Allowed

City Union Bank Ltd. v. M/S Sri Nayvateja Automobiles

DRT20 Mar 2024OA/225/2022

Case brief

AI extract

What is this about?

Debt Recovery Tribunal allowed an Original Application filed by two City Union Bank branches for recovery of dues amounting to Rs. 3,12,55,583/- from automobile company and individuals who availed loans and created equitable mortgages. The tribunal found the claim proved due to the default of the respondents and granted recovery with interest.

What did the court decide?

Joint and several liability of respondents 1-4 to pay Rs. 2.25 crore with interest; joint and several liability of respondents 1-3 to pay Rs. 86.88 lakh with interest; entitlement to proceed against m

City Union Bank Ltd. versus M/S Sri Nayvateja Automobiles — Banking and Recovery | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL.II AT HYDERABAD

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DATED THIS THE 2OTH DAY OF I4ARCH, 2024

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PRESENT: SH. RAMESHWAR KOTHE, B.Com, L.LB. (HonS.), IVI.A, PRESIDING OFFICER

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ORIGINAL APPLICATION NO. 225 OF 2022

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City Union Bank Ltd. Kadapa Branch, Kadapa Rep by its Branch Manaqer.

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City Union Bank Ltd. Miyapur Branch Hyderabad. Rep. by its Branch Manager. ....Applica nts.

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Versus

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M/s. Sri Navyateja Automobiles Rep. Proprietor Mr. A. Venkataiah 3/339/18, Chennai Road Central Jail, IOC Petrol Pump Cuddapah.

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Mr. A. Venkataiah S/o Mr. Atikari Narayana Age: Major, D. No.8/45 Akula Street, Siddavatam Village cuddapah.

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lvlrs. A. Venkata Lakshmi Wo^{Mr. A. Venkataiah} Age: Major, D. No.8/45 Akula Street, Siddavatam Village Cuddapah.

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Mr. A. Venkata Ratnam S/o Mr. Atikari Narayana Age: Major, D. No.8/45 Akula Street, Siddavatam Village Cuddapah. ,.4)n^.,/ ^,,^

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l"l r. Gundam Sudhakar Reddy S/o Mr. Gundam Subba Reddy Age: 43 years, D.No.2- 107 Kalasapadu Village & Sub Station, Kalasapadu Mandal Cuddapah District. 6. Mr. Pothuganti Badu llah S/o Mr. Pothuganti Balaiah Age: 32 years Pulliveedu Village Pulliveedu Gram Panchayat Porumamilla Ma ndal Cuddapah District.

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The Registrar Sub Registrar Office Badvel, Cudda pah District, A.P.

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... Defenda nts.

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Cou nsel for Applica nt Mr. Trivikram Chitturu. Cou nsel for Defendants 1 to 3: N4r. B. Srinivasa Reddy. Defenda nts 4 to 7 Expa rte.

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:: ORDER ::

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The Appllcant Bank filed the present OA for the recovery of a total sum of Rs.3,12,55,583/- (Rs.2,25,67 ,211l- pertaining to Cuddapah Branch and Rs.86,88,372l- pertaining to f4iyapur Branch) from the defendants 1 to 4^jointly and severally with interest @17.250lo p.a. with monthly rests from the date of Application till the date of realisation along with costs and sale of OA schedule^properties.

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The averments of applicant bank as^per the OA, briefly, are that 1't defendant represented by its^proprietor 2nd defendant with 3'd defendant approached the 1"t applicant bank initially for oLcc limit of Rs.40 lakhs in March, 2013, followed by fut""f

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enhancements and fresh credit facilities from time to time. Defendants executed the loan documents including extension of mortgage belonging to defendants 2 and 4 from time to time. Defendants 1to 3 availed OLCC facility of Rs.60 lakhs from 2nd applicant bank in June, 2015, duly secured by the personal guarantee and equitable mortgage over the property belonging to 3'd defendant. The security interest is duly evidenced by respective Memorandum of Deposit of Title Deeds. The 3'd defendant allenated 358 sq.yds from out of OA Schdeule-3 mortgaged property in favour of 6th defendant through his GPAD5 subsequent to mortgage. Defendants failed to pay the interest leading to classiFication of the accounts as NPA on 30.11.2020. Applicant issued demand notice dated 27.04.2021.

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Defendants 1 to 3 right to file written statement forfeited on 03.03.2023.

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The Applicant Bank examined S.V.V.N.D. Vinod, Branch lvlanager, Kadapa Branch, as AW-1 and matked 22 documents through him as Ex.A.1 to A.22. Applicant Bank also examined Rajasekaran R, Branch Manager, Miyapur Branch as AW-2 and marked 10 documents through him as Ex. A.23 to Ex. A.32. Applicant Bank filed part satisfaction Memo for Rs,37,4o,ooo/- being the sale proceeds of OA Schdeule-7 property under the SARFAESI proceedings by 7'r applicant.

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Rlght of defendants adducing evident was forfeited on 23.02.2024 as learned counsel reported no instructionsTfrqg/r.r U'*s

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OA.22S|2O22

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Both the counsel reported no oral arguments. Perused the written arguments filed by the applicants and the material placed on record.

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The point that arises for consideration is:-

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Whether the Applicant Bank is entitled for the balance OA claim against the Defendants and sale of OA schedule balance assets as^prayed for?

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According to applicant bank, 1't defendant, represented by defendants 2 and 3 availed loan from 1't applicant branch. Defendants 2 and 4 created equitable mortgage over the properties described in OA schedules l and 2 properties besides execution of hypothecation agreements on behalf of 1't defendant, as a security for the loans availed from 1't applicant branch. Defendants 1 to 3 also availed credit facilities from 2nd applicant branch. The 3'd defendant created equitable mortgage over his property for the loan availed from the 2nd applicant branch besides hypothecation agreement by 1st defendant. A part of 3d defendant's mortgaged property has reportedly been sold by his GPA holder-Sth defendant to 6th defendant subsequent to the mortgage. Defendants after availing credit facilities from time to time failed to clear the dues as per the agreed terms. The averments clubbed with the evidence placed on record vide Ex.A.1 to Ex.32 establish the liability of defendants. The defendants neither filed written statement, nor adduced evidence, nor advanced arguments or cross examined the AW.1. Hence the OA claim is proved against the defendants 1 to 4. 21r$y-. ,w\ /^{/_/,/ <-$.t.-- </sup>}

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oa.22512022

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Defendants 1to 3, after entering appearance through their counsel, did not choose to file written statement, adduce evidence, advance arguments or cross examine the Applicants Witnesses contradicting the averments brought on record in the OA before this Tribunal. Defendant No.4 remained exparte. No relief is sought for against defendants 5 to 7. Under such circumstances, the Evidence Affidavit coupled with the recitals in documents viz., Exs.A.1 to A.32 marked on behalf of the Applicant Banks, clinches the claim of the Appllcant Banks against the Defendants. Hence the Defendants 1 to 4 are jointly and severally liable to pay the claim pertaining to the 1't Applicant and defendants 1 to 3 are jointly and severally liable to pay the claim pertaining to the 2"d Applicant ln the O.A. with future interest and costs.

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In the result, the present Original Application No.22512022 is allowed as under: -

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i) defendants 1 to 4 are jointly and severally liable to pay to the Applicant Bank a sum of Rs.2,25,67 ,ztl/- with future interest @10.75olo^p.a. simple from the date of application till the date of realization, less R9.37,4O,OOO/- being the sale proceeds of OA Schdeule-7 property under the SARFAESI^proceedings;

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ii) defendants 1 to 3 are^jointly and severally liable to^pay to the Applicant Bank a sum of Rs.86,88,372l- with future interest @ 10.75olo

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oA.22sl2022

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p.a. simple from the date of application till the date of realization;

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iii) the OA claim is secured by way mortgage of OA schedule 2 and 3 properties and the applicant banks are entitled to^proceed against the same for realisation of their respective dues;

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iv) the applicant banks are also entitled to proceed against the person and properties of the defendants 1 to 4 for realization of their respective dues; and

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v) the applicant bank is entitled for the costs.

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The Applicant Banks are directed to file Cost Memo within 2 weeks from the date of receipt of this Order.

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Issue Recovery Certificate accordingly.

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Communicate a copy of this order to the parties concerned and upload in the Web Portal.

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(Dictated to the steno, signed and pronounced by me in the open court on this the 2dh day of March, 2024).

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l-/ D(,"h (R-AMESHWAR KorHE) PRESIDING OFFICER

City Union Bank Ltd. v. M/S Sri Nayvateja Automobiles

Case brief

What is this about?

What did the court decide?

City Union Bank Ltd. v. M/S Sri Nayvateja Automobiles

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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