Allowed

Canara Bank v. Mr Veerasamy and Another

DRT22 Sept 2023TA/694/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application by Canara Bank for a recovery certificate against two defendant-borrowers for an agricultural loan default, granting reduced pendente lite interest of 9% per annum while rejecting penal interest.

What did the court decide?

Issuance of recovery certificate for Rs.21,90,624/- plus 9% per annum simple interest; permission to sell schedule properties; recovery of costs.

Canara Bank versus Mr Veerasamy and Another — Contract and Commercial Disputes | DRT (2023)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 22^nd day of September, 2023

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PRESENT: SHRI T. RAJESH

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PRESIDING OFFICER

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TA No.694 of 2022

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(Originally filed before DRT-I Chennai as OA No.271 of 2019 and thereafter transferred to this Tribunal and renumbered as TA No.694 of 2022)

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Canara Bank, Villupuram Branch Represented by its Senior Manager No.21/6, 1^st Floor, Chennai – Trichy Trunk Road Villupuram – 605 602 Villupuram District …Applicant

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Versus

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Mr. V. Veerasamy

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S/o Shri Vardhappa Chettiar Kallalipatti Village Gingee Taluk, Villupuram District

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Mr. V. Sankar S/o Shri Vardhappa Chettiar Kallalipatti Village, Gingee Taluk Villupuram District …Defendants

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Counsel for the Applicant Bank : Mr. M. Muthukumaran Counsel for 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’ seeking issuance of a Recovery Certificate for recovery of a sum of Rs.21,90,624/- together with interest at the rate of 13.15% per annum with half yearly rests from the date of filing of the OA till the date of realisation along with costs of the application and for sale of schedule properties.

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The subject matter of the case is the Agricultural Loans availed by the defendants from the Applicant Bank.

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It is the case of the applicant that the defendants approached the applicant by Loan Application dated 30.05.2007 for grant of Farm Machinery Loan for purchase of Farmtrach 47 HP Tractor and a tipping wheeled trailer along with other accessories and the applicant considering the said request sanctioned Farm Machinery Loan of Rs.5,80,000/- to the defendants on 30.05.2007 and the defendants executed various loan and security documents on 15.06.2007.

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It is also the case of the applicant that the defendants deposited the title deeds of the properties more fully described in Schedule to the OA with an intention to create equitable mortgage over the same and executed simple mortgage deed dated 04.06.2007 registered as Doc. No.1259 of 2007, SRO, Gingee.

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It is also the case of the applicant that the defendants violated the terms and conditions of sanction and committed default in repayments and failed to regularize the loan accounts despite repeated request. It is stated that the defendants however executed acknowledgement of debt and security on 15.03.2010, 07.01.2013 and 18.08.2015

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It is the case of the applicant that after availing the loan, the defendants were irregular in remitting the loan amount. The efforts of the applicant bank to make the defendant to settle the loan did not yield any 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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Summons taken out to the defendants returned with endorsement “Refused” and hence the service was held sufficient. As there was no representation on behalf of the defendants on 25.07.2019, the defendants were called absent and set ex-parte on that day. Applicant Bank filed Proof Affidavit along with 16 documents, which were marked as Ex. A-1 to A-16 on 08.06.2023, however, exhibits A-5 to A-9 and A-12 are marked subject to proof. The Ld. Counsel for Applicant Bank made his submissions on 09.08.2023 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 defendants?

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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-16 along with the proof affidavit. The documents produced in evidence are all found admissible. 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

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defendant. Further, the statement of accounts in respect of the loan account produced and certified under the Banker’s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendants. It is clear from the statement of accounts that penal interest is not capitalized.

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In view of the foregoing, it is clearly evident that the application filed by the applicant bank is well within the period of limitation and this Tribunal possesses the territorial and pecuniary jurisdiction to entertain this OA.

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In view of the fact that the loan facility availed by the defendant is agricultural loan and the applicant has claimed interest at contractual rate till the date of filing of the OA, this Tribunal is of the view that the pendente lite interest can be awarded at reduced rates and prayer for grant of penal interest is rejected.

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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) TA No.694 of 2022 stands allowed.

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(b) Applicant is permitted to realize an aggregate sum of Rs.21,90,624/from the defendants jointly and severally together with interest at the rate of 9% per annum (simple), from the date of filing of OA till date of realization after deducting all the amounts received by them during the pendency of OA, and also by selling the schedule properties and other assets of the defendants.

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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 are personally liable for all such amounts due as ordered above.

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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 22^nd day of September, 2023)

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

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Canara Bank v. Mr Veerasamy and Another

Case brief

What is this about?

What did the court decide?

Canara Bank v. Mr Veerasamy and Another

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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