Debts Recovery Tribunals and Appellate Tribunals
ORIENTAL BANK OF COMMERCE vs PSG Impex on 3 January 2024
**IN THE DEBTS RECOVERY TRIBUNAL AT COIMBATORE**
DATED THIS 03<sup>rd</sup> DAY OF JANUARY, 2024
**PRESENT: SHRI. M.P. BALASUBRAMANIAN, M.A., B.L., PRESIDING OFFICER**
**TRANSFER APPLICATION No.797 OF 2019**
[OA No.704/2013 OF DRT, MADURAI]
BETWEEN
M/s.Oriental Bank of Commerce,
Represented by its Branch Manager.
Karur Branch,
No.492, Jawahar Bazaar,
Karur – 639 001.
... Applicant Bank
AND
M/s. PSG Impex,
Represented by its Sole Proprietor,
Mr. K. Rajendran,
S/o. Kuppusamy,
Santhosh House,
No.10, Gowripuram Extension,
Opposite to Anna Nagar Water Tank,
Sengunthapuram (Post)
Karur – 639 002,
Karur Taluk,
Karur District.
Residing at :
No.41, R.M. Colony,
Dindigul – 624 001,
Dindigul Taluk,
Dindigul District.
... Defendant
Appearance of Advocates :
*Counsel for Applicant Bank
None for Defendant*
*: Shri. I. Sounder
: Set Exparte*
2TA 797/2019
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**ORDER**
1. This Original Application is filed by the Applicant Bank, under Section 19 of the RDBD & FI Act, 1993,
a. to direct the Defendant personally to pay to the Applicant Bank a sum of Rs.89,28,211.50 together with interest at the rate of 16.75% per annum payable at monthly rests from the date of Application, till the date of its realization, failing which
b. to direct to bring the, mortgaged properties which are mentioned hereunder and the sale proceeds appropriated for recovery of Rs.89,28,211.50 together with interest at the rate of 16.75% per annum payable at monthly rests from the date of Application, till the date of its realization with Costs of this OA.
**BRIEF FACTS**
2. The Averments made by the Applicant Bank in the Application are stated as follows :
2.1. The Defendant approached the Applicant Bank for the Cash Credit Facility for a sum of Rs.60,00,000/- and Import Letter of Credit Loan Facility for a sum of Rs.30,00,000/-, in total Rs.90,00,000/- for his business of float, plaint, tinted and finished toughened, plain glass for automobiles, home and office purposes.
2.2. The Applicant Bank sanctioned the loan facilities to the tune of Rs.90,00,000/- and the Defendant had availed the loan facilities of Rs.90,00,000/- on 12.03.2008 and agreed to pay the loan amounts with interest at the rate of 15.25% per annum with monthly rests. The interest is varied fluctuating rates as per the directions of Reserve Bank of India.
3TA 797/2019
2.3. In order to secure the loan facilities, the Defendant had executed an Agreement of Hypothecation of Movable Assets/Lease Agreements/Hire Purchase Agreement etc., on 12.03.2008 for Rs.90,00,000/- in favour of the Applicant Bank agreeing to repay the loan amount with interest at the rate of 2% over the Reserve Bank of India/Prime Lending rate of the Bank, with a minimum of 15.25% per annum calculated on the daily balance due to the Bank in the said account and charged on monthly rests.
2.4. The Defendant had also executed necessary documents for the loans availed. On 12.03.2008, the Defendant had executed another Agreement of Hypothecation of Assets on 12.03.2008 for Rs.90,00,000/- in favour of the Applicant Bank and a Common Agreement. The Defendant also offered his immovable properties, which is mentioned in the Schedule of Property as security and deposited the original title deeds of his immovable properties with the Applicant Bank on 12.03.2008 and executed a Memorandum of Deposit of title deeds to the Applicant Bank on 13.03.2008 with intent to create an equitable mortgage over the land and building in an extent of 2426 Sq.Ft. in T.S.No.324/1, 326/1, 326/2, 326/3 & 329/2 Karur Municipal Town, Karur Taluk with the Registration Sub-District of Karur West and Registration District of Karur and the land and building in an extent of Ac.0.36 in S.F.No.742/3, Easanatham Village, Arvakurichy Taluk, Karur District. As per the said deposit, there is valid equitable mortgage for the loan facilities availed. There is valid charge over the properties.
2.5. The Defendant is liable to settle the claims due to the Applicant Bank personally and out of mortgaged properties. Inspite of repeated demands and requests made on the part of the Applicant Bank, the Defendant had not chosen to pay the amounts due under the loan 4TA 797/2019
transactions. The Applicant Bank has sent several reminders the Defendant had evaded to pay loan dues to the Applicant Bank. As such, the Applicant Bank invoked the provisions of SARFAESI Act, issued Notices, took possession of the properties through process of Law and also brought the properties for Sale under the Provisions of SARFAESI Act.
2.6. The 1<sup>st</sup> Item of the property mentioned in the Schedule of Property was brought for sale and one Mr. V.K. Asokan, S/o. Karuppannan, No.237, Arunachala Nagar, Ramagoundenur, Pasupathipalayam (Post), Karur - 639 004 became the successful bidder, and the 1<sup>st</sup> item of the property was sold in the said Auction held on 13.03.2013, the Auction Purchaser deposited the Sale Proceeds and the loan was adjusted on 20.04.2013.
2.7. In the meantime, the Defendant had filed an Appeal before the Debts Recovery Tribunal, Madurai in S.A.No.94/2010 praying to set aside the proceedings initiated in pursuance of the Possession Notice dated 06.05.2010 issued u/s.13(4) of the SARFAESI Act by the Applicant Bank and the Hon'ble Debts Recovery Tribunal, Madurai after hearing both the sides allowed the Appeal and thereby set aside the Possession Notice. Since, the Possession Notice dated 06.05.2010 was set aside, the entire proceedings under the Provisions of SARFAESI Act came to an end and the Applicant Bank has no other Option to return the amount paid by the Auction Purchaser and necessary reversal entries are made in the books of Accounts. The Defendant taking advantage of the allowing of the SA 94/2010, took possession of the property and sent a letter to the said effect to the Applicant Bank on 17.07.2013. The Defendant has not chosen to pay the amounts due so far. Therefore, the Applicant Bank filed this OA
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against the Defendant for recovery of the OA amount with interest & Costs, and this Hon'ble Tribunal may be allowed the OA with Costs.
3. The Defendant was called absent and set ex-parte on 06.01.2017.
4. The Applicant Bank, in order to prove its claim, has filed Proof Affidavit executed by Mr.M.Velayutham, Chief Manager of the Applicant Bank and marked the documents as Exts.A-1 to A-40 in support of its claim in the OA. A cumulative analysis of both the Proof Affidavit and documents marked by the Applicant Bank would prove the claim of the Applicant Bank in the OA.
5. The Ld. Counsel for the Applicant Bank had submitted his arguments and had reiterated the Statements in the OA and submitted that Final Order may passed in terms of the Proof Affidavit.
6. Therefore, in view of the observations made supra, the OA stands allowed and the Applicant Bank is entitled to recover
a. from the Defendant personally a sum of Rs.89,28,211.50 together with interest at the rate of 16.75% per annum payable at monthly rests from the date of Application, till the date of its realization, failing which
b. the Applicant Bank is directed to bring the mortgaged Schedule of Property for sale, and the sale proceeds appropriated for recovery of Rs.89,28,211.50 together with interest at the rate of 16.75% per annum payable at monthly rests from the date of Application, till the date of its realization with Costs of this OA.
7. In the result,
a. it is hereby directed that the Defendant personally to pay to the Applicant Bank, a sum of Rs.89,28,211.50 together with interest 6TA 797/2019
at the rate of 16.75% per annum payable at monthly rests from the date of Application, till the date of its realization.
b. On failure, the Applicant Bank is hereby directed to bring the mortgaged Schedule of Property for sale, and the sale proceeds appropriated for recovery of Rs.89,28,211.50 together with interest at the rate of 16.75% per annum payable at monthly rests from the date of Application, till the date of its realization with Costs of this OA.
8. All the pending IAs. if any, stand closed and disposed of by this Tribunal.
9. The Registry is directed to prepare DRC in terms of this Final Order. The Applicant Bank shall file memo of costs within 15 days from the date of this Order.
10. The Registry is directed to communicate the copy of this Order to both parties as provided in Rule 16 of the Debts Recovery Tribunal (Procedure) Rules, 1993 as amended in 2016.
*Dictated to Steno, directly typed on the Computer corrected and pronounced by me in the open Tribunal, this the 03<sup>rd</sup> day of January, 2024.*
**[M.P. BALASUBRAMANIAN] PRESIDING OFFICER**
7TA 797/2019**SCHEDULE OF PROPERTY****Item No.1 :**
Karur Registration District, West Karur Sub-Registration District, Karur Taluk, Karur Town, 3<sup>rd</sup> Ward, 8<sup>th</sup> Block, T.S.No.324/1, 326/1, 326/2, 236/3 and 329/2 Acre 6.31 $\frac{1}{2}$ which was converted into house sites, In this, House Site No.27D (Southern Portion) admeasuring East-west 80 $\frac{1}{4}$ Ft on the northern side; 81 $\frac{1}{2}$ Ft. on the Southern side; North-South 30 Ft. Total extent of 2426 Sq.Ft. situated within the specific boundaries of North of : the House Site No.27E; East of : the 30 Ft. wide east-west road; West of : the House Site No.27F; and South of : the House Site No.27D purchased by PL. Palaniappan. The property comprising right of path laid in the lay-out.
**Item No.2 :**
Karur Registration District, Aravakurichy Sub-Registration District, Aravakurichy Taluk, Easanatham Village, S.F.No.742/3 Acre 0.36. The property is situated within the specific four boundaries of North of : the property of R. Palanisamy; East of : the north-south road; West of : the property of vendor, common pathway, common 4 Ft. north-south pathway; and South of : the property of Durairaj Chettiar.
As per the present sub-division the property comprising in S.F.No.742/3B, Door No.375F 10, 375F 11, 375F 12. The property consisting of three commercial shops.
[M.P. BALASUBRAMANIAN] PRESIDING OFFICER
8TA 797/2019**PROOF AFFIDAVIT OF THE APPLICANT BANK**
1. Shri.M.Velayutham, Chief Manager
**LIST OF DOCUMENTS MARKED BY THE APPLICANT BANK**
<thead> <tr> <th>Sl. No.</th> <th>Date</th> <th>Description of Document</th> <th>Exhibits</th> </tr> </thead> <tbody> <tr> <td>1.</td> <td>12.03.2008</td> <td>Original – Sanction Letter.</td> <td>A.1</td> </tr> <tr> <td>2</td> <td>12.03.2008</td> <td>Original – Agreement for Hypothecation of Movable Assets/Lease Agreements/Hire Purchase Agreements, etc., executed by the Defendant in favour of the Applicant Bank.</td> <td>A.2</td> </tr> <tr> <td>3</td> <td>12.03.2008</td> <td>Original – Agreement of Hypothecation of Assets executed by the Defendant in favour of the Applicant Bank.</td> <td>A.3</td> </tr> <tr> <td>4</td> <td>12.03.2008</td> <td>Original – Common Agreement executed by the Defendant in favour of the Applicant Bank.</td> <td>A.4</td> </tr> <tr> <td>5</td> <td>12.03.2008</td> <td>Original – Sole Proprietorship Letter executed by the Defendant in favour of the Applicant Bank.</td> <td>A.5</td> </tr> <tr> <td>6</td> <td>18.03.2008</td> <td>Original – Letter of Confirmation executed by the Defendant in favour of the Applicant Bank.</td> <td>A.6</td> </tr> <tr> <td>7</td> <td>18.03.2008</td> <td>Original – Letter of Confirmation executed by the Defendant in favour of the Applicant Bank confirming the Deposit of Title Deeds with the Bank in respect of 2<sup>nd</sup> Item of the Properties.</td> <td>A.7</td> </tr> <tr> <td>8</td> <td>13.03.2008</td> <td>Original – Memorandum of Deposit of Title Deeds executed by the Defendant in favour of the Applicant Bank. (Doc.No.2140/2008).</td> <td>A.8</td> </tr> <tr> <td>9</td> <td>06.10.1995</td> <td>Original – Sale Deed executed by Malaikozhundhu and Others in favour of Rajendran (Doc.No.2968/1995).</td> <td>A.9</td> </tr> <tr> <td>10</td> <td>15.06.1995</td> <td>Xerox Copy of Sale Deed executed by Power Agent Devaraj in favour of Malaikozhundhu and others (Doc.No.2591/1995).</td> <td>A.10</td> </tr> <tr> <td>11</td> <td>14.06.1995</td> <td>Xerox Copy – General Power of Attorney Deed executed by Palaniappan and Others in favour of Devaraj (Doc.No.453/1995).</td> <td>A.11</td> </tr> <tr> <td>12</td> <td>29.04.1986</td> <td>Xerox Copy – Sale Deed executed by Ettippa Gounder @ Ettipatti Gounder in favour of</td> <td>A.12</td> </tr> </tbody> </table>
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<tr> <td></td> <td></td> <td>Palaniappan and Others (Doc.No.2026/1986).</td> <td></td> </tr> <tr> <td>13</td> <td>29.04.1986</td> <td>Xerox Copy – Sale Deed executed by Ettippa Gounder @ Ettu Gounder in favour of Palaniappan and Others (Doc.No.2027/1986).</td> <td>A.13</td> </tr> <tr> <td>14</td> <td>29.04.1986</td> <td>Xerox Copy – Sale Deed executed by Ettippa Gounder @ Ettu Gounder in favour of Palaniappan and Others (Doc.No.2028/1986).</td> <td>A.14</td> </tr> <tr> <td>15</td> <td>29.04.1986</td> <td>Xerox Copy – Sale Deed executed by Ettippa Gounder @ Ettu Gounder in favour of Palaniappan and Others (Doc.No.2029/1986).</td> <td>A.15</td> </tr> <tr> <td>16</td> <td>25.02.1980</td> <td>Xerox Copy – Sale Deed executed by Karuappannan and Paramasivam in favour of Palaniappan and Others (Doc.No.711/1980).</td> <td>A.16</td> </tr> <tr> <td>17</td> <td>09.01.1980</td> <td>Xerox Copy – Sale Deed executed by Vaiyapuri Gounder and Ramasamy in favour of Palaniappan and Others (DocNo.58/1980).</td> <td>A.17</td> </tr> <tr> <td>18</td> <td>09.01.1980</td> <td>Xerox Copy – Sale Deed executed by Muthusamy in favour of Palaniappan and Others (Doc.No.59/1980).</td> <td>A.18</td> </tr> <tr> <td>19</td> <td>14.07.1975</td> <td>Certified copy of Partition Deed entered between Vaiyapuri Gounder and Others. (Doc.No.2175/1975).</td> <td>A.19</td> </tr> <tr> <td>20</td> <td>14.06.1979</td> <td>Xerox Copy – Sale Deed executed by Samuthiravalli and Sukumar in favour of Palaniappan and others (Doc.No.2477/1979).</td> <td>A.20</td> </tr> <tr> <td>21</td> <td>08.05.2007</td> <td>Xerox Copy of Property Tax Receipt for the period 2003-2004 I, II 2004-2005 I, II in respect of K. Rajendran.</td> <td>A.21</td> </tr> <tr> <td>22</td> <td>28.12.2007</td> <td>Original – Receipt for payment of Electricity Consumption Charges.</td> <td>A.22</td> </tr> <tr> <td>23</td> <td>05.03.1997</td> <td>Original – Encumbrance Certificate No.1278/1997 (From 01.01.1968 to 31.12.1980).</td> <td>A.23</td> </tr> <tr> <td>24</td> <td>25.02.1997</td> <td>Original - Encumbrance Certificate No.1117/1997 (From 01.01.1981 to 24.02.1997).</td> <td>A.24</td> </tr> <tr> <td>25</td> <td>31.01.2008</td> <td>Xerox Copy – Encumbrance Certificate No.766/2008 (From 01.01.1987 to 03.01.2008).</td> <td>A.25</td> </tr> <tr> <td>26</td> <td>25.08.1995</td> <td>Original – Sale Deed executed by Mohammed Ismail and Amanullah in favour of Rajendran. (Doc.No.1196/1995).</td> <td>A.26</td> </tr> <tr> <td>27</td> <td>20.07.1995</td> <td>Certified Copy of Partition Deed entered into</td> <td>A.27</td> </tr> </table>
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<tr> <td></td> <td></td> <td>between Jameela Beevi and Others (Doc.No.6129/1995).</td> <td></td> </tr> <tr> <td>28</td> <td>09.10.1968</td> <td>Certified Copy of Gift Settlement Deed executed by Mohammed Yakup Rawther in favour of Mohammed Ismail and Others (Doc.No.1885/1968).</td> <td>A.28</td> </tr> <tr> <td>29</td> <td>01.12.1998</td> <td>Original - Certificate issued by Village Administrative Officer, Easanatham Village, Aravakurichy Taluk.</td> <td>A.29</td> </tr> <tr> <td>30</td> <td>20.02.2008</td> <td>House Tax Receipt for the period 2007-2008 in favour of K. Rajendran for Assessment No.407.</td> <td>A.30</td> </tr> <tr> <td>31</td> <td>20.02.2008</td> <td>House Tax Receipt for the period 2007-2008 in favour of K. Rajendran for Assessment No.406.</td> <td>A.31</td> </tr> <tr> <td>32</td> <td>20.02.2008</td> <td>House Tax Receipt for the period 2007-2008 in favour of K. Rajendran for Assessment No.405.</td> <td>A.32</td> </tr> <tr> <td>33</td> <td>14.11.2007</td> <td>Encumbrance Certificate No.1721/2007 (From 01.01.1987 to 13.11.2007).</td> <td>A.33</td> </tr> <tr> <td>34</td> <td>20.02.2008</td> <td>Encumbrance Certificate No.462/2008 (From 01.01.2007 to 19.02.2008).</td> <td>A.34</td> </tr> <tr> <td>35</td> <td>31.12.2009</td> <td>Original - Letter of Balance & Security Confirmation executed by the Defendant in favour of the Applicant Bank.</td> <td>A.35</td> </tr> <tr> <td>36</td> <td>31.12.2010</td> <td>Original - Letter of Balance & Security Confirmation executed by the Defendant in favour of the Applicant Bank.</td> <td>A.36</td> </tr> <tr> <td>37</td> <td>28.06.2013</td> <td>Xerox Free Copy of Final Order passed by the Hon'ble DRT, Madurai in SA 94/2010.</td> <td>A.37</td> </tr> <tr> <td>38</td> <td>17.07.2013</td> <td>Original - Letter given by the Defendant to the Applicant Bank regarding taking of possession of properties.</td> <td>A.38</td> </tr> <tr> <td>39</td> <td>--</td> <td>True Extract of Statement of Accounts.</td> <td>A.39</td> </tr> <tr> <td>40</td> <td>30.12.2013</td> <td>Certificate under Banker's Book Evidence Act.</td> <td>A.40</td> </tr> </table>
[M.P. BALASUBRAMANIAN] PRESIDING OFFICER