Allowed

State Bank of India v. Tamilarasan

DRT16 Feb 2023TA/633/2022

Case brief

AI extract

What is this about?

The applicant bank sought a Recovery Certificate for a housing loan default. The tribunal found the claim after充分利用 unchallenged documentary evidence, reduced the interest rate from contractual to 10% simple, and ordered the issuance of the certificate along with costs.

What did the court decide?

Recovery Certificate issued permitting recovery of principal dues plus 10% simple interest from filing date until realization.

State Bank of India versus Tamilarasan — Banking and Recovery | DRT (2023)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 17^th day of February, 2023

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PRESENT: SHRI T. RAJESH

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PRESIDING OFFICER

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TA No.633 of 2022

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(Originally filed before DRT-I, Chennai as OA No.559/2019 and thereafter transferred to this Tribunal and renumbered as TA No.633 of 2022)

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

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Versus

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R. Tamilarasan No.115, Anandham Nagar 1^st Main Road, Ramapuram Chennai – 600 089 …Defendant

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Counsel for the Applicant Bank : M/s K. Parameshwari 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 seeking issuance of a Recovery Certificate for recovery of a sum of Rs.43,19,466.88p with further interest at the rate of 10.9% per annum with monthly rests from the date of filing of this application till the date of realisation along with costs of the application and for the sale of schedule property.

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It is the case of the applicant that, the defendant approached the applicant for grant of housing loan by his application dated 25.09.2017 for purchase of the schedule mentioned property and the applicant considering the said request

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granted housing loan of Rs.48,32,000/- and SBI Suraksha Loan of Rs.1,59,935/- vide its sanction dated 11.10.2017. It is stated that the defendant agreed to repay said commencing from October 2017 i.e., at Rs.33824 up to 27.10.2017, thereafter at Rs.36,812/- from 27.11.2017 to 27.10.2020, thereafter at Rs.38653/- from 27.11.2020 up to 27.10.2023 and thereafter at Rs.36245/- from 27.11.023 upto 27.9.2047. It is also the case of the applicant that having availed the credit facility, the defendant executed Memorandum of Loan Agreement for home loan on 11.10.2017. It is the further case of the applicant that the defendant deposited the title deeds of schedule property with the applicant with an intention to create equitable mortgage over the same and confirmed the same by executing Memorandum of Deposit of Title deeds dated 26.4.2008 and confirmed the same by executing a letter dated 27.4.2018.

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It is also the case of the applicant that the defendant committed default in repayments and failed to regularize the loan accounts despite repeated request and hence the loan account was classified as NPA on 25.09.2018 in accordance with the guidelines of the Reserve Bank of India. It is stated that despite repeated requests the defendants did not clear the dues and hence the applicant issued the demand notice dated 5.6.2018 under Section 13(2) of the SARFAESI Act, followed by the Possession Notice dated 25.9.2018.

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It is the case of the applicant that despite repeated requests to the defendant, he did not come forward to clear the outstanding dues and the efforts of the applicant bank to make the defendant to settle the loan did not yield any

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result, and hence the applicant approached this Tribunal seeking issuance of a Recovery Certificate allowing recovery of the amount due in the account.

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Summon was taken out to the defendant returned with endorsement “Left” and hence was served notice by way of substituted service causing paper publication. As there was no representation on behalf of the defendants on 9.1.2020, the defendant was set ex-parte on that day. Applicant Bank filed Proof Affidavit along with 11 documents, which were marked as Exhibits A-1 to A-11 on 20.07.2022. The Ld. Counsel for Applicant Bank made his submissions on 24.01.2023 and thereafter the matter stood till this date for passing final orders.

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The following issues arise for consideration in the matter: -

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(a) Whether the applicant had succeeded in proving the liability of the defendant?

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(b) What order as to cost of the proceedings need be passed?

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These issues are considered together.

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Heard the Ld. Counsel for the applicant, perused the OA averments and the record placed before the Tribunal.

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The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-11 along with the proof affidavit. Exhibit A-1 is the Authorisation Letter of the applicant dated 5.12.2020. Exhibit A-2 is the Loan application dated 25.9.2017 submitted by the 1^st defendant. Exhibit A-3 is the Arrangement Letter dated 11.10.2017 issued by the applicant and signed by

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the defendant. Exhibit A-4 is the Memorandum of Loan Agreement dated 11.10.2017 executed by the defendant. Exhibit A-5 is the Memorandum of Deposit of Title deeds dated 26.4.2018 executed by the defendant. Exhibit A- 6 is the confirmation letter of the defendant dated 27.4.2018 confirming deposit of title deeds. Exhibit A-7 is the Construction Agreement dated 21.6.2017, Doc. No.10824/2017, SRO, Chennai South Joint I in favour of defendant. Exhibit A-8 is the Sale deed dated 16.10.2017, Doc. No.10826/2017, SRO, Chennai, South Joint I in favour of defendant. Exhibit A-9 is the demand notice dated 5.6.2018 issued by the applicant under Section 13(2) of the SARFAESI Act. Exhibit A-10 is the possession notice dated 25.9.2018 issued by the applicant under Section 13(4) of the SARFAESI Act. Exhibit A-11 is the statement of accounts along with certificates under Bankers’ Book Evidence Act.

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Exhibit A-1 evidences that the Chief Manager of the applicant bank has been authorized to institute and defend the claim on behalf of the applicant. Exhibit A-2 evidences that the defendant approached the applicant bank vide his application dated 25.9.2017 for grant of housing loan for purchase of the schedule mentioned property. Exhibit A-3 evidences that the applicant sanctioned housing loan of Rs.48,32,000/- to the defendant. Exhibit A-4 evidences that the defendant executed Memorandum of Loan Agreement on 11.10.2017 thereby agreeing to repay the said sum in monthly installments commencing from October 2017. Exhibit A-5 to A-8 evidences that the defendant is the absolute owner of the property and he deposited the title deeds of his property with the applicant bank on 26.4.2018 with an intention to create equitable mortgage over the same in favour of the applicant bank and

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confirmed the same by letter dated 27.4.2018. Exhibit A-9 and A-10 evidences that the defendant defaulted in repayment and failed to regularize the loan account despite repeated demand and request and hence the loan account was classified as NPA and the applicant issued the demand notice dated 5.6.2018 by invoking the provisions of SARFAESI Act followed by Possession Notice on 25.9.2018. Exhibit A-11, the statement of accounts produced and certified under the Banker’s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendant. It is clear from the statement of accounts that penal interest is not capitalized.

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The proof affidavit of the applicant bank remained unchallenged and unrebutted. Therefore, on careful consideration of proof affidavit along with Exhibits filed on behalf of the applicant bank, besides the material placed before the Tribunal, the Tribunal is satisfied that the applicant bank has successfully proved the OA claim against the defendant. Point is answered accordingly.

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From the documents produced from the said of applicant, it is clear that the claim of the applicant had filed the OA is well within the period of limitation. The statement of accounts as produced also evidences that there is no capitalisation of penal interest.

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The discussions as held herein before and the findings entered therein, this Tribunal is of the considered opinion that the applicant had successfully proved the OA claim as made in the OA. The right of the applicant to recover the cost of the proceedings is answered in positive as by defaults, the defendant compelled the applicant to approach this Tribunal. In regard to the

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interest, this Tribunal is of the view that issue the applicant had calculated and claimed interest at contractual rate with monthly rest, the said claim need not be disturbed. However, taking note of the fact that instant loan is a housing loan and the interest rates have come down, this Tribunal is inclined to award interest at a reduced rate @ 10% (simple) from the date of filing of the OA till realisation.

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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, OA is disposed off in the following manner: -

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(a) OA No.110 of 2022 stands allowed.

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(b) Applicant is permitted to realize a sum of Rs.43,19,466.88p with further interest at the rate of 10% per annum (simple) from the defendant 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 schedule 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 Account.

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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 copy 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 17^th day of February, 2023)

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

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State Bank of India v. Tamilarasan

Case brief

What is this about?

What did the court decide?

State Bank of India v. Tamilarasan

Case brief

What is this about?

What did the court decide?

What the court decided

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