Allowed

Canara Bank v. M/s. My Smart Store Pvt. Ltd.

DRT28 Dec 2023TA/72/2022

Case brief

AI extract

What is this about?

INA appraised under RDB Act allowed TA No.72 of 2022 permitting bank to recover principal and reduced simple interest from defendants or their assets since defendants remained ex-parte and evidence was uncontroverted.

What did the court decide?

Permitted recovery of Rs.3,40,09,842.88 plus simple interest @14% p.a. jointly and severally with defendants; execution against property.

Canara Bank versus M/s. My Smart Store Pvt. Ltd. — Company and Corporate | DRT (2023)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 28^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.72 of 2022

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(Originally filed before DRT-I Chennai as OA No.223 of 2020 and thereafter transferred to this Tribunal and renumbered as TA No.72 of 2022)

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Canara Bank, Egmore Branch (Erstwhile Syndicate Bank) Represented by its Chief Manager Reginal Office-I, 1^st Floor Leelavathi Buildings, 66, Armenian Street Chennai – 600 001 …Applicant

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Versus

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M/s My Smart Store Pvt. Ltd., Rep. by its Director, Mr. Akbar Ali No.1/2, Portugese Church Street 3^rd Lane, Sevenwells

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Chennai – 600 001

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Mr. Akbar Ali S/o Mr. Umar Alio 72/287, Linghi Chetty Street Chennai – 600 001

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Mr. Seeni Haja Mohammed S/o Mr. Umar Ami

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No.29, Krishnan Koil Street

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2^nd Floor, Mannady, Chennai – 600 001 …Defendants

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Counsel for the Applicant Bank : M/s K.V. Subramanian Associatex 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 a sum of Rs.3,40,09,842.88p together with interest at the rate of 17% per annum with

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monthly rests from the date of filing of the OA till the date of realization in full along with costs of this application and also by proceeding against the schedule mentioned 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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The 1^st defendant a Private Limited Concern, represented by 2^nd defendant as its Director approached the applicant by its Loan Application dated 15.05.2017 for grant of credit facility to meet its Working Capital requirements and the applicant considering the said request vide sanction dated 19.05.2017 sanctioned Secured Overdraft Synd MSE Loan of Rs.2,50,00,000/- to the defendant. The 1^st defendant represented by 2^nd defendant executed necessary loan document on 19.05.2017 and the defendants 2 and 3 also executed guarantee agreements on 19.05.2017. The 2^nd defendant deposited the title deeds of his properties more fully described in the schedule to the OA with the applicant bank on 4.5.2017 with an intention to create equitable mortgage over the same and confirmed the same by executing two Memorandum of Deposit of Title deeds dated 17.05.2017 registered as Doc. No.2758 of 2017, SRO, Thiruvottiyur and 4705/2017, SRO Guduvancheri.

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It is further stated that even though the defendant had obliged to repay the amount promptly and regularly, they failed to do so resulting in default in repayment and hence the account was classified as NPA.

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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 seeking recovery of the amount due in the account with further interest and costs.

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The defendants remained absent and hence were called absent and set ex-parte on 14.06.2022.

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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-16 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 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 loan under MSE Scheme and the applicant has charged interest at contractual rates till the date of filing of the OA 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.72 of 2022 stands allowed.

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(b) Applicant is permitted to realize a sum of Rs.3,40,09,842.88p with future and pendentelite interest @14% 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 or recovered by them during the

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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 2 and 3 are personally liable for all such amounts due under the Loan Accounts.

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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 28^th day of December, 2023)

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

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Canara Bank v. M/s. My Smart Store Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/s. My Smart Store Pvt. Ltd.

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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