Allowed

Canara Bank v. Sri. N Suresh Shetty

DRT19 Apr 2024OA/1078/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the Original Application filed by Canara Bank for recovery of Rs. 26,99,938/- and interest from the defendant borrower. The defendant failed to appear before the Tribunal, and the claim remained unchallenged. The Tribunal confirmed the dues under OCC and CFITL loans and directed recovery through the sale of mortgaged and personal assets.

What did the court decide?

The applicant bank is entitled to recover Rs. 26,99,938/- consisting of principal and accrued interest under OCC and CFITL loans, with liberty to recover the balance by sale of scheduled and personal

Canara Bank versus Sri. N Suresh Shetty — Contract and Commercial Disputes | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 19^th Day of April, 2024

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Present: SMT. S. V. GOWRAMMA Hon’ble Presiding Officer

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OA. No.1078/2022

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BETWEEN:

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Canara Bank Electronic City Branch Phase-2, Electronic City Phase II Bangalore-560 100. Represented by its Senior Manager, Smt. Suma Nadar.

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… APPLICANT

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AND:.

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Sri. N. Suresh Shetty S/o Sri. Narayana Shetty Aged about 58 years, Proprietor of HOTEL ADARSH SAGAR No.36/1, Venugopalaswamy Building, Hosur Road, Electronic City, Bangalore-560 100. ...DEFENDANT

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Counsel on record/appeared for:

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Applicant : Sri. M.S. Vinayaka Defendant : Exparte.

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FINAL ORDER

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The present Original Application (OA) is filed on 05.07.2022 under section 19 of Recovery of Debts and Bankruptcy Act 1993 for recovery of a sum of Rs.26,99,938/- (Rupees twenty six lakh ninety nine thousand nine hundred and thirty eight only) with further interest thereon from the date

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OA. No. 1078/2022

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of filing the Application till realization from the Defendant.

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The application filed is within the period of limitation as prescribed under Section 24 Recovery of the Debts and Bankruptcy Act 1993 and the subject recovery claim falls within the jurisdiction of this Hon’ble Tribunal. Brief facts of the case:

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It is the case of the applicant bank where in the Defendant as borrower is Proprietor of M/s. HOTEL ADARSH SAGAR had approached the applicant bank seeking for OCC facility Loan Rs.10,00,000/- (Rupees ten lakh Only) an loan application dated 02.05.2015 for the purpose of his business. After, considering the request of the Defendant, the Applicant Bank sanctioned the OCC facility Loan Rs.10,00,000/- (Rupees ten lakh Only) has been enhanced for Rs.20,00,000/- (Rupees twenty lakh only) on 02.06.2017 in respect of the said loan.

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3.1. The Applicant submits that as per the request of the Defendant the said OCC facility had been renewed for Rs.20,00,000/- (Rupees twenty lakh only) on 21.08.2019 in respect of the said loan.

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The defendant executed necessary loan documents in favour of the applicant bank as security for the due repayment of the loans, interest, cost and charges, and Defendant executed Composite Hypothecation Agreement dated 02.05.2015 & 02.06.2017 & 21.08.2019 and On Demand Promissory Note dated 02.06.2017 & 21.08.2019 in favour of the Applicant Bank.

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OA. No. 1078/2022

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The Applicant, the defendant has opted to avail the moratorium in term of the RBI COVID 19 Regulatory Package. Hence applicant has permitted to converted the accumulated interest debited to his Working Capital (OD/ CC) account from 01.03.2020 to 31.08.2020 to a CFITL Loan facility of Rs.1,03,795/- (Rupees one lakh three thousand seven hundred and ninety five only) on 03.09.2020 in respect of the said loan.

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The Applicant Bank submits that the Defendant, after availing the said facilities, failed to repay the loan amount and committed default. The loan account of the Defendant had been classified as a Non Performing Asset (NPA) on 01.11.2020 and the Applicant Bank issue a Legal Notice dated 26.05.2022 calling upon the defendants to repay the entire outstanding loan amount. However, there was no positive response from the Defendant. Hence, this Original Application (OA) has been filed to recover the dues from the Defendant.

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After the filing of the OA, summons was sent to the Defendant Registered Post with Acknowledgment Due the same is duly served on 14.11.2022. Therefore, service held sufficient. When OA was taken up on 19.07.2023 even after giving sufficient time, there was no appearance or representation from the Defendant; hence, Defendant was placed exparte on 19.07.2023.

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Heard the submissions of Applicant Bank and perused the records.

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To prove the case of the Applicant Bank, Smt. Suma Nadar W/o

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Sri. Pradeep Kumar, Senior Manager, has filed Affidavit by way of evidence

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OA. No. 1078/2022

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and same was considered as evidence of AW.1 and marked as Ex.A1, the

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list of Document came to be marked as Ex.A2 and documents came to be

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marked as Ex.A3 to A17. As the Defendant remained ex-parte, the OA claim remains unchallenged. There is no contra evidence available on record to repudiate the claim of the Applicant Bank.

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Having regard to the amount advanced, the interest applied, the conduct and operations in the account and the default committed, this Tribunal comes to the conclusion that the applicant bank is entitled to a final order on the following terms:

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: O R D E R:

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The OA is allowed with costs,

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(a) The applicant bank is allowed to recover from Defendant to pay an amount of Rs.26,99,938/- (Rupees twenty six lakh ninety nine thousand nine hundred and thirty eight only) consisting of:

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i. The Defendant to pay a sum of Rs.25,74,138/- (Rupees twenty five

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lakh seventy four thousand one hundred and thirty eight only) under OCC Loan, with future interest at the rate of 12.65% p.a. and plus 2% p.a. penal interest compounded monthly rest from the date of the OA Application till the realization of the amount.

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OA. No. 1078/2022

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ii. The Defendant to pay a sum of Rs.1,25,800/- (Rupees one lakh twenty five thousand eight hundred only) under CFITL Loan, with future interest at the rate of 9.75% p.a. and plus 2% p.a. penal interest compounded monthly rest from the date of the OA Application till the realization of the amount.

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(b) In the event of failure of the Defendant to pay the aforesaid amount, the bank is at liberty to recover the amount by sale of the schedule mentioned property in the OA;

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order;

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(d) If the sale proceeds of the schedule mentioned properties are not sufficient to satisfy the dues as ordered above, the applicant bank is at liberty to sell the personal assets of the defendant (both movable and immovable) respectively to recover the balance dues as required under law;

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(e) The applicant bank shall file the latest memo of calculation of OA amount together with interest, costs etc., to be paid by the defendants duly considering the amounts, if any, paid by the defendant and/or amount realized by sale of assets etc., during the intervening period after the filing

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OA. No. 1078/2022

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of the OA, enabling the Registry to prepare Recovery Certificate for the

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amount to be paid by the respective defendants to the applicant bank.

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(f) The applicant bank shall file memo of costs within ten days from the

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date of this final order.

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(g) Recovery Certificate shall be drawn up and issued to the Recovery

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Officer in terms of the final order.

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(h) Interim Application pending if any, stands disposed of with this Final Order.

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10. A copy of this order be communicated to the parties concerned.

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[Dictated to the (CS), transcribed by her, corrected and signed by me on this the 19^th Day of April 2024].

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Sd/-

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PRESIDING OFFICER

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DRT-II, BENGALURU

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Smt. Suma Nadar W/o Sri. Pradeep Kumar, Senior Manager, of Applicant Bank.

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Exhibits on the part of the Applicant:

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Exhibit	Particulars of Documents	Date
Nos.
A1	Applicant Evidence
A2	List of Documents.
A3	Loan Application Form submitted by Defendant.	29.04.2015
A4	Composite Hypothecation Agreement executed by Defendant in favour of Applicant.	02.05.2015
A5	Loan Application Form submitted by Defendant.	02.06.2017

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OA. No. 1078/2022

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A6	Overdraft facility granted to me/ us executed by the Defendant in favour of Applicant.	02.06.2017
A7	Composite Hypothecation Agreement executed by the Defendant in favour of Applicant.	02.06.2017
A8	Demand Promissory Note executed by the Defendant in favour of Applicant.	02.06.2017
A9	Loan Sanction Letter	06.08.2019
A10	Overdraft facility granted to me/ us executed by the Defendant in favour of Applicant.	21.08.2019
A11	Composite Hypothecation Agreement executed by the Defendant in favour of Applicant.	21.08.2019
A12	Demand Promissory Note executed by the Defendant in favour of Applicant.	21.08.2019
A13	Sanction Letter of CFITL Loan	30.08.2020
A14	Legal Notice issued to Defendant.	26.05.2019
A15	Returned Postal Cover
A16	Statement of OCC Loan Account.
A17	Statement of CFITL Loan Account.

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Witness Examined for the Defendant: -Nil - List of Documents Exhibited for the Defendant: -Nil -

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SCHEDULE DESCRIPTION OF THE MOVABLE PROPERTY

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Hypothecation of Hotel Materials at Venugopal Swamy building

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Hosur Road, Electronic City Bangalore.

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Sd/-

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PRESIDING OFFICER

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DRT-II, BENGALURU

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OA. No. 1078/2022

Canara Bank v. Sri. N Suresh Shetty

Case brief

What is this about?

What did the court decide?

Canara Bank v. Sri. N Suresh Shetty

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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