Allowed

Canara Bank v. Sri. B. M. Prakash

DRT22 Jan 2024OA/146/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the bank's application for recovery of agricultural term loans, KCCS, and a vehicle loan against joint borrowers who defaulted. The defendants, who did not appear, were estopped from challenging the claims supported by documentary evidence. A final order directed the recovery of principal and interest along with a schedule of specific properties for sale.

What did the court decide?

Allowed the OA for recovery of Rs. 2,79,95,985/- including interest; authorized sale of schedule properties and personal assets to satisfy dues.

Canara Bank versus Sri. B. M. Prakash — Banking and Recovery | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 22^nd Day of January, 2024

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

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OA. No.146/2022

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BETWEEN:

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Canara Bank Branches at Hi-Tech Agricultural Finance Branch, ‘M’ Block, Unity Building, J.C.Road, Bangalore-560002 (Karnataka State) and is Represented by its Senior Manager Smt. K.Sai Sudha W/o P.Balaji,

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… APPLICANT

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AND:.

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1.Sri.B.M.Prakash S/o Munikrishnappa.B.M. Aged 53 years, Residing at No.1704, M.G.Road, Srinivasapura Town, Kolar District - 563135,

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Smt. T.S.Manorama W/o Sri. B.M.Prakash, Aged 40 years, Residing at No.1704, M.G.Road, Srinivasapura Town, Kolar District - 563135 ... DEFENDANTS

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Counsel on record/appeared for:

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Applicant : Sri. U.C Vasanthi Defendant No.1 & 2 : Exparte

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FINAL ORDER

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The present Original Application (OA) is filed on 03.07.2019 under section 19 of Recovery of Debts and Bankruptcy Act 1993 for recovery of

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OA. No. 146/2022

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a sum of Rs.2,79,95,985/- (Rupees two core seventy nine lakh ninety five thousand nine hundred and eighty five only) with further interest thereon from the date of filing the Application till realization from the Defendants.

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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.

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Brief facts of the case:

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Term Loan

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It is the case of the applicant bank where in the Defendant Nos.1 to 2 are borrowers had approached the Applicant Bank seeking for Farm Term Loan of Rs.2,55,00,000/- (Rupees two crore fifty five lakh only) an loan application dated 11.07.2016 for the purpose of Broiler parent Breeding. After considered the request of the Defendants the Applicant Bank sanctioned a Term Loan of Rs.2,55,00,000/- (Rupees two crore fifty five lakh only) vide sanction memorandum dated 12.11.2016 in Loan A/c No.2373796000041. The Defendants agreed to repay the said loan in 9 years including 12 months moratorium period in 95 monthly instalments of Rs.2.66 lakhs each and final instalment of Rs.2.30 lakhs, commencing September 2017 onwards together with interest @ 10.75% p.a. as the Bank may specify from time to time, and has also agreed to pay a penal interest @ 2% p.a. in the event of default in payment of any one installment or in regularizing the amounts as per the terms stipulated in the agreement.

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OA. No. 146/2022

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3.1. The defendants executed necessary loan documents in favour of the applicant bank as security for the due repayment of the loans, interest, cost and charges, and Defendants executed Memorandum of Agreement for Agricultural Loans dated 12.11.2016 and Particulars of Vehicles /Machinery /Equipment/Livestock etc. hypothecated dated 12.11.2016 and registered Simple Mortgage Deed dated 09.11.2016 which is registered as Doct.No.SVP-1-09297-2016-17, and Stored in CD No.SVPD119, in the Office of the Sub-Registrar, Srinivasapura in favor of the Applicant Bank.

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Kisan Credit Card Scheme (KCCS)

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Further, the Defendants approached the Applicant Bank seeking for Kisan Credit Card Scheme (KCCS) Loan of Rs.20,00,000/- (Rupees twenty lakh only) an loan application dated 16.05.2017 for the purpose of meeting cultivation expenses of crops and maintenance of diary animals, farm machineries and soil application. After considered the request of the Defendants the Applicant Bank sanctioned a Kisan Credit Card Scheme (KCCS) Loan of Rs.20,00,000/- (Rupees twenty lakh only) vide sanction memorandum dated 02.06.2017 Loan A/c No.2373895000013. The loan was agreeing amongst other conditions to repay the interest on the outstanding on the K.C.C.S. Facility @ 10.75% p.a., along with penal interest @ 2% p.a. for overdues.

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4.1. The defendants executed necessary loan documents in favour of the applicant bank as security for the due repayment of the loans, interest,

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OA. No. 146/2022

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cost and charges, and Defendants executed Agreement and Deed of Hypothecation for KCCS dated 02.06.2017 and Defendant No.1 executed Registered Simple Mortgage Deed dated 16.05.2017, which was registered as Doct.No.SVP-1-00392-2017-18, and Stored in CD No.SVPD123, in the Office of the Sub-Registrar, Srinivasapura in favour of the applicant bank. Canara Vehicle Loan

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Further, the 1^st Defendant approached the Applicant Bank seeking for Canara Vehicle Loan of Rs.21,00,000/- (Rupees twenty one lakh only) an loan application dated 21.09.2017 for the purpose of purchase purchasing New Four Wheeler ‘New Toyoto Crysta’ Vehicle for the purpose of agriculture. After considered the request of the 1^st Defendant the Applicant Bank sanctioned a Canara Vehicle Loan of Rs.21,00,000/(Rupees twenty one lakh only) vide sanction memorandum dated 21.09.2017. The loan was repayable in 84 equated monthly instalments of Rs.33,521/- each commencing from 21.10.2017 onwards together with interest @ 8.75% p.a. as the Bank may specify from time to time, and has also agreed to pay a penal interest @ 2% p.a. in the event of default in payment of any one installment or in regularizing the amounts as per the terms stipulated in the agreement.

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5.1. The defendants 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 Canmobile Loan Agreement dated 21.9.2017 and Letter of particulars of vehicles hypothecated dated

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OA. No. 146/2022

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22.09.2017 and Letter of Revival dated 13.12.2018 in favour of the applicant bank.

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The Applicant Bank submits that the Defendants, after availing the said facilities, failed to repay the loan amount and committed default. The loan account of the Defendants had been classified as a Non Performing Asset (NPA) on 24.01.2021 and the Applicant bank issue a Legal Notices dated 18.09.2021 calling upon the defendants to repay the entire outstanding loan amount. However, there was no positive response from the Defendants. Hence, this Original Application (OA) has been filed to recover the dues from the Defendants.

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After the filing of the OA, summons was sent to the Defendant Nos.1 & 2 through Registered Post with Acknowledgment Due the same is duly served on 30.06.2022. Therefore, service held sufficient. When OA was taken up on 10.11.2022 even after giving sufficient time, there was no appearance or representation from the Defendants; hence, Defendant Nos.1 & 2 was placed exparte on 10.11.2022.

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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, Sri. K.M. Prasanna Kumari

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W/o Ajay Kumar, Manager has filed Affidavit by way of evidence and same was considered as evidence of AW.1 and marked as Ex.A1, the list of Document came to be marked as Ex.A2 and documents came to be marked as Ex.A3 to A44. As the Defendants remained ex-parte, the OA

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OA. No. 146/2022

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claim remains unchallenged. There is no contra evidence available on

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record to repudiate the claim of the Applicant Bank.

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Having regard to the amount advanced, the interest applied, the

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conduct and operations in the account and the default committed, this

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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 Defendants to pay an amount of Rs.2,79,95,985/- (Rupees two core seventy nine lakh ninety five thousand nine hundred and eighty five only) consisting of:

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i. Term Loan liability of Rs.2,32,37,690/- (Rupees two core thirty two

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lakh thirty seven thousand six hundred and ninety only) together with interest @ 8.8% p.a. and penal interest @ 2% p.a. from 09.12.2021 till the date of payment of the debt in full in respect of Term Loan A/c No.2373796000041.

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Ii. KCCS Loan liability of Rs.30,02,472/- (Rupees thirty lakh two thousand four hundred and seventy two only) together with interest @

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OA. No. 146/2022

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9.65% p.a. and penal interest @ 2% p.a. from 09.12.2021 till the date of payment of the debt in full in respect of KCCS Loan A/c No.2373895000013.

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iii. Canara Vehicle Loan liability of Rs.17,55,823/- (Rupees seventeen lakh fifty five thousand eight hundred and twenty three only) together with interest @ 7.80% p.a. and penal interest @ 2% p.a. from 09.12.2021 till the date of payment of the debt in full in respect of Canara Vehicle Loan A/c No.2373636000001.

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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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(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 defendants (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 defendants and/or amount

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OA. No. 146/2022

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realized by sale of assets etc., during the intervening period after the filing

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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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11. 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 22^nd Day of January 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: Sri. K.M. Prasanna Kumari W/o Ajay Kumar, Manager of Applicant Bank.

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Exhibits on the part of the Applicant:

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Exhibit Nos.	Particulars of Documents	Date
A1	Applicant Evidence
A2	List of Documents.
A3	Application for Term Loan	11.07.216
A4	Memorandum of Agreement for Agricultural Loans	12.11.2016
A5	Particulars of vehicles/ Machinery/ Equipment/ Livestock, etc. hypothecated.

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OA. No. 146/2022

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A6	Link Letter to be obtained when disbursement is made on a subsequent day	17.11.2016
A7	Registered Simple Mortgage Deed which is registered as Doc.No.SVP-1-09297-201617, and Stored in CD No. SVPD119, in the office of the Sub-Registrar, Srinivasapura.	09.11.2016
A8	Govt. Grant Certificate No. LND.RUO(Y)151/1996/97, issued by Tahsildar, Srinivasapura taluk.	17.05.1997
A9	Mutation Extract issued by Tahasildar, Srinivasapura Taluk.	31.03.2012
A10	R.T.C. Extract for the period 2011-12.
A11	Tax paid Receipt	02.11.2016
A12	Encumbrance Certificate for the period 14.08.2012 to 18.01.2013
A13	Govt. Grant Certificate No.LND.RUO(K)151/1996-97, issued by Tahsildar, Srinivasapura Taluk.	24.03.1997
A14	Mutation Extract MR.35/2005-06, issued by Village Accountant, Srinivasapura Taluk.	07.10.2013
A15	R.T.C Extract for theperiod 2016-17.
A16	Taxpaid receipt	02.11.2016
A17	Encumbrance Certificate for the period 01.10.2005 to 09.03.2016
A18	Registered Sale Deed dated 05.07.2008 Registered as Doct. No. KLR-1-01371-2008-09, and Stored in CD No.KLRD43, Link the office of the Sub-Registrar, Kolar.	05.07.2008
A19	Registered Sale Deed dated 05.07.2008 Registered as Doct. No. KLR-1-06311-2011-12, and Stored in CD No.KLRD90, Link the office of the Sub-Registrar, Kolar.	03.03.2012
A20	Registered Release Deed Registered as Doct. No. KLR-1-00558-2012-13, and Stored in CD No.KLRD93, in the office of the Sub-Registrar, Kolar.	21.04.2012
A21	Mutation Extract MR.H15/2011-12, issued by Village Accountant, Srinivasapura taluk	06.11.2012
A22	R.T.C Extract for the period 2012-13
A23	Tax paid Receipt	24.10.2016
A24	Encumbrance Certificate for the period 01.04.2004 to 05.09.2012

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OA. No. 146/2022

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A25	Registered Sale Deed Registered as Doct. No. 682/92-93, Book-I, Vo.1361, Pg.164-166, in the office of the Sub-Registrar, Srinivasapura.	10.08.1992
A26	Registered Sale Deed Registered as Doct. No. SVP-1-01535- 2011-12 AND Stored in CD No.SVPD40, in the office of the Sub-Registrar, Srinivasapura.	17.08.2011
A27	Property Tax Challan for Rs.1992/-	24.10.2016
A28	Encumbrance Certificate for the period 01.04.2005 to 17.03.2014
A29	Building Licence issued by Chief Officer, Srinivasapura T.M.C.	27.03.2013
A30	Applciation by Defendant No.2 for KCCS Loan.	16.05.2017
A31	Registered Simple Mortgage Deed registered As Doct.NO.SVP-1-00392-2017-18, and Stored in CD No.SVPD123, in the Office of the Sub- Registrar, Srinivasapura.	16.05.2017
A32	Agreement and Deed of Hypothecation for Kisan Credit Card Scheme Facility.	02.06.2017
A33	Loan Application by Defendant No.1 for Canara Vehicle Loan.	21.09.2017
A34	Canmobile Loan Agreement
A35	Letter of particulars of vehicles hypothecated.
A36	Letter of Revival in respect of Term Loan	13.12.2018
A37	Letter of Revival in respect of KCCS Loan
A38	Letter of Revival in respect of Canara Vehicle Loan.
A39	Legal Notice	18.09.2021
A40	Acknowledgement by Defendant No.1
A41	Acknowledgement by Defendant No.2
A42	Statement of Accounts in respect of Term Loan A/c No. 2373796000041	09.12.2021
A43	Statement of Accounts in respect of KCCS Loan A/c No. 2373895000013	09.12.2021
A44	Statement of Accounts in respect of Canara Vehicle Loan A/c No. 2373636000001.

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

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OA. No. 146/2022

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SCHEDULE-A PROPERTY

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(Belonging to Sri.B.M.Prakash S/o Munikrishnappa..B.M).

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All that piece and parcel of land bearing Sy.No.84/P8, measuring 4 Acres 38 Guntas, Situated at Srinivasapura Rural Village, Kasaba Hobli, Srinivasapura Taluk, Kolar District, and bounded on the East: by Own land, West: by Property of Sri.Shivanna, North: by Property of Sri.Sathyanarayana and South: by Property of Sri.Narayanappa.

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SCHEDULE-B PROPERTY

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(Belonging to Sri.B.M.Prakash S/o Munikrishnappa..B.M).

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All that piece and parcel of land bearing Sy.No.84/P9, measuring 4 Acres 38 Guntas, Situated at Srinivasapura Rural Village, Kasaba Hobli, Srinivasapura Taluk, Kolar District, and bounded on the East: by Own land, West: by property of Sri.Shivanna, North: by own land and South: by Government Property.

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SCHEDULE-C PROPERTY

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(Belonging to Sri.B.M.Prakash S/o Munikrishnappa..B.M).

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All that piece and parcel of land bearing Sy.No.65, measuring 4 Acres, Situated at Dadireddyhalli Village, Holur Hobli, Kolar Taluk, Kolar District, and bounded on the East: by property of Arikeri Gadi, West: by Dadireddyhalli Road, North: by land of Sri.S.Rajendra and South: by Jadery Road.

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SCHEDULE-D PROPERTY

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(Belonging to Smt.T.S.Manorama W/o Sri.B.M.Prakash).

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All that piece and parcel of Site and House property bearing Old Municipal No.385, and present Municipal AR No.597 measuring East to West: 65 feet, and North to South: 27 feet, Situated at Ward No.18, Pattabi Road, Srinivasapur Town, Kolar District, and bounded on the East: by Pattabi Road, West: by Conservancy lane, North: by Vasavi Choultry and South: by House property of Sri.Pandurangaiah Shetty.

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Sd/DRT-II, BENGALURU

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PRESIDING OFFICER

Canara Bank v. Sri. B. M. Prakash

Case brief

What is this about?

What did the court decide?

Canara Bank v. Sri. B. M. Prakash

Case brief

What is this about?

What did the court decide?

What the court decided

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