Allowed

State Bank of India v. Era Educational Society

DRT29 Jul 2024OA/131/2022

Case brief

AI extract

What is this about?

Applicant Bank sought recovery of Rs. 24.10 Crores under OA.No.131/2022 along with interest and sale of secured assets. Tribunal allowed application and ordered defendants to pay dues, with specific amounts detailed for various loan accounts.

What did the court decide?

To pay Rs. 24,10,63,239.59 along with interests @ 8.15% or 7.40% p.a. as detailed for different loan accounts, proceed against properties, make status quo order absolute, and issue recovery certificat

State Bank of India versus Era Educational Society — Banking and Recovery | DRT (2024)

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IN THE DEBTS RECOVFI], 'TRIBUNAL-I AT HYDERABAD

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DATED THrS l Ftt ::9^11' DAY OF JULY, 2024

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

OA.No.131 of 2022

Between :

-.:it!

State Bank of India, Stressed Assets Recovery^Branch, 1't floor, TSRTC Bus Station, Kachiguda, Hyderabad 500 027.

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Represented by its Asst. Gen Manager

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Applicant

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VERSUS

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ERA Educational SocietY, Represented by its SecretarY Sri Ajay Kumar Reddy,^1-16C, Bellary road, RachanaPalli, Ananthapur, A.P - 515 004.

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2, Sri K. Arun Kumar^ReddY, R/o 1-16C, BellarY road, Rachanapalli, Ananthapur, A.P - 515 004'

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SmtKanamPalliSusheela, H. No.1- 16C, Bellary road, RachanaPalli, Ananthapur, A.P - 515^004.

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SmtRamreddyRenukaDevi, H.No.2-9-303, Snehanagar, NGOs colony road, WaddePallY, Telangana - 506 370.

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2 I JUL ztlt

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Sri KanamPalli^{NarendraReddY,} R/o 1-16C, BellarY road, Rachanapalli, Ananthapur, A.P - 515 004.

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(OA.131 of 2022)

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6.	Sri ChinnagireddyNagabhushana Reddy,S/oC.SankaraReddy, R/o 6-4-110-2,3'dcross, lYaruthinagar, Ananthapur-515001.
7.	Sri GundaSrihari, s/oSriG.Lakshamanna, R/o 1-1132-18-G2, Adapaalaveedhi,Kadiri, Ananthapur-515591.
B.	SriRasiReddy LokanathaReddy, s/oR. KesavaReddy,Rlo2-7 Isurallapalli(V),Jakkalacheruvu Post,Goothymandal, Ananthapur-515 401.
9.	SmtAkuletiSreeku mari, w/o A.MadhusudhanReddy, R/o 1-156a,kandlapalli, Pamidi,Ananthapurdist-515775.
10.	SriUrachinta laSreenivasulu, s/oC. Pakkerappa,R/o 1-2-376, santhinagar, Ananthapur- 515004..... Defendants
Co	unselfor theParties:
For	theApplicant SriM.V.JanakiRam
For	theDefendants Sri ORDER :zsJULmr^* 'rJ .'.. ^.j Ti.*l- S^"'
1,	TheApplicant Bankfiledthe^present for recoveryofatotalsumofRs.24,10,63,239. Twenty ,. ..,,
	FourCroresTenLakhsSixtyThreethousandTwohundred
	thirtynineand^paisefiftynineonly)i.e,

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(OA.131 of 2022 )

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a) A sum of Rs.18,22,41,477.60ps under term loan account^with further interest @ 8.15o/o^p.a with monthly rests from date of^filing of OA till the date of realization;

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b) A sum of Rs.3,37,24,447.54ps under GECL account^{with further} interest @ 7.40o/o^p.a with monthly^{rests from date of filingof OA} till the date oF realization;

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c) A sum of Rs.87,40,BBB.48ps under^{WCTL account with further} interest @ 8.15olo^p.a with^{monthly rests from date of filing of OA} till the date of realization;

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d) A sum of Rs.71,01,971.89ps^{under FITL accountwith further} Interest @ 8.15olo^p.a with^{monthly rests from date of filing of OA} till the date of realization;

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e) A sum of Rs.92,54,454.08ps^{underFITL accountwith further} interest @ 8.15o/o^p.a with^{monthly rests from date of filing of OA} till the date of realization;

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and in default for sale of^{mortqaged propertiesand hypothecated} movables as described in the schedule^{to OA.}

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As per the averments in the^{application, defendant}

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No.1is a registered Educationa.!--s9-c,iely^{in the nameand style of "Era} ' " -f-;" Educational Society". VfC #€n:{ant^{no.5. is the President,the} .1'4:' ri':!;' defendant no.2 is S"##ry,^{defg-Ildant no.7} \s^{Joint Secretaryof} defenda nt no' I societil' --rne &€rdllla^{rfiffho' :'+;p' B' 9' 1 0 a lon g with} ..^j.' 1, ; ^i defendants No.2,5 and'y^{(a. j} .foelguarantors !6'(RE,+oan^{transaction.The} \i.4r'h, uve'Alk':,i^ ^-^ -^^ ..i, ^,^!L^- ^r defendant no.1 availed tbK$.q{if;19}7'50 @i^{crores vide letter of}

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(oA.131 of 2022)

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arrangement dated 16.10.2018. To secure due repayment of aforesaid loan facilities, defendant no.1 executed agreement of loan for overall limit and agreement of hypothecation of goods and assets dated 20.10.2018. Defendants 3 to 10^jointly executed deed of guarantee guaranteeing due repayment of loan amount. Defendants 1 to 4 created equitable mortgage over their properties on 20.10.2018 by way of deposit of title deeds in respect of OA schedule property-1,2 and 3. Subsequently the Term loan of Rs.17.50 Crores was renewed to Rs.1805.02 lakhs, car loan of Rs.31.18 lakhs and GECL to 350 lakhs totaling to Rs.2186.20 lakhs through^{letter of} arrangement dated L3.07 .2020. Defendants^No.1 to^{10 jointly} executed deed of^guarantee dated 13.07.2020^{guaranteeingdue} repayment. The applicant bank renewed/ restructured and sanctioned the credit facilities as below:

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IS^No	Irvp"^{of facility}	]^{ns(in tarhsl}
1	iTermloan
2		80,00
	FITL-1	6s.00
	FITL-2
	GECL
	SMEcarloan
	Total	za?6.29___

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To secure due repayment of^v the defendant no.l- created equitable mo on 29 .03.202t and defendants 1 to 4 .//:ffied the over respective il^* 2 I^{JUL 202{} properties. ti,-< \rs :.",

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(OA.131 of 2022 )

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It is submitted by the^{Applicantbank that the Defendants} have availed the said loan^{facility and failed to keep up the} repayment schedule, as^such the^{account was classified as NPA and} issued leqal notice dated 18.04.2022.^{Inspite of demands made by} Applicant the defendants^{have not regularized the account, and the} applicant bank issued^{notices but the defendantsdid not come} forward to repay the^{same. The total claim of Applicant against} defendants is Rs.24,1O,63,239.59ps^{(Rupees TwentyFour} Crores Ten Lakhs^{SixtyThree thousandTwo hundredthirty} nine and^paise fifty^{nine only) i.e, a sum of Rs'18,22,41,477'60ps} a sum of for term loan with^interest @^{B. 15% p'a;}

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Rs.3,37,24,447.54ps^{for GECL loan with interest @ 7'4Oo/oP'a)} Rs.B7,40,BB8.4Bps^{for WCTLloan with interest @ B'15o/o p'a; a sum} of Rs.71,01,971.89ps^{underFITL-1 with interest@ B'f5% p'a and a} sum of Rs.92,54,454,08ps^{underFITL-2 with interest @ B'15%} from date of application^{till date of} p.awith monthlY rests realization.^{Hence the OA.}

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The Defendants^{filed Written statement denying the avermentsmade} intheoA.Itissubmittedthatdefendantsno.3tol0hadzerostake t no.2 admitted the^loan holding in the^{above OA.} half of defendant^no.1 outstanding of^{Rs. 17,50,} society. It^{is contend} ,{frot tnu licant obtained^{sig n atu res} later forged^bY of defendants^{on bl} I oo&$,J{lL^{lffi{i.h *.} ,, : -{

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(OA.131 of 2022 )

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Applicant bank. It is further contended that^{the applicantbank} never followed the^procedure as^{contemplated in the provisions of} SARFAESI Act, 2002. Hence^{prayed for dismissalof OA.}

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During the course of^{trial, on behalf of the Applicant Bank Sri G'} DurgaPrasad, Chief Manager^{is examinedas AW.1 and throughhim} marked 26 documents as^{Ex'A.L to A.58' Sri K. Arun Kumar Reddy,} Secretary of defendant^{No'2,on behalf of defendantsD'1 to l0} examined himself^{as DW.1 and filed Exhibit B'1'}

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Heard the arguments.

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Now, the Points^{that arise for consideration are:}

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i) Whether the Appllcant^{Bank has proved its claim as madein} OA against the defendants^? ii) To what relief ?

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Point No.i):

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6.ASperthematerialplacedbytheApplicantbankitisclearthat defendants availed^{Term loan of Rs' 17'50Crores was renewed to} lakhs and GECL to³⁵⁰ Rs.1805.02 lakhs, the hypothecation^of lakhs totaling^to w materials,^stores, entire current inclydi4g *flfot : {sets receivables of the^{companyand alpo3g} rtgaged the schedule

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(oA.131 of 2022)

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mentioned immovable properties. The said loan facility was extended from time to time and the defendants executed all necessary security documents with the Applicant Bank. It is clear that the defendants failed to make repayments and subsequently the Applicant bank classified the account as NPA and initiated SARFESI^proceedings demanding the^defendants to liquidate the outstanding liability in the said loan account Moreover, a^perusal of the documents filed by the^{Applicant bank} makes clear that all the relevant documents are^{executed by the} defendants in the normal course of transaction.^{As per the} statement of accounts, the defendants are^liable to^{pay the OA} claim. Considering all the circumstances, I^am of^{opinion that} the defense taken by the defendants^{is not tenable.Hence the} applicant bank is entitled to^claim the^{OA amountfrom} defendants. Therefore, the^{OA claim deserves to be allowed} against the defendants.

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Point No.ii)

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In the result, the Present^Origi as under:

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The Defendants No.1 to 10 are

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h costs
? g JUL zMI
\'.i''
to pay

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Applicant Bank a total Rs.24, 10,63,239.59ps^{(Rupees Twenty}

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(OA.131 of 2022)

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Four Crores Ten Lakhs Sixty Three thousand Two hundred thirty nine and paise fifty nine only) i.e,

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a) A sum of Rs.18,22,41,477.60ps under term loan account wlth further interest @ 8.15o/o p.afrom date of filing of OA till the date of realization;

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b) A sum of Rs.3,37,24,447.54ps under GECL account with further interest @ 7.40o/o^p.afrom date of filing of OA till the date of realization;

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c) A sum of Rs.B7,40,BBB.48ps under WCTL account^{with further} interest @ 8.15%^p. s from date of filing of OA till the^{date of} realization;

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d) A sum of Rs.71,01,971.89ps under^{FITL accountwith further} interest @ 8.15olo^p.a from date of filing of^{OA till the date of} realization;

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e) A sum of Rs.92,54,454.08ps under^{FITL accountwith further} interest @ 8.15olo^p.a from date of^{filing of OA till the date of} realization;

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The applicant bank is entit against the mortgaged properties and hypoth in schedule to OA.

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(OA.131 of 2022 )

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The Applicant Bank is also entitled to^proceed against the^person and properties of defendants No.2 to 10 and^properties of defendant no.1 firm towards realization of the debt due.

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The status quo order in IA.No.365/2023 and 366/2023 dated 28.02.2023 in respect of Petition schedule^properties is^made a bsolute.

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t2. The Applicant Bank is entitled^{to the costs of the OA.}

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The Applicant shall file a^{cost memowithin two weeksfrom the} date of receiPt of order.

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t4. issue Recovery certificate accordingly.

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Communicate a copy^{of the order to the parties concerned'}

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(Dictated to the P.A., transcribed^{by her, correctcd,} signed and^{pronounccd by mc ln theopcn} court on this the^{29th day} ot^{)uly, 2024)}

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sd/_

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.z -. '. (G. GOPICHAND)
A' a: " '-!,- !-.".- PRESIDING OFFICER
Ej+ <br>i' 4- ,.:'
L- ..; ;- ' v<br>: zsrut zmt :

State Bank of India v. Era Educational Society

Case brief

What is this about?

What did the court decide?

State Bank of India v. Era Educational Society

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

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