Allowed

Canara Bank v. Mr. T. Subbaiyan

DRT29 Dec 2023TA/693/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the bank's application for recovery of an agricultural loan. It permitted realization of the principal amount plus 8% p.a. simple interest while restricting the liability of heirs to the value of the estate inherited from the deceased borrower.

What did the court decide?

Realization of aggregate claim of Rs.72,11,722.36 plus 8% p.a. simple interest from accused jointly and severally, with liability of heirs restricted to inherited estate.

Canara Bank versus Mr. T. Subbaiyan — Contract and Commercial Disputes | DRT (2023)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 29^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.693 of 2022

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(Originally filed before DRT-I Chennai as OA No.221 of 2021 and thereafter transferred to this Tribunal and renumbered as TA No.693 of 2022)

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Canara Bank Thanjavur Main Branch Represented by its Chief Manager (Erstwhile Syndicate) No.1783, South Main Street Opposite to Rajarajan Clinic Thanjavur – 613 009, Thanjavur District …Applicant

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Versus

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Mr. T. Subbaiyan S/o Shri Thiagarajan No.141, Vadakkukottai Village Thirunallur (PO), Orathanadu Taluk Thanjavur District – 614 626

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Mr. C. Krishnamoorthy S/o Shri Chidambaran No.80, Vadakkukottai Village Thirunallur (PO), Orathanadu Taluk Thanjavur District – 614 626

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Mr. C. Saravanan S/o Shri Chidambaran No.80, Vadakkukottai Village Thirunallur (PO), Orathanadu Taluk Thanjavur District – 614 626

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Mrs. C. Sivabakkiyam W/o Shri Chidambaram No.80, Vadakkukottai Village Thirunallur (PO), Orathanadu Taluk Thanjavur District – 614 626

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Mr. C. Nadimuthu S/o Shri Chidambaran No.80, Vadakkukottai Village Thirunallur (PO), Orathanadu Taluk Thanjavur District – 614 626 …Defendants

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Counsel for the Applicant Bank : Mr. Muthukumaran Defendants : 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 an aggregate sum of Rs.72,11,722.36p comprising a sum of Rs.52,78,435.65p together with interest at the rate of 11.95% per annum with monthly rests being the amount due under Farm Machinery Loan Account No.63408540000514; a sum of Rs.11,06,455.62p together with interest at the rate of 11.95% per annum with monthly rests being the amount due under Minor Irrigation Loan Account No.63408540000506; and a sum of Rs.8,26,831.09p being the amount due under SKCC Facility 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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It is stated that one Mr. Chidambaram approached the erstwhile Syndicate Bank on 18.10.2005 for grant of agricultural loan and the applicant considering the said

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request sanctioned Farm Machinery Loan of Rs.7,40,000/-, Minor Irrigation Loan of Rs.1,48,000/- and Farm Loan – Kisan Credit Scheme facility of Rs.1,00,000/-. The first defendant executed necessary loan and security documents on 24.10.2005. The defendants 1 to 3 executed deed of guarantee on 24.10.2005. The defendant 2 and 3 offered their properties as security for the loans availed by Mr. Chidambaram and deposited the title deeds on 05.10.2005 with an intention to create equitable mortgage over the same and confirmed the same by executing Memorandum of Deposit of Title Deeds dated 7.10.2005 registered as Doc. No.3183 of 2005, SRO, Orathanadu. The 1^st defendant hypothecated the tractor in favour of the applicant and said hypothecation endorsement is made in the Registration Certificate on 25.10.2005. It is stated that the said Mr. Chidambaram died intestate leaving before defendants 2 to 5 as his legal heirs to inherit his properties.

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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 30.09.2019.

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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

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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 remained absent and hence were called absent and set ex-parte on 30.09.2019.

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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-27 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, which the applicant is entitled to get recovered from the defendants and their

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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 Agricultural Term loan for construction of shopping complex 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.693 of 2022 stands allowed.

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(b) Applicant is permitted to realize an aggregate amount of Rs.72,11,722.36p with future and pendentelite interest @8% 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 property and other assets of the defendants. However, the liabilities of defendants 4 and 5 are restricted to the extent of estate inherited by them from the Late

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Mr. M. Chidambaram.

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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 1 to 5 are personally liable for all such amounts due under the Loan Accounts; however the liability of defendants 4 and 5 are restricted to the extent of interest they had inherited from Late M. Chidambaram.

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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 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 29^th day of December, 2023)

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

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Canara Bank v. Mr. T. Subbaiyan

Case brief

What is this about?

What did the court decide?

Canara Bank v. Mr. T. Subbaiyan

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

Coram

Case details

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