Allowed

State Bank of India v. Mr. P. Kannusamy

DRT22 Sept 2023TA/719/2022

Case brief

AI extract

What is this about?

DRT-II Chennai allowed the bank''s application for a recovery certificate under the RDB Act, finding the defendant''s loan liability proven. The bank was permitted to realize the outstanding principal and reduced interest by sale of secured assets.

What did the court decide?

Recovery certificate issued; realization of Rs.15,38,409.22 with 11% simple interest via sale of properties and personal liability of defendants.

State Bank of India versus Mr. P. Kannusamy — Banking and Recovery | 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.719 of 2022

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(Originally filed before DRT-III Chennai as OA No.167 of 2016 and transferred to DRT-I Chennai and renumbered as TA No.57 of 2019 and thereafter transferred to this Tribunal and renumbered as TA No.829 of 2023)

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State Bank of India Rep. by its Branch Manager Pattukottai Branch Pattukottai

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…Applicant

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Versus

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Mr. P. Kannusamy S/o Ponnambalam West Streeet, Solagankarai Village Orathanadu Taluk, Thanjavur District

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Mrs. Vellaiammal W/o Ponnambalam West Streeet, Solagankarai Village Orathanadu Taluk, Thanjavur District

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Mr. Panchaiyan S/o Ponnambalam West Streeet, Solagankarai Village Orathanadu Taluk, Thanjavur District

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Mr. Muthaiyan S/o Ponnambalam West Streeet, Solagankarai Village Orathanadu Taluk, Thanjavur District

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Mr. Ramaiyan S/o Ponnambalam West Streeet, Solagankarai Village Orathanadu Taluk, Thanjavur District

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Mrs. Jayalakshmi D/o Ponnambalam West Streeet, Solagankarai Village Orathanadu Taluk, Thanjavur District …Defendants

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Counsel for the Applicant Bank Counsel for Defendants

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: Mr. S. Pandurangan : 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.15,38,409.22p together with interest at the rate of 16.50% per annum with half yearly rests from 28.01.2015 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 credit facility availed by the defendants from the Applicant Bank.

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It is the case of the applicant that the 1^st defendant approached the applicant bank for grant of loan for purchase of tractor, tipper, cultivator and other implements by submitting Loan Application dated 26.09.2006 and the applicant considering the said request vide its sanction dated 26.09.2006 sanctioned a Term Loan of Rs.5,70,000/- to the 1^st defendants. It is also the case of the applicant that the 1^st defendant executed necessary loan and security documents on 26.09.2006 and also hypothecated the tractor and other implements more fully described in Schedule ‘A’ to the OA.

¶23

It is also the case of the applicant that the defendants deposited the title deeds of the properties more fully described in Schedule ‘B’ to the OA on 29.09.2006 with an intention to create equitable mortgage over the same and executed Memorandum of Deposit of Title deeds dated 03.11.2016 registered as Doc. No.3084 of 2006, SRO, Orathanadu.

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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 and hence the loan account was classified as NPA.

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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.

¶27

Summons taken out to the defendants. As there was no representation on behalf of the defendants on 28.07.2017, the defendants were called absent and set ex-parte on that day. Applicant Bank filed Proof Affidavit along with 13 documents, which were marked as Ex. A-1 to A-13 on 01.08.2023. The Ld. Counsel for Applicant Bank made his submissions on 05.09.2023 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-13 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 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.

¶35

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 agriculture 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.

¶37

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.719 of 2022 stands allowed.

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(b) Applicant is permitted to realize a sum of Rs.15,38,409.22p from the defendants jointly and severally together with interest at the rate of 11% per annum (simple), from 28.01.2015 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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State Bank of India v. Mr. P. Kannusamy

Case brief

What is this about?

What did the court decide?

State Bank of India v. Mr. P. Kannusamy

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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Case details

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