Allowed

Indian Overseas Bank, v. M/s. Hotel Saroj Krishna

DRT26 May 2023TA/734/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed a recovery application filed by State Bank of India against a borrower for a defaulting housing loan, permitting realization of the dues through sale of property and personal liability.

What did the court decide?

Recovery Certificate issued; realization of Rs.53,06,319/- with 8% simple interest permitted via sale of schedule property and/or personal recovery.

Indian Overseas Bank, versus M/s. Hotel Saroj Krishna — Banking and Recovery | DRT (2023)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 26^th day of May, 2023

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PRESENT: SHRI T. RAJESH

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PRESIDING OFFICER

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TA No.734 of 2022

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(Originally filed before DRT-I Chennai as OA No.340 of 2019 and thereafter transferred to this Tribunal and renumbered as TA No.734 of 2022)

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State Bank of India Stressed Assets Recovery Branch Rep. by its City Case Officer No.32, 2^nd Floor, Red Cross Building Montieth Road, Egmore Chennai – 600 008 …Applicant

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Versus

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Mr. D. Venkatesh S/o E. Dhamotharan No.14/91, 10^th Street, 14^th Block Thirunagar, Villivakkam Chennai – 600 049 …Respondent Counsel for the Applicant Bank : M/s Mrs. N.S. Revathi Counsel for Defendant : 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 defendant for recovery of a sum of Rs.53,06,319/- with interest at the rate of 9.45% per annum with monthly rests from the date of filing of the OA till the date of realization in full along with costs of this application and for sale of schedule mentioned property.

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The subject matter of the case is the “Housing Loan” availed by the defendant from the applicant bank.

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It is the case of the applicant that the defendant approached the applicant bank for grant of housing loan for purchasing the schedule mentioned property vide his Loan Application dated 26.04.2016 and the applicant considering the said request granted housing loan of Rs.43 lakhs to the defendant vide sanction letter dated 28.04.2016. It is stated that the defendant having availed the loan to secure the same executed various loan documents on 29.04.2016 viz., Memorandum of Loan Agreement agreeing to repay the same in monthly installments of Rs.37,451/-, affidavit subjecting himself to certain terms and conditions, deed of undertaking and Agreement to mortgage the schedule mentioned property. It is also stated that the defendant deposited the title deeds of the property with the applicant bank on 17.2.2017 with an intention to create equitable mortgage over the same and confirmed the same by executing confirmation letter dated 17.02.2017 and also executed Memorandum of Deposit.

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It is the case of the applicant that the defendant having availed the credit facilities defaulted in repayments and failed to regularize the loan account despite repeated demands and also failed to comply with the terms and conditions of sanction and therefore the loan account was classified as NPA on 1.2.2017.

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It is the case of the applicant that after availing the loan, the defendant was 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 were taken out to the defendant and the same returned with endorsement “No such person” and hence was served with notice by substituted service by effecting paper publication. As there was no representation on behalf of the defendant on 21.01.2020 the defendant was set ex-parte on that day. Applicant Bank filed Proof Affidavit along with 14 documents, which were marked as Exhibits A-1 to A-14 on 08.03.2023. The Ld. Counsel for Applicant Bank made his submissions on 17.04.2023 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 defendant?

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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-14 along with the proof affidavit. Exhibit A-1 is the Loan Application dated 26.04.2016 submitted by the defendant. Exhibit A-2 is the sanction letter dated 28.4.2016 issued by the applicant sanctioning housing loan of Rs.43 lakhs. Exhibit A-3 is the arrangement letter dated 29.4.2016 signed by defendants. Exhibit A-4 is the Memorandum of Term Loan Agreement dated

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29.4.2016 executed by the defendant. Exhibit A-5 is the affidavit dated 29.4.2016 executed by the defendant. Exhibit A-6 is the deed of undertaking given by the defendant on 29.4.2016. Exhibit A-7 is the agreement to mortgage dated 29.4.2016 executed by the defendant. Exhibit A-8 is the confirmation letter dated 17.2.2017 executed by the defendant. Exhibit A-9 is the Memorandum of Deposit dated 17.02.2017 executed by the defendant. Exhibit A-10 is the Memorandum relating to deposit of title deeds dated 17.02.2017 executed by the defendant. Exhibit A-11 is the General Power of Attorney dated 23.12.2015. Exhibit A-12 is the Agreement of sale dated 28.12.2015 entered into between Mr. U. Nazer Hussai, power agent of Mr. A. Syed Maraikayer and Mr. D. Venkatesh. Exhibit A-13 is the sale deed in favour of Mr. D. Venkatesh dated 8.6.2016 registered as Doc. No.2272 of 2016 on the file of SRO, Kodambakkam. Exhibit A-14 is the statement of accounts in respect of the loan account along with certificates under Bankers’ Book Evidence Act.

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Exhibit A-1 evidences that the defendant by loan application dated 26.4.2016 approached the applicant bank for grant of housing for purchase of schedule mentioned property. Exhibit A-2 evidences that the applicant considering the request of the defendant sanctioned housing loan of Rs.43 lakhs to the defendant. Exhibit A-3 to A-6 evidences that the defendant to secure the loan availed executed various loan documents in favour of applicant bank on 29.04.2016. Exhibit A-7 to A-13 evidences that the defendant is the absolute owner of the schedule mentioned property and is empowered to deal with the same. It also evidences that the defendant deposited the title deeds of the

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property with the applicant bank on 17.2.2017 with an intention to create equitable mortgage over the same in favour of the applicant and confirmed the same by executing Memorandum relating to deposit of title deeds dated 17.2.2017. Exhibit A-14, 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 defendant. It is clear from the statement of accounts that penal interest is not capitalized.

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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. Point is answered accordingly.

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In view of the foregoing, it is clear the above OA has been filed well within the period of limitation and this Tribunal has the pecuniary and territorial jurisdiction to take up the OA.

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In view of the fact that the loan availed by the defendant is a Housing Loan and the applicant has charged and claimed interest at contractual rate till the filing of the OA, this Tribunal is of the view that the pendent lite and future interest be awarded at the rate 8% per annum (simple)

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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

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the applicant is entitled to realize. Hence, OA is disposed off in the following manner: -

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(a) TA No.734 of 2022 stands allowed.

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(b) Applicant is permitted to realize a sum of Rs.53,06,319/- with further interest at the rate of 8% per annum (simple) from the defendant from the date of filing of the OA till date of realization, after deducting all the amounts received by them during the pendency of OA, and also by selling the schedule mentioned property and the other assets of the defendant.

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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 defendant is personally liable for all such amounts due.

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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 26^th day of May, 2023)

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

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Indian Overseas Bank, v. M/s. Hotel Saroj Krishna

Case brief

What is this about?

What did the court decide?

Indian Overseas Bank, v. M/s. Hotel Saroj Krishna

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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