Allowed

Central Bank of India, v. K.Mohan

DRT30 Nov 2023TA/637/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the transfer application filed by the Central Bank of India for recovery of outstanding dues totaling Rs. 26,75,041/- along with interest from the primary borrowers and legal heirs, directing sale of scheduled properties and issuance of a recovery certificate.

What did the court decide?

Allowed recovery of Rs.26,75,041/- with interest; directed sale of Schedule properties; issued Recovery Certificate.

Central Bank of India, versus K.Mohan — Contract and Commercial Disputes | 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.637 OF 2022 (Old TA.No.163/2019–DRT-I, Chennai) (Old OA.No.41/2015–DRT-III, Chennai)

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Central Bank of India, Represented by its Branch Manager, Paithambadi Branch.

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… Applicant.

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Vs.

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K.Mohan,

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S/o.Kaliyaperumal, Perumal Koil Street, Aviyunur, Panruti, Cuddalore.

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K.Elumalai,

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S/o.Kandasamy, Perumal Koil Street, Aviyunur, Pantruti, Cuddalore.

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3. K. Arumugam (Deceased)

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Mrs. Kanaga,

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W/o.Late K.Arumugam, Perumal Koil Street, Aviyunur, Pantruti Taluk.

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Master Vimalraj, S/o.Late K.Arumugam, Perumal Koil Street, Aviyunur, Pantruti Taluk. (4 and 5 are legal heirs of No.3)

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… Defendants.

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Counsel for Applicant : M/s.D.Sathyaraj. Defendants 1, 2, 4 and 5 : Exparte. 3^rd Defendant : Deceased.

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ORDER

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The above Transfer Application is filed under section 19 of the Recovery

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of Debt and Bankruptcy Act seeking recovery a total sum of Rs.26,75,041/- with further interest from the date of filing of the TA and by allowing the same to be recovered from the defendants 1,2,4 and 5 and also by sale of schedule mentioned properties .

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The above original application is filed before the DRT-III and stood transferred to DRT-I and again to this Tribunal and renumbered as above.

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3 The case of the applicant can be encapsulated as follows:

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The 1^st defendant as the borrower and 2^nd defendant as the guarantor had applied for and availed a cash credit facility for Rs. 3,00,000/-. Term Loan facility for Rs. 13,00,000/- was also availed by the 1^st defendant for which 3^rd defendant stood as a guarantor. Another credit facility for Rs. 36,000/- was also availed for the purchase of a two wheeler.

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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 1^st and 3^rd defendants had created security by way of equitable mortgage over the schedule mentioned properties. Over and above the same, hypothecation over the livestock, crop, plants and equipments were 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.

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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 requests, the applicant had on 20.09.2014 caused to issue a lawyer notice requiring repayment of the amount due in the account to defendant 1, 2, 4 and 5 as the 4^th and 5^th defendants are legal heirs of D3.

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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 1, 2, 4 and 5 failed to enter appearance, they were set exparte on 14.06.2016 whereas D3 is already expired.

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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 A 22 and got the same marked in evidence.

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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 TA 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 evidence put forth by the applicant were found admissible. From the statement

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of accounts as produced by the applicant, it is evident that the amount as claimed in the TA is outstanding in the account, which the applicant is entitled to get recovered from the defendants and their assets (including the schedule mentioned properties). The claim of the applicant is well within the period of limitation and there is no Capitalization of penal interest. Since the facilities are for agriculture purpose the interest is awarded @9% (simple). However for two wheeler loan the interest is awarded @11% (simple).

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In view of the finding as entered above

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i) TA No.637/2022 stands allowed. ii) Applicant is permitted to recover an amount of Rs.26,75,041/- (Rupees Twenty Six Lakhs Seventy Five Thousands and Forty One only) with future and pendentelite interest @ 9% p.a. on 6,00,578 from defendants 1 and 2 @ 9% p.a. on 20,41,508 p.a. from Defendants 1, 4 and 5 and @11% p.a. on 32,955 from 3^rd defendant from the date of filing of the TA till realisation 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 ‘A’ to be proceeded against and sold and if the sale proceeds are not sufficient the 1^st defendants and his other assets are liable to be proceeded against.

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iv) Schedule ‘C’ properties to be proceeded against and sold for the liability of Rs.24,41,508/- and interest. However, the liability of defendants 4 and 5 is limited to the extent of interest they inherited from deceased 3^rd defendant.

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v) A Recovery Certificate is to be drawn and issued to the recovery officer to enable recovery of the amount as per the above terms.

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vi) 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

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Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) 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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Sd./-

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

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Central Bank of India, v. K.Mohan

Case brief

What is this about?

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Central Bank of India, v. K.Mohan

Case brief

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What did the court decide?

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