Allowed

Union Bank of India, v. E.Muthukrishnan

DRT30 Nov 2023TA/769/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed a transfer application filed by Union Bank of India against E.Muthukrishnan and Thiru Arooran Sugars Ltd. for recovery of an agricultural loan of Rs. 21,35,577/- with future interest at a simple rate of 12% per annum, permitting recovery from the defendants and mortgaged assets.

What did the court decide?

Recovery of Rs. 21,35,577/- with future and pendent lite interest @ 12% p.a. (simple) from date of filing till realization, via recovery certificate and sale of mortgaged property.

Union Bank of India, versus E.Muthukrishnan — Contract and Commercial Disputes | DRT (2023)

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IN THE DEBT RECOVERY TRIBUNAL –II CHENNAI

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Dated this 30^th day of November, 2023

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PRESENT : SHRI T.RAJESH PRESIDING OFFICER

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TA.No.769 OF 2023

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(Old OA No.321/2019-DRT-I, Chennai)

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Union Bank of India, (Previously Corporation Bank), Branch at Kumbakonam, 85-A, Sarangapani East Street, Kumbakonam, Kumbakonam Taluk, Thanjavur District Represented by its Chief Manager.

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(Amended as per order of Hon’ble Tribunal

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dt.28.09.2022 vide Dy.No.735/2020) …APPLICANT.

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Vs.

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E.Muthukrishnan, S/o.Ekambaram,

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Murugan Koil Street, V.Agaram, Villupuram District-605105.

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Thiru Arooran Sugars Ltd., Represented by its Chairman & Managing Director, Registered Office At No.112, Uthamar Gandhi Salai, Nungambakkam, Chennai – 600 034.

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Sugar Mill at Thiru Arooran Sugars Limited, Thirumandankudi – 612 301. Papanasam Taluk, Thanjavur District. Represented by its Senior Manager. …DEFENDANTS

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Counsel for Applicant : Mr.R.Santhanam. Defendants : Exparte.

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O R D E R

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The above Transfer Application is filed under section 19 of the Recovery of Debt and Bankruptcy Act seeking recovery of Rs.21,35,577/- with further interest from the date of filing of the TA and also by allowing the same to be recovered from the defendants personally and also by sale of the mortgaged schedule property.

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The above original application is filed before the DRT-I 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 being the borrower and 2^nd defendant being the Corporate Guarantor had applied for and availed a short term Agricultural loan for Rs.15,00,000/- from the erst while Corporation Bank .

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It is also stated that the above facilities were availed after execution of necessary loan documents by defendants obliging themselves to repay the amount promptly and regularly without fail. The 2^nd defendant as approved by the Board of Directors had extended a Corporate Guarantee and executed the same for a sum of

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Rs.45,00,000/-.

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Apart from execution of the necessary loan documents, hypothecation over the receivables, movable assets and debt were marked as being the security for repayment of the loan.

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Even though the defendants had obliged themselves to repay the amount promptly and regularly, they failed to do so resulting defaults in the account and the same being declared as NPA.

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The applicant’s officials had on many occasions approached the defendants requesting them to repay the account and despite the same, no effort was made by the defendants to get the account regularized over to pay back the amount. Even as no repayment was made despite repeated request the applicant had on 05.05.2018 cause to issue a lawyer notice requiring repayment of the amount due in the account. The 2^nd defendant though sought time for repayment, the same was not done.

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It is also the case of the applicant that despite repeated reminders and requests, the defendants had failed to make the balance due forcing the applicant to file this OA seeking recovery of the amount due in the account with further interest and cost.

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Even as the defendants failed to enter appearance, they were set exparte on 28.09.2022. Later as Corporation Bank got amalgamated

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with the applicant, applicant got substituted in place of erst while Corporation Bank.

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The applicant had let in evidence through AW1 who had sworn to a Proof Affidavit in terms of the pleadings in the OA and also produced Exhibits A1 to A22 and got the same marked.

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Heard the counsel for the applicant and considered the contention as taken in the OA in the light of documentary evidence and proof affidavit. The following issues arise for consideration in this matter.

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i) Whether the applicant had succeeded in proving the OA claim?

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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 remain exparte. The evidence tendered by the applicant remains uncontroverted and undisputed. The evidences put forth by the applicant were found admissible. The applicant had not produced the registration certificate of the vehicle to prove that hypothecation is marked. However as the defendants had not disputed, the evidence of the same is held as proved. 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,

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which the applicant is entitled to get recovered from the defendants and their assets (including the schedule mentioned property). The claim of the applicant is well within the period of limitation and there is no Capitalization of penal interest. Since the OA claim arrived at by calculating interest at agreed rate with monthly rest and the same is not declined, this Tribunal is of that the view the pendentelite interest can be awarded at simple rate @ 12% (simple).

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In view of the finding as entered above

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i) TA.No.769 OF 2023 stands allowed.

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ii) Applicant is permitted to recover an amount of Rs. 21,35,577/- (Rupees Twenty One Lakhs Thirty Five Thousand Five Hundred Seventy Seven only) with future and pendentelite interest @ 12% per annum (simple) from the date of filing of the TA till realization after giving credit to all the amount recovered and received during the pendency of the TA.

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iii) A Recovery Certificate is to be drawn and issued to the recovery officer to enable recovery of the amount as per the above terms.

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iv) Applicant is allowed to realize cost of the proceedings for which cost memo is to be filed in 7 days’ time from the date of receipt of the copy of the order.

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Communicate a copy of the order to the parties concerned in terms of

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Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

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( Dictated to PA, transcribed by him, corrected, signed and pronounced by me in the Open Court, this 30^th day of November, 2023 )

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Sd./-

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

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Union Bank of India, v. E.Muthukrishnan

Case brief

What is this about?

What did the court decide?

Union Bank of India, v. E.Muthukrishnan

Case brief

What is this about?

What did the court decide?

What the court decided

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