Allowed

Canara Bank v. M/s. Arv Wash Tech

DRT6 Feb 2024OA/47/2023

Case brief

AI extract

What is this about?

The DRT allowed the applicant bank's application for a recovery certificate. The court found the bank's evidence un-rebutted and sufficient, rejecting the prayer for penal interest but permitting recovery of principal, future interest, and costs via proceedings against hypothecated assets and personal liability of the guarantor.

What did the court decide?

Recovery of Rs.40,75,743/- with future interest via proceedings against hypothecated assets and personal liability of the second defendant; Recovery Certificate to be issued.

Canara Bank versus M/s. Arv Wash Tech — Banking and Recovery | DRT (2024)

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IN THE DEBT RECOVERY TRIBUNAL –II CHENNAI

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Dated this 6^th day of February, 2024

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PRESENT: SHRI T. RAJESH PRESIDING OFFICER

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O.A.No.47 of 2023

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Canara Bank Hosur SME Branch No. 550/1, Bagalur Road, Hosur – 635 109 Krishnagiri District Applicant

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Vs.

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M/s. ARV Wash Tech Represented by its Propreitor Mr. M Sakthivel 1/1J Raja City, Thottagiri Road Avalapally Post, Hosur – 635 109 2. Mr. M Sakthivel, S/o Muthu Proprietor: M/s. ARV Wash Tech 1/1J Raja City, Thottagiri Road Avalapally Post, Hosur – 635 109

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Also at: Mr. M Sakthivel S/o Muthu No.2/577, A 1, Avalapalli Road, Basthi Indira Nagar, Hosur Defendants Counsel for Applicant : M/s. R. Santhanam Defendants : Exparte

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ORDER

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1. The Application is filed Under Section 19 (1) of the Recovery of Debts And Bankruptcy Act, 1993 seeking for issuance of a Recovery Certificate for a total sum of Rs.26,56,516/-Term Loan Accountavailed by the defendants with future interest along with costs and for sale of schedule mentioned properties.

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The Applicant Bank contends that a Term Loan credit facilityof Rs. 40,00,000/- 1^st defendantproprietor on befalf of his proprietary concern whereas 2^nd and 3^rd defendants stood as guarantors.

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It is also stated that the above facilities were availed by the defendants after execution of necessary loan documents obliging themselves to repay the amount promptly and regularly, without fail.

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The Applicant Bank further contends that despite availing the credit facility by obliging to pay back the amount, the defendants failed in compliance of the same and all the efforts of the Applicant Bank to make the defendants pay back the amount failed forcing the Applicant Bank to file this Application.

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Summons was taken out and as the defendant failed to appear they were set exparte on 08.06.2023.

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The Applicant Bank let in evidence through AW1, filed proof affidavit in confirmation with the pleadings and got marked Exhs. A1 to A19.

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Heard.The following issues arise for consideration:

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i. Whether the Applicant Bank had proved the OA claim?

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ii. What orders are to be passed?

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Both these issues are decided together.

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8. The Applicant Bank’s evidences remain un-rebutted and hence proved. The documents produced by the Applicant Bank are found to be admissible and are sufficient to provethe OA claim. Hence the Applicant Bank is entitled for the OA claim. The OA claim is made within limitation and there is no capitalization of penal interest. The prayer for penal interest is rejected.

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In view of the above:

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i. OA. No: 47 of 2023stands allowed.

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ii. Applicant Bank is permitted to recover an amount of Rs.40,75,743/- (Rupees Forty Lakhs Seventy Five Thousand Seven Hundred and Forty Three Only/-) with future and pendentelite interest @ 9.30% p.a. on Rs.34,18,875/- and @ 9.10% on Rs.6,56,868/- both with monthly restsfrom the date of filing of the OA till realization from the defendants and also by proceedings against the hypothecated assets after giving

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credit to all the amounts recovered and received during the pendency of the OA.

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iii. In case of default of payment by the defendants, the 2^nd defendant is personally liable for all such amounts due and payable to the Applicant Bank.

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iv. A Recovery Certificate is to be drawn and issued to the recovery Officer to enable recovery of the amounts as per the above terms.

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v. Applicant Bankis allowed to realize cost of the proceeding for which cost memo is to be filed in 7 days’ time from the date of receipt of the copy of the order.

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Communicate a copy of the order to the parties concerned in

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terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

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(Dictated to PA-2, transcribed by him, corrected, signed and pronounced by me in the Open Court, this 6^th day of February, 2024)

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Sd/- (T. RAJESH) PRESIDING OFFICER DRT–II, CHENNAI

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Canara Bank v. M/s. Arv Wash Tech

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/s. Arv Wash Tech

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

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