Allowed

Canara Bank v. Sri.Sangamesh P Ragam

DRT24 Apr 2024OA/266/2022

Case brief

AI extract

What is this about?

The Tribunal allowed an Original Application filed by Canara Bank to recover dues of Rs.34,73,039.69 from a loan defaulter. The claim, relating to working capital and term loans, was unchallenged due to the defendant's ex-parte status. The Court ordered recovery of principal, interest, and penal charges.

What did the court decide?

Recovery of Rs.34,73,039.69 with interest and penal charges; liberty to sell mortgage and personal assets for balance.

Canara Bank versus Sri.Sangamesh P Ragam — Arbitration | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 24^th Day of April, 2024

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

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OA. No.266/2022

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BETWEEN:

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Canara Bank Station Bazar Branch, Beside Govt Printing Press, 1st Floor, Al Sharay College M.S.K.Mill Road, Kalburagi -585102 Represented By Its Chief Manager Sri.Shyam Shriram Lature … APPLICANT

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AND:.

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Sri. Sangamesh.P.Ragam S/o.Prabhakar Sangayya Ragam Proprietor M/s.Ragam Dress Business/Unit address Shop No.7, Ground Floor, Kandur Mall, Station Bazar, Timmapuri Circle, Kalburagi -585102.

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Residence Address

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H.No. E/8/2026, Bhavani Nagar, Near Hanuman Temple Kalaburagi-585104

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...DEFENDANT

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Counsel on record/appeared for:

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Applicant : Sri. Nandish N.J. Defendant : Exparte.

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FINAL ORDER

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The present Original Application (OA) is filed on 25.02.2022 under

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OA. No. 266/2022

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section 19 of Recovery of Debts and Bankruptcy Act 1993 for recovery of a sum of Rs.34,73,039.69 (Rupees Thirty Four Lakhs Seventy Three Thousand Thirty Nine and Sixty Nine Paise Only) with further interest thereon from the date of filing the Application till realization from the Defendant.

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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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It is the case of the applicant bank where in the Defendant M/s. Ragam Dresses is Proprietary concern represented by its Sole Proprietor Sri.Sangamesh P. Ragam. The Defendant had approached the applicant bank seeking for Open Cash Credit (OCC) Limit for Rs.25,00,000/- (Rupees twenty five Lakh Only) an loan application dated 01.06.2018 for the purpose of working capital requirement. After considering the request of the Defendant applicant bank sanctioned the open cash credit limit of Rs.20,00,000/- (Rupees twenty lakh only) on 12.06.2018, renewed on 23.07.2019 and renewed with enhancement from Rs.20,00,000/- (Rupees twenty lakh only) to Rs.25,00,000/-(Rupees twenty five lakh only) on 06.08.2019 and renewed on 19.03.2021 for Rs.25,00,000/- in account No. 0873261000033. The Sanctioned CFITL (Covid FITL 6 Months Interest) of Rs.1,38,732/- in account No.087371000025 granted on 01.09.2020. The

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OA. No. 266/2022

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defendant agreed to pay a minimum interest at 9.15% p.a. RLLR Plus 2.25% on working capital.

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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 Defendant executed Sanction Communication dated 07.06.2018, 23.07.29, 06.08.2019, & 19.03.2021 and Cash Credit Agreement dated.12.06.2018 and Request for Overdraft Facilities dated.12.06.2018 and Registered Memorandum of Deposit of Title Deeds on 06.06.2018 which was registered as No.GLB-1-02455-2018-19 in Book1 stored in CD.No.GLBD477 in the Office of Sub-Registrar, Kalaburagi and Supplemental Agreement dt.06.08.2019 Supplemental Registered Memorandum of Deposit of Title Deeds dated 03.08.2019 registered on 05.08.2019 document is registered as No.GLB-1-05455-2019-20 in Book - 1 stored in CD.No.GLBD641in the office of Sub-Registrar, Kalaburagi and Letter of Revival dated.23.07.2019 in favour of the Applicant Bank.

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Further, the Defendant Nos.1 firm had approached the applicant bank seeking for Working Capital limit of Rs.4,99,000/- (Rupees four lakh ninety nine thousand only) an Loan Application dated 03.06.2020 in Loan A/c No.0873755000001. After considering the request of the Defendant, the applicant bank sanctioned an Working Capital limit of Rs.4,99,000/(Rupees four lakh ninety nine thousand only) on 03.06.2020. The loan is repayable in 48 months a moratorium 12 months on the principal amount

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OA. No. 266/2022

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on the principal amount during which interest is payable and 36 equated monthly installment of Rs.15,522/- to be repaid after moratorium. The defendant agreed to pay a minimum interest at 07.90% p.a. in respect of the said loan.

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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 dated 03.06.2020 and Registered Supplemental Memorandum of Deposit of Title Deed dated 23.07.2020 which is registered as No.GLB-1-02740-2020-21 in Book-1 stored in CD.No.GLBD863 in the office of Sub-Registrar, Kalburgi and Sanction communications dt.07.06.2018, 23.07.2018, 06.08.2019, 19.03.2021 and 03.06.2020

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infavour of the Applicant Bank.

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The Applicant Bank submits that the Defendant, after availing the said facilities, failed to repay the loan amount and committed default. The loan account of the Defendant had been classified as a Non Performing Asset (NPA) and the Applicant Bank issue a Legal Notice dated 15.12.2021 calling upon the defendant to repay the entire outstanding loan amount. However, there was no positive response from the Defendant. Hence, this Original Application (OA) has been filed to recover the dues from the Defendant.

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After the filing of the OA, summons was sent to the Defendant Registered Post with Acknowledgment Due the same is duly served on

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OA. No. 266/2022

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27.07.2022. Therefore, service held sufficient. When OA was taken up on 14.02.2023 even after giving sufficient time, there was no appearance or representation from the Defendant; hence, Defendant was placed exparte on 14.02.2023.

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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, Smt. G. Kavitha, Chief

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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

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A27. As the Defendant 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 Defendant to pay an amount of Rs.34,73,039.69 (Rupees Thirty Four Lakhs Seventy Three Thousand Thirty Nine and Sixty Nine Paise Only) consisting of:

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OA. No. 266/2022

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i. A sum of Rs.27,76,277.62 (Rupees twenty seven lakh seventy six thousand two hundred and seventy seven and Paise sixty two Only) together with future interest @ 9.15% p.a. plus 2% penal interest with monthly, from the date of OA application and till the date of realization.

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ii. A sum of Rs.1,53,200.07 (Rupees one lakh fifty three thousand two hundred and Paise seven Only) together with future interest @ 9.60% p.a. plus 2% penal interest with monthly, from the date of OA application and till the date of realization.

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iii. A sum of Rs.5,43,562/- (Rupees five lakh forty three thousand five hundred and sixty two Only) together with future interest @ 7.90% p.a. plus 2% penal interest with monthly, from the date of OA application and 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

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OA. No. 266/2022

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liberty to sell the personal assets of the defendants (both movable and

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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

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amount together with interest, costs etc., to be paid by the defendants duly considering the amounts, if any, paid by the defendant 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

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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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(h) Interim Application pending if any, stands disposed of with this Final Order.

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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 24^th Day of April 2024].

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Sd/-

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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: Smt. G. Kavitha, Chief Manager, of Applicant Bank.

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OA. No. 266/2022

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Exhibits on the part of the Applicant:

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Exhibit Nos.	Particulars of Documents
A1	Applicant Evidence
A2	List of Documents.
	Open Cash Credit (OCC) Limit of Rs.25,00,000/- in A/c No. 0873261000033 granted on 06.08.2019 & CFITL (Covid FITL 6 Months Interest) of Rs.1,38,732/- in A/c No. 087371000025 granted on 01.09.2020
A3	Application Form for Loans MICRO & SMALL ENTERPRIESES (MSEs) dated 01.06.2018
A4	Sanction Memorandum dated 12.06.2018
A5	Sanction Communication dated 07.06.2018 executed by Defendant.
A6	Cash Credit Agreement dated 12.06.2018 executed by Defendant.
A7	Request for Overdraft Facilities dated 12.06.2018 by Defendant.
A8	Registered Memorandum of Deposit of Title Deeds on 06.06.2018 executed by Defendant Sri. Sangamesh P ragam in favour of Applicant Bank. The document is registered as No.GLB-1-02455-2018-19 in Book-I stored in CD No. GLBD477 in the Office of Sub-Registrar, kalaburgi.
A9	Application Form for Loans to MICRO & SMALL ENTERPRIESES (MSEs) dated 22.07.2019
A10	Sanction Communication dated 23.07.2019 executed by Defendant.
A11	Application Form for Loans to MICRO & SMALL ENTERPRIESES (MSEs) dated 06.08.2019
A12	Sanction Communication dated 06.08.2019 executed by Defendant.
A13	Supplemental Agreement dated 06.08.2019 executed by Defendant.
A14	Supplemental Registered Memorandum of Deposit of Title Deeds date 05.08.2019 executed by Defendant Sri. Sangamesh P Ragam in favour fo the Applicant Bank. The Document is registered as No.GLB-1-05455-2019-20 in Book-I stored in CD.No. GLBD641, in the office of sub- Registrar, Kalaburagi along with EC
A15	Application Form for Loans to MICRO & SMALL ENTERPRIESES (MSEs) dated 27.01.2019
A16	Sanction Memorandum dated 27.01.2021 executed by Defendant.

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A17	Sanction Communication dated 19.03.2021 executed by Defendant.
A18	Letter of Revival dated 23.07.2019 executed by Defendant.
	Working Capital Term Loan Limit of Rs.4,99,000/- granted on 03.06.2020 in A/c No.0873755000002
A19	Application Form for Loans to MICRO & SMALL ENTERPRIESES (MSEs) dated 03.06.2020
A20	Process Note Format for Sanction of Guaranteed Emergency Credit Line (GECL) dated 03.06.2020
A21	Agreement cum deed of Hypothecation dated 03.06.2020 executed by Defendant.
A22	Registered Supplemental Memorandum of Deposit of Title Deed dated 23.07.2020 executed by Defendant in favour of the applicant. The document is registered as No.GLB-1- 02740-2020-21 IN Book-1 stored in CD No. GLBD863 in the office of Sub-Registrar, Kalaburgi.
A23 & A24	Notice dated 15.12.2021 (a)
A25 to 27	Certified statement of account 2 nos. along certificate.

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

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SCHEDULE- “A” Hypothecation Of Properties

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Hypothecation of stock, pulses and other moveable’s and goods in process and the finished goods, assets purchase out of bank finance situated at shop No.7, ground floor, Kandur mall, Station Bazar, Timmapuri circle, Kalburagi.

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SCHEDULE- “B” Mortgage Properties

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All the part and parcel of Open Plot No.17 &18 in Sy.No.129/1 (129/1A as per the NA Order) measuring 1420 sq. ft, situated at Kapnoor Village, Revanasiddeshwar Colony, Kalaburagi Taluk & District and bounded on

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OA. No. 266/2022

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East by : Plot No.16 West by : 20’ Wide Road North by : Plot No.10 South by : 30’ Wide Road

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Sd/-

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PRESIDING OFFICER

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DRT-II, BENGALURU

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OA. No. 266/2022

Canara Bank v. Sri.Sangamesh P Ragam

Case brief

What is this about?

What did the court decide?

Canara Bank v. Sri.Sangamesh P Ragam

Case brief

What is this about?

What did the court decide?

What the court decided

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