Allowed

Icici Bank Limited v. M/S. Sri. Venkateshwara Earth Movers, Rep by Its Proprietor Sri. Srinivas Raju a

DRT24 Apr 2024OA/723/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed ICICI Bank's Original Application for recovery of Rs. 75,96,662.30 plus interest from borrowers who defaulted on three construction equipment loans, ordering joint or several liability and recovery from hypothecated assets.

What did the court decide?

Recovery of Rs. 75,96,662.30 with interest @ 11.75% p.a. from 20.01.2022, enforced via sale of hypothecated properties and personal assets of the defendants.

Icici Bank Limited versus M/S. Sri. Venkateshwara… — 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 24^th day of April 2024

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

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OA NO.723/2022

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BETWEEN:

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ICICI Bank Limited, 4/10, Mythree Tower, Bommanahalli, Hosur Main Road, Bengaluru-560068. Represented through its Constituted Attorney Sri Pramodh. G.

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…APPLICANT

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AND:

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Sri Venkateshwara Earth Movers,

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A registered proprietary firm having its office at

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#61, 5th Cross, Vijaya Bank Colony,

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Basavanapura Main Road,

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K R Puram, Bengaluru-560 036.

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Represented by its proprietor

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Srinivas Raju A.

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Srinivas Raju A,

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Son of Govinda Raju. Aged about 42 Years, Residing at #266, 7th Cross, Krishna Nagar, Vijaya Bank Colony, K R Puram, Bangalore – 560 036.

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Smt. S Sailaja, Wife of A Srinivas Raju, Aged about 34 Years, Residing at #61, 15th Cross, Basavanapura Main Road, Vijaya Bank Colony, K R Puram, Bangalore–560 036.

…DEFENDANTS

OA No.723/2022

Counsel on record/appeared for:

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Applicant : Vidhii Partners

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Defendant Nos.1 to 3 : Ex-parte.

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FINAL ORDER

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The present Original Application (OA) is filed on 09-05-2022, under section 19 of the Recovery of Debts due to Banks and Financial Institutions Act 1993 for recovery of a sum of Rs.75,96,662.30/-(Rupees Seventy Five Lakhs Ninety Six Thousand Six Hundred and Sixty Two and Thirty Paisa 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 second defendant is the proprietor of the 1^st defendant proprietary firm Sri Venkateshwara Earth Movers which was registered as a proprietorship firm on 08.07.2018. The 2^nd & 3^rd defendants have addressed a sole proprietorship letter declaring that the second defendant is solely responsible for the conduct and affairs of Sri Venkateshwara Earth

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Movers. The first defendant is being sued as Borrower for the debt

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OA No.723/2022

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disbursed under the aforesaid loan facilities provided by the Original Applicant. The defendant No.2 being the proprietor of the 1^st defendant firm is an applicant and the 3^rd defendant is a co-applicant to the loan borrowed by the Defendant Nos.1 & 2. The defendants intended to purchase a used Kobelco SK380 Excavator and had approached the applicant bank to avail a construction equipment loan for the purchase of the same.

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The defendants had submitted Preliminary Credit Facility Application bearing No. CB 000 313549 for the purchase of the construction equipment. The Preliminary Credit Facility Application Form and Credit Facility Application dated 27.12.2019 form part and parcel of the of the loan sanction documentation process of the Applicant bank. The Defendants had duly accepted the terms and conditions, which were also handed over to Defendants and further the Defendants have acknowledged the same. Pursuant to sanction of the loan, the defendant has executed a hypothecation deed, hypothecating the vehicle, for which financial facility was availed along with an irrevocable power of attorney in favour of the applicant bank for full satisfaction of the loan amount. The hypothecation deed and irrevocable power of attorney executed by the defendant in favour of the applicant bank.

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Pursuant to the aforesaid sanction, the Defendants vide credit facility application dated 27.12.2019 inter alia agreed that:

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i) They shall repay the facility and interest thereon in the manner and on the dates specified thereto;

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OA No.723/2022

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ii) Terms of Rs,1,44,955/- per month for 48 months under said loan account.

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iii) Date of commencement of EMI was 22.01.2020 & the Due Date for payment of each EMI was on 22^nd day of each month

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iv) The Defendants agreed to pay a fixed rate of interest at 11.75% p.a. on the principal amount.

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The Applicant states that the above loan was accordingly disbursed in favour of the defendant No.1. The Defendants though initially made payments as agreed, but neglected and failed to do so from 22^nd October 2021.

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The Applicant further states that the Applicant was left with no other option but to issue Loan Recall Notices dated 15.11.2021 in respect to used construction equipment calling upon the Defendants to pay a sum of Rs.46,85,240/- (Rupees Forty-Six Lakhs Eighty-Five Thousand Two Hundred and Forty Only) as on 11^th November 2021 along with interest within 7 days from the receipt of the notice and further informed the Defendants that incase of the failure to repay the outstanding amount. The applicant is herewith furnishing Foreclosure statement dated 19^th January 2022 along with loan account statement pertaining to defendants to substantiate the claim made by the applicant bank to the tune of Rs.47,05,552.70/- (Rupees Forty-Seven Lakhs Five Thousand Five Hundred Fifty-Two and Seventy paise Only) as on 19^th January 2022 along with other charges.

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OA No.723/2022

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The defendants intended to purchase a construction equipment for their commercial purpose and had approached the Applicant Bank for a working capital term loan to purchase the vehicle under Emergency Credit Line Guarantee Scheme. The defendants have made an application for sanction of a term loan/working capital limit of Rs.10,69,500/- under Emergency Credit Line Guarantee Scheme by the defendants giving a selfundertaking. It is submitted that on 30.08.2020 the applicant bank has issued a sanction letter sanctioning working capital term loan of Rs.10,69,550/- under Emergency Credit Line Guarantee Scheme and the amount sanctioned was disbursed to the account of the defendants.

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Pursuant to the aforesaid sanction, the defendants inter alia agreed that:

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a) They shall repay the facility and interest thereon in the manner and on the dates specified thereto,

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b) Terms of repayment: 4 years from the date of disbursement.

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c) The opposite parties agreed to pay a fixed rate of interest at 9.25% p.a. on the principal amount.

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It is submitted that in reference of sanction letter dated 30.08.2020

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the defendants have given an undertaking to the applicant bank undertaking to create effective security in favour of the applicant bank as stipulated. Pursuant to sanction of the loan, the defendants have executed a hypothecation deed, for which financial facility was availed in favour of the applicant bank for full satisfaction of the loan amount, order dated

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OA No.723/2022

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31.08.2020 the SHCIL. The defendants initially made payments as agreed under the Facility Agreement. However, the opposite parties failed and neglected to continue to do the same since 15^th November 2021. The applicant states that the defendants failed and neglected to make payment to the applicant.

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The Applicant further states that the Applicant was left with no other option but to issue a recall Notice dated 15.11.2021 in respect to used construction equipment loan all the Defendants inter alia calling upon the Defendants to pay a sum of Rs.11,03,808/- (Rupees Eleven Lakhs Three Thousand Eight Hundred and Eight Only) along with interest as on 11^th November 2021 and further informed the Defendants that incase of their failure to repay the outstanding amount, the Applicant shall proceed in accordance with law. The Applicant submits that the Defendants have defaulted in making payment under the said facilities.

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The defendants intended to purchase a digger namely Tata Hitachi Ex 210 LC Super from Om Sairam Diggers and had approached the applicant bank to avail construction equipment loan. Subsequently the defendants have signed an addendum to the preliminary credit facility application. The Defendants submitted Preliminary Credit Facility Application Form, addendum to preliminary credit facility Application dated 28.09.2020 to avail the credit facility for purchase of the digger from Om Sairam Diggers as construction equipment Loan.

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OA No.723/2022

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The Applicant did not provide any separate sanction letter to the 1^st Defendant. The Preliminary Credit Facility Application Form and Credit Facility Application dated 28.09.2020 form part and parcel of the loan sanction documentation process of the Applicant bank. Pursuant to sanction of the loan, the defendants have executed a hypothecation deed, hypothecating the vehicle, for which financial facility was availed along with an irrevocable power of attorney in favour of the applicant bank for full satisfaction of the loan amount. On 28.09.2020 the SHCIL has issued a payment confirmation challan for the payment of stamp duty by the applicant. The hypothecation deed, stamp duty payment details and irrevocable power of attorney executed by the defendants in favour of the applicant bank.

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Pursuant to the aforesaid sanction, the Defendants vide credit facility

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application dated 28.09.2020 inter alia agreed that:

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i) They shall repay the facility and interest thereon in the manner and on the dates specified thereto;

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ii) Terms of repayment: Rs.88,001/- per month for 36 months under said loan account.

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iii) Date of commencement of EMI was 15.11.2020 & the Due Date for payment of each EMI was on 15^th day of each month

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iv) The Defendants agreed to pay a fixed rate of interest at 12.52% p.a. on the principal amount.

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OA No.723/2022

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The Applicant further states that the Applicant was left with no other option but to issue Loan Recall Notices dated 15.11.2021 in respect to construction equipment Loan calling upon the Defendants to pay a sum of Rs.19,72,328/- (Rupees Nineteen Lakhs Seventy-Two Thousand Three Hundred and Twenty-Eight Only) as on 11.11.2021 along with interest within 7 days from the receipt of the notice and further informed the Defendants that incase of the failure to repay the outstanding amount. The Applicant values its claim in the Original Application at Rs. 75,96,662.30/as on 19.01.2022 and is claiming future interest on the aforesaid loan from 20.01.2022. 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 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 Defendants No.1 to 3 by RPAD and the applicant bank filed a memo 17.02.2023, postal cover was returned with postal Shara “Left”. Hence, summons through substitute service was taken and the Applicant Bank published the summons to the Defendants in two daily leading newspapers kannada daily Newspaper “Samyuktha Karnataka’’ and English Daily ‘’The Hindu” on 01.03.2023. When OA was taken up on 10.11.2023, even after giving sufficient time, there was no appearance or representation from the defendants, hence, Defendants No.1 to 3 was placed ex-parte on 10.11.2023.

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OA No.723/2022

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Heard the submissions of Counsels and perused the records.

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To prove the case, Sri.Pramodh.G., aged about Major, Collection Manager and constituted Attorney of the 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 A42. 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:-

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: O R D E R:

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The OA is allowed with costs,

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(a) The Applicant bank is allowed to recover from defendant Nos.1 to 3

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jointly or severally, a sum of Rs. 75,96,662.30/- with interest @ 11.75% from 20.01.2022 being the aggregate amount outstanding and payable under the loan account bearing Nos. UQBNG00041298927, UQBNG0004199430 & UQBNG00042133489 together with contractual interest till the date of realization.

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OA No.723/2022

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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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(g) Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of the final order.

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OA No.723/2022

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

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[Dictated to the (GS), transcribed by him, corrected and signed by me on this the 24^th day April 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: Sri. Pramodh.G, Collection Manager and Constituted Attorney of the Applicant Bank.

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Exhibits on the part of the Applicant :

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Sl.	PARTICULARS	Exhibits
No.
1.	Power Of Attorney	A3
2.	Registration Certificate of Sri Venkateshwara Earth Movers	A4
3.	Sole Proprietorship Letter	A5
4.	Preliminary Credit Facility Application No.313549	A6
5.	Credit Facility Application dated 27.12.2019	A7
6.	Key Facts statement and most important information	A8
7.	Deed of Hypothecation	A9
8.	Irrevocable Power of Attorney	A10

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OA No.723/2022

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9.	Loan Recall Notice dated 15.11.2021 to the 2^nddefe	ndant	A11
	in respect of loan account bearing UQBNG00041298927.	No.
10.	Endorsement		A12
11.	Loan Recall Notice dated 15.11.2021 to the 3^rddefe	ndant	A13
	in respect of loan account bearing UQBNG00041298927.	No.
12.	Endorsement		A14
13.	Foreclosure statement dated 19.01.2022 in respect o account bearing No. UQBNG00041298927.	f loan	A15
14.	Loan Account Statement in respect of loan account be No. UQBNG00041298927.	aring	A16
15.	Emergency Credit Line Guarantee Scheme – undertaking by the borrower	self	A17
16.	Certificate of the defendants as stipulated by Reserve of India	Bank	A18
17.	Sanction letter dated 30.08.2020		A19
18.	Undertaking in relation to Security		A20
19.	Deed of Hypothecation		A21
20.	Stamp Duty payment details dated 31.08.2020		A22
21.	Loan Recall Notice dated 15.11.2021 to the 2^nddefe	ndant	A23
	in respect of loan account bearing	No.
	UQBNG00041999430.
22.	Endorsement		A24

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	OA	No.72	3/2022
23.	Loan Recall Notice dated 15.11.2021 to the 3^rddefen	dant	A25
	in respect of loan account bearing	No.
	UQBNG00041999430.
24.	Endorsement		A26
25.	Foreclosure statement dated 19.01.2022 in respect of account bearing No. UQBNG00041999430.	loan	A27
26.	Loan Account Statement in respect of loan account be No. UQBNG00041999430.	aring	A28
27.	Preliminary Credit Facility Application bearing No. CB 429027	999	A29
28.	Addendum to preliminary credit facility No. 429027		A30
29.	Credit Facility Application Form dated 28.09.2020		A31
30.	Key Facts statement and most important information.		A32
31.	Deed of Hypothecation		A33
32.	Stamp Duty payment details dated 28.09.2020		A34
33.	Irrevocable Power of Attorney		A35
34.	Loan Recall Notice dated 15.11.2021 to the 2^nddefen	dant	A36
	in respect of loan account bearing	No.
	UQBNG00042133489.
35.	Endorsement		A37
36.	Loan Recall Notice dated 15.11.2021 to the 3^rddefen	dant	A38
	in respect of loan account bearing UQBNG00042133489.	No.
37.	Endorsement		A39

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OA No.723/2022

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Foreclosure statement dated 19.01.2022 in respect of loan A40
account bearing No. UQBNG00042133489.
39. Loan Account Statement in respect of loan account bearing A41
No. UQBNG00042133489.
40. Certificate under Section 2-A of the Bankers’ Books A42
Evidence Act, 1891

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Witness Examined for the Defendants: -Nil – List of Documents Exhibited for the Defendants:

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-Nil –

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SCHEDULE OF MOVABLES HYPOTHECATED BY THE DEFENDANTS

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Construction Equipment Vehicle As per Hypothecation. TATA HITACHI Ex.210LC

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Sd/PRESIDING OFFICER DRT-II, BENGALURU

Icici Bank Limited v. M/S. Sri. Venkateshwara Earth Movers, Rep by Its Proprietor Sri. Srinivas Raju a

Case brief

What is this about?

What did the court decide?

Icici Bank Limited v. M/S. Sri. Venkateshwara Earth Movers, Rep by Its Proprietor Sri. Srinivas Raju a

Case brief

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What did the court decide?

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