Allowed

Bank of India v. Mrs. Vineeta Gupta

DRT10 Mar 2023TA/79/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the Bank of India's application to recover outstanding dues from three defendants. The Tribunal confirmed the debt and liability after perusing unchallenged affidavit evidence but ruled that the claimed high-interest rates were excessive, awarding a reduced simple interest rate instead.

What did the court decide?

Recovery certificate issued for Rs.64,72,167 plus 9% per annum simple interest from the date of filing; sale of schedule properties permitted.

Bank of India versus Mrs. Vineeta Gupta — Banking and Recovery | DRT (2023)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 10^th day of March, 2023

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PRESENT: SHRI T. RAJESH

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PRESIDING OFFICER

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TA No.79 of 2023

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( Originally filed before DRT-I Chennai as OA No.636 of 2019 and thereafter Transferred to this Tribunal and renumbered as TA No.79 of 2023)

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Bank of India Anna Nagar Branch W-124, New No.41, III Avenue Anna Nagar, Chennai – 600 040 Represented by its Constituted Attorney

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…Applicant

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Versus

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Mrs. Vineeta Gupta W/o Mr. Sanjay Gupta Flat No. E, 2^nd Floor, Plot No.4514, “Y” Block No.23, New No.42, 5^th Avenue Anna Nagar, Chennai – 600 040 2. Mr. Sanjay Gupta S/o Mr. Ramachandra Prasad Flat No. E, 2^nd Floor, Plot No.4514, “Y” Block No.23, New No.42, 5^th Avenue Anna Nagar, Chennai – 600 040 3. M/s Jagadamba Handlooms No.W-116, 3^rd Avenue Road (Opp. BSNL Telephones) Anna Nagar, Chennai – 600 040 Represented by its Proprierix Mrs. Vineeta Gupta …Defendants Counsel for the Applicant Bank : Mr. M.P. Venkateswaran Counsel for Defendants : Mr. G. Vijaykumar / 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 defendantfor recovery of an aggregate sum of Rs.64,72,167 /- comprising a sum of Rs.28,92,688/- with further interest at the rate of 9.40 % per annum with monthly rests being the amount due under home loan account, a sum of Rs.33,32,147/- with further interest at the rate of 11.45% per annum with monthly rests being the amount due under Cash Credit Account and a sum of Rs.2,47,332/- with further interest at the rate of 9.40% per annum with monthly rests being the amount due under Term Loan Accountfrom the date of filing of the application till the date of realization in full along with costs of this application and for sale of schedule properties.

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The subject matter of the case is the various credit facilitiesavailed by the defendants from the applicant.

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It is the case of the applicant that the defendants 1 and 2 approached the applicant bank in the month of May 2012 for take over of their home loan which they had availed from Vijaya Bank, Anna Nagar Branch for the purchase of schedule mentioned property vide loan application dated 23.5.2012 and the applicant bank considering the said request vide its sanction letter dated 11.7.2012 sanctioned home loan of Rs.24,30,000/- to the defendants 1 and 2. It is stated that the said amount was paid to the Vijaya Bank, Anna Nagar branch by RTGS and by letter dated 16.7.2012 requested Vijaya Bank to hand over the title deeds of the schedule mentioned property. It is also the case of the applicant that to secure the said loan the defendants 1 and 2 executed various

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loan documents on 16.7.2012 viz., Demand Promissory Note for a sum of Rs.24,30,000/-, Installment letter undertaking to repay the loan in 240 installments of Rs.24,191/- per month commencing from one month after the disbursement, bearer letter authorizing the applicant to disburse the loan, composite loan document and Agreement of home loan thereby agreeing to the terms and conditions of sanctions.

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It is also the case of the applicant that the defendants 1 and 2 requested the applicant bank for sanction of Cash Credit facility of Rs.20,00,000/- to the 3^rd defendant and submitted a loan application. It is stated that the 2^nd defendant offered to stand as a guarantor for the cash credit facility to be sanctioned to the 3^rd defendant and the schedule mentioned property was offered as security for the due repayment of the said facility. It is stated that taking into account the submissions of the defendants, the applicant sanctioned Cash Credit facility of Rs.20 lakhs to the 3^rd defendant. It is also stated that the 3^rd defendant represented by the 1^st defendant as its Proprietrix executed various loan documents in favour of applicant bank on 16.7.2012 viz., Demand Promissory Note for a sum of Rs.20 lakhs, Bear letter authorizing the applicant to disburse cash credit limit, composite loan documents and hypothecation cum loan agreement hypothecating stocks of handlooms clothes, dress materials, mattresses, pillows, blankets etc., in favour of the applicant. It is further stated that the 2^nd defendant executed guarantee agreement on 16.7.2012 thereby guaranteeing due repayment of the credit facility availed by the 3^rd defendant.

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It is the further case of the applicant that the 1^st defendant deposited the title deeds of the schedule mentioned property with the applicant bank on 18.7.2012 with an intention to create equitable mortgage over the same in favour of the applicant bank to secure the home loan facility availed by the 1^st defendant and the cash credit facility availed by the 3^rd defendant and executed Memorandum of Deposit of Title deeds dated 3.8.2012 registered as Doc. No.2758 of 2012 in the office of Sub Registrar, Anna Nagar.

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It is also the case of the applicant that at the request of the defendants vide loan application dated 11.9.2014, the applicant bank sanctioned additional cash credit facility of Rs.5 lakhs vide its sanction letter dated 11.9.2015 thereby enhancing the cash credit facility to Rs.25 lakhs. It is stated that to secure the additional cash credit facility the 1^st defendant representing the 3^rd defendant executed various loan documents on 11.9.2014 viz., Demand Promissory Note for a sum of Rs.5 lakhs, Bear letter authorizing the applicant to disburse cash credit limit, composite loan documents and hypothecation cum loan agreement hypothecating stocks of handlooms clothes, dress materials, mattresses, pillows, blankets etc., in favour of the applicant. It is further stated that the 2^nd defendant executed guarantee agreement on 11.9.2014 thereby guaranteeing due repayment of the additional credit facility availed by the 3^rd defendant.

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It is the case of the applicant that the additional cash credit facility is secured by the mortgage of the immovable property more fully described in the schedule to the OA belonging to the 1^st defendant, who deposited the title deeds with the applicant bank on 11.9.2014 with an intention to create equitable mortgage over

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the same in favour of the applicant bank and executing Memorandum of Deposit of Title deeds dated 12.9.2014 registered as Doc. No.3965 of 2014 on the file of SRO, Anna Nagar.

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It is the case of the applicant that the defendants 1 and 2 approached the applicant in the month of January 2016 for rescheduling the repayment of the home loan since they suffered heavy losses in the floods that occurred in Chennai in December 2014 and submitted a request letter dated 29.1.2016, pursuant to which the home loan account was rescheduled and the defendants agreed to repay the home loan in 201 installments of Rs.24,560/- per month commencing from November 2016. It is stated that the defendants 1 and 2 executed supplemental term loan agreement on 29.1.2016.

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It is also the case of the applicant bank that at the request of the defendants the applicant sanctioned a Term Loan of Rs.2,95,721/- to the 3^rd defendant vide its sanction letter dated 11.3.2016 under the flood relief scheme. It is stated that to secure the said facility the 3^rd defendant represented by 1^st defendant executed various documents on 11.3.2016 viz., Demand Promissory Note for a sum of Rs.2,95,721/-, Bearer Letter, Installment letter undertaking to repay the term loan in 48 installments of Rs.7,458/- per month commencing from November 2016, Composite Loan Agreement, hypothecation cum Loan Agreement, Supplemental Term Loan Agreement. It is also stated that the 2^nd defendant executed guarantee agreement on 11.3.2016 thereby guaranteeing due repayment of the term loan availed by the 3^rd defendant.

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It is the further case of the applicant that the defendants 1 and 2 acknowledged the debt in respect of home loan by executing acknowledgement of debt and security on 1.7.2015, 29.1.2016 and 10.1.2019. It is stated that the defendants acknowledged the debt and security by executing acknowledgement of debt and security on 11.9.2014, 11.3.2016 and 25.1.2019. It is also stated that the defendants similarly executed acknowledgement of debt and security in respect of the Term Loan Account on 25.1.2019.

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It is the case of the applicant that the defendants having availed the credit facility 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 applicant bank classified the home loan account, cash credit facility and the Term Loan account on 30.06.2018, 1.8.2018 and 31.07.2018 respectively. As the defendants did not come forward to clear the outstanding dues the applicant invoked the provisions of the SARFAESI Act and issued the demand notices under Section 13(2) of the Act on 11.10.2017 and 4.7.2018 followed by possession notices on 9.10.2018 under Section 13(4) of the Act.

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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 defendants 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 defendantswere served and a vakalt was filed by Ld. Counsel. As the defendants did not choose to file the reply statement despite availing sufficient opportunity, the chance for filing reply statement was closed on 27.2.2020. Applicant Bank filed Proof Affidavit along with 48 documents, which were marked as Ex. A-1 to A-48on 8.7.2022. As there was no representation on behalf of the defendant on 31.01.2023, the defendants were set ex-parte on that day. The Ld. Counsel for Applicant Bank made his submissions on 31.01.2023 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-48 along with the proof affidavit. Exhibit A-1 is the loan application dated 23.05.2012 submitted by the 1^st and 2^nd defendants for take over of the home loan from Vijaya Bank, Anna Nagar. Exhibit A-2 is the sanction letter of the applicant bank dated 11.7.2012 sanctioning home loan of Rs.24,30,000/- to the defendants 1 and 2. Exhibit A-3 is the letter dated

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16.7.2012 sent by the applicant bank to Vijaya Bank, Anna Nagar for handing over the title deeds of the schedule mentioned property. Exhibit A-4 to A-8 are the loan documents executed by the defendants 1 and 2 in favour of the applicant bank viz., Demand Promissory Note, Installment letter, Bearer Letter, Composite Loan document and agreement for home loan. Exhibit A-9 is the application submitted by 3^rd defendant represented by 1^st defendant for grant of Cash Credit Facility. Exhibit A-10 to A-13 are the loan documents executed by 3^rd defendant represented by 1^st defendant viz., Demand Promissory Note, Bearer Letter, Composite Loan document, hypothecation cum loan agreement. Exhibit A-14 is the deed of guarantee dated 16.7.2012 executed by the 2^nd defendant. Exhibit A-15 is the Memorandum of Deposit of Title deeds dated 3.8.2012 executed by 1^st defendant and registered as Doc. No.2758 of 2012 with SRO, Anna Nagar. Exhibit A-16 is the Loan application dated 11.9.2015 submitted by the 3^rd defendant for grant of additional cash credit facility and Exhibit A-17 is the sanction letter of the applicant dated 11.9.2014 sanctioning additional cash credit facility of Rs.5 lakhs to the 3^rd defendant. Exhibit A-17 to A-22 are the loan documents executed by 3^rd defendant represented by 1^st defendant on 11.9.2014 viz., Demand Promissory Note, Bearer Letter, Composite Loan document, hypothecation cum loan agreement, supplemental deed of hypothecation. Exhibit A-23 is the guarantee deed executed by the 2^nd defendant on 11.9.2014. Exhibit A-24 is the Memorandum of deposit of title deeds dated 12.9.2014 executed by 1^st defendant in favour of applicant and registered as Doc. No.3965 of 2014. Exhibit A-25 is the sale deed dated

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6.2.2012 executed in favour of 1^st defendant and registered as Doc. No.392 of 2012 on the file of SRO, Anna Nagar. Exhibit A-26 is the request letter dated 29.01.2016 submitted by the defendants 1 and 2 for rescheduling the home loan account. Exhibit A-27 is the Supplemental Term Loan Agreement dated 29.1.2016 containing the revised repayment schedule. Exhibit A-28 is the sanction letter of the applicant bank dated 11.3.2016 sanctioning Term Loan of Rs.2,95,721/- to the 3^rd defendant. Exhibit A-29 to A-34 are the loan documents executed by the 3^rd defendant represented by 1^st defendant viz., Demand Promissory Note, Bearer letter, Installment letter, composite loan document, hypothecation cum loan agreement and supplemental term loan agreement. Exhibit A-35 is the deed of guarantee dated 11.3.2016 executed by the 2^nd defendant to secure the Term loan sanctioned to 3^rd defendant. Exhibit A-36 to A-42 are the acknowledgement of debts cum security executed by the defendants on 1.7.2015, 29.1.2016, 10.01.2019, 11.9.2014, 11.3.2016, 25.01.2019 and 25.1.2019 in respect of all the loan accounts. Exhibit A-43 and A-44 are the demand notices dated 11.10.2017 and 4.7.2018 issued by the applicant bank under Section 13(2) of the SARFAESI Act. Exhibit A-45 is the possession notice dated 9.10.2018 issued by the applicant bank under Section 13(4) of the SARFAESI Act. Exhibit A-46 to A-48 are the statement of accounts in respect of the home loan account, Cash Credit facility and the Term Loan account respectively along with certificates under Bankers’ Book Evidence Act.

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Exhibit A-1 evidences that the defendants 1 and 2 approached the applicant bank by their loan application dated 23.5.2012 for taking over the home loan

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availed from Vijaya Bank, Anna Nagar Branch for purchase of the schedule mentioned property and Exhibit A-2 evidences that the applicant bank considering the said request sanctioned home loan of Rs.23,65,000/-. Exhibit A- 3 evidences that the applicant bank transferred the amount to Vijaya Bank Anna Nagar Branch and has therefore by its letter dated 11.7.2012 requested the said bank for handing over of the original title deeds of the property. Exhibit A-4 to A- 13 evidences that the defendants 1 and 2 executed necessary loan documents in favour of applicant bank to secure the home loan facility availed by them from the applicant bank. Exhibit A-14 evidences that the 2^nd defendant executed deed of guarantee on 16.7.2012 thereby guaranteeing due repayment of the home loan facility availed by the 1^st defendant. Exhibit A-15 evidences that the 1^st defendant deposited the title deeds of the property with the applicant bank with an intention to create equitable mortgage over the same and executed Memorandum of Deposit of Title deeds on 3.8.2012, which is registered as Doc. No.2758 of 2012 on the file of SRO, Anna Nagar. Exhibit A-16 evidences that the defendants 1 and 2 by their application dated 11.9.2014 requested the applicant bank for sanctioning Cash Credit facility to the 3^rd defendant. Exhibit A- 17 evidences that the applicant bank considering the request of the defendants sanctioned cash credit facility of Rs.20 lakhs to the defendant vide its sanction letter dated 11.9.2014. Exhibit A-18 to A-22 evidences that the defendants to secure the cash credit facility executed necessary loan and security documents. Exhibit A-23 evidences that the 2^nd defendant executed guarantee letter on 11.9.2014 thereby guaranteeing due repayment of the cash credit facility availed

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by the 3^rd defendant. Exhibit A-24 and A-25 evidences that the 1^st defendant is the owner of the schedule mentioned property by way of Sale deed dated 6.2.2012 in his favour and he had deposited the title deeds with the applicant bank with an intention to create equitable mortgage over the same and confirmed the same by Memorandum of Deposit of Title deeds dated 12.9.2014 registered as Doc. No.3965 of 2014, SRO, Anna Nagar. Exhibit A-26 evidences that the 1^st and 2^nd defendants approached the applicant bank by letter dated 29.1.2016 for rescheduling the home loan due to loss that occurred due to floods in Chennai. Exhibit A-27 evidences that the applicant reschedule the loan and the defendants executed Supplemental Term Loan Agreement on 29.1.2016. Exhibit A-28 to A- 34 evidences that at the request of the defendants 1 and 2 the applicant sanctioned a Term Loan of Rs.2,95,721/- to the defendants and to secure the same the defendants executed necessary loan and security documents in favour of the applicant bank. Exhibit A-35 evidences that the 2^nd defendant guaranteed the due repayment of the Term Loan availed by the 1^st defendant by executing deed of guarantee on 11.3.2016. Exhibit A-36 to A-42 evidences that the defendants acknowledged the debt and security in respect of all the three loan accounts on various dates. Exhibit A-43 and A-44 evidences that the defendants defaulted in repayment and hence the loan account was classified as NPA and the applicant invoking the provisions of the SARFAESI Act issued demand notice under Section 13(2) of the SARFAESI Act on 25.1.2019 and 11.10.2017. Exhibit A-45 evidences that the defendants did not come forward to clear the outstanding dues and therefore the applicant issued the possession notice on

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9.10.2016 under Section 13(4) of the SARFAESI Act. Exhibit A-46 to A-48, the statement of accounts in respect of both the loan accounts 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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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 defendants. Point is answered accordingly.

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In view of the foregoing, it is evident that the application has been filed well within the period of limitation and this Tribunal possess both pecuniary and territorial jurisdiction to entertain the OA. Further, in view of the fact that the instant loan is a home loan, cash credit facility and Term Loan availed by the defendants and in view of the fact that the interest rates have come down, this Tribunal is of the view that the interest rate could be awarded at reduced rates. Therefore, the interest rate claimed by the applicant is rejected and the Tribunal proceeds to award interest at the rate of 9% 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 the applicant is entitled to realize. Hence, OA is disposed off in the following manner: -

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(a) TA No.79 of 2023 stands allowed.

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(b) Applicant is permitted to realize an aggregate sum of Rs.64,72,167/- with further interest at the rate of 9% per annum (simple)from the date of filing of the OAtill date of realization from the defendants jointly and severally, 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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I If the sale proceeds are not found sufficient to cover the amount due and payable to the Applicant, the defendants 1 and 2 are 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 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 the10^th day of March, 2023)

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

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Bank of India v. Mrs. Vineeta Gupta

Case brief

What is this about?

What did the court decide?

Bank of India v. Mrs. Vineeta Gupta

Case brief

What is this about?

What did the court decide?

What the court decided

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