Allowed

Central Bank of India v. M/s Naviya Cashews

DRT27 Dec 2023TA/577/2022

Case brief

AI extract

What is this about?

The Applicant Bank filed an application for recovery of a loan defaulting amount under the RDB Act. The court found the claim proven as the defendants were ex-parte. However, the court reduced the future interest rate from 16% to 12% simple interest. The application was allowed granting recovery from the mortgaged property and assets of the guarantors.

What did the court decide?

Permission to realize aggregate amount of Rs.4,09,98,584 with future interest @12% p.a. simple from defendants and by selling scheduled properties; issuance of Recovery Certificate.

Central Bank of India versus M/s Naviya Cashews — Company and Corporate | DRT (2023)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 27^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.577 of 2022

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(Originally filed before DRT-I Chennai as OA No.343 of 2020 and thereafter transferred to this Tribunal and renumbered as TA No.577 of 2022)

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Central Bank of India Panruti Branch No.65, Cuddalore Main Road Panruti – 607 106 Represented by its Authorised Offficer …Applicant

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Versus

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M/s Naviya Cashews

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A Proprietary Concern

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Rep. by its Proprietor, Mrs. S. Rajavalli Having Office at No.15/31, 3^rd Street

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Police Line, Panruti – 607 106

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Mrs. S. Rajavalli W/o Mr. V. Sabapathy Proprietor of M/s Naviya Cashews Residing at No.15/31, 3^rd Street Police Line, Panruti – 607 106

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Mrs. Arunmozhi W/o Mr. R. Ramasamy Residing at A. Melampattu Panruti – 607 103

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Mr. R. Ramasamy S/o Mr. Ramachandran A Melmampattu, Panruti – 607 103

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Mr. S. Arularasan S/o Mr. V. Sabapathy Residing at No.15/31, 3^rd Street Police Line, Panruti – 607 106

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Mr. S. Anbarasan S/o Mr. V. Sabapathy Residing at No.15/31, 3^rd Street Police Line, Panruti – 607 106 …Defendants Counsel for the Applicant Bank : Mr. E. Vijayaraghavan Defendants : Mr. C.A. Anburaja / 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 Rs.4,09,98,584/- with further interest at the rate of 16% 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 a proprietary concern represented by Mrs. S. Rajavalli, the 2^nd defendant had availed various credit facilities from the applicant in the year 2011 onwards as the 1^st defendant requested for grant of Cash Credit Facility of Rs.1,00,00,000/- and Packing Credit of Rs.3,75,00,000/-. The applicant considering the said request sanctioned Cash Credit facility of Rs.29,00,000/and EPC limit was enhanced from 1,75,00,000/- to Rs.2,75,00,000/- on 03.09.2014. It is stated that the 1^st defendant executed necessary loan documents on 03.09.2014. The 2^nd defendant deposited the title deeds of her property more fully described in Schedule ‘B’ to the OA with an intention to create

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equitable mortgage over the same and confirmed the same by executing Memorandum of Deposit of Title deeds dated 22.07.2014 registered as Doc. No.1880/2014, SRO, Panruti and Doc. No.2176/2015, SRO, Kadampuliyr dated 05.09.2014. The 1^st defendant represented by 2^nd defendant acknowledged their debts by executing new set of documents on 25.05.2016 for a sum of Rs.3,04,00,000/-. It is stated that the 3^rd and 4^th defendants along with one Mr. V. Sabapathy stood as guarantors to the above facility and executed agreement of guarantee on 25.05.2016. It is also stated that the said Mr. V. Sabapathy died intestate leaving behind defendants 2, 3, 5 and 6. As the defendants 2 and 3 are already on record, defendants 5 and 6 were impleaded as party defendants in the OA.

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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 01.04.2018.

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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. .

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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 were initially represented by a Ld. Counsel and as the defendants did not choose to file the reply statement the chance was closed on 16.12.2021. As there was continuously no representation for defendants continuously, they were called absent and set ex-parte on 01.08.2023.

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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-30 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,

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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 loan under MSE Scheme 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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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.577 of 2022 stands allowed.

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(b) Applicant is permitted to realize an aggregate amount of Rs.4,09,98,584/with future and pendentelite interest @12% 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 schedule mentioned properties and other assets of the defendants. However, the liabilities of defendants 5 and 6 are restricted to the extent of estate inherited by them from the Late Mr. V. Sabapathy.

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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 defendants 2 to 6 are personally liable for all such amounts due under the Loan Accounts; however the liability of defendants 5 and 6 are restricted to the extent of interest they had inherited from Late V. Sabapathy.

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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 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 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 27^th day of December, 2023)

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

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Central Bank of India v. M/s Naviya Cashews

Case brief

What is this about?

What did the court decide?

Central Bank of India v. M/s Naviya Cashews

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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