Allowed

State Bank of India v. B.K. Madhan Kumar

DRT28 Dec 2023TA/441/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an application filed by State Bank of India for recovery of defaulted home loan amounts. The court rejected the prayer for compound interest and awarded simple interest at 9% per annum. A part satisfaction was recorded based on prior property sales.

What did the court decide?

Recovery of aggregate sum with future simple interest at 9% p.a. from defendant; Recovery certificate issued to Recovery Officer.

State Bank of India versus B.K. Madhan Kumar — Consumer Protection | 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 PRESIDING OFFICER

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TA No.441 of 2022

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(Originally filed before DRT-I Chennai as OA No.423 of 2019 and thereafter transferred to this Tribunal and renumbered as TA No.441 of 2022)

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State Bank of India Rep. by its City Case Officer Stressed Asset Recovery Branch Red Cross Building, Montieth Road Egmore, Chennai …Applicant

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Versus

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B.K. Madhan Kumar S/o B. Krishnamoorthy Old No.19/1, New No.12 1^st Floor, Jayammal Street A.N. Colony, Aminjikarai Chennai – 600 029

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Also at B.K. Madhan Kumar S/o B. Krishnamoorthy SRM Institute of Medical Sciences No.1, Jawaharlal Nehru Salai 100 Ft. Road, Vadapalani Chennai – 600 026 …Defendant

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Counsel for the Applicant Bank : M/s K. Chandrasekaran 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.1,52,40,246/- comprising a sum of Rs.25,52,907/- together with interest at the rate of 9.30% per annum with monthly rests being the amount

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due under Home Loan Account No.36041748893; a sum of Rs.36,82,099/together with interest at the rate of 9.30% per annum with monthly rests being the amount due under Home Loan Account No.36041782266; and a sum of Rs.90,05,240/- together with interest at the rate of 9.35% 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 sale of 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 defendant approached the applicant bank vide Loan Applications dated 30.05.2016, 30.05.2016 and 24.08.2016 for grant of home loan for purchasing Item-I, Item-II and Item-III of the schedule mentioned properties and the applicant considering the said request vide sanction letters dated 19.8.2016, 22.8.2016 and 7.9.2016 sanctioned home loan of Rs.24,22,000/-, Rs.36,33,000/- and Rs.86,25,000/- respectively. The defendant having availed the loan executed necessary loan and security documents in respect of the loan accounts on 7.9.2016, 7.9.2016 and 8.9.2016 respectively. The defendant also deposited the title deeds of Item-I, Item-II and Item-III of schedule properties with the applicant bank on 7.9.2016, 7.9.2016 and 8.9.2016 respectively with an intention to create equitable mortgage over the same in favour of the applicant bank. The same was also confirmed by execution of a Memorandum of Deposit of Title deeds dated 25.11.2016, 25.11.2016 and 08.12.2016 respectively.

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It is further stated that even though the defendant had obliged to repay the amount promptly and regularly, they failed to do so resulting in default in repayment and hence the account was classified as NPA on 10.09.2016.

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It is contended by the applicant that the applicant’s officials had on many occasions approached the defendant requesting them 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. The applicant therefore invoked the provisions of SARFAESI Act and issued the demand notice dated 11.06.2018 under Section 13(2) of the Act, but the defendant did not come forward to clear the outstanding dues.

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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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The defendant remained absent and hence was called absent and set ex-parte on 06.02.2020.

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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-39 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 the 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. 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 applicant has charged interest at contractual rates till the date of filing and further as the interest rates have come down, this Tribunal is inclined to reject the prayer for interest with monthly rests and award simple interest at reduced rates.

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During the pendency of the TA the applicant filed a memo stating therein that the applicant brought the two items of Schedule properties viz., Item-I and Item-III of the TA to sale on 30.06.2022 and 10.06.2019 and realized a sum of Rs.17,85,000/- and Rs.63,40,000/- respectively and prayed for recording part

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satisfaction for a sum of Rs.81,25,000/-. This Tribunal vide its proceedings dated 23.11.2023 recorded part satisfaction of the TA claim for a sum of Rs.81,25,000/-

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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 and the defaults occurred therein, which the applicant is entitled to realize. Hence, TA is disposed off in the following manner: -

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(a) TA No.441 of 2022 stands allowed.

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(b) Applicant is permitted to realize an aggregate amount of Rs.1,52,40,246/with future and pendentelite interest @9% p.a., simple from the defendant, 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 the sum of Rs.81,25,000/- realized by sale of Item-I and Item-III of TA schedule properties, and also by selling the Schedule-III property 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 15 days from the date of receipt 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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State Bank of India v. B.K. Madhan Kumar

Case brief

What is this about?

What did the court decide?

State Bank of India v. B.K. Madhan Kumar

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

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Case details

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