Item No.2

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Main, Marutinagar, Yelahanka, Bangalore – 560064, being part of the Survey No.10:1 of Venkatla Village, Yelahanka Hobli, Bangalore North Taluk, and subsequently converted from and including the 1st floor of the built up area of the building measuring 700 sq. feet in all built using jungle wood and red oxide flooring and all rights, privileges and appurtenances thereto East to West : 30 Feet North to South : 40 Feet Bounded by:

East : Site No.203 West : Road

Item No.3

the Survey No. 10:1 of Venkatla Village, Yelahanka Hobli, Bangalore North Taluk, and subsequently converted from and including the ground floor of the built up area of the building measuring 700 sq. feet in all built using jungle wood and red oxide flooring and all rights, privileges and appurtenances thereto East to West : 30 Feet North to South : 40 Feet Bounded by: East : Site No.203 West : Road

Sd/- PRESIDING OFFICER, DRT-II, BENGALURU