Allowed

State Bank of India, v. Michael David

DRT30 Nov 2023TA/400/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the Debt Recovery Application filed by the State Bank of India against the defendant for recovery of housing and Suraksha loan dues. Evidence was uncontradicted as the defendant was absent.

What did the court decide?

Recovery certificate issued for Rs.37,37,431.21p plus future simple interest at 9% p.a.; permission to sell scheduled properties; personal liability enforced if sale proceeds insufficient.

State Bank of India, versus Michael David — Contract and Commercial Disputes | DRT (2023)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 30^th day of November, 2023

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PRESENT: SHRI T. RAJESH

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PRESIDING OFFICER

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TA No.400 of 2022

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(Originally filed before DRT-I Chennai as OA No.105/2021 and thereafter transferred to this Tribunal and renumbered as TA No.400 0f 2022)

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State Bank of India Rep. by its Authorised Officer RACPC Chennai No.16, Whannels Road Egmore, Chennai – 600 008 …Applicant

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Versus

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Michael David 18/74, 5^th Street, Annai Sivagami Nagar Thiruvottriyur Near Thermal Power Station Chennai – 600 057 …Defendant

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Counsel for the Applicant Bank : M/s K. Parameshwari & C. Srikanth 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 (formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendants for recovery of an aggregate sum of Rs.37,37,431.12p comprising a sum of Rs.33,49,900.41p together with interest @9.65% per annum with monthly rests being the amount due under Housing Loan Account and a sum of Rs.3,87,530.71p with interest @9.65% per annum with monthly rests being the amount due under SBI Suraksha Loan facility from the date of filing of this OA till the date of realization

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in full along with costs of this application and for sale of schedule mentioned 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 defendant had applied for and availed a housing loan of Rs.38,50,000/- and SBI Suraksha Loan of Rs.3,24,802/- for purchase of a flat comprised in S. No.14/2, Guduvancheri Village, Chengalpet Taluk, Kancheepuram District, more fully described in Schedule to the OA.

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It is also stated that the above facilities were availed after execution of necessary loan documents obliging themselves to repay the amount promptly and regularly, without fail, in 360 Equated Monthly Installments of Rs.31,315/- each arrived at by calculating interest @8.55% per annum. Apart from execution of necessary loan documents, the defendant deposited the title deeds of the schedule mentioned property with an intention to create equitable mortgage over the same and confirmed the same by executing Memorandum of Deposit of Title deeds dated 4.6.2018 by depositing Construction Agreement.

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It is further stated that even though the defendant had obliged himself to repay the amount promptly and regularly, he failed to do so resulting in default in repayment and hence the account was classified as NPA on 25.04.2019.

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It is contended by the applicant that the applicant’s officials had on many occasions approached the defendant requesting him to regularize the account and despite the same no effort was made by the defendant 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 issued demand notice under Section 13(2) of the SARFAESI Act on 5.9.2019 followed by a Possession Notice under Section 13(4) of the SARFAESI Act on 11.02.2020 requiring the repayment of the amount due in the account.

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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 defendant failed to enter appearance he was called absent and set ex-parte on 04.07.2022.

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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- 10 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 defendant?

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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 defendant 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 defendant and his assets (including the scheduled property). 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 housing loan and 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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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.400 of 2022 stands allowed.

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(b) Applicant is permitted to realize an aggregate amount of Rs.37,37,431.21p/- with future and pendentelite interest @9% p.a., simple from the defendant, from the date of filing of the OA till date of its realization after deducting all the amounts received by them during the pendency of OA, and also by selling the schedule properties and other assets of the defendant. .

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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 under the Loan Accounts.

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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 30^th day of November, 2023)

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

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State Bank of India, v. Michael David

Case brief

What is this about?

What did the court decide?

State Bank of India, v. Michael David

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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