Allowed

State Bank of India v. Mr. K. Dhamotharan

DRT19 May 2023TA/330/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application filed by a bank for recovery dues from a defaulting home loan borrower. The court validated the loan documents and demand notice, ordering the bank to realize the principal amount along with reduced pendent lite interest at 8% per annum via sale of assets or personal liability.

What did the court decide?

Applicant permitted to realize Rs. 21,28,083/- with 8% pendent lite interest from defendants jointly and severally; Recovery Certificate to be issued.

State Bank of India versus Mr. K. Dhamotharan — Banking and Recovery | 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.330 of 2022

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(Originally filed before DRT-I Chennai as OA No.114 of 2020 and thereafter transferred to this Tribunal and renumbered as TA No.330 of 2022)

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State Bank of India Retail Assets Centralized Processing Centre No.16, Whannels Road First Floor, Egmore, Chennai – 600 009 …Applicant

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Versus

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Mr. K. Dhamotharan S/o Mr. Kamaraj No.31/2, Rajiv Gandhi Nagar 3^rd Cross Street, Urapakkam Chennai – 603 202 …Defendant

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Counsel for the Applicant Bank : M/s M. Suresh 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 an aggregate sum of Rs.21,28,083/-with further interest at the rate of 9.10% per annum with monthly rests from the date of the OA till the date of realization in full along with costs of this application and for sale of schedule mentioned properties.

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

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It is the case of the applicant that the defendant approached the applicant bank for grant of housing loan for purchasing the schedule mentioned property vide his loan application dated 19.3.2017 and the applicant considering the said request vide its sanction dated 30.3.2017 sanctioned housing loan of Rs.18,00,000/subject to terms and conditions which were duly accepted by the defendant. It is also the case of the applicant that the defendant having availed the loan facility in order to secure the same executed various loan documents on 31.03.2017 viz., Arrangement Letter, Memorandum of Loan Agreement for home loan granted to public and Agreement to mortgage.

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It is also the case of the applicant that the defendant deposited the title deeds of the property more fully described in the schedule to the OA with the applicant bank and with an intention to create equitable mortgage over the same by executing Memorandum of Deposit dated 6.5.2017 and confirmed the same by letter dated 6.5.2017 also. Further, the defendant executed Memorandum of Deposit of Title deeds on 15.12.2017 registered as Doc. No.13237/2017, SRO Guduvancherry.

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It is stated 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 the case a NPA on 26.03.2018 . It is also stated that as the defendants did not come forward to clear the outstanding dues despite repeated demands and hence the applicant issued the demand notice

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under Section 13(2) of the SARFAESI Act on 1.9.2018.Despite the same the defendant did not come forward to clear the outstanding dues.

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It is the case of the applicant that after availing the loan, the defendants were 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 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 defendants and the same were returned unserved with endorsement “Refused” and hence the service was held deemed sufficient. As there was no representation on behalf of the defendants on 14.12.2021 they were called absent and set ex-parte on that day. Applicant Bank filed Proof Affidavit along with 12 documents, which were marked as Ex. A-1 to A-15 on 09.03.2023. The Ld. Counsel for Applicant Bank made his submissions on 24.04.2023 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-15 along with the proof affidavit. Exhibit A-1 is the Loan Application submitted by the defendant dated 19.3.2017 requesting for grant of housing loan. Exhibit A-2 is the Sanction letter of the applicant bank dated 30.3.2017. Exhibit A-3 is the Arrangement Letter between the applicant bank and the defendant duly signed by the defendant. Exhibit A-4 is the Memorandum of Loan Agreement dated 31.3.2017 executed by the defendant. Exhibit A-5 is the Agreement to Mortgage dated 31.3.2017 executed by the defendant. Exhibit A-6 is the Memorandum of Deposit dated 6.5.2017 executed by the defendants. Exhibit A-7 is the confirmation letter of the defendant dated 6.5.2017 confirming creation of equitable mortgage over the schedule mentioned property. Exhibit A- 8 is the Memorandum of Deposit of Title deeds dated 15.12.2017 executed by the defendant and registered as Doc. No.13237/2017 on the file of SRO, Guduvancherry. Exhibit A-9 is the Agreement of sale dated 25.9.2013 entered between Mr. D. Sivakumar and Mr. K. Dhamotharan. Exhibit A-10 is the Construction Agreement dated 10.01.2017 entered between Mrs. Banumathi, Rep. of S.B. Homes and K. Dhamotharan registered as Doc. No.3059/2017, SRO Guduvancherry. Exhibit A-11 is the sale deed dated 3.4.2017 executed by Mr. D. Sivakumar in favour of K. Dhamotharan registered as Doc. No.3060/2017, SRO, Guduvancherry. Exhibit A-12 is the demand notice dated 1.9.2018 issued by the applicant under Section 13(2) of the SARFAESI Act. Exhibit A-13 and A-

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14 are the statement of accounts in respect of the loan account along with certificates under Bankers’ Book Evidence Act. Exhibit A-15 is the Authorisation Circular issued by the applicant bank.

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Exhibit A-1 evidences that the defendant approached the applicant bank by loan application dated 19.3.2017 for grant of housing loan for the purpose of purchasing the OA schedule mentioned property. Exhibit A-2 evidences that the applicant considering the request of the applicant sanctioned home loan of Rs.18,00,000/- to the defendant vide sanction letter dated 30.3.2017. Exhibit A-3 to A-4 evidences that having availed the home loan the defendant executed loan documents on 31.3.2017 in favour of applicant bank. Exhibit A-5 to A-7 evidences that the defendant agreed to mortgage the schedule mentioned property in favour of the applicant and deposited the title deeds on 6.5.2017 with an intention to create equitable mortgage over the same and also confirmed the same by letter dated 6.5.2017. Exhibit A-8 evidences that the defendant created equitable mortgage over the OA schedule property in favour of the applicant by deposit of title deeds and by executing Memorandum of Deposit of Title deeds dated 15.12.2017 registered as Doc. No.13237/2017, SRO, Guduvancherry. Exhibit A-9 to A-11 evidences that the defendant is the absolute owner of the property and is empowered to create equitable mortgage over the same. Exhibit A-12 evidences that the defendant defaulted in repayment and hence the loan account was classified as NPA and the applicant bank invoking the provisions of SARFAESI Act issued the demand notice under Section 13(2) of the Act on 1.9.2018. Exhibit A-13, the statement of accounts in respect of the loan account

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produced and certified under the Banker’s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendants. It is clear from the statement of accounts that penal interest is not capitalized. Exhibit A-14 evidences that the Manager of the applicant is authorized to institute and defend the case on behalf of the applicant bank.

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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 instant loan availed by the defendant is a housing loan and also that the applicant had calculated and claimed interest at contractual rates, this Tribunal is of the view that the pendent lite interest can be awarded at reduced rates and therefore proceeds to award interest at the rate of 8% per annum (simple).

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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) OA No.114 of 2020 stands allowed.

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(b) Applicant is permitted to realize a sum of Rs. 21,28,083/- with further interest at the rate of 8% per annum (simple) from the date of filing of the application till date of realization 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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(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 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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State Bank of India v. Mr. K. Dhamotharan

Case brief

What is this about?

What did the court decide?

State Bank of India v. Mr. K. Dhamotharan

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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