Allowed

Canara Bank v. Divya Associates

DRT22 Nov 2023OA/93/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an Original Application filed by Canara Bank for recovery of a term loan of approximately Rs. 1.01 crore from Divya Associates, holding the debtor liable based on documents on record as the defendant failed to substantiate defenses.

What did the court decide?

The defendant is liable to pay the applicant bank a sum of Rs.1,01,21,585.63 ps with future interest and costs; the OA claim is secured by hypothecation of schedule assets.

Canara Bank versus Divya Associates — Banking and Recovery | DRT (2023)

¶1

IN THE DEBTS^{RECOVERYTRIBUNAL-II AT HYDERABAD} DATED THIS^{THE 22ND DAYOF NOVEMBER,2023} PRESENT: SH.^{RAMESHWAR KOTHE,B'COM,L.LB. (HONS.), M.A.} PRESIDING^OFFICER

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ORIGINAL^{APPLICATIONNO. 93 OF 2022}

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Canara^Bank Balanagar Branch lK ComPlex 1't Floor, Main^Road Balanagar,^HYderabad ....Applicant. Rep. by its^{GPA Holder.}

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Versus

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Divya Associates Rep. by its^Proprietor Ms. Gonola^Divya D/o Gonola^Lingam Age: about²³ Years Occ: Business 601-B Amongh^Plaza Teachers ColonY^Road opp: CM CamP^Office Begumpet,^H Ydera^{bad- 50 0016}

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Also at: H. No. 77-457 /2^{IN Nagar} Near Mallanna^TemPle Malkajgirl, Hyderabad . ..... Defendant. Tea ng a na^- 500^047.

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Counsel for the Applicant^{: Ms. Sangeetalaiswal'} Counsel for Defendant : Mr. V. Sethu Madhava^Rao' Q{,*,

oA.9312022

:: ORDER::

The Applicant Bank fited the present OA filed u/s 19 of the Recovery of the Debts Due to Banks and Financial Institutions Act, 1993, for recovery of a sum of Rs.1,O 1,21,5g5.63ps from the defendant with future interest @9.900/0 plus 2yo penal interest p.a. with monthly rests from 25.OI.ZOzZtill the date of realisation along with costs and sale of OA schedule assets.

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The averments of applicant bank as per the OA, briefly, are that defendant availed term loan of Rs.1,OO,OO,OOO/_ vide sanction letter dated 27.O7.2027 for purchase of machinery by hypothecating the said machinery. The loan was to be repayable in EMIS. By August 2021, the business activities of the defendant were closed and the hypothecated assets were not found. The account was classified as NpA on 17.O1.2022, followed by tegal notice dated 27.0t.2022. Defendant has not liquidated the outstanding dues. Hence this Application.

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Defendant filed written statement. The averments of defendant as per the written statement, in brief, are that applicant bank got signatures on blank printed documents at the time of sanctioning the loan. There is every reason to believe that the blank documents were made use of by the applicant to suit their requirements in the OA. The Affidavit/Vakalatnama filed in the OA have not been attested by the Advocate. The applicant bank failed to restructure and converting into FITL as per RBl/Ministry of Finance guidelines. The payments made by the defendant are not shown in the statement of account. It is incorrect to state that the business activities were closed and

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Ory"*

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oA.9312022

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the hypothecated machinery were found missing and contrary to the information furnished in Para 3 of the OA. Due to stoppage of activities during Covid.19, the machinery was lying idle and because of its exposure to the open air it became scrap. The applicant claimed exorbitant rate of interest contrary to the terms and conditions of the loan agreement. With these submissions, defendant prayed for dismissal of OA.

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The Applicant Bank examined T. Gaikwad, Manager of the Applicant, as AW-1 and marked 11 documents through him as Ex. A.1 to Ex. A.11.

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Defendant's right of evidence is forfeited vide docket order dated 03.10.2023.

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Heard learned counsel appearing for the applicant. Learned counsel appearing for the defendant reported that Written Statement filed by him may be treated as arguments. Perused the material placed on record.

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According to learned counsel for the applicant the defendant committed default in repayment of loan as per agreed terms. The defendant neither produced any documentary evidence to rebut the OA claim nor chose to cross examine the AW.l to prove the contentions raised in the written statement. Hence the OA may be allowed on the basis of the recitals in the Exs. A.1to A.11.

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B. The point that arises for consideration is:-

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Whether the Applicant Bank is entitled for the claim made in the OA against Ow*

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oa.9312022

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the Defendant and OA schedule property?

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It is an admitted fact that defendant availed loan from the applicant bank. The contentions raised by the defendant in the written statement are validity of aFfidavit/vakalatnama filed in the OA, obtaining signatures of defendant on blank prtnted loan documents, extending the benefit of restructuring of loan as per RBI guidelines and charging higher rate of interest contrary to agreed terms. Having contended so, defendant nelther produced any documents in support of its contentions nor cross examined the AW.1 to substantiate its contentions over the validity of documents, rate of interest etc. Under such circumstances, the documents relied on by the applicant bank along with the recitals mentioned therein clinches the OA claim in favour of the applicant bank and against the defendant. Accordingly, I hold that the defendant is liabte to pay the OA claim to the applicant along with interest and costs thereon.

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In the result, the present Original Application No.93/2022 is allowed as under: -

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i) The defendant is liable to pay to the Applicant Bank a sum of Rs.1,01,21,585.63ps with future interest @9.900/0 p.a. simple from the date of application till (he date of realization;

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ii) the OA claim is secured by way of hypothecation of OA schedule assets and the O#"

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oa.9312022

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applicant bank is entitled to proceed against the same for recovery of its dues;

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iii) the applicant bank is entitled to proceed against the person and properties of the defendant for realization of its dues; and

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iv) the applicant bank is entitled for the costs.

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The Applicant Bank is directed to file Cost Memo within 2 weeks from the date of receipt of this Order.

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Issue Recovery Certincate accordingly.

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Communicate a copy of this order to the parties concerned. (Dictated to the steno, signed and pronounced by me in the open coun on this the 22'd day of November,2023).

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OY'*

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(RAMESHWAR KOTHE) PRESID]NG OFFICER

Canara Bank v. Divya Associates

Case brief

What is this about?

What did the court decide?

Canara Bank v. Divya Associates

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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