Allowed

Canara Bank, v. M/s.Kirvis Trades and Services

DRT30 Nov 2023TA/522/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed a transfer application filed by a bank to recover a debt of over Rs. 2.12 crores along with interest from proprietors and a guarantor. The court proceeded ex parte due to lack of representation by the defendants.

What did the court decide?

Recovery of Rs. 2.12 crores with interest at varying rates allowed; schedule properties to be sold; recovery certificate to be issued.

Canara Bank, versus M/s.Kirvis Trades and Services — Banking and Recovery | DRT (2023)

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IN THE DEBT RECOVERY TRIBUNAL –II CHENNAI Dated this 30^th day of November, 2023

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PRESENT: SHRI T.RAJESH PRESIDING OFFICER

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TA.No.522 OF 2022

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(Old OA.No.406/2020–DRT-I, Chennai)

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M/s.Canara Bank, Koyambedu Branch,

Chennai – 600 107.

… Applicant.

Vs.

M/s.Kirvis Trades and Services, Proprietor : B.Madan Mohan, No.41, MCK Nagar, Adaiyalampattu Village, Vanagaram, Chennai – 600 095.

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B.Madana Mohan, B-43, Willow Blocks, City Lights Meadows Apartments, No.82, Andalammal St., Nolambur, Chennai – 600 082.

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SK Balasubramanian, Guarantor, S/o.Karumuna Gounder, No.62, B2, Arthanari School Street, S.P.Pudur, Namakkal – 637 001. … Defendants.

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Counsel for Applicant : Mr.M.S.Viswanathan. Defendants : Exparte.

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ORDER

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The above Transfer Application is filed Under Section 19 of the Recovery of Debt and Bankruptcy Act seeking recovery of Rs.2,12,69,225/- with further interest from the date of filing of the TA and by allowing the same to be recovered from the defendants jointly and severally and also by sale of mortgaged properties.

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The above Original Application is filed before the DRT-I and takes 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 2^nd defendant being the proprietor of 1^st defendant as the borrower and 3^rd defendant being the guarantor had applied for and availed Overdraft facility from the applicant which was initially for Rs.30,00,000/- and enhanced up to Rs. 1,20,00,000/- on 30.03.2015. The defendants had also availed a Car Loan for Rs. 6,00,000/-

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It is also stated that the above facilities were availed after execution of necessary loan documents by defendants obliging themselves to repay the amount promptly and regularly, without fail.

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Apart from execution of the necessary loan documents, the 2^nd and 3^rd

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defendants had created security by way of equitable mortgage over the

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schedule properties. Apart from execution of the necessary loan documents, hypothecation over the stocks was marked as being the security for repayment of the loan.

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Even though the defendants had obliged themselves to repay the amount promptly and regularly, they failed to do so resulting defaults in the account and the same being declared as NPA with effect from 31.05.2019.

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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 over to pay back the amount. Even as no repayment was made despite repeated request, the applicant had on 02.07.2019 caused

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to issue demand notice requiring 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 defendants had failed to make the repayment forcing the applicant to file this TA seeking recovery of the amount due in the account with further interest and cost.

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Even as the defendants failed to enter appearance, they were set exparte on 07.07.2022 as the counsel who filed the vakalat had relinquished the vakalat and there was no representation afterwards.

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The applicant had let in evidence through AW1 who had sworn to a Proof Affidavit in terms of the pleadings in the TA and also produced Exhibits A1 to A23 and got the same marked.

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Heard the counsel for the applicant and considered the contentions as taken in the TA in the light of documentary evidence and proof affidavit. The following issues arise for consideration in this matter.

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i) Whether the applicant had succeeded in proving the OA claim?

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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 remain exparte. 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 stated 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

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is well within the period of limitation and there is no Capitalization of penal interest. Since the interest claimed is on the higher side future and pendentelite interest are awarded at simple rate.

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In view of the finding as entered above.

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i) TA No.522 OF 2022 stands allowed.

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ii) Applicant is permitted to recover the total amount of

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Rs.2,12,69,225/- (Rupees Two Crores Twelve Lakhs Sixty Nine Thousands Two Hundred and Twenty Five only) with future

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and pendentelite interest @15.70% (simple) on 2,10,06,460/- and @9.65% (simple) on 2,62,755/- from the

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date of filing of the TA till realization from the defendants after giving credit to all the amount recovered and received during the pendency of the TA.

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iii) The schedule property to be proceeded against and sold and if the sale proceeds are not sufficient the defendants and their other assets are liable to be proceeded against.

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iv) A Recovery Certificate is to be drawn and issued to the recovery officer to enable recovery of the amount as per the

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above terms.

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v) Applicant is allowed to realize cost of the proceedings for which cost memo is to be filed in 7 days’ time from the date of receipt of the copy of the 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)

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Rules, 1993.

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(Dictated to PA, transcribed by him, corrected, signed and pronounced by me in the Open Court, this 30^th day of November, 2023)

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

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Canara Bank, v. M/s.Kirvis Trades and Services

Case brief

What is this about?

What did the court decide?

Canara Bank, v. M/s.Kirvis Trades and Services

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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