Allowed

M/s Canara Bank (Formerly known M/s Syndicate Bank) v. M/s Mangai Department Stores

DRT28 Dec 2023TA/385/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the bank's application for recovery of debt. Since defendants were absent, evidence was uncontroverted. The Tribunal granted recovery of the principal sum with simple interest at 14% p.a. instead of monthly rests. The recovery certificate was directed to be issued.

What did the court decide?

Applicant permitted to realize aggregate amount with future interest @14% p.a. simple, jointly and severally, and issue Recovery Certificate.

M/s Canara Bank (Formerly known M/s Syndicate… — Contract and Commercial Disputes | DRT (2023)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 28^th day of December, 2023

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PRESENT: SHRI T. RAJESH

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PRESIDING OFFICER

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TA No.385 of 2023

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(Originally filed before DRT-I Chennai as OA No.101 of 2019 and thereafter transferred to this Tribunal and renumbered as TA No.385 of 2023)

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M/s Canara Bank (Formerly known M/s Syndicate Bank) Thanjavur Branch Rep. by its Senior Branch Manager No.11/2783, South Rampart

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Opp. Thilagar Thidal, Thanjavur – 613 009 …Applicant

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Versus

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M/s Mangai Department Stores Rep. by its Proprietor Mr. R. Raja No.19, Thiruvaluvar Nagar Thjanjavur – 5

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Mr. R. Raja S/o R. Rajagopal No.143, Mala Street, Pudu Nagar Post Gandharvakkottai Taluk

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Pudukkottai District – 613 301

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M. Saravanan S/o S. Murugaiyan No.167, Cauvery 8^th Cross New Housing Unit, Thanjavur …Defendants

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Counsel for the Applicant Bank : M/s V. Suthakar Defendants : 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 defendants for recovery of a sum of

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Rs.57,58,493.86p together with interest at the rate of 15.75% per annum with monthly rests from the date of filing of the application till the date of realization in full along with costs of this application and for schedule of properties..

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The above Original Application is filed before DRT-I Chennai and stood transferred to this Tribunal and renumbered as above.

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

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The 1^st defendant is Proprietorship firm represented by its Proprietor, the 2^nd defendant approached the applicant for grant of credit facilities for improvement of its business and considering the said request the applicant sanctioned Cash Credit Facility of Rs.30,00,000/- vide its sanction letter dated 6.3.2013. To secure the said facility the 1^st defendant represented by its Proprietor, the 2^nd defendant executed various loan and security documents on 6.3.2013. The 3^rd defendant executed guarantee agreement on 6.3.2013. The 2^nd defendant deposited the title deeds of his property more fully described in Schedule ‘B’ to the OA with an intention to create equitable mortgage over the same and confirmed the same by executing Memorandum of Deposit of Title deeds dated 5.3.2013 registered as Doc. No.687 of 2013, SRO, Vallam.

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It is further stated that even though the defendant had obliged to repay the amount promptly and regularly, but failed to do so resulting in default in repayment and hence the account was classified as NPA on 13.02.2015.

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It is contended by the applicant that the applicant’s officials had on many occasions approached the defendants requesting them to regularize the account and despite the same no effort was made by the defendants to get the account regularized or to pay back the amount. It is stated that as no repayment was forthcoming despite repeated request the applicant invoked the provisions of the SARFAESI Act and issued the demand notice under Section 13(2) of the SARFAESI Act dated 25.03.2015 requiring the repayment of the amount due in the account followed by Possession Notice dated 22.07.2015.

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It is also the case of the applicant that despite repeated reminders and requests the defendant 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 costs.

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It is the further case of the applicant that the defendants remained absent and hence were called absent and set ex-parte on 02.07.2019.

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The applicant had let in evidence through AW-1, who had sworn to a Proof Affidavit in terms of the pleading in the OA and also produced Exhibits A-1 to A-11 and got the same marked in evidence.

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Heard the Ld. Counsel for the Applicant and considered the contentions as taken in the OA in the light of documentary evidence and proof affidavit.

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The following issues arise for consideration in this matter: -

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(i) Whether the applicant had succeeded in proving the OA claim as against the defendants?

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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 remained ex-parte. 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.

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In view of the fact that the subject loan is a cash credit facility and the applicant has charged interest at contractual rates till the date of filing and further as the interest rates have come down the Tribunal is inclined to reject the interest with monthly rests and award simple interest at reduced rates.

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During the pendency of the OA the applicant filed a memo stating therein that the Schedule ‘B’ properties has been brought for sale under SARFAESI Act and realized a sum of Rs.13,10,000/-. The said memo is taken on file and part

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satisfaction of the OA claim for a sum of Rs.13,10,000/- was recorded by proceedings dated 12.10.2023.

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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, TA is disposed off in the following manner: -

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(a) TA No.385 of 2023 stands allowed.

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(b) Applicant is permitted to realize an aggregate amount of Rs.57,58,493.86p with future and pendentelite interest @14% p.a., simple from the defendants jointly and severally, from the date of filing of the OA till realization, after deducting all the amounts received by them during the pendency of OA, and also by selling the hypotheca and other assets of the defendants. It is made clear that the sum of Rs.13,10,000/- realized by the applicant by sale of Schedule ‘B’ property to the OA be given credit to the loan account of the 1^st defendant on its respective date

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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

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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 28^th day of December, 2023)

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

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M/s Canara Bank (Formerly known M/s Syndicate Bank) v. M/s Mangai Department Stores

Case brief

What is this about?

What did the court decide?

M/s Canara Bank (Formerly known M/s Syndicate Bank) v. M/s Mangai Department Stores

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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