Allowed

Canara Bank v. Sri. Manoj Shetty

DRT20 Feb 2024OA/434/2022

Case brief

AI extract

What is this about?

The DRT allowed the bank's original application for recovery of dues. The defendant failed to appear and file a written statement, leaving the claim unchallenged. The court appointed a measurer to determine the sale proceeds of hypothecated properties or personal assets.

What did the court decide?

Directed the defendant to pay Rs. 43,12,303/- with future interest, costs, and authorized the bank to sell the defendant's personal assets or schedule properties if necessary.

Canara Bank versus Sri. Manoj Shetty — Company and Corporate | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 20^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.434/2022

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BETWEEN:

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Canara Bank, Yenagudde Branch, Ground Floor, Meera Complex, Old Post Office Road, Katpady, Udupi Taluk & District Represented by: It’s Senior Manager Mr.Prasad , …APPLICANT

AND

Mr.Manoj Shetty

S/o.Jayakara Shetty

Aged about 29 years

R/at Noji Hosamane , Radha Nivas Kurkal Village, Subhasnagar Post Udupi -574105. …DEFENDANT

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Counsel on record/appeared for:

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Applicant : Malini Vinay Defendant : Ex-parte.

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FINAL ORDER

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The present Original Application (OA) is filed on 12-04-2022 under section 19 of the Recovery of Debts due to Banks and Financial Institutions

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Act 1993 for recovery of a sum of Rs.43,12,303/-(Rupees Forty Three

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Lakhs Twelve Thousand Three Hundred and Three 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 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 is a business man engaged in the business of running Tourist Transport Vehicles and approached the Applicant Bank in the year 2015 & 2016 for Two Loans to buy transport buses under the MSME Scheme of the Applicant Bank. The two loans were sanctioned after considering the credit worthiness of the applicant and on the security of the hypothecated vehicles. The two loans availed by the defendant are enumerated. OSL MSME Loan of Rs.19.85 Lakhs sanctioned on 05.01.2016.

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The Defendant on 23.12.2015, requested the Applicant Bank for an amount of Rs.19,85,000/- to purchase a brand new Tata Star Bus for his business needs. The requested amount was sanctioned by the applicant at 11.20% interest p.a compoundable monthly. The loan was to be repaid in 84 months with 3 months holiday. The Defendant has executed a composite hypothecation agreement on 05.01.2016 agreeing to the terms and conditions of sanction and hypothecating the 1^st item of schedule A as well as per the agreement, the defendant had to repay the loan in 84 EMIs of

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OA No.434/2022

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Rs 35,970/- each. The loan is also secured under the CGTMSE cover. The

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documents were executed to avail this loan :

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i) Application form by Defendant on 23.12.2015.

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ii) Sanction letter by applicant Dated 05.01.2016 which is duly acknowledged by the defendant.

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iii) Composite hypothecation agreement on 05.01.2016 executed by Defendant.

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iv) Letter of revival on 10.09.2020.

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The Defendant again sought for a loan of Rs.31 lakhs on 07.10.2016 for purchasing a Ashok Leyland Bus. The Applicant sanctioned the said amount on the security of the hypothecation of the bus which was purchased out of bank finance. The loan was sanctioned then prevailing rate of interest at 10.95% floating interest p.a with monthly rests after taking into consideration the net worth & the value of the hypothecated asset. The loan was repayable in 84 months in equated monthly installments of Rs. 55,498/- each as agreed to by the defendant. The loan dues are secured by the CGTMSE cover. The documents were executed to avail this loan :

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i) Application form on 07.10.2016 produced.

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ii) Sanction letter by applicant dated 09.11.2016 produced.

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iii) Composite hypothecation agreement on 18.11.2016 , produced.

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iv) Letter of revival on 10.09.2020 , produced.

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OA No.434/2022

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The Defendant is liable to repay the loan dues with interest and also liable to pay an additional 2% interest over & above the normal interest in case of default. The rate of interest is subject to variation from time to time.

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The Defendant failed to make the repayments of the loan dues as agreed and has not serviced interest thereon as per the terms and conditions agreed to by him . Even after repeated requests and demands from the applicant bank, the defendant went on assuring the applicant bank, but on one pretext or the other failed to repay the debt due to bank in terms of loan documents and agreements and allowed the loan accounts to become NPA 01.12.2020.

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The Defendant has become liable to pay forthwith all the outstanding loan dues together with interest and cost. The Applicant Bank issued a notice to the defendant on 01.03.2022 recalling the overdue installments. But the Defendant has failed to repay the loan dues. In view of the continued default on the part of the Defendant in repayment of the outstanding dues. Calling upon the Defendant to repay the outstanding balance. However, there was no positive response from the defendant. Hence, this Original Application (OA) has been filed to recover the dues from the defendants.

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After the filing of OA, summons was sent to the Defendant on 9.

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08.06.2022 by RPAD with Acknowledgement produced and Defendant appeared through counsel Shri.K.Prasanna Shetty filing Vakalath, but did

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OA No.434/2022

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not file the Written Statement in spite of opportunity, hence Written

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Statement of Defendant was closed on 29.05.2023. When OA was taken up on 29.05.2023 even after giving sufficient time, there was no appearance or representation from the Defendant.

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Heard the submissions of Counsels and perused the records.

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To prove the case, Mr. Prasad, aged about 39 years, Senior 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.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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12. The OA is allowed with costs,

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a) The Applicant bank is allowed to recover from defendant jointly or severally to pay a sum of Rs.Rs.43,12,303/- (Rupees Forty Three Lakhs Twelve Thousand Three Hundred and Three only) being the amount claimed in the application together with future interest at

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OA No.434/2022

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10.30% & 8.75% respectively for the two loans plus 2% penal interest from the date of the application till realization with monthly rests.

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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 defendants 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.434/2022

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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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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 20^th day of February 2024]

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Sd/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: Swapna Shetty, Senior Manager of the Applicant Bank.

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Exhibits on the part of the Applicant:

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SL. NO	PARTICULARS	DATE	EXHIBITS
1	Application cum appraisal form	23.12.2015	A3
2	Sanction letter	05.01.2016	A4
3	Composite hypothecation agreement	05.01.2016	A5
4	Letter of revival	10.09.2020	A6
5	Application cum appraisal form	07.10.2016	A7
6	Sanction letter	09.11.2016	A8
7	Composite hypothecation agreement	18.11.2016	A9

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OA No.434/2022

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8	Letter of revival	10.09.2020	A10
9	Bank notice duly acknowledged	01.03.2022	A11
10	Statements of accounts		A12 & 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 “A”

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i) TATA STAR BUS WITH REG NO. KA.20.D.7677 AND CHASIS NO MAT755001F8E13237, ENGINE NO. 497TC73EUY820752

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ii) ASHOK LEYLAND BUS WITH REG NO. KA.20.AA.0687, CHASIS NO MB1PEBEFD5GETW6882 AND ENGINE NO. GTEZ426063.

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Sd/PRESIDING OFFICER DRT-II, BENGALURU

Canara Bank v. Sri. Manoj Shetty

Case brief

What is this about?

What did the court decide?

Canara Bank v. Sri. Manoj Shetty

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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