Allowed

Bank of Baroda, v. M/s. Rock Star and Co.

DRT30 Nov 2023TA/262/2022

Case brief

AI extract

What is this about?

The DRT adjudicated a Transfer Application filed by Bank of Baroda to recover an outstanding loan amount from a defaulting proprietorship concern and its proprietrix. The court allowed the application permitting recovery of the principal sum, interest, and authorizing a Recovery Certificate.

What did the court decide?

Recovery of Rs.53,74,903/- with future and pendentelite interest @9% simple from filing date; issuance of Recovery Certificate; allowance of litigation costs.

Bank of Baroda, versus M/s. Rock Star and Co. — Banking and Recovery | DRT (2023)

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IN THE DEBT RECOVERY TRIBUNAL –II CHENNAI Dated this 30^th day of November, 2023

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PRESENT: SHRI T.RAJESH PRESIDING OFFICER

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TA.No.262 OF 2022

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(Old OA.No.180/2022–DRT-I, Chennai)

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Bank of Baroda, Nungambakkam Branch, Dwaraka Building, 1^st Floor, No.79, (Old No.36), Nungambakkam High Road, Chennai – 600 034. Rep.by its Chief Manager/ Authorised Officer, (IFSC Code:BARBONUNGAM)

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… APPLICANT.

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Vs.

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M/s. Rock Star & Co., A proprietorship concern Rep.by its Proprietrix, Mrs.R.Vanitha (PAN.No.AZJPV8408M).

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Mrs. R.Vanitha, W/o. Rajesh Kannan, Proprietrix of M/s. Rocks Star & Co.

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Residing and having office at No.1, Kannan Garden, Kodur, Krishnapuram, Ponneri, Thiruvallur-601 204. … DEFENDANTS Counsel for Applicant : M/s.E.Vijayaraghavan. Defendants : Exparte. ……

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ORDER

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The above Transfer Application is filed under section 19 of the Recovery of Debt and Bankruptcy Act seeking recovery of Rs.53,74,903/- with further interest from the date of filing of the TA and also by allowing the same to be recovered from the defendants jointly and severally and to allow the same to be recovered by selling hypothecated assets.

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The case of the applicant can be encapsulated as follows:-

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The 1^st defendant a proprietory concern with 2^nd defendant as its proprietrix had applied for cash credit facility for Rs.40,00,000/- under CGTMSE scheme which was disbursed, pursuant to execution of loan documents including declaration and demand promissory note. Apart from above the defendants got sanctioned and availed two credit facilities for Rs.4,00,000/- each as short term working capital under BGELCS Scheme and a demand loan sanctioned on 04.05.2020 and 14.05.2020 respectively. The defendants have again requested the applicant bank for granting another additional Short Term Working Capital assistance under BGELCS Scheme and a Demand Loan facility of Rs.8,00,000/- each which was sanctioned by the applicant on 17.06.2020. These credit facilities are sanctioned on due execution of relevant loan documents.

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It is also stated that the above facilities were availed after execution of necessary loan documents by defendants obliging themselves to repay the amount promptly and regularly, without fail. Apart from execution of the necessary loan documents, a composite hypothecation over goods, movables and other assets were marked as being the security for repayment of the loan.

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Even though the defendants had obliged themselves to repay the amount promptly and regularly, they failed to do so resulting defaults in the accounts and the same being declared as NPA on 30.09.2021.

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The applicant’s officials had on many occasions approached the defendants requesting them to repay the account and despite the same, no effort was made by the defendants to get the account regularized over to pay back the amount.

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Even as no repayment was made despite repeated request the applicant had cause to issue a lawyer notice dated 18.12.2021 requiring repayment of the amount due in the account. However the defendants had acknowledged the debt.

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It is also the case of the applicant that despite repeated reminders and requests the defendants had failed to make the repayment forcing the applicant to file this OA seeking recovery of the amount due in the account with further interest and cost.

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Even as the defendants failed to enter appearance, they were set exparte on 01.02.2023.

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The applicant had let in evidence through AW1 who had sworn to a Proof Affidavit in terms of the pleadings in the OA and also produced Exhibits A1 to A29 and got the same marked.

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Heard the counsel for the applicant and considered the contention as taken in the OA in the light of documentary evidence and proof affidavit. The following issues arise for consideration in this matter.

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i) Whether the applicant had succeeded in proving the OA claim?

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ii) What orders are to be passed?

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Both these issues are gone into and decided together.

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The case put forth by the applicant in the Application remains unrebutted as defendants remain exparte. The evidence tendered by the applicant remains uncontroverted and undisputed. The evidences put forth by the applicant were found admissible. From the statement of accounts as produced by the applicant, it is evident that the amount as claimed in the OA is outstanding in the account, which the applicant is entitled to get recovered from the defendants and their assets. The claim of the applicant is well within the period of limitation and there is no Capitalization of penal interest. Taking note of the fact that the

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applicant had arrived at the OA claim by calculating interest at agreed

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rate and the credit facility is for agricultural purpose, this Tribunal is of the view that pendentelite and future interest can be awarded at a reduced rate 9% (simple).

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In view of the finding as entered above

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i) TA.No.262 OF 2022stands allowed. ii) Applicant is permitted to recover an amount of Rs.53,74,903/- (Rupees Fifty Three Lakhs Seventy four Thousand Nine Hundred and Three only) with future and pendentelite interest @9% (simple) from the date of filing of the TA till realization after giving credit to all the amount recovered and received during the pendency of the TA.

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iii) A Recovery Certificate is to be drawn and issued to the recovery officer to enable recovery of the amount as per the above terms.

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iv) Applicant is allowed to realize cost of the proceedings for which cost memo is to be filed in 7 days’ time from the date of receipt of the copy of the order.

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Communicate a copy of the order to the parties concerned in terms of

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Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

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

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

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Bank of Baroda, v. M/s. Rock Star and Co.

Case brief

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Bank of Baroda, v. M/s. Rock Star and Co.

Case brief

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