Allowed

Canara Bank v. Smt. Gayathri Madiraju

DRT7 Feb 2024OA/283/2022

Case brief

AI extract

What is this about?

This order adjudicates an Original Application filed by Canara Bank for recovery of an outstanding housing loan of ₹61.23 lakhs. The Tribunal, noting the default by principal borrowers and a developer who breached the tripartite agreement, allowed the application and directed joint and several recovery from the defendants with interest.

What did the court decide?

Recovery of ₹61,23,922 with interest and costs; liberty to sell scheduled properties or personal assets for recovery of dues and balance.

Canara Bank versus Smt. Gayathri Madiraju — Arbitration | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 7^th Day of February 2024

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Present: SMT. S. V. GOWRAMMA

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Hon’ble Presiding Officer

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OA NO.283/2022

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BETWEEN:

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Canara Bank Retail Assets Hub, No.18, Ramanashree Arcade, M.G. Road, Bengaluru-560001 Represented by its Asst. General Manager, Sri. A.S. Ashok Kumar.

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…APPLICANT

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AND

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Smt. Gayathri Madiraju W/o. Shri. Babu Madiraju, Aged about 37 years, No:44, 2^nd Main, 13 Cross, Sir.M.V. layout, Kodigehalli, Vidaranyapura, Bengaluru-560097.

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Shri. Babu Madiraju S/o. Sri. Narayanaraju.M Aged about 45 years, No.44, 2^nd Main, 13^th Cross, Sir.M.V. layout, Kodigehalli, Vidyaranyapura, Bengaluru-560097.

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Also At:

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M/s. Sri. Venkateshwara Electrometals & Chemicals No.138A, 3^rd Phase, 8^th Main, Peenya Industrial Area, Bengaluru-560058

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OA No.283/2022

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M/s.Parthi Builders & Developers Having its Regd. Office at No.204 Rajinigandha, Garden Apartments 21, Vittal Mallya Road, Bengaluru-560001.

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Reptd: by its Partners.

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Smt. Akkayamma

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Sri.Munegowda

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Sri.Anand

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Sri.Harish

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Not Known Father Name

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Sl No.4 to 7 are residents of No.292 and 293/1, Jakkur Gramatana Byatarayanapura, Yelahanka Hobli, Bengaluru-560064.

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Sri.Jayaramaiah (Since Deceased, D9 is the Legal Heirs of D8)

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Smt.Sujatha

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Sri.Manjunath

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Smt.Jayamma

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Smt.Rathnamma

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Smt.Sunitha

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Smt.Bhagya

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Sri.M. Chinnarayaswamy

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Sri.Keshava Murthy

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Sri.Manjunath

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Not Known Father Name.

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Sl. No. 8 to17 are residing at: Property No.294/292/291/290, Jakkur Village, Yelahanka Hobli, Bengaluru-560064.

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...DEFENDANTS.

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Counsel on record/appeared for:

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Applicant : Sowbhagya.N.A

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Defendants Nos.1 to 17 : Ex-parte.

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(Defendant No.8 is Deceased)

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FINAL ORDER

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The present Original Application (OA) is filed on 09-03-2022, under section 19 of the Recovery of Debts due to Banks and Financial Institutions Act 1993 for recovery of a sum of Rs.61,23,922 (Rupees Sixty One Lakhs Twenty Three Thousand Nine Hundred and Twenty Two Only) with further interest thereon from the date of filing till realization from defendants.

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The Application filed is within the period of limitation as prescribed

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under Section 24 of the Recovery of Debts Due to Banks and Financial Institutions Act 1993 and the subject recovery claim falls within the jurisdiction of this Tribunal.

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Brief facts of the case:

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The defendants No. 1 and 2 are the Principal Borrowers, defendant No.3 is partnership firm represented by its partner and authorised signatory for defendants No. 3 to 17, Defendants No. 3 to 17 are land owners of ‘A’ schedule property in Item Nos. I to IV and have executed registered Agreements and power attorney’s in favour of 3 to 17.

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The 1^st and 2^nd Defendants in the August 2016, approached the Applicant Bank for financial assistance for purchase of Flat. Subsequently,

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the 1^st and 2^nd defendants submitted Loan Application dated 18-08-2016 to the Applicant Bank for the purpose of purchase of Flat. The Applicant Bank after processing Loan Application of the defendants sanctioned housing loan of Rs.60,00,000-00 (Rupees Sixty Lakhs Only) availed by the defendants, terms and condition of Sanction Memorandum dated 20-08-2016 accepted by the defendants bearing Account Nos. 0887627000009.

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The Defendant No.3 Builder cum Developer of the ‘A’ Schedule property in Item Nos. I to IV and also promoter/builder promised to construct the Apartment to the buyers and handover the same in terms of the agreement of sale individually entered with the buyers. The Defendants No. 1 and 2 have also entered into an Agreements of Sale dated 11-08-2016, simultaneously with defendant No.3, wherein the defendant No.1 and 2 have agreed to purchase the flat in schedule ‘B’ and ‘C’ properties of ‘A’ schedule property in Item Nos. I to IV as per terms and conditions laid down in the said agreements.

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The Defendants No.1 and 2 accepted terms and conditions, have executed the Housing Loan Agreements dated 12-09-2016 of Housing Loan and Enclosure-IV in favour of the Applicant Bank. The above documents of 1st and 2^nd defendants have agreed to repay Housing Loan amount in 330 months in 324 Equated Monthly Instalments of Rs.56,03700 along with interest at the rate of 10.55% per annum, in the case of default in payment of the loan with compounded monthly rest together with varied rate of interest and also incidental charges and penal interest

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OA No.283/2022

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as agreed to the terms and conditions of repayment as per the loan agreement executed by the defendants with the Applicant Bank. The defendant’s No. 1 and 2 on availing the housing loan have also agreed to create an equitable mortgage by deposit of original title deed at later stage on registration of conveyance sale deed.

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The Applicant bank submits that as per the Tripartite Agreement dated 12-09-2016 executed by defendants No 1 to 3 in favour of the Applicant Bank, wherein the 3^rd defendant had categorically assured and agreed that the Apartment will be constructed, shall be completed as per the schedule and the same shall be conveyed to the borrowers. It is also mentioned in the Tripartite Agreements that the loan amount may be credited to the account No.0887201001962 of M/s. PARTH BUILDERS AND DEVELOPERS, operated in Canara Bank, Lavelle Road Branch, Bengaluru.

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The 3^rd defendant requested to the applicant bank, substantial part of loan amount sanctioned to the defendants No. 1 and 2, same is released during the course of construction and credited to the aforesaid Account of the defendant No.3 as mutually agreed in the Tripartite Agreements.

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The Applicant Bank submits that Defendants have failed to perform the terms and covenants of the agreements of sale and stopped further construction of the apartment and the borrowers have also not taken any legal steps for specific performance of the agreements with the defendant No.3 and all the defendants failed to safeguard the interest of the Applicant

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OA No.283/2022

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Bank. Notwithstanding, the failure of the defendant No 3 to 17 to complete the project and execute the Sale Deeds in favour of the defendant No.1 to 2 and as also principal borrowers are bound to repay the debts and liabilities as per the contractual obligations committed by the defendants in terms of the Loan Agreements and other incidental documents executed by defendants before sanctioning the loan.

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The Defendants No.1 to 3 having executed the Tripartite Agreement in favour of the Applicant Bank and failed to perform the terms and conditions of the said agreements and the defendant No.3 failed to complete the construction of the apartment and handover finished apartment to defendants No.1 and 2. Hence the defendant No.3 is guilty of committing breach of contract and blatantly misusing the funds of the bank along with the defendants No. 1 and 2. Defendant No.3 to17 are also jointly and severally liable to pay the debts due to the Applicant Bank along with defendants No.1 and 2. Defendants No. 3 to 17 are owners of the ‘A’ schedule property Item No. I to IV have executed Registered Agreements in favour of 3^rd defendant.

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The Defendants No. 1 and 2 have executed Letters of Revival on 04-09-2019 reviving the loan documents in favour of the applicant bank and accepted the liabilities. The Defendants have failed and neglected to pay the amount due. In view of the continued on the part of the Defendants in repayment of the outstanding dues, the Loan Account has become Non-Performing Asset on 15.12.2020.

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OA No.283/2022

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The Applicant Bank has issued Demand Notice dated 09-04-2020 and Legal Notice dated 08-11-2021 to the defendants and called upon the defendants to repay the entire loan dues along with interest and also informed the defendants of the Bank’s intention to proceed legally, if the loan dues are not paid to the Applicant Bank. In view of the failure of the project undertaken by the defendants and having committed fraud and breach of the terms of Tripartite Agreement thereby leading to heavy financial loss and misuse of public funds for which defendant No. 3 to 17 are also liable to pay the debts along with the defendants No.1 and 2. Neither replied to the said Legal Notice nor paid the loan dues to the Applicant Bank or executed the Sale Deed in favour of 1^st and 2^nd defendants by the 3^rd defendant.

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The Defendants are due to the Applicant Bank a sum of Rs.61,23,922/- (Rupees Sixty One Lakhs Twenty Three Thousand Nine Hundred and Twenty Two only) as on 17.02.2022, together with applicable interest, charges, costs thereon in respect of the said loan. Present rate of interest at the rate of 8.55% per annum, compounded monthly rest on the outstanding liability and penal interest at the rate of 2% per annum. The Applicant Bank submits that the Defendants, after availing the loans, failed to repay the loan amount and committed default. 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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OA No.283/2022

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After the filing of OA, summons was sent to the Defendants Nos.1 to

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17, by way of Registered Post with Acknowledgement is duly served and Defendants No.1 to 17 appearance through counsel Shri. L.Aswatha Naryana by filing Vakalath, but did not file the Written Statement in spite of opportunity, hence Written Statement of Defendants No.1 to D7 and D9 to D17 stands closed. 18.01.2023 D8 is deceased. D9 is the LRs of D8. Who

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is already in record. When OA was taken up on 25.11.2022 even after giving sufficient time, there was no appearance or representation from the Defendants No.1 to D7 and D9 to D17.

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Heard the submissions of Counsels and perused the records.

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To prove the case, Mr. A.S.Ashok Kumar, aged about 50 years, Asst.General Manager, of the applicant Bank, has filed Affidavit by way of evidence and same was considered as evidence of AW.1 and marked as Ex.A1, and documents came to be marked as Ex.A1 to A20. 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, documents executed, the conduct and operations in the loan 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:-

OA No.283/2022

: O R D E R:

The OA is allowed with costs,

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(a) (i) The Applicant bank is allowed to recover from defendants jointly or severally to pay a sum of Rs.61,23,922/- (Rupees. Sixty-one Lakhs Twenty-Three Thousand Nine Hundred Twenty-two Only) as on 17-02-2022 with interest and charges at the rate of 8.55% per annum, compounded monthly rest and penal interest at the rate of 2% per annum with effect from 17.02.2022 till the date of payment in full.

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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 properties 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 movables and immovables) 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

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OA No.283/2022

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defendants and/or amount realized by sale of assets etc., during the intervening period after the filing of the OA, enabling the Registry to

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prepare Recovery Certificate for the amount to be paid by

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

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[Dictated to the (GS), transcribed by her, corrected and signed by me on this the 07^th 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: Its Divisional manager, Sri.M.Balasubramani of the Applicant Bank.

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Exhibits on the part of the Applicant:

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SL. NO.	PARTICULARS	EXHIBITS
1.	Evidence Affidavit	A1
2.	List of Documents	A2

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OA No.283/2022

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3.	Loan Application along with Specimen Signature Form	A3
4.	Sanction Memorandum dated 19/20-08-2016	A4
5.	Agreement of Sale dated 11-08-2016	A5
6.	Housing Loan Agreement dated 12-09-2016 along with Annexures-B - Irrevocable Mandate for Deduction of Loan Instalments and Link Letter, Letter Evidencing Deposit of Title Deeds to Housing Loan and Enclosure-IV	A6
7.	Tripartite Agreement dated 12-09-2016	A7
8.	Revival Letters dated 04-09-2019	A8 & A9
9.	Demand Notice dated 09-04-2020,Legal Notice dated 08-11-2021, Postal Acknowledgements and Returned Postal Covers.	A10 to A18
10.	Computerized Statement of Account and Certificate	A19 & A20

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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:

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-Nil –

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SCHEDULE ‘A’ PROPERTY

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Item No. I:

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All that piece and parcel of immovable property bearing Khata No.295/293/292 of Bruhat Bangalore Mahanagara Palike, Old No.292 and No. 293/1 of Byatarayanapura City Municipal Council and situated at Jakkur

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OA No.283/2022

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Gramatana, Yelahanka Hobli, Bangalore North Taluk, measuring East to West 63 sq.ft., and North to South (120 + 115)/2 sq.ft., and bounded on the:

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East by : Property belonging to Sri Subbarayappa, West by : Property belonging to Sri Jayaramaiah and Brothers, North by : Property belonging to Sri Ramachandrappa, South by : Property belonging to Smt. Chikka Akkayamma.

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Item No. II:

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All that piece and parcel of immovable property bearing Khata No.294/292/291/290 of Bruhat Bangalore Mahanagara Palike, Old Khata No.293/291/290 and 294/292/291 of Byatarayanapura City Municipal Council, measuring about 10,206 Sq.ft., and situated at Jakkur Village, Yelahanka Hobli, Bangalore North Taluk, together with a house measuring 990 Sq.ft. The house is constructed with Mangalore Tiles Roof, Red-Oxide Flooring and Jungle Wood Doors and Windows and bounded on:

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East by : Property belonging to Smt. Akkayamma and Smt. Kempamma

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West by : Property belonging to Sri Muniputtanna and Kempanna, North by : Property belonging to Sri P. Ramachandrappa, South by : Property belonging to Smt. Akkayamma and Smt. Kempamma.

OA No.283/2022

Item No. III:

All that piece and parcel of residential property bearing Khata No.360-1/358/357 of Bruhat Bangalore Mahanagara Palike, situated at Jakkur Gramatana, Yelahanka Hobli, Bangalore North Taluk, earlier Khata No.360/358/357 issued by the Byatarayanapura City Municipal Council, measuring East to West (14.5 + 23.5)/2 feet, North to South (32+31)/2 feet (East 32 feet, West 3 feet), together with a house measuring 200 Sq.ft. The house is constructed with Mangalore Tiles Roof, Red-Oxide Flooring and Jungle Wood Doors and Windows and bounded on:

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East by : Jakkur, Yelahanka Road, West by : Property belonging to Sri Muninanjappa alias Abbaiah now Sri Subbarayappa, North by : Property belonging to Sri Rama, S/o Sri Hemanna,

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South by : Property belonging to Smt. Munitayamma

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Item No. IV:

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All that piece and parcel of residential property bearing Khata No.359/357/356 of Bruhat Bangalore Mahanagara Palike, situated at Jakkur Gramatana, Yelahanka Hobli, Bangalore North Taluk, earlier Kaneshumari No. 240/465/270, measuring East to West 30 feet and North to South 30 feet, totally measuring 900 Sq.ft. and Windows bounded on:

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East by : Property belonging to Smt. Anandamma, West by : Property belonging to Smt. Akkayamma, North by : Property belonging to Sri Munianjanappa alias Abbayappa, South by : Property belonging to Sri Angathatti Muniyappa

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OA No.283/2022

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SCHEDULE ‘B’ PROPERTY

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An undivided share in that piece and parcel of Schedule A Property, which works out to 2.68% equivalent to 599 Sq.ft. of land against Flat No. G-11.

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SCHEDULE ‘C’ PROPERTY

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All that piece of Apartment G-11 with super built up area 1400 Sq.ft., consisting of three rooms, hall, kitchen on Ground Floor in the multistoreyed building known as “ PARTH OYSTER ” to be constructed in property in Schedule ‘A’ here to including one half portion in depth of the joints between the ceilings of the flat and floors of the flat above it and internal walls and external walls between such levels together with One Car Park in the stilt floor of the building together with proportional undivided

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share and interest in the Schedule ‘A’ Property.

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

Canara Bank v. Smt. Gayathri Madiraju

Case brief

What is this about?

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Canara Bank v. Smt. Gayathri Madiraju

Case brief

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