CORPORATION BANK vs Ellammal Traders on 13 February 2019

O R D E R

1. This application has been filed under Sec.19(1) of the RDDBFI Act by the Applicant Bank to recover from the Defendants a sum of Rs.74,93,085.78ps/-, due as on 26.03.02, together with the pendente lite and future interest @ 17.50% compounded with quarterly rests from the date of application till the date of realization and by sale of the hypothecated and mortgaged properties, more fully described in Schedule-A & B of the application and with cost.

2. The brief averments of the application filed by the Applicant Bank are as follows:- D-1 is a Partnership firm and D-2 & D-3, are the partners of the said firm. D-2 to D-4 are also guarantors of the loan transaction. D-1 was enjoying certain credit facilities with the applicant bank since 1999. From time to time the limit was enhanced and the limits enjoyed by the defendants are as under: Bank Guarantee Rs.20,00,000/- , Cash credit facility (Hyp of Book Debts) of Rs.15 lakhs. As security, evidence and cover for the said credit facilitiy of Rs.15,00,000/- the defendants has executed ;- (a) Demand Promissory Note executed by D-2 & D-3 as partners of D-1 (b) Take Delivery Letter (c) Hypothecation of Goods executed by D-2 & D-3 as partners of D-1 (d) Agreement for Hypothecation of book debts executed by by D-2 & D-3 as partners of D-1. In respect of Bank Guarantee of Rs.20,00,000/-, D-2 & D-3 as partners of D-1 executed an Agreement of Counter Guarantee agreeing to indemnify the bank against all action, proceedings, claims, demands losses, damages, loss what so ever that may be brought or made against the bank in consequence of executing the bank guarantee. D-2 to D-4 stood as guarantor for both the credit facility and jointly executed an Agreement of Guarantee dated 24.03.03. They also agreed that the guarantee shall be a continuing guarantee for the payment of the ultimate balance to become due to the bank by the borrower. D-1 has deposited the title deeds of two properties described in „B‟ Schedule of the application with the application bank. The said factum was confirmed by Memorandum dated 05.02.99 in respect of item No.1 and Memorandum dated 17.02.99 in respect of item No.2 of „B‟ Schedule. D-1 executed General Power of Attorney dated 17.02.99 in favour of the applicant bank. The defendants 2 to 4 by agreement dated 30.04.1999 assigned the following L.I.C policies in favour of the applicant bank :- (i) Policy No.710963924 – Assured Rs.50,000/-- by P.L. Thirunavukkarasu, (ii) Policy No.710963949- Assured Rs.1,00,000/- by P.T. Rajmohan, (iii) Policy No.710963981 – Assured Rs.50,000/-- by P.L. Dhanapalan. The aforesaid policies have been surrendered and amounts have been credited to the account. As the defendants failed to repay the dues, the applicant issued a lawyer‟s notice dated 11.08.01 to the defendants. The defendants though received the notices, they have failed to reply the notice as well as repay the dues. Hence, the Applicant Bank has filed the OA for recovery of Rs.74,93,085.78ps/- with interest and costs.

Pending adjudication, the applicant bank invoked measures under SARFAESI proceedings and sold item No.1 of „B‟ Schedule for a sum of Rs.35,35,000/- and the title deeds were delivered to the auction purchaser.

3. The Defendants were set ex-parte.

4. The Applicant Bank, in order to prove its claim, has filed Proof Affidavit executed by one Mr. G.M. Srinivasa Rao, who is the Chief Manager of the Applicant Bank. The then officer of the Applicant Bank has stated in the proof affidavit that the original documents Exh.A-1 to A-15 had been seized by the Applicant Bank would prove the claim of the Applicant Bank in the OA. Therefore, this Original Application is allowed. The Applicant Bank is entitled for a final order on the following lines:- The Applicant Bank is entitled to recover from the Defendants a sum of Rs.74,93,085.78ps/-, due as on 26.03.02, together with the pendente lite and future interest @ 17.50% compounded with quarterly rests from the date of application i.e. 27.03.02 till the date of realization and also the costs.

5. The Defendants are directed to pay, jointly and severally, a sum of Rs.74,93,085.78ps/- together with the pendente lite and future interest @ 17.50% compounded with quarterly rests from 27.03.02 till the date of realization and also the costs. On failure to pay the above said debt to the Applicant Bank, the Applicant Bank is directed to bring the hypothecated and mortgaged properties, more fully described in „A‟ & „B‟ Schedule of the application, for sale to realize its dues and costs.

6. 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. 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. Dictated to PS, taken down, transcribed, typed by him, corrected and pronounced by me in the open court this the 13th February, 2019. Sd/-

SCHEDULE – “A” (ITEM NO.I)

Steels such as iron and steel plates and related products while stored at the 71/B Sub Jail Road, Trichy and 72, Sembudoss Street II Floor, Chennai – 600 001 or at any other place that way be notified to the bank from time to time. (ITEM NO.II)

(a) L.I.C.Policy bearing No.710963981 standing in the name of P.L.Dhanapalan (b) L.I.C.Policy bearing No.710963949 standing in the name of P.T.Rajmohan

(c) L.I.C.Policy bearing No.710963924 standing in the name of P.L.Thirunavukkarasu LIC policies surrendered and credited to the account SCHEDULE – “B” Item No. I : Sold under SARFAESI proceedings All that piece and parcel of land, admeasuring an extent of 1421 sq.ft. and house building thereon (consisting of Ground and First Floor of 1100 sq.ft. each) bearing Door No.48, Plot No.446-C, IV Trust Cross Street, Mandavelipakkam, Chennai – 600 028 comprised in R.S.No.4458 Mylapore Village, bounded on the North by: Property in Plot No.430-B, Door No.32; South by: Property in Door No.18 IV Trust Cross Street, East by: 30 feet Road; West by: Property in Plot No.446-B Door No.17 and measuring on the Northern side 48 1/2 ; on the Southern side 49 feet 3 inches; on the Eastern and Western side 29 feet and situated within the Sub- Registration District of Mylapore and Registration District of Chennai-Central. Item No. II

All that piece and parcel of land bearing Plot No.D-79 measuring 216 sq.meters comprised in S.No.3/1A1a3 part situate at Sathangadu Village, Tiruvallur District (Chingleput District) bounded on the North by 18 metre Road, South by: Plot No.44, East by: Plot No.D-80 and West by: Plot No.78 admeasuring East to West 9 metre and North to South 24 metre. Sd/-

LIST OF DOCUMENTS FILED BY THE APPLICANT BANK S. No. Date Description of document Exhibits

1. ---- Proof Affidavit ----

2. 24.03.2000 Original Demand Promissory Note for a sum of Rs.15,00,000/- executed by D-2 and D-3 as partners of D-1 in favour of applicant bank Ex.A-1

3. 24.03.2000 Original Take delivery letter executed by D-2 and D-3 as partners of D-1 in favour of applicant bank Ex.A-2

4. 24.03.2000 Original Hypothecation of Goods to Secure Demand Cash Credit executed in favour of applicant bank Ex.A-3

5. 24.03.2000 Original Agreement for Hypothecation of Book Debts executed by D-2 and D-3 as partners of D-1 in favour of applicant bank Ex.A-4

6. Original Agreement of Counter guarantee executed by D-2 and D-2 as partners of D-1 Ex.A-5

7. 24.03.2000 Original Guarantee agreement jointly executed by D- 2 to D-4 in favour of applicant bank Ex.A-6

8. 17.02.1999 Original General power of attorney executed by defendant No.1 in favour of applicant bank Ex.A-7

9. 05.02.1999 Original Memorandum of deposit of title deeds in respect of Item No.1 in „B‟ schedule of claim application Ex.A-8

10. 27.03.1991 Original Lease-cum-sale agreement Ex.A-9

11. 17.02.1999 Original Memorandum in respect of Item No.2 in „B‟ schedule of claim application Ex.A-10

12. 24.03.2000 Original Continuity letter executed by D-1 Ex.A-11

13. 24.03.2000 Original Continuity letter executed by D-2 Ex.A-12

14. 24.03.2000 Original Continuity letter executed by D-3 Ex.A-13

15. 11.08.2011 Office copy of Lawyer‟s Notice Ex.A-14

16. ----- Statement of Accounts Ex.A-15

Sd/-