Allowed

Central Bank of India v. Krushna Chandra kamala

DRT1 Aug 2024OA/237/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the bank's original application for recovery of Rs. 58.92 lakh owed by the primary borrower and guarantor, along with ancestral debts of guarantor's heirs. The court directed issuance of a recovery certificate awarded 10% simple interest and held that the mortgage applicants are not personally liable beyond secured assets.

What did the court decide?

Issuance of Recovery Certificate for Rs. 58,92,725/- with 10% simple interest from filing date; restraint on transfer of assets.

Central Bank of India versus Krushna Chandra kamala — Contract and Commercial Disputes | DRT (2024)

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BEFORE THE DEBTS RECOVERY TRIBUNAL, CUTTACK

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PRESENT: - SRI JITENDRA PRASAD SINGH, PRESIDING OFFICER.

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O.A. No.237 OF 2022

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DATE OF DELIVERY OF ORDER:01.08.2024

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Central Bank of India, Khordha Branch At- Plot No. 2405, Ganapat Mansion, Court Road, Po/Ps/Dist-Khordha-752055 IFSC CODE- CBIN00283528

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… Applicant

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V e r s u s

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Sri Krushna Chandra Kamala, S/o-Late Madan Mohan Kamala, At-Champapur, Po--Gadaniala

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Ps/Dist- Khordha-752056

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Sri Rama Chandra Kamala, S/o-Late Madan Mohan Kamala, At-Champapur, Po—Gadaniala, Mallipur, Ps/Dist- Khordha-752056

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Shantilata kamala (legal Heir) D/o-Late Madan Mohan kamala At-Champapur, Po—Gadaniala, Mallipur, Ps/Dist- Khordha-752056

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Rina Rani, (legal Heir) D/o-Late Madan Mohan Kamala At-Champapur, Po—Gadaniala, Mallipur, Ps/Dist- Khordha-752056

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Sulochana Kamala, (legal Heir) D/o-Late Madan Mohan Kamala At-Champapur, Po—Gadaniala, Mallipur, Ps/Dist- Khordha-752056

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Menaka kamala, (legal Heir) D/o-Late Madan Mohan Kamala At-Champapur,

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Po—Gadaniala, Mallipur, Ps/Dist- Khordha-752056

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Arati kamala, (legal Heir) D/o-Late Madan Mohan Kamala At-Champapur, Po—Gadaniala, Mallipur, Ps/Dist- Khordha-752056

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Bharati kamala, (legal Heir) D/o-Late Madan Mohan Kamala At-Champapur, Po—Gadaniala, Mallipur, Ps/Dist- Khordha-752056

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Niyati kamala, (legal Heir) D/o-Late Madan Mohan Kamala At-Champapur, Po—Gadaniala, Mallipur, Ps/Dist- Khordha-752056

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… Defendants

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Counsel for the Applicant Bank: - Sri Manoj Kumar Mishra

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For the Defendants No.1 to 9 None. (Ex-parte on 11.08.2022)

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JUDGEMENT

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This is an Original Application under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 initiated by the applicant against the defendants No.1 to 9 praying for issuance of Recovery Certificate to the tune of Rs.58,92,725/- (Rupees Fifty Eight Lakhs Ninety Two Thousand Seven Hundred Twenty five) only together with interest, cost and other usual reliefs.

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The brief facts of the case as made out in the Original Application by the applicant bank is that the Defendant No.1 Sri Krushna Chandra kamala is an individual is the applicant-cum-mortgagor, the defendant No.2 Sri Ram Chandra kamala and deceased Madan Mohan kamala were stood as Guarantor, related as Father and sons, that after death of the deceased Madan Mohan kamala, his legal heirs are impleaded as party as the defendants No.3 to 9, the defendant No.1 having experience in Poultry business and wanted to setup a poultry business of his own and to meet

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the contingency the defendant No.1 approached the applicant bank for agricultural limit of Rs.18 Lakhs, and after considering the same the applicant bank sanctioned Rs.18 Lakhs on 27.07.2013 and to avail the limit the defendant No.1 executed Demand promissory note of Rs.18 Lakhs on 27.07.2013. After execution of loan documents the defendant No.1 wanted to enlarge his business and to meet the contingency the defendant No.1 approached the applicant bank for Agricultural credit and the defendant No.1 submitted Loan application on dt. 07.12.2013 for Rs.24.50 lakhs with other documents for consideration.

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After considering the loan application, the authorities of the applicant bank on 27.12.2013 was pleased to Sanction of Rs.24,50,000/in favour of the defendant No.1 for Poultry Broiler Unit business with interest @11.25% p.a. with adjustment of 1%, with margin of 25% i.e.Rs.6,12,500/-) personal guarantee of Ramchandra Kamala, with security of EM of Land in the name of the defendant No.1 in MouzaHosenpur in the Dist. of Khordha and with certain terms and conditions, which was accepted by the defendant No.1 as a token of acceptance.

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To obtain the above Loan facility the defendants being present before

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the applicant bank and executed necessary banking documents to obtain Poultry Loan of Rs.24.50 Lakhs the defendant No.1 along with Ramchandra Kamala executed necessary banking documents for availment of sanction loan facility. After due execution of banking documents by the defendants, the applicant bank Sanctioned the Housing Loan in favour of the defendants and disbursed full limit according to terms and conditions of sanction, as evident from the statements of accounts.

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After execution of loan documents in favour of the applicant bank, the defendants transacted the loan account in a regular manner and due to further need of money for poultry business, the defendant No.1 vide its loan application dtd. 09.08.2014 for Agricultural Credit of Rs. 15 Lakhs for his Poultry business and submitted loan application. After considering the same the authorities of the applicant bank was pleased to Sanction Rs.15 Lakhs under Central Kissan Credit Card Scheme on

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09.08.2014 out of which Rs.12,75,000/- for Allied activities and Rs.2,25,000/- for Ancillary Activities with certain terms and conditions which was accepted by the defendant No.1 as a token of acceptance.

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To obtain the above Loan facility the defendants being present before the applicant bank and executed necessary banking documents to obtain Poultry Loan of Rs.15 Lakhs the defendant No.1, the defendant No.2 and deceased father of the defendant No.1 to 9 executed necessary banking documents for availment of sanction loan facility. After due execution of banking documents by the defendants, the applicant bank Sanctioned the Housing Loan in favour of the defendants and disbursed full limit according to terms and conditions of sanction as evident from the statement of accounts. The necessary documents were executed by the defendants on various dates with the applicant Bank.

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After execution of loan documents in favour of the applicant bank the defendants transacted the loan account in a regular manner and thereafter failed to deposit the sale proceeds and installments as per terms and condition of sanction, for which the loan account of the defendant No.1 turned to NPA for which the applicant bank issued Notices U/s.13(2) on 27.06.2019 in the name of the defendant No.1 to regularize the loan account. There is no reply by the defendant No.1 to the notice U/s.13(2) and the defendant No.1 did not pay any heed for regularization of her two loan accounts, for which the applicant bank issued Possession notice on 19.09.2019 in the name of the defendants for regularization of his loan account and the same has been published in two daily leading newspapers 24.09.2019.

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After repeated personal contact the defendants did not turn up to the applicant bank to regularize the loan accounts of the defendant No.1, due to such irregularities on the part of the defendants for repayment of the loan dues can be ascertained better from the statement of account maintained in due course of banking business by the applicant bank. The statement of account of the loan account of the Defendants relate to loan account No.3271170903 come to Rs.28,46,581/- as on 04.02.2022 interest calculated @ 10.20%, Loan account No.3366716506 comes to

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Rs.18,51,572/- as on 04.02.2022 interest calculated @12.20%, and Loan account No.3316310390 comes to Rs.11,94,572/- as on 04.02.2022 interest calculated @9.70%. Total outstanding comes to Rs.58,92,725/-In total Rs.58,92,725/- are due as on 04.02.2022 in Three Loan accounts, to which the defendants are jointly and severally liable to pay the said sum with further interest, cost and expenses etc. till full and final payment of the loan outstanding dues as per the agreed rate of interest. The applicant Bank as per terms and conditions of the banking documents is entitled to recover its outstanding dues amounting to Rs.58,92,725/- including interest Pendent elite and future interest with cost till full and final repayment of the entire loan dues. As the defendants failed to pay the amount due to the applicant inspite of repeated demands and issuance of demand notice, the applicant bank having no other way to recover the dues of the bank, has filed this Original Application against the defendants for realization of Rs.58,92,725/- with future interest at contractual rate from 05.02.2022 till the date of realization with costs and for other relief’s as prayed for in the application and for the issuance of Recovery Certificate against the defendants.

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Notices were issued to the defendants to show cause as to why the relief prayed for by the applicant bank be not granted. Notice sent by post to the defendants could not be served, for which notice was published against the defendants. Inspite of publication of notices none has appeared for the defendants. Hence the defendants No.1 to 9 were set exparte vide order dated 11.08.2022. This Tribunal had no other option but to hear ex-parte against the defendants No.1 to 9.

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I have heard the learned Counsel for the applicant bank and have perused the relevant documents.

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Now the point that arises for consideration is whether the applicant is entitled to recover the claim amount from the defendants as prayed for in the application.

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Point:-The applicant bank filed evidence on affidavit in support of its claim and also filed the documents executed by the defendants in favour of the applicant bank in respect of the cash credit and term loan sanctioned by

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the applicant bank to the defendants. From the perusal of the records, it is seen that the defendants had availed the credit facilities from the applicant bank and have executed the relevant documents on 27.07.2013, 27.12.2013, 09.08.2014, and the defendants deposited Rs,1,61,024.00 on 29.02.2015, and Rs.1,42,801.00 on 09/07/2015. Thereafter no deposit has been made by the defendants till filing of the original application and the present original application is filed on 29.03.2022.

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It has been pleaded by the learned Counsel for the applicant bank that it is a mortgage suit wherein limitation is governed under Article 62 of the Limitation Act, wherein limitation is 12 years to enforce payment of money secured by mortgage or otherwise charged upon the immovable properties. Since the mortgage was created on 23.04.2014 to secure the credit facility, hence limitation under Article 62 of the Limitation Act shall be 12 years from 23.04.2014 and accordingly limitation for filing original application for sale of the mortgaged property will be upto 23.04.2026 whereas original application has been filed on 29/03/2022 is well within the limitation with regard to the sale of the mortgaged property. In such circumstances, no personal liability can be fastened on the defendants No.1 and 2. Accordingly it is held that the original application is well within time.

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The Bank dues have not been liquidated despite repeated demands and request. Thus from the oral and documentary evidence the applicant bank has established its case. There is no evidence from the side of the defendants to contradict it. The applicant bank has proved that the application is within time, the Tribunal has territorial jurisdiction and the rate of interest charged at the contractual rate per annum with monthly rests.

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From the perusal of the evidence on affidavit and the documents filed by the applicant bank which were executed by the defendants in favour of the applicant bank in respect of the loan sanctioned by the applicant bank

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to the defendants, they are in corroboration with the evidence on affidavit filed by the applicant bank.

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Therefore, on considering the entire evidence on affidavit and the documents i.e Valuation report (Exhibit-1), Authorization letter (Exhibit2), Demand Promissory note dtd. 27.07.2013 (Exhibit-3), Letter of continuity dtd. 27.07.2013 (Exhibit-4), Loan cum Hypothecation Agreement (Exhibit-5), Loan application dtd. 07.12.2013 along with other documents (Exhibit-6), Sanction letter dtd. 27.12.2013 (Exhibit-7), Declaration U/s-4(1) for Creation of charge along with property documents (Exhibit-8 series), Loan application dtd. 09.08.2014 (Exhibit9), Sanction advice dtd. 09.08.2014 (Exhibit-10), Letter of continuity for Rs.15 Lakhs on 09.08.2014 (Exhibit-11), Demand Promissory note of Rs. 15 Lakhs on 09.08.2014 (Exhibit-12), Loan cum Hypothecation agreement (Exhibit-13), Form of Guarantee dtd. 09.08.2014 along with consent clause executed by the deceased Madan Mohan Kamala, the father of the defendants No.1 to 9(Exhibit-14), Declaration U/s-4(1) for creation of charge along with property documents (Exhibit-15 series), Notices U/s.13(2) on 27.06.2019 (Exhibit-16 series), possession notice dtd. 19.09.2019 along with paper publications (Exhibit-17 series), Statement of Accounts (Exhibit-18 series), filed by the applicant bank along with the original application which were executed by the defendants in favour of the applicant bank in respect of the cash credit and term loan sanctioned to the defendants by the applicant bank, it clearly proves the fact that the defendants after availing the said facilities sanctioned by the applicant bank, have failed to pay the amount due to the applicant bank in spite of repeated demands. Hence the applicant bank having no other way has filed this application against the defendant for realization of Rs.58,92,725/- (Rupees Fifty Eight Lakhs Ninety Two Thousand Seven Hundred Twenty five) with future interest at contractual rate with monthly rests from 04.02.2022 till the date of realization with costs and for other reliefs as prayed for in the application.

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Therefore, considering the aforesaid facts and circumstances, I have no hesitation to hold that the defendants are liable to pay the applicant bank a sum of Rs.58,92,725/- (Rupees Fifty Eight Lakhs Ninety Two Thousand Seven Hundred Twenty five) with future interests, cost and other relief’s as prayed for in the application.

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The applicant bank had claimed pendentilite & future interest at contractual rate @11.25% per annum with monthly rests from 05.02 . 2022 till the date of realization. On filing of the original application the contract between the parties comes to an end and as per the provisions of Section 19(20) of Recovery of Debts Due to banks and Financial Institutions Act, 1993, which are analogous to Section 34 of CPC, this Tribunal has the discretion to award pendetilite and future interest. Therefore, this Tribunal feels that it is just and reasonable and the interest of justice will be best served if pendentilite and future interest @10% simple per annum is awarded. Accordingly this point is answered.

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O R D E R

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In the result, the original application is allowed for Rs.58,92,725/(Rupees Fifty Eight Lakhs Ninety Two Thousand Seven Hundred Twenty five) only ex-parte with ex-parte cost against the defendants No.1 to 9 with interest @10% per annum simple from the date of filing of the application i.e. 29.03.2022 till the date of realization. The defendants No.1 and 2 are jointly and severally liable to pay the said amount. The applicant bank is entitled to recover the said amount from the defendants No.1 and 2 after the sale of the hypothecated/mortgaged assets given as security which is morefully described in the schedule of the original

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application which shall form part of this judgment. Defendants No.1 and 2 are not personally liable to pay the dues of the Bank.

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The liability of the defendants no.3 to 9 to pay the aforesaid amount shall be limited to the extent they had inherited the estate of Late Madan Mohan Kamala and there shall be no personal liability of the defendants no.3 to 9 to pay the aforesaid amount.

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Interim order, if any, is made absolute and the defendants are restrained from depleting, transferring, encumbering or in any way dealing with their assets without first paying the claim of the applicant bank.

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Registry is directed to drawn up Recovery Certificate forthwith in the forms as prescribed and put up for signatures in terms of provisions contained in Section 19(22) of the Act to be issued on the basis of the order of this Tribunal to the Recovery Officer along with a copy of the OA for further action as per law. The Recovery Officer shall realize the amount as per the certificate in the manner and mode prescribed under the law from the defendants No.1 to 9.

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The parties are directed to appear before the Recovery Officer on 17 . 09.2024 for further action in accordance to law in the event the entire amount is not paid by the said date.

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This order is dictated and corrected by me and pronounced in the open Court under my signature, this the 1^st day of August, 2024.

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(Jitendra Prasad Singh) Presiding Officer

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DEBTS RECOVERY TRIBUNAL: ORISSA: CUTTACK ORDER SHEET

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OA No.237 of 2022

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Sl. No	Date of order.	Order with the signature.	Action (if any) taken on the order.
	01.08.24	Orders pronounced in the open Court (vide separate order). The original application is allowed for Rs.58,92,725/- (Rupees Fifty Eight Lakhs Ninety Two Thousand Seven Hundred Twenty five) only ex-parte with ex-parte cost against the defendants No.1 to 9 with interest @10% per annum simple from the date of filing of the application i.e. 29.03.2022 till the date of realization. The defendants No.1 and 2 are jointly and severally liable to pay the said amount. The applicant bank is entitled to recover the said amount from the defendants No.1 and 2 after the sale of the hypothecated/mortgaged assets given as security which is morefully described in the schedule of the original application which shall form part of this judgment. Defendants No.1 and 2 are not personally liable to pay the dues of the Bank. The liability of the defendants no.3 to 9 to pay the aforesaid amount shall be limited to the extent they had inherited the estate of Late Madan Mohan Kamala and there shall be no personal liability of the defendants no.3 to 9 to pay the aforesaid amount. Interim order, if any, is made absolute and the defendants are restrained from depleting, transferring, encumbering or in any way dealing with their assets without first paying the claim of the applicant bank. Registry is directed to drawn up Recovery Certificate forthwith in the forms as prescribed and put up for signatures in terms of provisions contained in Section 19(22) of the Act to be issued on the basis of the order of this Tribunal to the Recovery Officer along with a copy of the OA for further action as per law. The Recovery Officer shall realize the amount as per the certificate in the manner and mode prescribed under the law from the defendants No.1 to 9. The parties are directed to appear before the Recovery Officer on 17.09.2024 for further action in accordance to law in the event the entire amount is not paid by the said date. This order is dictated and corrected by me and pronounced in the open Court under my signature, this the 1^stday of August, 2024.
		(Jitendra Prasad Singh) Presiding Officer

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Central Bank of India v. Krushna Chandra kamala

Case brief

What is this about?

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Central Bank of India v. Krushna Chandra kamala

Case brief

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