Allowed

Canara Bank v. M/S. Slv Distributors Rep. by Its Prop; Sri. K. Gopina

DRT23 Jan 2024OA/295/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the Original Application filed by Canara Bank for recovery of a term loan sum of Rs. 38,78,000 along with interest and costs. The claim was proved unchallenged as the defendant remained ex-parte, and an order for recovery from bankable security and personal assets was issued.

What did the court decide?

Recovery of Rs. 38,78,000 from the defendant along with current and future interest at 16.95% p.a. compounded monthly and costs; liberty to sell schedule and personal assets for recovery of dues.

Canara Bank versus M/S. Slv Distributors Rep. by… — Contract and Commercial Disputes | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 23^th Day of January 2024

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

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OA NO.295/2022

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BETWEEN:

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CANARA BANK, BTM Layout Branch – I, No. 28/29, 18^th Main, 7^th Cross, BTM 2^nd Stage, Bangalore – 560 076. … APPLICANT

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AND

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M/s. SLV Distributors, Represented by its Proprietor, Sri. K. Gopinath, S/o. Sri. T. Krishna Reddy, Aged about 41 years, No. 517, ITI Layout, Mangammanapalya, Bommanahalli Post, Bangalore – 560 068. … DEFENDANT

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Counsel on record/appeared for:

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Applicant : Sri. Rohit. R. Achar Defendant : Ex-parte

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FINAL ORDER

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The present Original Application (OA) is filed on 10-02-2022, under section 19 of the Recovery of Debts due to Banks and Financial Institutions Act 1993 for recovery of a sum of Rs.38,78,000=00 (Rupees Thirty Eight Lakhs Seventy Eight Thousand Only) with further interest thereon from the date of filing till realization from defendants.

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OA No.295/2022

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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 Defendant a Proprietorship Firm represented by its Proprietor approached the Applicant Bank for the purpose of Credit Facility for his manufacturing of Drinking Water business needs. Accordingly, the Applicant Bank granted a Term Loan Facility of Rs.41,00,000=00 on 03-02-2018 to the Defendant for the aforesaid purpose. The Defendant executed the documents in favour of the Applicant Bank in respect of the aforesaid Term Loan availed by him from the Applicant Bank. Loan Application dated 03-02-2018, Sanction Letter dated 02-02-2018, Agreement Cum Deed of Hypothecation dated 03-02-2018, Guarantee Covering Letter dated 03-02-2018, Guarantee Agreement dated 03-02-2018, Particulars of Hypothecation dated 15-02-2018, Letter of Undertaking dated 03-02-2018, and Letter of Proprietorship dated 03-02-2018.

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The Defendant agreed to repay the Term Loan Facility along with interest at 10.45 % p.a. compounded monthly and also agreed to pay interest at varied rates from time to time. The Defendant also agreed to

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OA No.295/2022

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pay overdue interest of 2% in case of defaults in payment of the Credit Facility as agreed. The Term Loan Facility is repayable in 84 equated monthly instalments of Rs.69,500=00 each from date of availing the loan and interest to be paid as and when due. The Defendant by way of Primary Security Hypothecated the Schedule Assets purchased out of the loan proceeds in favour of the Applicant Bank. The Defendant executed Letter of Revival dated 12-03-2021. The Defendant did not operate the Term Loan account satisfactorily and committed defaults. The Defendant did not adhere to the sanction terms in spite of repeated demands, personal approaches made by the Applicant Bank.

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The Applicant is entitled for the Current and Future Interest on the claim amount of Defendants at 16.95 % p.a. compounded monthly on the Term Loan Facility from the date of application till the date of realisation of the entire claim amount at the present prevailing rate.

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The Applicant Bank submits that the Defendant, after availing the said loan, failed to repay the loan amount and committed default. When the Notice was issued by the Applicant Bank on 31.01.2022, calling upon the Defendants to pay the 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 by RPAD, on 10.06.2022, duly served, Acknowledgement produced. When OA was taken up on 10.08.2022, even after giving sufficient time, there

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OA No.295/2022

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was no appearance or representation from the defendant, hence, Defendant was placed ex-parte on 10.08.2022.

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Heard the submissions of Counsels and perused the records.

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To prove the case, the Applicant Bank. Chief Manager, Smt. Shaila.C.Murari. K, D/o. Sri. Kashiram. S. Murari, aged abnout 49 years, has filed Affidavit by way of evidence and same was considered as evidence of AW.1 and marked as Ex.A1, the list of Documents came to be marked as Ex.A2 and documents came to be marked as Ex.A3 to A13. 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, 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:-

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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) i) The applicant bank is allowed to recover from defendant a sum of Rs. 38,78,000=00 (Rupees Thirty Eight Lakhs Seventy Eight Thousand Only) against the Defendant along with costs of the proceedings before the Hon’ble Tribunal and Current and Future Interest on the claim amount at 16.95% p.a. compounded

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OA No.295/2022

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monthly on the Term Loan Facility from the date of application till the date of realisation of the entire claim amount at the present prevailing rate.

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b) In the event of failure of the defendant 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 defendant (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 defendant 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 amount to be paid by 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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OA No.295/2022

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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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11. 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 23^rd day of January 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. Madhu. S., S/o. Sri. Mareppa. S.C. Chief Manager, of the

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Applicant Bank.

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Exhibits on the part of the Applicant:

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Sl No.	Particulars	Date	Exhibits
1.	Loan Application	03.02.2018	A3
2.	Sanction Letter	02.02.2018	A4
3.	Agreement Cum Deed of Hypothecation	03.02.2018	A5
4.	Guarantee Covering Letter	03.02.2018	A6
5.	Guarantee Agreement	03.02.2018	A7
6.	Particulars of Hypothecation	15.02.2018	A8

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OA No.295/2022

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7.	Letter of Undertaking	03.02.2018	A9
8.	Letter of Proprietorship	03.02.2018	A10
9.	Letter of Revival	12.03.2020	A11
10.	Legal Notice	31.01.2022	A12
11.	Account Extract		A13

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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

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Fully Automatic Water Treatment Plant, 60 BPM Automatic Bottling Machine, Semi-Automatic Drop, Auto tool Shrink Stainless Steel Pipe, 30 ton Chiller, Box Packaging, Chemical, Microbiological Lab with Table belonging to the Defendant – M/s. SLV Districutors, Represented by its Proprietor, Sri. K. Gopinath, 517, 8^th Main, ITI Layout, Mangammanapalya, Bommasandra Post, Bangalore – 560 068.

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

Canara Bank v. M/S. Slv Distributors Rep. by Its Prop; Sri. K. Gopina

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/S. Slv Distributors Rep. by Its Prop; Sri. K. Gopina

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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