Allowed

State Bank of India v. Sri Sanganagouda Basanagouda

DRT17 Jan 2024OA/99/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the bank's application filed under Section 19 of the RDB Act to recover Rs. 32,12,609 and future interest from the two defendant legal heirs in an ex-parte proceeding where they failed to appear and contest the default on an agricultural term loan.

What did the court decide?

Allow the OA and recover Rs. 32,12,609 with future interest at 14.30 p.a. by sale of schedule properties and personal assets.

State Bank of India versus Sri Sanganagouda Basanagouda — Banking and Recovery | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 17^th Day of January, 2024

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Present: SMT. S. V. GOWRAMMA

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Hon`ble Presiding Officer

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OA. No.99/2022

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BETWEEN:

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State Bank of India having its Local Head Office at St. Mark’s Road, Bangalore and a Branch Office at Asset Recovery Branch at Mysore Bank Building, BKG Complex, A- Block, 2^nd Floor, Avenue Road, Bengaluru- 560009 represented by it’s Chief Manager , Sri. Vinay Bhat … APPLICANT

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AND:

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Sri. Sanganagouda Basanagouda Jagatagal S/o Sri. Basanagouda Jagatagal Aged about 38 years

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Sri. Shivanagouda Basanagouda Jagatagal S/o Sri. Basanagouda Jagatagal Aged about 35 years

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Both are R/o Jagatgal Village Deodurg Taluq, Raichur District-584 111 ... DEFENDANTS

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Counsel on record/appeared for: Applicant : Sri. G. N. Satya Murthy Defendants : Exparte

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:FINAL ORDER:

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The Original Application (OA) is filed on 05.01.2022 by Applicant Bank under Section 19 of the Recovery of Debts and Bankruptcy Act,

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2 OA. 99/2022

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1993, against the defendant to recover a sum of Rs.32,12,609/- (Rupees Thirty Two Lakhs Twelve Thousand Six Hundred Nine Only) with further interest thereon from the date of filing the Application till realization from the defendants.

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BRIEF FACTS OF THE CASE :

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The Applicant submits that the application is filed within the

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period of limitation as prescribed under Section 24 of the Recovery of Debt Due to Banks and Bankruptcy Act 1993, and the subject recovery claim falls within the jurisdiction of this Hon’ble Tribunal.

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The case of the Applicant Bank is that the loan was availed by Late Basanagouda Jagatagal (father of Defendants No.1.and 2) . Sri . Basanagouda Jagatagal died on 04.02.2014. True Copy of the Death Certificate dated 06.09.2018 is produced as Document/ Annexure

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No.1. Defendants No.s 1 and 2 are the legal heirs of deceased Sri. Basanagouda Sangangouda Jagatagal.

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Late Basanagouda Jagatagal (father of Defendants No.1.and 2) approached the then State Bank of Mysore, presently the Applicant Bank to avail Agricultural Term Loan facility to the extent of Rs.5,97,000/- (Rupees Five Lack Ninety Seven Thousand Only) under an Application dated 20.09.2007. The then State Bank of Mysore, presently the Applicant Bank, sanctioned an Agricultural Term Loan Facility of Rs.5,97,000/- (Rupees Five Lack Ninety Seven Thousand

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3 OA. 99/2022

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Only) for the purpose of purchase of Tractor and trailer vide sanction letter by the sanctioning authority dated 20.09.2007.

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The terms and conditions of the sanction were duly communicated to the Late Basanagouda Jagatagal (father of Defendants No.1.and 2) by the then State Bank of Mysore, presently the Applicant Bank, under the Letter of Sanction stated above. Late Basanagouda Jagatagal (father of Defendants No.1.and 2) has signed the Letter of Sanction agreeing to the terms and conditions stated therein. The rate of interest agreed to be paid under the loan documents, in respect of the Term Loan facility, is @ 11.75 % p.a., with half yearly rests. It was agreed that the rate of interest is subject to the changes in the State Bank Advance Rate/State Bank Medium Term Loan Rate and such revised rate of interest would always be construed as agreed to be paid by the Late Basanagouda Jagatagal (father of Defendants No.1.and 2). The term loan was agreed to repaid in 18 half yearly instalments of Rs.33,000/with interest and costs w.e.f. August 2008.

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It is submitted that in consideration of sanctioning the Term Loan Facility stated above and made available, Late Basanagouda Jagatagal (father of Defendants No.1.and 2) executed Agreement of Hypothecation dated 20.09.2007. The Late Basanagouda Jagatagal (father of Defendants No.1.and 2) hypothecated the crops grown in the lands, more fully described in Schedule II to this Application, as also all the moveable Assets of the Late Basanagouda Jagatagal (father of

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4 OA. 99/2022

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Defendants No.1.and 2) including the tractor, trailer, Tools, Equipments, Fixtures and all other Machineries, Receivables and Investments, other.

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Late Basanagouda Jagatagal (father of Defendants No.1.and 2) executed a Registered Mortgage over the Schedule II (A) and (B) Properties as security for the Agricultural Term Loan and also the Cash Credit Loan aggregating to Rs.7,25,000/.

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8. As per RBI norms the repaying capacity of the people affected by natural calamities gets severely impaired due to the damage to the economic pursuits and loss of economic assets, relief in repayment of loans becomes necessary in areas affected by natural calamity and hence, restructuring of the existing loans of the borrowers in draught affected areas were required to be provided with relief measures including relief in repayment of loans by way of rephasing /rescheduling/restructuring of the existing loans without insisting for additional collaterals in terms of guidelines issued by RBI from time to time.

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Accordingly the term loan and cash credit loans are rephased/rescheduled from time to time wherein the overdue portions are transferred to rephased accounts giving time for the borrowers to repay the dues. In the context as above the term loan was rephased /restructured as hereunder.

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a) The term loan was rephased on 29.03.2010 where the overdue portion in a sum of Rs. 4,50,000/- is credited to the

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5 OA. 99/2022

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original account No.64013930231 and debited to the rephased account bearing Number 64057602403. The said rephased account is herein after referred to as Rephased Account 1.

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b) Again the term loan was rephased on 12.09.2012 where in the overdue portion in a sum of Rs. 3,15,000/- is credited to the original account No. 64013930231 and debited to the rephased account bearing Number 64104122379. The said rephased account is herein after referred to as Rephased

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Account 2.

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c) Further, KCC account is converted and rephased on 04.03.2010 where in the overdue portion in a sum of Rs. 1,53,700/- is credited to the KCC original account and closed and debited to the rephased account bearing Number 64056650708. The said rephased account is herein after referred to as Rephased Account 3.

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The Applicant submits that the Defendant failed to operate and regularise the aforesaid facilities satisfactorily in spite of providing relief measures and have committed breach of various terms of sanction and the loan documents, as a result the Loan Account and rephased accounts have become irregular and the Defendant has become defaulter. The Defendant failed to pay the instalments as agreed to under the Loan Documents as also to pay interest accrued from time to time.

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6 OA. 99/2022

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The Defendant failed to pay the entire outstanding amount in the accounts in spite of repeated requests and demands. That due to aforesaid irregularities and non-payment of Principal and Interest, the Defendant became liable to pay the outstanding amount. The Defendant is at present liable to pay the current and future interest at 11.75 % p.a. compoundable with half yearly rests. The interest payable from time to time, under the terms of the sanction/loan documents, has been duly notified. The Defendant is liable to pay the total outstanding amount together with interest, costs, etc. to the Applicant Bank.

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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 loan account was classified as NPA. The default in repayment continued and 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 No.1 and 2 through Registered Post with Acknowledgment Due and summons served in the month of March 2022. When OA was taken up on 03.08.2022 even after giving sufficient time, there was no appearance or representation from the defendants; hence, Defendant was placed exparte on 03.08.2022..

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Heard the submissions of Applicant Bank and perused the records.

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7 OA. 99/2022

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To prove the case of the Applicant Bank, Chidambar Majali, S/o. Kashinath Majali, Chief Manager of the applicant bank, has filed his 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 A14. 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,

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the conduct and operations in the 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 a sum of Rs.32,12,609/- (Rupees Thirty Two Lakhs Twelve Thousand Six Hundred Nine Only) along with current and future interest at 14.30 % P.A. compoundable with half yearly rests from 10.08.2021 till the date of realisation of the entire amount due.

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8 OA. 99/2022

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(b) In the event of failure of the defendants to pay the aforesaid

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

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(d) If the sale proceeds of the schedule mentioned

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mortgaged/hypothecated 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 movable and immovable) 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

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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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9 OA. 99/2022

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(g) Recovery Certificate shall be drawn up and issued to the

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Recovery Officer in terms of the final order.

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A copy of this order is communicated to the parties concerned.

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[Dictated to the (PR), transcribed by her, corrected and signed by me on this the 17^th of January, of 2024]

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Sd/-

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(S.V. GOWRAMMA) 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: Chidambar Majali, S/o. Kashinath Majali, Chief Manager of the

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applicant bank

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Exhibits on the part of the Applicant:

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Exhibit Nos.	Particulars of Documents
A1	Applicant Evidence
A2	List of Documents.
A3	Application For loan dated 20.09.2007
A4	Sanction Letter dated 20.09.2007
A5	Hypothecation Agreementdated 20.09.2007
A6	Registered Mortgage Deed dated 20.09.2007
A7	Affidavit letter
A8	Certified Accounts Extract (ATL) dated 13.08.2021
A9	Certified Accounts Extract (Rephased) dated 13.08.2021
A10	Certified Accounts Extract dated 09.08.2020
A11	Certified Accounts Extract (Rephased) dated 09.08.2020
A12	Certified Accounts Extract (Rephased) dated 09.08.2020
A13	Account Closure Summary dated 09.08.2020
A14	Account Closure Summary dated 09.08.2020
A15	Account Closure Summary dated 09.08.2020
A16	Account Closure Summary dated 09.08.2020

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OA. 99/2022

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A17 Account Closure Summary dated 09.08.2020

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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- I

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The crops grown in the lands more fully described in Schedule II hereunder as also all the moveable Assets of the Defendant including the Tools, Equipments, Fixtures and all other Machineries, Receivables and Investments, other movable assets and valuables, including the Assets generated out of the Bank Finance.

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SCHEDULE II (A) and (B) Properties

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The Agricultural Land of the Defendant bearing:

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A) Sy.No. 49/ -2 measuring 4 Acres 38 Guntas

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Bounded by : East:Land of Sangappa Gouda,West:Land of Bhadrappa, North: Land of Rachanagouda, South: Land of Suresh Nayak,

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B) Sy.No. 85/1- measuring 4 Acres 20 Guntas Bounded by : East:Land of Basavaraj,

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West: Land of Basavaraj North: Land of Shivanappa, South: Land of Veerupakshi

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Land is situated at Jagatgal Village, Taluq-Deodurg , District –Raichur

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Sd/-

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(S.V. GOWRAMMA) PRESIDING OFFICER DRT-II, BENGALURU

State Bank of India v. Sri Sanganagouda Basanagouda

Case brief

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State Bank of India v. Sri Sanganagouda Basanagouda

Case brief

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