BANK OF INDIA vs M/S. KUSHI CREATIONS on 7 September 2019

**FINAL ORDER**

The present Application dated 10.10.2014 came to be registered on the basis of jurisdictional transfer and renumbered as TA.No.457/2017 under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993 seeking recovery of an amount of Rs.13,90,753/- (Rupees thirteen lakh, ninety thousand, seven hundred fifty-three only) from the Defendants together with interest and cost.

2. The case of the applicant bank is that Defendants had approached the applicant bank for sanction of various credit facilities such as (a) Term Loan a sum of Rs.2,17,000/- in the name of 1^st defendant, (b) another Term Loan of Rs.5,70,000/- in the individual capacity of 2^nd defendant, (c) Cash Credit facility of Rs.5,00,000/- in the name of 1^st defendant.

Considering the request of the defendants, the Applicant Bank has sanctioned (a) Term Loan of Rs.2,17,000/- in the name of 1^st defendant, (b) another Term Loan of Rs.5,70,000/- in the 3TA.No.457/2017

individual capacity of 2^nd defendant, (c) Cash Credit facility of Rs.5,00,000/- in the name of 1^st defendant, vide Sanction Letters dated 24.04.2013 and 31.05.2013. The Defendants have executed requisite necessary documents in favour of the applicant bank for the above said loans. The defendants have agreed to repay the said loans as per the terms and conditions of the applicant bank. After availing the loans, the defendants failed to regularize the loan accounts and also failed to pay the installments and did not come forward to repay the balance outstanding. Hence, the OA was filed and now numbered as TA.457/2017. The applicant bank has produced the documents in favour of its case viz., Sanction Letters, Demand Promissory Notes, Hypothecation-cum-Loan Agreements, Undertaking Letters, Draft Declaration, Agreement for Hypothecation, Authorization Letter, and Certified Accounts Extracts.

3. Further the Defendants agreed to repay the above loans with variable rate of interest, as applicable from time to time as per the directions of the Head Office/Central Office of the Applicant Bank and penal interest in case of default and keep 4TA.No.457/2017

the account regular by paying installments as and when due to the satisfaction of the Applicant Bank, as detailed in the OA by the Applicant Bank.

4. The Defendants after utilizing the entire loans proceed for the above said purpose have failed to make the repayments of the loans due as agreed and they have not serviced the interest thereon as per the terms and conditions. The Defendants have become chronic defaulters in the loan accounts and not taken any steps to clear the dues and hence, the recovery process is initiated against the defendants to recover the dues.

5. In the light of these factors, it is contended by the Applicant Bank that, defendants are liable to pay a total sum of Rs.13,90,753/- (Rupees thirteen lakh, ninety thousand, seven hundred fifty-three only).

6. After transfer of the OA, summons was served on defendant No.2 through RPAD, and summons of defendant No.1 returned with postal shara as 'left office, hence, returned' and summons published by paper publications in two daily newspapers on 5TA.No.457/2017

defendant No.1. Even then, when the defendants were called out, they are remained absent and placed *ex-parte*.

7. To prove the case of the Applicant Bank, its Chief Manager – Mrs. Shashikala. R Nayak W/o. Mr. P. Rathnakar Nayak has filed her affidavit by way of evidence and same was considered as evidence of AW-1 and marked at Ex. A-1 and list of documents came to be marked as Ex.A-2 and 29 documents came to be marked as Ex.A-3 to Ex.A-31.

8. No evidence on behalf of the Defendants.

9. Arguments of Learned Counsel for the Plaintiff/ applicant bank heard and perused the records of the case.

10. Following points arise for my consideration:

1) Whether Plaintiff/applicant bank proves its case as contended in the plaint/application?

2) What order?

11. For the following reasons, I answer the above referred points in the following manner:

6TA.No.457/2017 IN OA.334/2015-DRT-I**REASONS**

12. Mrs. Shashikala. R Nayak W/o. Mr. P. Rathnakar Nayak – Chief Manager of the applicant bank came to be examined as AW-1. Her affidavit by way of evidence reiterates the facts pleaded in the plaint and her affidavit is also corroborated by the above referred Ex.A-3 to Ex.A-31, which clearly establish the case of the applicant bank to allow the present TA. Added to this, in spite of paper publication, the Defendants No.1 and 2 have remained absent, hence, it is to be construed that they have admitted the entire case pleaded by the applicant bank as sought in the present TA.

13. Therefore, for these reasons, present TA is to be allowed with costs as sought by the applicant bank.

**:ORDER:**

Present TA stands allowed with costs.

Defendants shall be jointly and severally liable to pay entire TA amount of Rs. 13,90,753/- (Rupees thirteen lakh, ninety thousand, seven hundred fifty-three only) towards the liability of (a) Term Loan amount with 7TA.No.457/2017

outstanding of Rs.2,24,903, (b) Term Loan-2 with outstanding amount of Rs.1,28,863/- & (c) Cash Credit facility with outstanding amount of Rs.10,36,987/- with interest at the rate of 13.10% p.a., 10.65% p.a., and 13.10% p.a., respectively at monthly compounded rests, from the date of filing of Application to the date of final realization as sought by the Applicant Bank in the OA/TA.

In the event of failure of Defendants to pay the said TA amount, the applicant bank is at liberty to sell the hypothecated movable assets as mentioned in the Schedule of the main Application according to Law by the applicant bank in the TA.

In spite of sale of the property mentioned in the Schedule/s, if the TA amount is not fully realized, then the Applicant Bank is at liberty to proceed against the person and other properties of the Defendants as required under law and also as advised.

8TA.No.457/2017

Applicant Bank shall file fresh Memo of calculation of TA amount together with interest, costs etc., to be paid by Defendants duly taking into account the amount/s if any paid by the Defendants and/or amount realized by sale of assets, etc., during the intervening period after filing the TA, to enable the office to prepare Recovery Certificate for the amount to be paid by the Defendants to the Applicant Bank.

Office is directed to issue Recovery Certificate.

(Dictated to the Steno, transcribed by her and after necessary corrections, signed and pronounced by me in the Open Court on this the 7^th day of September, 2019)

**(K. RAVINDRAN NAIR)** Presiding Officer I/c - DRT II, Bengaluru.

9TA.No.457/2017 IN OA.334/2015-DRT-I**ANNEXURES:****LIST OF WITNESSES EXAMINED ON BEHALF OF APPLICANT-BANK:**

AW.1 – Mrs. Shashikala. R Nayak W/o. Mr. P. Rathnakar Nayak, Chief Manager of Applicant Bank.

**LIST OF DOCUMENTS MARKED ON BEHALF OF APPLICANT BANK:**

Ex.A.1 : Affidavit of AW.1. Ex.A.2 : List of documents. Exs.A.3 – A.31 : 29 documents.

**LIST OF WITNESSES EXAMINED ON BEHALF OF DEFENDANTS :**

- NIL -

**LIST OF DOCUMENTS MARKED ON BEHALF OF DEFENDANTS:**

-NIL-

**(K. RAVINDRAN NAIR)**

Presiding Officer, I/c-DRT-II, Bengaluru.

K\*

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