Allowed

Karur Vysya Bank v. Mrs. Kavitha S

DRT6 Mar 2024OA/55/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the bank's application filed under the RDB Act for issuance of a recovery certificate. The court held evidence uncontroverted and ordered joint and several recovery of principal, pending, and future interest at 9% p.a. from defendants jointly and severally.

What did the court decide?

Issuance of Recovery Certificate for Rs.66,09,085.06 plus future interest at 9% p.a.; Defendants held jointly and severally liable.

Karur Vysya Bank versus Mrs. Kavitha S — 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 ofMarch, 2024

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PRESENT: SHRI T.RAJESH PRESIDING OFFICER

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O.A.No.55of 2022

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Karur Vysya Bank New No. 114, Thatchur Road, Kosapalayam, Arni – 632 301

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…Applicant

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Vs.

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Mrs. Kavitha S. W/o. Mr. Sekar D.No: 39/1, Dharmaraja Koil Street, Arni – 632 301

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Mr. D. Sekar Anand S/o. Mr. Dhanasekar, No. 8/21, Bakthavachalam Street, Teynampet, Chennai – 600 018

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National Collateral Management Services Ltd, Unit Nos: 505 to 509, 5^th Floor, Lodha Supremus, Off JVLR, Opp. Kanjumarg Station, Kanjumarg (East), Mumbai –400 042 ...Defendants Counsel for Applicant : M/s.S. L. Rajesh Defendants : Exparte

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ORDER

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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.66,09,085.06Pdue under the 5 Warehouse Receipt Loan Accountsalong with future interest and costs.

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The Applicant Bank contends thata Warehouse Receipt Loan Credit facility of Rs.24,15,000/-, Rs. 6,00,000/-, Rs. 6,00,000/-, Rs. 38,25,000/-, 38,25,000/- were availed by the 1^st defendant.The 2^nd Defendant stood as guarantor. The 3^rd defendant had in pursuant to service agreement for providing collateral Management service for Warehouses , had agreed that they will be responsible for the commodities stored in subject to natural loss.

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It is also stated that the above facilities were availed after execution of necessary loan documents by the defendants, 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 facilities by obliging to pay back the amounts, the defendants failed in compliance of the same and all the efforts of the Applicant Bank to

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make the defendants pay back the amounts failed, forcing the Applicant Bank to file this Application.It is also stated that the

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3^rd defendant being the custodian of goods failed in compliance of the Agreement and had issued warehouse receipts without verification leading to failure in preservation of the stocks pledged with the Applicant Bank and is therefore liable.

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Summons was taken out and as defendant D3 failed to enter appearance, theywere set exparte on 27.10.2022. Even though the Defendants D2 and D3 entered appearance and filed reply statement, they failed to file counter proof affidavit and failed to appear hence, subsequently they were set exparte on 06.03.2024 and the matter was heard exparte.

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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 A38.

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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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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 prove the OA claim. Hence the Applicant Bank is found to be entitled for the OA claim. The OA claim is made within limitation and there is no capitalization of penal

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interest. The 3^rd defendant by virtue of the collateral management agreement cannot escape from the liability. Since OA claim is arrived at by calculating interest at agreed rate, the pendentelite and future interest is awarded at 9% p.a. (simple). Prayer for monthly rests and penal interest is declined.

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In view of the above:

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i. OA. No: 55of 2022 stands allowed.

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ii. Applicant Bank is permitted to recover an amount of Rs.66,09,085.06P(Rupees Sixty Six Lakhs Nine Thousand Eighty Five and Six Paise Only/-)together with future and pendentelite interest @ 9% p.a. (simple) from the date of filing of the OA till realization from the defendants jointly and severallyand their assets after giving credit to all the amount recovered and received during the pendency of the OA.

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iii. It is made clear that the defendantsD1 and D2 are personally liable for all such amounts due in the Loan accounts.

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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 Bank is allowed to realize cost of the proceedings 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

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(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 ofMarch, 2024)

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

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Karur Vysya Bank v. Mrs. Kavitha S

Case brief

What is this about?

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Karur Vysya Bank v. Mrs. Kavitha S

Case brief

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