Allowed

Karnataka Bank Ltd., v. Mr. Govindappa

DRT30 Oct 2023OA/289/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the applicant bank's application for a recovery certificate regarding an outstanding loan and overdraft, permitting recovery via sale of mortgaged scheduled property.

What did the court decide?

Recovery Certificate issued for Rs.26,40,015.79 plus 11% simple interest, recoverable by selling scheduled property and other assets.

Karnataka Bank Ltd., versus Mr. Govindappa — Contract and Commercial Disputes | DRT (2023)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 30^th day of October, 2023

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PRESENT: SHRI T. RAJESH

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PRESIDING OFFICER

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OA No.289 of 2022

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Karnataka Bank Ltd., Rep.by its Chief Manager & Authorized Signatory, Shri Prasanna, S/o. Nagnand Pavaskar, The Asset Recovery Management Branch, No.324, Ground Floor, Thambu Chetty Street, Chennai – 600 001 …Applicant

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Versus

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Mr. Govindappa, S/o. Mr. Devaiah, No.6/359, Venkatarayapuram Village, Bagalur Post, Hosur Taluk, Krishnagiri Districh, Tamil Nadu – 635 109

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Mrs. Geetha, W/o. Mr. D. Govindappa, No.6/359, Venkatarayapuram Village, Bagalur Post, Hosur Taluk, Krishnagiri Districh, Tamil Nadu – 635 109 …Defendants

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Counsel for the Applicant Bank : Mrs. V. Kamala Kumar Counsel for Defendants : Ex-parte

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FINAL ORDER

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This Original Application is filed seeking issuance of a Recovery Certificate for Rs. 26,40,015.79/- with further interest.

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The defendant had availed a term loan for Rs.17,50,000/- and an over draft for Rs.3,50,000/- from the applicant. The term loan was repayable in 7 yearly instalments of 2,50,000/- and over draft was to be repaid on demand apart from remittance of interest. The defendant had executed necessary loan

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documents including hypothecation agreement apart from the above a mortgage was created in respect of schedule properties.

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It is stated that the defendants had failed to repay the amount and the over draft had exceeded the limit. It is also the case of the applicant that, because of the defaults, the account was classified as NPA on 31.5.2018 and despite the same. The debt was acknowledged on 6.12.2018. Since the defendant failed to pay back the amount, this OA is filed. Summons was taken out and defendant entered appearance though a counsel. However no reply statement was filed and because of non appearance of the defendant, they were set exparte on 1.2.2023. The applicant had filed exparte proof affidavit and examined AW1 and got to marked Ext.A1 to A17.

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Heard the counsel for the applicant and considered the contention in the light of documentary evidence. The following issues arise for consideration.

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i) Whether the applicant had succeeded in proving the OA claim. ii) What orders as to be passed.

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Since both these issues are interrelated, the same were gone into and decided together.

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The only evidence available in this matter is the uncontrdicted exparte evidence tendered by the applicant. The credit sanction letters, term loan agreement and consent letters produced as A 1 to A5 evidences the availment of the credit facility and the liability of the defendant to pay back the amount. The hypothecation agreements, Ext.A6 and A11 take delivery letter A7 and demand promissory note, Ext.A8 also proves the liability of the defendants to

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pay back the amount. The consent letters A9 and A10 and the cheque collection letter A12 also supports the case of the applicant. A13 memorandum of deposit of the title deeds evidences the creation of mortgage. A14 and A15 are the acknowledgment of debt. the above documents found admissible in evidence. The above documents are sufficient to prove the obligation of the defendants to pay back the amount.

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Ext.A16 and A17 the statement of accounts duly certified proves that the amount claimed in the OA is outstanding and that the penal interest is not capitalized.

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In view of the above discussion this Tribunal is satisfied that the OA is liable to be allowed. Since the applicant had levied and charged interest including penal interest at the agreed rate, this Tribunal is of the view that pantalets and future interest can be awarded at simple rate.

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In the result

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i) OA.289 of 2022 stands allowed.

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ii) The applicant is permitted to realize an amount of Rs.26,40,015.79/with further interest at 11% per annum (Simple), from the date of filing of the OA till realization.

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iii) The amount as above shall be recovered by proceeding against and by selling the scheduled property.

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iv) If the sale proceeds are not sufficient to wipe of the liability the defendants and their other assets are liable to be proceeded against.

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v) A Recovery Certificate shall be drawn on above terms and issued to the Recovery Officer to effect Recovery as aforesaid.

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vi) Applicant is also allowed cost of the proceedings for which a cost memo is to be filed in 7 days from the date of receipt of the order.

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Communicate a copy of the order to the parties concerned in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

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(Dictated to PS, transcribed by him, corrected, signed and pronounced by me in Open Court on this the 30^th day of October, 2023)

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(T. RAJESH ) PRESIDING OFFICER DRT-II, CHENNAI

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Karnataka Bank Ltd., v. Mr. Govindappa

Case brief

What is this about?

What did the court decide?

Karnataka Bank Ltd., v. Mr. Govindappa

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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Case details

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