Allowed

Canara Bank v. M/S. Ahswa Batteries Industry

DRT31 Jan 2024OA/1523/2022

Case brief

AI extract

What is this about?

The Tribunal heard an Original Application filed by Canara Bank to recover dues totaling Rs. 35,48,095.00 along with interest. The respondents appeared exparte. Finding the claim unchallenged and supported by documentary evidence, the Tribunal allowed the application.

What did the court decide?

Recovery of Rs. 35,48,095.00 plus interest and costs; liberty to sell schedule properties and personal assets if necessary; issuance of Recovery Certificate.

Canara Bank versus M/S. Ahswa Batteries Industry — 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 31^st Day of January, 2024

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Present: SMT. S. V. GOWRAMMA

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Hon`ble Presiding Officer

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OA. No.1523/2022

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BETWEEN:

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CANARA BANK, its Registered Head Office at # 112, J.C. Road, Bangalore -560002 and interalia it’s Branch Office at Dabaspete Branch, Dabaspete, Bangalore Rural District – 562111 Rep. by its Senior Manager Sri. Pavan Kumar G.A.

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...Applicant

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AND

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M/s. Ahswa Batteries Industry At, No-2, Indira Nagar, Hanumathapura, Billanakote Post, Sompura Hobli,

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Nelamangala Taluk-562111,

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Bangalore Rural District.

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Sri. Sridhara. Y, S/o Yallappa, By its Prop: M/s.Ahswa Batteries Industry. Aged about 34 years, Residing at, Hanumanthapura Village, Billanakote Post, Sompura Hobli,

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Nelamangala Taluk-562111, Bangalore Rural District. 3. Smt. Rudranamma W/o Yallappa,

OA. 1523/2022

Aged about 53 years,

Residing at, Hanumanthapura Village, Billanakote Post, Sompura Hobli, Nelamangala Taluk-562111,

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Bangalore Rural District. … Defendants

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Counsel on record/appeared for: Applicant : Mr. Mohamed Afroze Ahmaed Defendants : Exparte

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:FINAL ORDER:

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The Original Application (OA) is filed on 14.09.2022 by Applicant Bank under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993, against the defendant to recover a sum Rs.35,48,095.00 (Rupees Thirty Five Lakhs Forty Eight Thousand and Ninety Five Only) with further interest thereon from the date of filing the Application till realization from the defendants.

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BRIEF FACTS OF THE CASE :

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The Applicant submits that the application is filed within the period of limitation as prescribed under Section 24 of the Recovery of Debt Due to Banks and Bankruptcy Act 1993, and the subject recovery claim falls within the jurisdiction of this Hon’ble Tribunal.

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The case of the Applicant Bank is that the 1^st and 2^nd Defendant availed a OD MSME Loan of Rs.12,00,000.00 (Twelve Lakhs Only) on 28.02.2015 and the same is repayable along with interest at

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OA. 1523/2022

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the rate of 10.90% p.a , plus overdue interest 2%. The same Loan has been Renewed on 24.02.2016. and again the loan has been renewed and enhanced to the limit of Rs.12,50,000.00 on 24.06.2016 and again the Loan has been enhanced and renewed to the limit of Rs.12,75,000.00 on 01.10.2016, and again the Loan has been renewed and enhanced to the limit of Rs.13,50,000.00 on 05.07.2017. 4. The 1^st and 2^nd Defendants borrowed a Term Loan-I of Rs.8,50,000.00 on 26.05.2015 for the purpose of Purchase of New Machinery & Equipments and the same is repayable in 84 monthly installments of Rs.10,120.00 along with interest at the rate of 9.35%p.a , plus overdue interest, and also the 1^st and 2^nd Defendants borrowed a Term Loan-II of Rs.7,28,000.00 on 03.11.2016 for the purpose of Purchase of New Machinery & Equipments and the same is repayable in 84 monthly installments of Rs.8,700.00 along with interest at the rate of 13.20%p.a., plus overdue interest, and also the 2^nd Defendant borrowed a Vehicle Loan of Rs.2,55,000.00 on 03.11.2016 for the purpose of for the purpose of Purchase of Car (Maruthi Suzuki India Ltd.,) on 21.06.2017, which is Registered. before the RTO, Tumakuru, vide bearing Regn.No.KA-52-M-7411, agreeing to repay the same in EMI of Rs.6,541.00, along with interest at the rate of 9.35% p.a plus overdue interest, In total Aggregate the

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OA. 1523/2022

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Defendant borrowed a sum of Rs.31,83,000.00 and executed all the Loan Documents in favour of the Applicants Bank.

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The Cash Credit Agreement executed by 1^st and 2^nd defendants dated 28.02.2015 is produced herewith as Annexure A-1. NF-482, Certificate of Loan Papers Obtained dated 28.02.2015 is herewith produced as Annexure A-2. Request for Overdraft Facilities dated 28.02.2015 executed by the 1^st and 2^nd Defendant is herewith produced as Annexure A-3. Guarantee Covering Letter dated 28.02.2015 executed by the 3^rd Defendant is herewith produced as Annexure A-4. Guarantee Agreement dated 28.02.2015 executed by the 3^rd Defendant is herewith produced as Annexure A-5. Sanction Memorandum for Renewed Loan dated 24.02.2016 is herewith produced as Annexure A-6. NF-482, Certificate of Loan Papers Obtained dated 24.02.2016 is herewith produced as Annexure A-7. Letter of Renewal executed by 1^st and 2^nd Defendant dated 24.02.2016 is herewith produced as Annexure A-8. Supplemental Agreement executed by 2^nd Defendant dated 24.06.2016 is herewith produced as Annexure A-9. Letter of Renewal executed by 1^st and 2^nd Defendant dated 24.06.2016 is herewith produced as Annexure A-10. Sanction Memorandum dated 01.10.2016 is herewith produced as Annexure A- 11. On Demand Pronote of Rs.12,75,000.00 dated 01.10.2016 is herewith produced as Annexure A-12. Letter of Renewal executed by

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OA. 1523/2022

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1^st and 2^nd Defendant dated 01.10.2016 is herewith produced as Annexure A-13. Supplemental Agreement executed by 1^st and 2^nd Defendant dated 01.10.2016 is herewith produced as Annexure A-14. The Loan Application for Renewed Loan dated 05.07.2017 executed by the Defendants is herewith produced as Annexure A-15. Sanction Memorandum dated 05.07.2017 is herewith produced as Annexure A- 16. Letter of Renewal executed by 1^st and 2^nd Defendant dated 05.07.2017 is herewith produced as Annexure A-17. Supplemental Agreement executed by 1^st and 2^nd Defendant dated 05.07.2017 is herewith produced as Annexure A-18. Letter of Revival dated 24.06.2016 executed by the 1^st and 2^nd Defendant is herewith produced as Annexure A-19. Letter of Revival dated 26.07.2018 executed by the 1^st and 2^nd Defendant is herewith produced as Annexure A-20. Letter of Revival dated 19.04.2021 executed by the 2^nd Defendant is herewith produced as Annexure A-21.

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The Loan Application for Term Loan-I dated 27.04.2015 executed by the 1^st and 2^nd Defendants is herewith produced as Annexure A-22. Sanction Memorandum dated 14.05.2015 is herewith produced as Annexure A-23. Deed of Hypothecation executed by 2^nd Defendant dated 26.05.2015 is herewith produced as Annexure A-24. Particulars of Hypothecation dated 26.05.2015 is herewith produced as Annexure A-25. Letter of undertaking executed by the 1^st and 2^nd

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OA. 1523/2022

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Defendants dated 26.05.2015 is herewith produced as Annexure A-26. NF-482, Certificate of Loan Papers Obtained dated 26.05.2015 is herewith produced as Annexure-27.

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The 3^rd Defendant executed a Supplemental Memorandum

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of Deposit of Title Deeds of her immovable property in respect to property, bearing Khaneshumari No.67/136/1, measuring East-West38Ft, North-South-75Ft, Situated at, Hosahalli Village, Billanakote Post, Sompura Hobli, Kuluvanahalli Village, Nelamangala Taluk, Bangalore Rural District, under Vide Regn.No.NMG-1-01654/2015- 16, Vide C.D. No. NMGD334 dated 20.05.2015. The Registered Mortgage Deed dated 20.05.2015 is herewith produced as Annexure A-28. Possession Notice dated 04.01.2022 is herewith produced as Annexure A-29. Particulars of Assets Standing in the Name of the borrower dated 27.04.2015 is herewith produced as Annexure A-30. Letter of Revival dated 20.02.2018 executed by the 2^nd Defendant is herewith produced as Annexure A-31. Letter of Revival dated 26.01.2019 executed by the 2^nd Defendant is herewith produced as Annexure A- 32. Letter of Revival dated 18.02.2021 executed by the 2^nd Defendant is herewith produced as Annexure A-33. Demand Notice issued by the 1^st Defendant dated 27.12.2018 is herewith produced as Annexure A- 34.

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OA. 1523/2022

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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 various loan documents in respect of loans 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 was classified as NPA on 12.12.2018. The default in repayment continued and 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 filing of this OA, summons sent to the Defendants by Registered Post with Acknowledgment Due, which is duly served on all the defendants and the service of summons was completed as per Regulation. Thereafter when the OA came up for hearing on 26.07.2023, even after giving sufficient time, there was no appearance or representation from the defendants. Hence, the defendants placed exparte on 26.07.2023.

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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, Mr. Amruthaa. S, W/o Arjunraj, Senior Manager, has filed his Affidavit by way of

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OA. 1523/2022

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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 A52. As the defendants 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 defendants sum of Rs.35,48,095.00 (Rupees Thirty Five Lakhs Forty Eight Thousand and Ninety Five Only) with current and future interest at 10.90% p.a towards OD MSME Loan and 11.45%p.a., towards Term Loan-I and 13.20%p.a. towards Term Loan-II and 9.35% towards Vehicle Loan, compounded yearly from 02.07.2022 towards OD MSME Loan, from 27.06.2022 Towards Term Loan, from 04.07.2022 towards Farm Machinery Loan, and from 22.07.2022 towards Canara Vehicle Loan, till realization.

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OA. 1523/2022

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(b) In the event of failure of the defendants 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 mortgaged/hypothecated 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) 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 realized by sale of assets etc., during the intervening period after the filing of the OA, enabling the Registry to prepare Recovery Certificate for the amount to be paid by defendants to the applicant bank.

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(f) The applicant bank shall file memo of costs within ten days from the date of this final order.

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(g) Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of the final order.

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OA. 1523/2022

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

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[Dictated to the (PR), transcribed by her, corrected and signed by me on this the 31^st of January, of 2024]

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Sd/-

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(S.V. GOWRAMMA) PRESIDING OFFICER DRT-II, BENGALURU

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Mrs. Amruthaa.S, Senior Manager Officer of the applicant bank

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Exhibits on the part of the Applicant:

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Annexure	Particulars	Date
A1	Applicant Evidence
A2	List of Documents
A3	The Cash Credit Agreement	28.02.2015
A4	NF-482, Certificate of Loan Papers Obtained	28.02.2015
A5	Request for Overdraft Facilities	28.02.2015
A6	Guarantee Covering Letter	28.02.2015
A7	Guarantee Agreement	28.02.2015
A8	Sanction Memorandum for Renewed Loan	24.02.2016
A9	NF-482, Certificate of Loan Papers	24.02.2016
A10	Letter of Renewal	24.02.2016
A11	Supplemental Agreement	24.06.2016
A12	Letter of Renewal	24.06.2016
A13	Sanction Memorandum	01.10.2016
A14	On Demand Pronote of Rs.12,75,000.00	01.10.2016

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OA. 1523/2022

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A15	Letter of Renewal	01.10.2016
A16	Supplemental Agreement	01.10.2016
A17	The Loan Application for Renewed Loan	05.07.2017
A18	Sanction Memorandum	05.07.2017
A19	Letter of Renewal	05.07.2017
A20	Supplemental Agreement	05.07.2017
A21	Letter of Revival	24.06.2016
A22	Letter of Revival	26.07.2018
A23	Letter of Revival	19.04.2021
A24	The Loan Application for Term Loan-I	27.04.2015
A25	Sanction Memorandum	14.05.2015
A26	Deed of Hypothecation	26.05.2015
A27	Particulars of Hypothecation	26.05.2015
A28	Letter of undertaking	26.05.2015
A29	NF-482, Certificate of Loan Papers	26.05.2015
A30	The Registered Mortgage Deed	20.05.2015
A31	Possession Notice	04.01.2022
A32	Particulars of Assets	27.04.2015
A33	Letter of Revival	20.02.2018
A34	Letter of Revival	26.01.2019
A35	Letter of Revival	18.02.2021
A36	Demand Notice	27.12.2018
A37	Sanction Memorandum	03.11.2016
A38	Deed of Hypothecation	03.11.2016
A39	Letter of undertaking	03.11.2016

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OA. 1523/2022

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A40	NF-482, Certificate of Loan Papers	03.11.2016
A41	Demand Notice	27.12.2018
A42	Canmobile Loan Agreement	21.06.2017
A43	Copy of B-Register Extract of Vehicle
A44	Notice to Guarantor	01.01.2019
A45	Notice under section 13(4) of the SARFAESI Act,
A46	Letter of Revival	09.10.2019
A47	The Copy of the PAN Card of the 2^ndDefendant
A48	Demand Notice issued by the 2^ndDefendant	27.12.2018
A49	Statement of Account in OD MSME Loan- A/No.3285256000018
A50	Statement of Account in Term Loan-I A/No.3285768000141
A51	Statement of Account in Term Loan- II A/No.328566000014
A52	Statement of Account in Vehicle Loan- A/No.3285603000147

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Witness Examined for the Defendants:

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-Nil -

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List of Documents Exhibited for the Defendants: -Nil -

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S C H E D U L E ‘A’

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Hypothecation of vehicle which has been already sold

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bearing Regn.No.KA-52-M-7411 , purchased out of Bank Funds.

OA. 1523/2022

SCHEDULE ‘B’

The 3^rd Defendant is the owner of the Property.

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All that piece and parcel of the Site Property situated at Hosahalli, Billinakote Post, Sompura Hobli, Kuluvanahalli Village Panchayath, Nelamangala Taluk, Bangalore Rural District, bearing Khaneshumari No. 67/136/1 measuring East-West : 38Ft, North-South: 75 Ft. bounded by:

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East by : Passage, West by : Property of Rajanna, North by : Property of Rudrappa South by : Road and House of Puttana.

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Sd/(S.V. GOWRAMMA) PRESIDING OFFICER DRT-II, BENGALURU

Canara Bank v. M/S. Ahswa Batteries Industry

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/S. Ahswa Batteries Industry

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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