Allowed

Karur Vysya Bank v. Karthick

DRT7 Feb 2024OA/130/2022

Case brief

AI extract

What is this about?

In OA No. 130 of 2022, the Tribunal allowed the applicant bank’s claim for a recovery certificate of Rs. 40,23,344.24 plus pendentelite and future interest at 9% p.a. against the borrower and the collateral management company, finding the bank’s evidence un-rebutted and the claim within limitation.

What did the court decide?

Recovery Certificate issued for Rs. 40,23,344.24 plus future and pendentelite interest at 9% p.a. (simple) with cost of proceedings.

Karur Vysya Bank versus Karthick — Insolvency and Bankruptcy | DRT (2024)

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IN THE DEBT RECOVERY TRIBUNAL –II CHENNAI Dated this 7^th day of February, 2024

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PRESENT: SHRI T. RAJESH PRESIDING OFFICER

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O.A.No. 130 of 2022

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Karur Vysya Bank New NO. 114, Thatchur Road, Kosapalayam, Arni – 632 301

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…Applicant

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Vs.

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Mr. V. S. Karthick S/o. Mr. V. Subramani No.2/95, Palla Street, Pungambadi, Arni – 632 001 PAN No: DXDPK6272F

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National Collateral Management Services Ltd. Unit Nos: 505 to 509, 5^th Floor, Lodha Supremus, Off JVLR, Opp. Kanjumarg Station Kanjurmarg (East), Mumbai – 400 042 …Defendants Counsel for Applicant : M/s. S. L. Rajesh Defendants : Exparte

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...

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ORDER

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The Application is filed Under Section 19(1) of the Recovery of DebtsAnd Bankruptcy Act, 1993 seeking for issuance of a Recovery Certificate for Rs.40,23,344.24Pdue in respectof Ware House

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ReceiptLoan for Working Capital Requirements availed by the 1^st defendant along with future interests and costs.

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The Applicant Bank contends that atotal credit facility of Rs. Rs.18,90,000/- under Warehouse Receipt Loan for Working Capital Requirementswas availed by the 1^st defendant. The 2^nd defendant had in pursuant to service agreement for providing collateral Management service for Warehouses , had agreed that they will be responsible for the commodities stored in subject to natural loss.

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It is also stated that the above facilities were availed by the 1^st Defendant after execution of necessary loan documents obliging himself to repay the amount promptly and regularly, without fail.

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The Applicant Bank further contends that despite availing the credit facility by obliging to pay back the amount, the defendants failed in compliance of the same and all the efforts of the Applicant Bank to make the defendants pay back the amount failed forcing the Applicant Bank to file this Application. It is also stated that the 2^nd defendant being the custodian of goods failed in compliance of the Agreement and had issued warehouse receipts without verification leading to failure in preservation of the stocks pledged with the Applicant Bank and is therefore liable.

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Summons was taken out and as the defendants failed to enter appearance,leading this Tribunal to proceed further after setting them exparte on 22.12.2022.

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The Applicant Bank let in evidence through AW1, filed proof affidavit

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in confirmation with the pleadings and got marked Exhs. A1 to A9.

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Heard.The following issues arise for consideration:

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i. Whether the Applicant Bank had proved the OA claim?

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ii. What orders are to be passed?

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Both these issues are decided together.

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The Applicant Bank’s evidence remains un-rebutted and hence proved. The documents produced by the Applicant Bank are found to be admissible and are sufficient to prove the OA claim. Hence the Applicant Bank is found to be entitled for the OA claim. The OA claim is made within limitation and there is no capitalization of penal interest.The 2^nd defendant by virtue of the collateral management agreement cannot escape from the liability.Since OA claim is arrived at by calculating interest at agreed rate, the pendentelite and future interest is awarded at 9% p.a. (simple).

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In view of the above:

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i. OA. No: 130of 2022stands allowed.

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ii. Applicant Bank is permitted to recover an amount of Rs.40,23,344.24P (Rupees Forty Lakhs Twenty Three Thousand Three Hundred Forty Four and Twenty Four Paisa Only/-)with future and pendentelite interest @ 9%p.a. (simple)

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from the date of filing of the OA till realization from the defendants and their assets after giving credit to all the amount recovered and received during the pendency of the OA.

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iii. It is made clear that the 1^st defendant is personally liable for all such amounts due in the Loan accounts.

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iv. A Recovery Certificate is to be drawn and issued to the recovery Officer to enable recovery of the amounts as per the above terms.

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v. Applicant Bankis allowed to realize cost of the proceeding 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

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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 PA-2, transcribed by him, corrected, signed and pronounced by me in the Open Court, this 7^th day of February, 2024)

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

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Karur Vysya Bank v. Karthick

Case brief

What is this about?

What did the court decide?

Karur Vysya Bank v. Karthick

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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