Allowed

M/s Deutsche Bank Ag v. M/s Gee Ess International

DRT19 May 2023TA/7/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an applicant bank application for recovery of dues and issuance of a Recovery Certificate. The court found the claim unrebutted due to the defendant's absence and admitted interest at a reduced rate pending litigation.

What did the court decide?

Issued Recovery Certificate permitting realization of Rs.39,29,082.70p plus interest at 18% p.a. (simple) from filing date.

M/s Deutsche Bank Ag versus M/s Gee Ess… — Contract and Commercial Disputes | DRT (2023)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 19^th day of May, 2023

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PRESENT: SHRI T. RAJESH

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PRESIDING OFFICER

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TA No.7 of 2022

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(Originally filed before DRT-I Chennai as OA No.290 of 2019 and thereafter transferred to this Tribunal and renumbered as TA No.7 of 2022)

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M/s Deutsche Bank AG 4-4A, Western Tower Sunny Side, Ground Floor Shafi Mohammed Road Thousand Lights, Chennai – 600 006 Represented by its Authorised Representative Mr. M. Deiveegan …Applicant

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Versus

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M/s GEE ESS International Represented by its Proprietor Mr. Swaminathan Gopalan Shop No.2, 1^st Floor, No.217/225 Thambu Chetty Street, Mannady Chennai – 600 001

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Residing at No.7B, Sri Gowri Puthra Plots Kabiler Street Extension Pazhavanthangal, Chennai – 600 014

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Also at No.3, Thangavelu Street Puzhithivakkam, Chennai – 600 091 …Defendant

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Counsel for the Applicant Bank : M/s Sai Krishnan Associates Counsel for Defendant : Mr. Madhu Sudhanan

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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 defendants’ seeking issuance

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of a Recovery Certificate for recovery of a sum of Rs.39,29,082.70p with

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further interest at the rate of 18.35% per annum with monthly rests from the date of the application till the date of realisation along with costs of the application.

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It is the case of the applicant that the defendant approached the applicant for grant of Business Installment Loan vide loan application dated 9.8.2017 and considering the said request the applicant sanctioned a loan of Rs.44 lakhs to the defendant under Loan Account No.350025897430019 on 18.8.2017 and the defendant executed the Loan Agreement on the same day. It is also stated that the said loan was repayable in 36 equated monthly installments of Rs.1,59,071/- commencing from 5.9.2017 to 05.08.2020.

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It is also the case of the applicant that the defendant committed default in repayment and failed to regularize the loan account despite repeated demands and therefore the applicant sent a legal notice on 26.09.2018 demanding a sum of Rs.38,67,057.20p due as on 05.09.2018. The said notice returned with endorsement “Left: on 4.10.2018 at the business address and was served at residential address.

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It is the case of the applicant as the defendants did not come forward to clear the outstanding dues and hence the applicant is constrained to file this application for recovery of its legitimate dues.

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Despite availing sufficient time the defendant did not choose to file its reply statement and hence the chance was closed on 24.12.2019.

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The applicant bank filed its proof affidavit along with 9 documents, which are

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marked as Exhibits A-1 to A-9, the details of which are as under: -

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Sl. No.	Date	Description of Documents	Exhibits
1.	20.09.1991	Certificate of establishment of place of business in India	A-1
2.	05.04.1988	Licence No.BOM-41 issued by Reserve Bank of India	A-2
3.	19.03.2019	Power of Attorney	A-3
4.	09.08.2017	Loan Application Form	A-4
5.	18.08.2017	Loan Agreement	A-5
6.	26.09.2018	Legal notice	A-6
7.	04.10.2018	Returned cover of the legal notice with respect to the business address	A-7
8.	04.10.2018	Proof of service of the legal notice with respect to residential address	A-8
9.	17.10.2018	Statement of Accounts	A-9

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The defendant did not choose to file their reply statement and further remained absent on several hearings and hence were set ex-parte on 8.3.2023.

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Heard the Ld. Counsel for the Applicant Bank. Perused the records.

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Having heard the Ld. Counsels for the applicant and after perusing the records, the Tribunal framed the following points for consideration: -

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1. Whether the applicant bank has established its claim against the defendant? If so, for what amount?

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2. Whether the applicant bank is entitled for pendent lite and future interest, if so, at what rate ?

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Point No.1

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Whether the applicant bank has established its claim against the defendant? If so, for what amount?

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The applicant bank in its endeavor to establish its claim against the defendant examined its official as AW1 and got marked exhibits Ex.A-1 to A-9. Ld. Counsel for Applicant placing reliance on the proof affidavit of AW-1, besides Exhibits A-1 to A-9 strenuously contended that the claim of the applicant stands established, as such, the applicant is entitled for a recovery certificate.

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Ld. Counsel for Applicant Bank would contend that even as per the Reply Statement filed, the defendants have not denied availing of credit facility, execution of loan and security documents and creation of mortgage in favour of the applicant and as such the said admission is sufficient enough to allow the claim of the applicant. It is further contended that the defendant remained absent and did not choose to file either the reply statement or the Counter Proof Affidavit and therefore the claim of the applicant stand unrebutted.

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As rightly contended by the Ld. Counsel for Applicant, the defendant did not choose to either file the reply statement or the Counter Proof Affidavit substantiating the pleas taken in reply statement. Here it is to be stated that as per the scheme of adjudication of a claim/counter under the RDB Act, parties shall file their respective affidavits/counter affidavits in support of their claim or counter claim as the case may be and the Tribunal shall on the basis of the affidavits filed, adjudicate and decide the claim/counter claim. Therefore, in the absence of any evidence being put forth by the defendant, as rightly contended by the Ld. Counsel for Applicant, the defense put forth by

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the defendant remain unsubstantiated hence cannot be considered, thus the claim of the applicant stands unrebutted.

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Therefore, in the light of the discussion as aforesaid, it is clear that the proof affidavit and the documents filed along with by the applicant remain unchallenged by the defendant. Further, the Tribunal on careful perusal of the unrebutted Proof Affidavit of AW-1 besides Exhibits A-1 to A-9 is fully satisfied that the applicant has established its claim. This point is answered accordingly.

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Point No.2

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Whether the applicant bank is entitled for pendent lite and future interest, if so, at what rate?

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In terms of Sec. 19 (20) of the RDB Act, the Tribunal has been empowered to pass an order regarding payment of interest from the date on or before which payment of the amount is found due, up to the date of realisation or only payment, as it think fit to meet the ends of justice. Further, Hon’ble Supreme Court, in the judgement (reported in II 2009 BC pg. 696) in the matter of State Bank of India – vs – Sarath Textiles, held that “ Sec. 19 (20) of the RDDB & FI Act confers discretion on the Tribunal to award interest on the applicant being as it thinks fit to meet the ends of justice. ”. Further, Hon’ble Supreme Court of India in the matter of Central Bank of India – vs – N. Raveendra (reported in 2002 [1] SCC pg. 367) held that “ Sec. 34 of CPC confers discretion on the Court to award or not to award interest or to award interest at such rate as it deems fit de-horse notwithstanding the contract between the parties. ” Sec. 19 (20) of the RDDB & FI Act is akin to Sec. 34 CPC.

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While it is the case of the applicant that the applicant bank is entitled for contractual rate of interest till discharge of the entire outstanding dues, however, the defendant would contend that in so far as pendente lite and future interest is concerned, the contractual rate of interest may not be applied. It is to be stated that the claim of the applicant bank includes the rate of interest and other charges payable as per the contract. The Tribunal already held that the applicant bank is entitled for the amount claimed in the OA. As already stated, the Tribunal has awarded contractual rate of interest as claimed by the applicant bank till the date of filing the OA and the lending rate had considerably come down, the Tribunal is of the view that the defendants are entitled for a reduced rate of interest. Therefore, under these circumstances, the Tribunal is inclined to grant pendente lite and future interest at reduced rates on the OA claim amount from the date of filing till the date of realization. Point No.2 is answered accordingly.

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In view of the afore mentioned discussions, the OA is disposed off in the following manner: -

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(a) TA No.574 of 2022 stands allowed.

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(b) Applicant is permitted to realize an amount of Rs.39,29,082.70p with further interest @18% per annum (simple) from the date of filing of the application till the date of realization in full, from the defendants jointly and severally after deducting all the amounts received by them during the pendency of OA, and also by selling the other assets of the defendants.

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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 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 19^th day of May, 2023)

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

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M/s Deutsche Bank Ag v. M/s Gee Ess International

Case brief

What is this about?

What did the court decide?

M/s Deutsche Bank Ag v. M/s Gee Ess International

Case brief

What is this about?

What did the court decide?

What the court decided

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