Allowed

City Union Bank Limited v. P.Ramesh, S/o. Palanisamy

DRT30 Oct 2023TA/827/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the bank's application for a recovery certificate arising from a tractor loan. The court confirmed the outstanding amount and adjusted the interest rate to 10% per annum, establishing personal liability for first two defendants and limited liability for legal representatives of the deceased.

What did the court decide?

Recovery certificate issued for Rs.23,47,484.06 plus interest at 10% per annum from filing date until realization, with costs awarded.

City Union Bank Limited versus P.Ramesh, S/o… — Contract and Commercial Disputes | DRT (2023)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 30^th day of October, 2023

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PRESENT: SHRI T. RAJESH

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PRESIDING OFFICER

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TA No. 827 of 2023

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(Originally filed before DRT-III Chennai as OA No.10 of 2017 and thereafter transferred to DRT-I Chennai and renumbered as TA No.470 of 2018 and thereafter transferred to this Tribunal and renumbered as TA No.827of

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City Union Bank Limited, Rep.by its Branch Manager, Pattukottai Branch, No.80, Ground Floor, Thalayari Street, Pattukottai – 614 601

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…Applicant

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Versus

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P.Ramesh, S/o. Palanisamy, No.48, Block I, Keela Karambaiyam, Karambaiyam Village, Pattukottai

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P. Suresh, S/o. Palanisamy, No.48, Block I, Keela Karambaiyam, Karambaiyam Village, Pattukottai

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S. Deivayee (Deceased) W/o. Subbaiyan, No.48, Block I, Keela Karambaiyam, Karambaiyam Village, Pattukottai

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Mrs. Pappa, Karambaiya Village, Pattukottai

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Mrs. Kasiammal, Karambaiya Village, Pattukottai,

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Mrs. Rajathi, Karambaiya Village, Pattukottai

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Murugaiyan Karmbaiya Village, Pattukottai …Defendants

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Counsel for the Applicant Bank : R. Sriram Counsel for Defendants : Ex-parte

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FINAL ORDER

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This Original Application in short OA is filed seeking issuance of a Recovery Certificate for Rs.23,47,484.06/- with further interest@14% per annum with half yearly rest from the date of application till realization.

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The defendants had availed a tractor loan from the applicant for Rs.6,60,000/and in lieu of the facility had executed necessary documents including hypothecation agreement. It is also stated that mortgage by deposit of title deeds are also created in respect of schedule properties. It is also contended that the applicants had periodically executed revival letter of Secured Advances in respect of the above facility.

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It is further contended that despite the undertaking to pay back the amount with interest, the defendants failed in fulfilling their obligation and despite many demands the repayments were not made. The account was classified as NPA on 31.3.2010 and hence this OA. Along with the OA, the applicant had produced the supporting documents.

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Summons was duly served on D1 and D2. As D3 expired additional defendant 4 to 7 were impleaded as Legal Representative of deceased D3 as per order in IA.1470 of 2017. By proceedings dated 13.05.2019, the defendants were called absent and set exparte.

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The applicant filed their proof affidavit through AW1 and marked documents A1 to A15.

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Heard the Ld. Counsel for the applicant and considered the pleadings and evidence adduced for the applicant. The following issues arise for consideration in this matter.

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i) Whether the applicant had proved the OA claim 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 applicant had let in evidence of Aw1, who deposed in terms of the OA claim by filing proof affidavit ExtA1 to A15 were produced and marked by the applicant Ext.A1 sanction letter evidences the sanctioning of the credit facility. The Demand Promissory Note; ExtA2 and the consent letters, ExtA5 and A6 evidences that the defendants had obliged to pay back the amount. The hypothecation agreement, Ext.A7 and letters of revival ExtA12 and A13 are also in conformity with the pleadings in the OA. The memorandum of deposit of title deeds, and the documents produced as ExtA11, A8 to A10 evidences the creation of mortgage by despot of title deeds in respect of the scheduled properties.

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The confirmation of balance; ExtA14 and the statement of accounts as duly certified produced as ExA15 proves that the amount as claimed in the OA is outstanding in the loan account. The above ExtA15 also evidences that the penal interest is not levied or capitalized.

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On consideration of the above documents, evidences and pleadings, this Tribunal is satisfied that the applicant had successfully proved the OA claim and their entitlement to recover the amount due in the account. The claim of

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the applicant is well within the limitation and there is no capitalization of penal interest.

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Since the applicant is entitled for issuance of a Recovery Certificate, the rate of interest to be award and cost are to be gone into. The applicant was compelled to approach this Tribunal by filing OA are hence there cannot be any dispute as to entitlement of cost. In respect of interest, this Tribunal after due consideration of the fact that the applicant had claimed interest as per contract till the date of filing of the OA, and the same is not altered, a reduced rate of interest can be allowed. This is because, this Tribunal had considered the credit facility is for agriculture allied activity.

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In the result

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i) TA. 857 of 2023 stands allowed.

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ii) The applicant is permitted to recover Rs.23,47,484.06 with further interest @ 10% per annum (simple) from the date of filing of the OA till realization after deducting the amounts received and recovered during the pendency of OA by proceeding against and selling hypothecated asset and also the schedule properties.

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iii) If the sale proceeds are not sufficient 1^st ad 2^nd defendants are personally liable and liability of defendant 4 to 7 will be limited to their inheritated estate of deceased D3.

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iv) Applicant is also allowed cost of the proceedings for which a cost memo is to be filed in 7 days from the date of issuance of the order.

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v) A recovery certificate to be drawn in terms of above and issued to the Recovery officer to recover the amount.

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Communicate a copy of the order to the parties concerned in terms of Section 19(21) of RDB Act r/w Rules 16 of DRT (procedure) rules.

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

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

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City Union Bank Limited v. P.Ramesh, S/o. Palanisamy

Case brief

What is this about?

What did the court decide?

City Union Bank Limited v. P.Ramesh, S/o. Palanisamy

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

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