Allowed

Indian Bank v. Ms. Vinodhini Priyanka

DRT22 May 2023TA/395/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the recovery certificate application by the bank against the defendants for an educational loan default. The claim was established via unchallenged affidavits and documents, and the bank was granted a 10% p.a. simple interest rate.

What did the court decide?

Issuance of Recovery Certificate for Rs.13,51,575/- with future interest at 10% p.a. simple from date of filing till realization.

Indian Bank versus Ms. Vinodhini Priyanka — Banking and Recovery | DRT (2023)

¶1

BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

¶2

Dated this 22^nd day of May, 2023

¶3

PRESENT: SHRI T. RAJESH

¶4

PRESIDING OFFICER

¶5

TA No.395 of 2023

¶6

(Originally filed before DRT-III Chennai as OA no.33 of 2018 and transferred to DRT-I Chennai and Renumbered as TA No.332 of 2018 and thereafter transferred to this Tribunal and

¶7

renumbered as TA No.395 of 2023)

¶8

Indian Bank Tirukoilur Branch No.82/1, M.L. Plaza, Union Office Road Villupuram District, Tamil Nadu Rep. by its branch Manager …Applicant

¶9

Versus

¶10

Ms. Vinodhini Priyanka D/o Dr. V. Radhakrishnan No.9, Gandhi Nagar Panampattu Road, Villupuram

¶11

Dr. V. Radhakrishnan No.9, Gandhi Nagar Panampattu Road, Villupuram …Defendants

¶12

Counsel for the Applicant Bank : M/s P.V. Murlidhar Counsel for Defendants 1 & 2 : M/s M.S. Associates

¶13

FINAL ORDER

¶14

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 of a Recovery Certificate for a sum of Rs.13,51,575/-with further interest at the rate of 12.25% per annum with monthly rests from the date of filing the OA till the date of realisation along with costs of the application.

¶15

¶16

It is the case of the applicant that the defendants approached the applicant bank for grant of educational loan for the 1^st defendant for pursuing BDS Course in Sri Balaji Dental College Hospital and considering the said request the applicant sanctioned Educational Loan of Rs.4 lakhs to the defendant on 20.08.2004. It is stated that the defendants having availed the said facility executed various loan documents on 20.08.2014 viz., Joint Demand Promissory Note and Disposal of Proceeds Letter by the 1^st defendant and the 2^nd defendant executed agreement of guarantee on 20.08.2014.

¶17

It is also the case of the applicant that after the completion of the degree the defendant failed and neglected to comply with the terms of the agreement nor paid the amount payable under the said loan account. It is stated that after strenuous efforts the applicant got issued a cheque for Rs.1,00,000/- from the defendant towards partial payment of the interest, however, the said cheque returned with remarks “Insufficient Funds” on 13.2.2015. It is also stated that the applicant had issued a notice dated 25.2.2015 to the 2^nd defendant under Section 138 of the Negotiable Instruments Act but in vain.

¶18

It is the case of the applicant that the defendants failed to regularize the loan account despite repeated requests and therefore the loan account was classified as NPA on 14.05.2017, however, the defendants acknowledged the debt on 5.8.2009, 30.06.2012 and 24.06.2015. It is contended that as the defendants did not come forward to clear the outstanding dues, the applicant sent a legal notice dated 23.09.2017 calling upon the defendants to clear the outstanding dues. It is stated that the requests of the applicant to the defendants to clear the

¶19

¶20

outstanding dues were in vain and hence the present application is filed for recovery of its dues.

¶21

The defendants filed a common reply statement denying each and every averments contained in the application and submitted that the application is liable to be dismissed. It is contended that the applicant has charged exorbitant interest to bring the OA within the pecuniary jurisdiction of this Tribunal and denied execution of acknowledgement debt. It is also stated that the claim made by the applicant is bereft of fact and therefore is liable to be dismissed. It is further stated that the OA is barred by limitation and liable to be dismissed for want of jurisdiction. The defendant thus prayed for dismissing the OA with exemplary costs.

¶22

The applicant bank filed its proof affidavit along with 11 documents, which are marked as Exhibits A-1 to A-11, the details of which are as under: -

¶23

S. No.	Date	Description of Documents	Exhibit Nos.
1.		Loan Application submitted by the defendants	A-1
2.	20.08.2004	Demand Promissory Note for Rs.4 lakhs executed by the1^st defendant	A-2
3.	20.08.2004	Disposal Proceeds Letter executed by the 1^st defendant.	A-3
4.	20.08.2004	Agreement for Educational Loans executed by the 1^stdefendant	A-4
5.	20.08.2004	Agreement of guarantee executed by the 2^nd defendant.	A-5
6.	05.08.2009	Acknowledgement ofdebt by the1^st defendant	A-6
7.	30.06.2012	Acknowledgement ofdebt by the1^st defendant	A-7
8.	24.06.2015	Acknowledgement ofdebt by the1^st defendant	A-8
9.	23.09.2017	Notice sent to the defendants by the applicant	A-9
10.		Powerof Attorneyissued by the applicant	A-10
11.		Statement of Accounts in respect of the loan account along with certificates under Bankers’ Book EvidenceAct.	A-11

¶24

¶25

Despite availing sufficient time the defendants did not choose to file their Counter Proof Affidavit and hence the chance for filing Counter Proof Affidavit was closed on 18.06.2019. Further, as there was no representation on behalf of the defendants on 17.12.2019 they were called absent and set ex-parte on that day

¶26

Heard the Ld. Counsel for the Applicant Bank. The defendants remain absent and did not choose to represent their case. Perused the records.

¶27

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

¶28

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

¶29

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

¶30

Point No.1

¶31

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

¶32

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-11. Ld. Counsel for Applicant placing reliance on the proof affidavit of AW-1, besides Exhibits A-1 to A-11 strenuously contended that the claim of the applicant stands established, as such, the applicant is entitled for a recovery certificate.

¶33

Ld. Counsel for Applicant Bank would further submit that even as per the Reply Statement filed, the defendant has not denied availing of credit facility, execution of loan documents and creation of mortgage over the schedule property in favour

¶34

¶35

of the applicant and as such the said admission is sufficient enough to allow the claim of the applicant. Ld. Counsel would also submit that the applicant the amount claimed by the applicant is proper and has charged interest only at contractual rates and the applicant bank has produced the statement of accounts duly certified under Bankers’ Book Evidence Act to substantiate the amount claimed by the applicant. Ld. Counsel further contended that defendants though filed the reply statement, did not choose to file any CPA despite sufficient opportunity and therefore the claim of the applicant stand unrebutted.

¶36

As rightly contended by the Ld. Counsel for Applicant, barring filing of reply statement, the defendant did not choose to file 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 Counter Proof Affidavit, as rightly contended by the Ld. Counsel for Applicant, the defense put forth by the defendant remain unsubstantiated hence cannot be considered, thus the claim of the applicant stands unrebutted. Further, the applicant bank has filed the statement of accounts accompanied by certificates under Bankers’ Book Evidence Act and therefore the claim of the defendants that the applicant the amount claimed by the applicant is not proper and has charged higher interest rates fails and remain unsubstantiated.

¶37

¶38

As regards the contention of the defendants that the amount claimed is not correct and the applicant has charged exorbitant interest to bring the claim within the pecuniary jurisdiction of this Tribunal is concerned it is to be stated that the applicant has filed statement of accounts duly certified under Bankers’ Book Evidence Act from which it is clear that the applicant has charged interest only at contractual rates and the amount claimed is correct.

¶39

As regards the other contention of the defendants that they did not execute the acknowledgement of debt is concerned, it is to be stated that the defendants did not dispute their signatures on the documents and hence the said contention of the defendants cannot be countenanced.

¶40

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 defendants. Further, the Tribunal on careful perusal of the unrebutted Proof Affidavit of AW-1 besides Exhibits A-1 to A-11 is fully satisfied that the applicant has established its claim. This point is answered accordingly.

¶41

Point No.2

¶42

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

¶43

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

¶44

¶45

(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.

¶46

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 in view of the fact that the instant loan is an educational loan 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 @ 10% p.a. simple on the OA claim amount from the date of filing till the date of realization. Point No.2 is answered accordingly.

¶47

¶48

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

¶49

(a) TA No.395 of 2023 stands allowed.

¶50

(b) Applicant is permitted to realize an amount of Rs.13,51,575/-with further interest @10% per annum (simple) from the defendants jointly and severally from the date of filing of OA till realization in full, after deducting all the amounts received by them during the pendency of OA, and also by selling the other assets of the defendants.

¶51

¶52

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

¶53

(e) The Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of this final order.

¶54

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.

¶55

(Dictated to PS, transcribed by him, corrected, signed and pronounced by me in Open Court on this the 22^nd day of May, 2023)

¶56

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

¶57

Indian Bank v. Ms. Vinodhini Priyanka

Case brief

What is this about?

What did the court decide?

Indian Bank v. Ms. Vinodhini Priyanka

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Ms G R Preetheka versus City Union Bank Limited

Idbi Bank Ltd. versus Mr P Sambathkumar

Idbi Bank Ltd., versus a. Saranya

Ms Kalaiselvi Food Products Pvt. Ltd. versus Canara Bank

Punjab National Bank versus Mr. E. Venkatesh

Punjab National Bank versus Mr. B. Kumaravel