Allowed

Bank of India v. Malnad Auto Treat

DRT20 Jan 2024OA/989/2022

Case brief

AI extract

What is this about?

Bank of India filed an Original Application under Section 19 of the Recovery of Debts Due and Bankruptcy Act 1993 to recover dues from M/s Malnad Auto Treat and its directors. The Tribunal allowed the application as the claim remained unchallenged due to the defendants' absence. The Bank was directed to recover the principal amount, interest, and penal interest from the defendants or their hypothe

What did the court decide?

Directing defendants to pay Rs.23,46,999.82 with interest and costs; liberty to sell schedule properties or personal assets for recovery.

Bank of India versus Malnad Auto Treat — Banking and Recovery | 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 January, 2024

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

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OA. No.989/2022

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BETWEEN:

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BANK OF INDIA Branch office at HSR Layout, 50, 19th Main Road, Sector 3, HSR Layout, Bengaluru – 560 102, Represented by its Chief Manager and Constituted Attorney Mr. Arunkesh.S,

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… APPLICANT

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AND:.

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M/s Malnad Auto Treat Represented by its Directors i.Sri. C.S. Abhilash ii. Sri. Tarun No.17/5, 17th Cross, 3rd Sector, HSR Layout, Bengaluru – 560 102.

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Sri C.S.Abhilash S/o Surendra Gowda C R, age Major, No.222, 8th Cross, 1st Floor, 2nd Block, Flat No.207, Lake View Apartment, Somasundarapalya, HSR Layout, Bengaluru – 560 102. PAN No: BGUPA7390E PH: 9036022922

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Sri. Tarun S/o Chandrashekar, age Major, 389, 1st Floor, 5th Main, 23rd Cross, HSR Layout 7th Sector, Bengaluru – 560 102. ... DEFENDANTS

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Counsel on record/appeared for:

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Applicant : Sri. K. Raveendran

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OA. No. 989/2022

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Defendant Nos.1 to 3 : Exparte.

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FINAL ORDER

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The present Original Application (OA) is filed on 22.06.2022 under section 19 of Recovery of Debts Due and Bankruptcy Act 1993 for recovery of a sum of Rs.23,46,999.82 (Rupees Twenty Three Lakhs Forty Six Thousand Nine Hundred Ninety Nine and Paise Eighty Two Only) with further interest thereon from the date of filing the Application till realization from the Defendants.

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The application filed is within the period of limitation as prescribed under Section 24 Recovery of the Debts Due to Banks and Financial Institutions Act 1993 and the subject recovery claim falls within the jurisdiction of this Hon’ble Tribunal.

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Brief facts of the case:

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It is the case of the applicant bank where in the defendant No.1 is a proprietorship firm of which defendant No.2 & 3 is the Partners. The Defendant No.1 had approached the applicant bank seeking for Cash Credit Loan and disbursed the same to the tune of Rs.5,00,000/- (Rupees five lakh only) vide MSE I application form for SME’s, for the purpose of business i.e. Car Wheel Alignment, Balancing and allied services in Bengaluru. After considering the request of the 1st defendant, applicant bank sanctioned the Cash Credit Loan and disbursed the same to the tune

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of Rs.5,00,000/- (Rupees five lakh only) vide Sanction Letter dated 26.11.2015 in Loan A/c No. 843830110000032. The defendant agreed to

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OA. No. 989/2022

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repay the said loan on Demand. The Defendant executed on Demand Promissory Note dated 26.11.2015 with interest @ 12.75% p.a. with monthly rests and also agreed to pay penal interest @ 2% p.a. for the overdue amounts.

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Further, the Defendant No.1 had approached the applicant bank seeking for Term Loan and disbursed the same to the tune of Rs.25,00,000/- (Rupees twenty five lakh only) vide MSE I application form for SME’s, for the purpose of business i.e. Car Wheel Alignment, Balancing and allied services in Bengaluru. After considering the request of the 1st defendant, applicant bank sanctioned the Term Loan and disbursed the same to the tune Rs.25,00,000/- (Rupees twenty five lakh only) vide Sanction Letter dated 26.11.2015 in Loan A/c No. 843870410000015. The Term Loan in 82 EMI’s of Rs.46,182/- along with interest @ 12.75% p.a. with monthly rests and also agreed to pay penal interest @ 2% p.a. for the overdue amounts.

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The defendants executed necessary loan documents in favour of the applicant bank as security for the due repayment of the loans, interest, cost and charges, and Defendants executed On Demand Promissory Note dated 26.11.2015 and Agreement L-516 dated 26.11.2015 and Hypothecation Cum Loan Agreement dated 26.11.2015 and Bearer Letter in L-435 and Installment Letter in L-440 dated 26.11.2015 and Acknowledgement of Debt/ Securitized dated 24.05.2018 & 17.02.2021 in respect of the said loans in favour of the applicant bank.

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OA. No. 989/2022

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The Applicant Bank submits that the Defendants, after availing the said facilities, failed to repay the loan amount and committed default. The Defendants executed Acknowledgement of Debt/ Securitized dated 24.05.2018 & 17.02.2021. 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 Nos.1 to 3 through Registered Post with Acknowledgment Due the same is duly served on 31.10.2022 and 24.03.2023. Therefore, service held sufficient. When OA was taken up on 07.06.2023 even after giving sufficient time, there was no appearance or representation from the Defendants; hence, Defendant Nos.1 to 3 were placed exparte on 07.06.2023.

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Heard the submissions of Applicant Bank and perused the records.

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To prove the case of the Applicant Bank, Sri. Mr. Shashivardhana K.K. S/o Krishnaiah K.V., Senior Manager has filed Affidavit by way of evidence and same was considered as evidence of AW.1 and marked as Ex.A1, the list of Document came to be marked as Ex.A2 and documents came to be marked as Ex.A3 to A17. As the Defendants remained exparte, 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, the

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OA. No. 989/2022

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conduct and operations in the account and the default committed, this

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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 Defendants to pay an

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amount of Rs.23,46,999.82 (Rupees Twenty Three Lakhs Forty Six Thousand Nine Hundred Ninety Nine and Paise Eighty Two Only) consisting of:

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i. The Defendants to pay a sum of Rs.7,05,229.91 (Rupees Seven Lakhs Five Thousand Two Hundred Twenty Nine and Paise Ninety One Only) to the Applicant Bank in respect of the Loan amount due under Cash Credit Loan Account No.843830110000032 along with current and future interest thereon at the rate 12.75% p.a., with monthly rests and 2% penal interest from the date of Application till its full realization.

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ii. The Defendants to pay a sum of Rs.16,41,769.91 (Rupees Sixteen Lakhs Forty One Thousand Seven Hundred Sixty Nine and Paise Ninety One

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Only) to the Applicant Bank in respect of the Loan amount due under Term Loan Account No.843870410000015 along with current and future interest

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OA. No. 989/2022

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thereon at the rate 12.75% p.a., with monthly rests and 2% penal interest

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from the date of Application till its full realization.

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(b) In the event of failure of the Defendant to pay the aforesaid amount,

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the bank is at liberty to recover the amount by sale of the schedule mentioned property in the OA;

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order;

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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 movable and immovable) respectively 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

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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

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amount to be paid by the respective defendants to the applicant bank.

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(f) The applicant bank shall file memo of costs within ten days from the

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date of this final order.

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OA. No. 989/2022

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

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[Dictated to the (CS), transcribed by her, corrected and signed by me on this the 20^th Day of January 2024].

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Sd/-

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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: Mr. Shashivardhana K.K. S/o Krishnaiah K.V., Senior Manager of Applicant Bank.

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Exhibits on the part of the Applicant:

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Exhibit	Particulars of Documents
Nos.
A1	Applicant Evidence
A2	List of Documents.
A3	MSE I Loan Application Form for SME’s
A4	Sanction letter dated 26.11.2015
A5 & A6	On Demand Promissory Note dated 26.11.2015 for CC & TL
A7	Agreement L-516 dated 26.11.2015 for CC & TL
A8	Hypothecation cum loan agreement dated 26.11.2015for CC & TL
A9	Bearer Letter in L-435 dated 26.11.2015
A10	Installment Letter in L-440 dated 26.11.2015
A11	Acknowledgement of Debt / Securities dated 24.05.2018
A12 & A13	Acknowledgement of Debt / Securities dated 17.02.2021
A14	Statement of account in respect of CC

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OA. No. 989/2022

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A15	Statement of account in respect of TL along with Interest sheet and Certificate
A16	MSE I Loan Application Form for SME’s
A17	Sanction letter dated 26.11.2015
Witnes	s Examined for the Defendants: -Nil -
List of	Documents Exhibited for the Defendants: -Nil -

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Schedule Of Movables Hypothecated By The Defendants

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Hypothecation of the following machineries stored in the business premises of defendant No.1 i.e. No.17/5, 17th Cross, 3rd Sector, HSR Layout, Bengaluru– 560 102.

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Bosch 3D Wheel Aligner

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Bosch Tyre Changer

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Wheel Balancer, Camera, UPS

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Bosch Nitrogen Inflator

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Bosch Recycle Equipment

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Sd/-

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PRESIDING OFFICER DRT-II, BENGALURU

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OA. No. 989/2022

Bank of India v. Malnad Auto Treat

Case brief

What is this about?

What did the court decide?

Bank of India v. Malnad Auto Treat

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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Case details

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