Allowed

Canara Bank v. Mr. G. Govindasamy

DRT22 May 2023TA/10/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application by Canara Bank for recovery of dues outstanding from an agricultural loan account, relying on unchallenged documentary evidence to establish the debt and authority to recover via sale of properties.

What did the court decide?

Recovery of Rs.12,20,623/- plus interest at 8% per annum (simple) from 13.05.2022, with permission to sell schedule properties; issuance of Recovery Certificate.

Canara Bank versus Mr. G. Govindasamy — DRT (2023) — LawSathi Research

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 22^nd day of May, 2023

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PRESENT: SHRI T. RAJESH

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PRESIDING OFFICER

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TA No.10 of 2022

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(Originally filed before DRT-I Chennai as OA No.200 of 2022 and thereafter transferred to this Tribunal and renumbered as TA No.10 of 2022)

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Canara Bank Represented by its Manager Periamittoor Branch Bank Street, Katpadi Taluk Vellore District – 632 516 …Applicant

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Versus

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Mr. G. Govindasamy S/o Mr. Ganesan No.106, Periyakeesa Kuppam Village Melpadi, Katpadi Taluk Vellore District – 632 520 …Defendant

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Counsel for the Applicant Bank : M/s Kavitha Singuluri Counsel for Defendant : Ex-parte

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FINAL ORDER

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This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 against the defendant for recovery of a sum of Rs.12,20,623/- together with interest at the rate of 12% per annum with monthly rests from the date of filing of the OA till the date of realization in full along with costs of this application and for sale of schedule properties.

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The subject matter of the case is the “Agricultural Loan” availed by the defendant from the applicant bank.

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It is the case of the applicant that the sole defendant approached the applicant bank for grant of agricultural loan and the applicant considering the said request had sanctioned an amount of Rs.8,00,000/- to the defendant vide its sanction dated 5.8.2014 as Farm Development Loan. It is stated that the defendant executed the Memorandum of Loan Agreement dated 6.8.2014. It is also stated that the defendant deposited the title deeds of his property more fully described in the schedule to the OA with the applicant bank on 6.8.2014 with an intention to create equitable mortgage over the same in favour of the applicant bank and confirmed the same by executing Memorandum of Deposit of Title deeds dated 26.4.2016 registered as Doc. No.3170 of 2016 on the file of SRO, Katpadi. It is further stated that the defendant had agreed to repay the said sum in 60 equated monthly installments along with interest on such rate or rates as the bank may from time to time specify by notice calculated on daily debit balance.

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It is the case of the applicant that the defendants having availed the credit facility defaulted in repayments and failed to regularize the loan account despite repeated demands and also failed to comply with the terms and conditions of sanction and therefore the loan account was classified as NPA on 30.06.2017. It is stated that as the defendant did not come forward to clear the outstanding dues the applicant issued legal notice dated 4.7.2018 calling upon the defendant to repay the entire sum.

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It is the case of the applicant that after availing the loan, the defendant was irregular in remitting the loan amount. The efforts of the applicant bank to make the defendant to settle the loan did not yield any result, and hence the applicant

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approached this Tribunal seeking issuance of a Recovery Certificate allowing recovery of the amount due in the account.

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Summons were taken out to the defendant and the same were served. However, there was no representation for the defendant. Applicant Bank filed Proof Affidavit along with 17 documents, which were marked as Exhibits A-1 to A-13 on 21.02.2023, however, as Exhibit A-15 to A-17 formed part of Exhibit A-14, they are marked together as Exhibit A-14. As there was continuously no representation on behalf of the defendant the defendant was called absent and set ex-parte on 21.2.2023. The Ld. Counsel for the applicant was heard on 17.3.2023 and thereafter the matter stood till this date for passing final orders.

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The following issues arise for consideration in the matter: -

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(a) Whether the applicant had succeeded in proving the liability of the defendant?

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(b) What order as to cost of the proceedings need be passed?

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These issues are considered together.

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Heard the Ld. Counsel for the applicant, perused the OA averments and the record placed before the Tribunal.

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The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-14 (though 17 documents were filed) along with the proof affidavit. Exhibit A-1 is the specimen signature card of the defendant dated

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6.8.2014. Exhibit A-2 is the Common application cum appraisal for credit facilities for agricultural loan dated 6.8.2014 submitted by the defendant. Exhibit A-3 is the sanction memorandum dated 6.8.2014 issued by the applicant. Exhibit A-4 is the Letter evidencing deposit of title deeds dated 6.8.2014 executed by the defendant. Exhibit A-5 is the confirmation of creation of equitable mortgage dated 15.4.2016 by the defendant. Exhibit A-6 is the Memorandum of Agreement dated 6.8.2014. Exhibit A-7 is the Memorandum of Deposit of Title deeds dated 26.4.2016 registered as Doc. No.3170/2016 executed by the defendant. Exhibit A-8 is the Letter evidencing deposit of title deeds dated 31.7.2014 registered as Doc. No.6552/2014 by defendant. Exhibit A-9 is the sale deeds dated 26.3.2009 executed by Deivanai Ammal and Valliammal in favour of Govindasamy. Exhibit A-10 is the sale deed dated 5.11.1990 executed by Nagappareddy, Kesava Reddy, Narasiman, Sivanesan in favour of G. Govindasamy. Exhibit A-11 is the acknowledgement of debt and security dated 25.07.2017 executed by the defendant. Exhibit A-12 is the Legal notice dated 03.07.2018 issued by the applicant. Exhibit A-13 is the acknowledgement cards of the legal notice. Exhibit A-14 is the statement of accounts in respect of the loan account along with certificates under Bankers’ Book Evidence Act.

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Exhibit A-1 to A-3 evidences that the defendant by application cum appraisal for credit facilities for agricultural loan approached the applicant for grant of credit facilities on 6.8.2014 and the applicant considering the said request sanctioned Farm Development Loan limit of Rs.8 lakhs vide its sanction dated 5.8.2014. Exhibit A-4 to A-10 evidences that the schedule mentioned properties belonged

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to the defendant and is empowered to deal with the property. It also evidences that the defendant executed Memorandum of Loan Agreement on 6.8.2014 and also deposited the title deeds of the property with the applicant bank on 6.8.2014 with an intention to create equitable mortgage over the same in favour of the applicant and confirmed the same by executing Memorandum of Deposit of Title deeds dated 26.04.2016 registered as Doc. No.3170/2016 on the file of SRO, Katpadi. Exhibit A-11 evidences that the defendant acknowledge debt on 25.7.2017 by executing acknowledgement of debt and security. Exhibit A-12 and A-13 evidences that the defendant defaulted in repayment, failed to regularize the loan account despite repeated demands and hence the applicant caused a legal notice on 3.7.2018 which was duly received by the defendant. Exhibit A-14, the statement of accounts produced and certified under the Banker’s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendant. It is clear from the statement of accounts that penal interest is not capitalized.

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The proof affidavit of the applicant bank remained unchallenged and unrebutted. Therefore, on careful consideration of proof affidavit along with Exhibits filed on behalf of the applicant bank, besides the material placed before the Tribunal, the Tribunal is satisfied that the applicant bank has successfully proved the OA claim against the defendant. Point is answered accordingly.

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In view of the foregoing, it is clearly evident that the application filed by the applicant bank is well within the period of limitation and this Tribunal possesses the territorial and pecuniary jurisdiction to entertain this OA.

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In view of the fact that the loan availed by the defendant being agricultural loan and the applicant has calculated and claimed interest at the contractual rates till the date of filing of the OA, this Tribunal is of the view that the pendent lite and future interests can be awarded at reduced rates. Further, this Tribunal while allowing the application to condone the delay in representation of the OA has by its proceedings dated 12.5.2022 recorded that the applicant bank will forego the interest from the date of filing till 12.5.2022 and therefore the pendent lite interest is awarded from 13.5.2022.

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In view of the afore mentioned discussions, the only conclusion this Tribunal can draw is that the applicant had clearly proved the disbursement of the loan, which the applicant is entitled to realize. Hence, OA is disposed off in the following manner: -

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(a) TA No.10 of 2022 stands allowed.

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(b) Applicant is permitted to realize a sum of a sum of Rs.12,20,623/- with further interest at the rate of 8% per annum (simple) from the defendant from 13.05.2022 till date of realization, after deducting all the amounts received by them during the pendency of OA, and also by selling the schedule mentioned properties and other assets of the defendant.

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(c) If the sale proceeds are not found sufficient to cover the amount due and payable to the Applicant Bank, the defendant is personally liable for all such amounts due.

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(d) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 7 days from the date of receipt of the copy of the order.

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(e) The Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of this final 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 22^nd day of May, 2023)

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

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Canara Bank v. Mr. G. Govindasamy

Case brief

What is this about?

What did the court decide?

Canara Bank v. Mr. G. Govindasamy

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Cases cited

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