Allowed

Canara Bank v. Abdul Haneez

DRT21 Feb 2024OA/193/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the bank's application for recovery of dues. The bank proved three term loans now NPA. The defendants failed to appear or adduce evidence. The Tribunal directed joint and several recovery of principal and interest.

What did the court decide?

Recovery of Rs.43,43,631.00 from respondents jointly and severally with interest at 12.35% p.a. from date of application till realization.

Canara Bank versus Abdul Haneez — Banking and Recovery | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 21^st Day of February, 2024

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

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OA. No.193/2022

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BETWEEN:

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CANARA BANK Kundapura Branch, At Kundapura Town, Udupi District – 576 201, Represented by it’s Manager, Sri. Ganesha

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… APPLICANT

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AND:.

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Sri. Abdul Haneez, S/o. Sri. Kalandar, Proprietor of M/s. A to Z Shamiyana, Having his place of business near Railway Bridge, Ammunje, Uppor Village, Kundapura, Udupi District.

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And residing at : House No.3-54, Sanjay Gandhi Road, Hangalur, Kundapura.

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Sri. Saifullah, S/o. Abdul Rahiman, Residing at No.1-27, Janata Colony, Karamballi, Kunjibettu Post, Udupi, Udupi District,

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And also residing at : Mudanidamburu, Near Abhinandan Petrol Bunk, Ambalpady, Udupi. ...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : Sri. V. Haridas Bhat Defendant No.1 : Sri. M. Devaiah Defendant No.2 : Sri. B.R. Raghavendra FINAL ORDER

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The present Original Application (OA) is filed on 20.01.2022 under section 19 of Recovery of Debts Due to Banks and Bankruptcy Act 1993 for recovery of a sum of Rs.43,43,631.00 (Rupees Forty Three Lakhs Forty Three Thousand Six Hundred and Thirty One Only) with further interest thereon from the date of filing the Application till realization from the Defendants.

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OA. No. 193/2022

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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-I

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It is the case of the applicant bank where in the 1^st defendant is the Borrower and 2^nd defendant is the Co-borrower. During the month of January 2018, the Defendants had approached the applicant bank seeking for Term Loan of Rs.20,00,000/- (Rupees twenty lakh only) an Loan Application dated 22.01.2018 for the purpose of purchase of shamiyana, chairs, tables, pipes, fans etc. for his business. After, considering the request of the Defendants favorably, the applicant bank sanctioned a Term Loan of Rs.20,00,000/(Rupees twenty lakh only) vide Sanction Letter dated 30.01.2018. The defendants agreed to repay the said loan of Rs.20,00,000/- in 84 monthly installments of Rs.34,561/-, commencing from 28.02.2018. The defendants agreed to pay interest on the said loan amount at the rate of 11.50% p.a. compounded monthly. The interest payable by the defendants was subject to changes in the interest rates made by the Bank from time to time. The defendants agreed to pay overdue interest at 2% p.a. above the rate of interest charged on the loan in the event of their default in payment of any one installment or in regularizing or in clearing the account as per the agreed terms.

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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 Letter of Undertaking dated 30.01.2018 & 23.10.2019 and Agreement Cum Deed of Hypothecation and Deed of Hypothecation dated 23.10.2019 and Letter addressed dated 23.10.2019 and Letter of Revival dated 23.10.2019 in favour of the applicant bank.

OA. No. 193/2022

Term Loan-II

Further, During the month of July 2018, the Defendants had approached the applicant bank seeking for Term Loan of Rs.14,00,000/- (Rupees Fourteen lakh only) an Loan Application dated 04.07.2018 for the purpose of purchase of shamiyana, chairs, tables, pipes, fans etc. for his business. After, considering the request of the Defendants favorably, the applicant bank sanctioned a Term Loan of Rs.14,00,000/- (Rupees Fourteen lakh only) vide Sanction Letter dated 06.07.2018. The defendants agreed to repay the said loan of Rs.14,00,000/- in 84 monthly installments of Rs.24,341/-, commencing from 06.08.2018. The defendants agreed to pay interest on the said loan amount at the rate of 11.50% p.a. compounded monthly. The interest payable by the defendants was subject to changes in the interest rates made by the Bank from time to time. The defendants agreed to pay overdue interest at 2% p.a. above the rate of interest charged on the loan in the event of their default in payment of any one installment or in regularizing or in clearing the account as per the agreed terms.

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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, cost and charges, and Defendants executed Agreement Cum Deed of Hypothecation and Deed of Hypothecation dated 06.07.2018 and Letter addressed dated 06.07.2018 & 23.10.2019 and Particulars of Hypothecated Movables Furnish dated 31.07.2018 & 23.10.2019 and Agreement Cum Deed of Hypothecation dated 23.10.2019 and Letter of Undertaking dated 23.10.2019 and Letter of Revival dated 23.10.2019 in favour of the applicant bank.

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Term Loan-III

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Further, During the month of November 2019, the 1^st Defendant had approached the applicant bank seeking for Term Loan of Rs.5,00,000/(Rupees Five lakh only) an Loan Application dated 02.11.2019 for the purpose

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OA. No. 193/2022

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of purchase of shamiyana, materials. After, considering the request of the 1^st Defendant favorably, the applicant bank sanctioned a Term Loan of Rs.4,00,000/- (Rupees Five lakh only) vide Sanction Letter dated 05.11.2019. The defendants agreed to repay the said loan of Rs.5,00,000/- in 86 monthly installments of Rs.9,135/-, commencing from 05.02.2020. The 1^st defendant agreed to pay interest on the said loan amount at the rate of 11.40% p.a. compounded monthly. The interest payable by the defendants was subject to changes in the interest rates made by the Bank from time to time. The defendants agreed to pay overdue interest at 2% p.a. above the rate of interest charged on the loan in the event of their default in payment of any one installment or in regularizing or in clearing the account as per the agreed terms.

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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 Defendants executed Agreement Cum Deed of Hypothecation dated 05.11.2019 and Letter addressed dated 05.11.2019 and Particulars of Hypothecation Movables furnish dated 05.11.2019 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) and the Applicant bank issue a Notice dated 21.10.2021 and Legal Notice dated 03.01.2022 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 Registered Post with Acknowledgment Due the same is duly served and Defendant No.1 entered appearance through counsel Sri. M. Devaiah and

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OA. No. 193/2022

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Defendant No.2 his counsel Sri. B.R. Raghavendra by filling Vakalath, but did not file the written statement in spite of opportunity, hence Written Statement of Defendant Nos.1 & 2 was closed on 19.01.2024. When OA was taken up on 19.01.2024even after giving sufficient time, there was no appearance or representation from the Defendants;

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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. Bharathi Vasanth, W/o. B. Vasanth Madhav, 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 A30. 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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10. The OA is allowed with costs,

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(a) The applicant bank is allowed to recover from Defendants jointly and severally to pay an amount of Rs.43,43,631.00 (Rupees Forty Three Lakhs Forty Three Thousand Six Hundred and Thirty One Only) consisting of:

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i. The Defendants jointly and severally to pay an amount of Rs.36,88,443=00 ( Rupees Thirty Six Lakhs Eighty Eight Thousand Four Hundred and Forty Three Only) due under the two Term Loan accounts, together with costs and interest thereon at 12.35% p.a. compounded monthly, from this OA application till the date of realization.

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OA. No. 193/2022

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ii. The 1st Defendant jointly and severally to pay an amount of Rs.6,55,188/- ( Rupees Six Lakh Fifty Five Thousand One Hundred and Eighty Eight Only) due under the Third Term Loan account, together with costs and interest thereon at 12.35% p.a. compounded monthly, from this OA application till the date of realization.

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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 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 defendant 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 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 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. No. 193/2022

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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 21^st Day of February 2024].

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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: Sri. Bharathi Vasanth, W/o. B. Vasanth Madhav, 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.
	I. Term Loan
A3	Loan Application submitted by the defendants. in the name of M/s. A to Z Shamiyana.	22.01.2018
A4	Loan Sanction Letter.	30.01.2018
A5	Letter of Undertaking executed by defendants.	30.01.2018
A6	Agreement cum Deed of Hypothecation executed by defendants.	30.01.2018
A7	Deed of Hypothecation executed by the 1st defendant.	23.10.2019
A8	Letter of Undertaking executed by the 1st defendant	23.10.2019
A9	Letter addressed by the 1st defendant to the applicant bank.	23.10.2019
A10	Letter of Revival executed by the 1st defendant	23.10.2019
	II. Term Loan
A11	Loan Application submitted by the defendants.	04.07.2018
A12	Loan Sanction Letter.	06.07.2018
A13	Agreement cum Deed of Hypothecation executed by defendants.	06.07.2018
A14	Letter addressed by the defendants to the applicant bank.	06.07.2018
A15	Particulars of Hypothecated Movables furnished by the defendants.	31.07.2018
A16	Agreement cum Deed of Hypothecation executed by 1st defendant.	23.10.2019
A17	Particulars of Hypothecated Movables furnished by 1st defendant.	23.10.2019
A18	Letter of Undertaking executed by 1st defendant.	23.10.2019
A19	Letter addressed by the 1st defendant to the applicant bank.	23.10.2019

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OA. No. 193/2022

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A20	Letter of Revival executed by 1st defendant.	23.10.2019
	III. Term Loan
A21	Loan Application.	02.11.2019
A22	Loan Sanction Memorandum.	05.11.2019
A23	Agreement cum Deed of Hypothecation executed by 1st defendant.	05.11.2019
A24	Letter addressed by the 1st defendant to the applicant bank.	05.11.2019
A25	Particulars of Hypothecated Movables furnished by 1st defendant.	05.11.2019
A26	Notice issued by the applicant bank to the defendants.	21.10.2021
A27	Legal Notice got issued by the applicant bank to the defendants.	03.01.2022
A28	Statement of Account in respect of Term Loan Account No. 0603768000361.
A29	Statement of Account in respect of Term Loan Account No. 0603768000385.
A30	Statement of Account in respect of Term Loan Account No. 0603768000504.

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

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SCHEDULE

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Shamiyana

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Chairs

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Tables

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Fans

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Pipes

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(The above movables are at : A to Z Shamiyana, near Railway Bridge, Ammunje, Uppor Village, Kundapura, Udupi District).

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

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PRESIDING OFFICER

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OA. No. 193/2022

Canara Bank v. Abdul Haneez

Case brief

What is this about?

What did the court decide?

Canara Bank v. Abdul Haneez

Case brief

What is this about?

What did the court decide?

What the court decided

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