INDIAN OVERSEAS BANK vs M KARTHIKEYAN on 12 February 2024

O R D E R

1. This Original Application is filed by the Applicant Bank, under Section 19 (1) of the RDDB & FI Act, 1993,

a. to direct the Defendant personally to pay to the Applicant Bank a sum of Rs.10,54,126.64 with subsequent interest @ 11.20%

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p.a. with monthly rests plus penal interest at the rate of 2% p.a. towards Term Loan and a sum of Rs.5,94,669.42 with subsequent interest @ 10.70% p.a. with monthly rests plus penal interest at the rate of 2% p.a. towards Cash Credit Facility from the date of Application, till the date of its realization;

b. to direct the Applicant Bank to bring the hypothecated assets mentioned hereunder for sale and the sale proceeds appropriated for recovery of a sum of Rs.10,54,126.64 with subsequent interest @ 11.20% p.a. with monthly rests plus penal interest at the rate of 2% p.a. towards Term Loan and a sum of Rs.5,94,669.42 with subsequent interest @ 10.70% p.a. with monthly rests plus penal interest at the rate of 2% p.a. towards Cash Credit Facility 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 availing of Term Loan and Cash Credit Facility. The Applicant Bank has sanctioned the Term Loan for a sum of Rs.6,60,000/- for purchase of Machinery and Cash Credit Facility to limit of Rs.3,00,000/- for Working Capital.

2.2. For the consideration of the Term Loan, the Defendant has executed a Demand Promissory Note on 27.01.2011 for a sum of Rs.6,60,000/- agreed to repay the loan amount with interest at the rate of 10.75% per annum with monthly rests. The Defendant has also executed a Letter Containing Terms & Conditions and Agreement of Term Loan Agreement on 27.01.2011 in favour of the Applicant Bank by hypothecating goods mentioned hereunder in 60 monthly 3 TA 448/2019

installments of Rs.14,628/- with interest at 10.75% p.a. with monthly rests or at such other rates as prescribed by the Reserve Bank of India from time to time.

2.3. For the consideration of the Cash Credit Facility, the Defendant has executed a Demand Promissory Note on 27.01.2011 for a sum of Rs.3,00,000/- agreed to repay the loan amount with interest at the rate of 10.75% per annum with monthly rests. The Defendant has also executed a Letter of Continuity on the same date in favour of the Applicant Bank containing several undertakings & Acceptance with regard to security of Properties-note, Operation of Accounts, Liabilities of the Defendant etc., and tendering the said properties-note as containing security for the said Cash Credit Facility. The Defendant has also executed Revival Letters dated 20.01.2014 & 15.12.2016 by admitting and acknowledging his liabilities in favour of Applicant Bank.

2.4. After availing the loans, the Defendant has not repaid the loans as agreed and promised by him. Thus the Defendant has committed default in repaying the loans. Therefore, the Applicant Bank issued Lawyer’s Notice dated 15.01.2013 to the Defendant. Despite the said notice and repeated demands made by the Applicant Bank, the Defendant did not take any steps to discharge the loan. Therefore, the Applicant Bank filed this OA against the Defendants for Recovery of the OA amount and this Hon’ble Tribunal may be allowed the OA with Costs.

3. The Defendant was called absent and set ex-parte on 16.01.2019.

5. The Applicant Bank, in order to prove its claim, has filed Proof Affidavit executed by one Mrs.Nithyakalyani, Senior Manager of the 4 TA 448/2019

Applicant Bank and marked the documents as Exts.A-1 to A11 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 on the basis of the claim in the Proof Affidavit filed by the Applicant Bank.

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 for a sum of Rs.10,54,126.64 with subsequent interest @ 11.20% p.a. with monthly rests towards Term Loan and a sum of Rs.5,94,669.42 with subsequent interest @ 10.70% p.a. with monthly rests towards Cash Credit Facility from the date of Application, till the date of its realization, failing which

b. the Applicant Bank is directed to bring the hypothecated goods mentioned hereunder for sale and the sale proceeds appropriated for recovery of a sum of Rs.10,54,126.64 with subsequent interest @ 11.20% p.a. with monthly rests towards Term Loan and a sum of Rs.5,94,669.42 with subsequent interest @ 10.70% p.a. with monthly rests towards Cash Credit Facility 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.10,54,126.64 with subsequent interest @ 11.20% p.a. with monthly rests towards Term Loan and a sum of Rs.5,94,669.42 with subsequent interest @ 10.70% p.a. with monthly rests towards Cash Credit Facility from the date of Application, till the date of its realization.

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b. On failure to pay, the Applicant Bank is hereby directed to bring the hypothecated goods mentioned hereunder for sale and the sale proceeds appropriated for recovery of a sum of Rs.10,54,126.64 with subsequent interest @ 11.20% p.a. with monthly rests towards Term Loan and a sum of Rs.5,94,669.42 with subsequent interest @ 10.70% p.a. with monthly rests towards Cash Credit Facility 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 12th day of February, 2024.

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SCHEDULE OF HYPOTHECATED GOODS Rapier Loom – 200 cm width, 24 Shafts Dobby, Frame 16, Beam 600 mm 2 Set, Pre Feeder, Reed, Cloth Roller, Wires, Dropper, Gripper, Tapes, Dropper Shelfs and other accessories etc., all stored & kept at Door No.5-4- 4-37, Annamalai Chetti Street, Jalagandapuram Post, Mettur Taluk, Salem District – 636 501.

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PROOF AFFIDAVIT OF THE APPLICANT BANK

1. Mrs.Nithyakalyani, Senior Manager LIST OF DOCUMENTS MARKED BY THE APPLICANT BANK

Sl. No. Date Description of Document Exhibits

27.01.2011 Xerox Copy of the Demand Promissory Note executed by the Defendant in favour of the Applicant Bank. A.1

27.01.2011 Xerox Copy of the Letter containing Terms & Conditions executed by the Defendant in favour of the Applicant Bank. A.2

27.01.2011 Xerox Copy of the Term Loan Agreement executed by the Defendant in favour of the Applicant Bank. A.3

27.01.2011 Xerox Copy of Agreement of Term Loan & Hypothecation with an Annexure dated 07.03.2011 executed by the Defendant in favour of the Applicant Bank. A.4

-- Xerox Copy of the Statement of Accounts. A.5

27.01.2011 Xerox Copy of Demand Promissory Note executed by the Defendant in favour of the Applicant Bank. A.6

27.01.2011 Xerox Copy of Letter of Continuity executed by the Defendant in favour of the Applicant Bank. A.7

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-- Xerox Copy of Statement of Accounts. A.8

20.01.2014 Xerox Copy of Revival Letter executed by the Defendant in favour of the Applicant Bank. A.9

15.12.2016 Xerox Copy of Revival Letter executed by the Defendant in favour of the Applicant Bank. A.10

15.01.2013 Xerox Copy of Lawyer Notice issued by the Applicant Bank to the Defendant. A.11