Allowed

Indian Overseas Bank v. Suns Food Company

DRT7 Feb 2024TA/144/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the application filed by Indian Overseas Bank for recovery of a loan amount of Rs. 25.74 lakhs against M/s Suns Food Company, which failed to repay the disbursed facility despite being a proprietary concern lacking collateral initially sanctioned under a government scheme.

What did the court decide?

Recovery of Rs. 25,74,577.68 with future interest @9.25% simple; Authority to proceed against proprietor personally and attach hypothecated assets; Issuance of Recovery Certificate.

Indian Overseas Bank versus Suns Food Company — Contract and Commercial Disputes | DRT (2024)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this the 7^th day of February, 2024

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PRESENT: SHRI T. RAJESH

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PRESIDING OFFICER

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TA No.144 of 2022

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(Originally filed before DRT-I Chennai as OA No.154 of 2022 and thereafter transferred to this Tribunal and renumbered as TA No.144 of 2022)

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Indian Overseas Bank, Panruti Branch No.597/A, First Floor Gandhi Road, Panruti Cuddalore – 607 105 Rep. by its Branch Manager …Applicant

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Versus

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M/s Suns Food Company Rep. by its Proprietor R. Suganya No.740, Throwpathy Amman Koil Street Manthipalayam, Kottalampakkam Panruti Taluk, Cuddalore – 607 106 …Defendant

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Counsel for the Applicant : M/s J. Ramanathan Defendant : Ex-parte

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FINAL ORDER

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The above Original Application is filed under section 19 of the Recovery of Debt and Bankruptcy Act seeking recovery of Rs.25,74,577.68p with further interest from the date of filing of the OA and also by allowing the same to be recovered from defendant and also from their assets including the hypotheca.

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The above original application is filed before the DRT-I and stood transferred to this Tribunal and renumbered as above.

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The case of the applicant in nutshell is as follows:-

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The defendant, a proprietary concern, had approached the applicant and availed a cash credit facility for Rs.20 Lakhs on 23.10.2019. the said facility was disbursed without any collateral as the lending was in pursuant to a scheme introduced by Central Government for fresh entrepreneurs. The said facility was disbursed pursuant to the execution of necessary loan documents including demand promissory note and letter of hypothecation.

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It is also stated that in order to get over the exigency occurred due to COVID -19 and additional credit facility for Rs.4 Lakhs was also sanctioned and disbursed as the defendant had also executed necessary loan documents in lieu of the above disbursement.

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Even though the defendant had obliged themselves to repay the amount promptly and regularly, they failed to do so resulting defaults in the account and the same being declared as NPA.

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The applicant’s officials had on many occasions approached the defendants requesting them to regularize the account and despite the same no effort was made by the defendants to get the account regularized over to pay back the amount.

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It is also the case of the applicant that despite repeated reminders and requests the defendants had failed to make the repayment forcing the applicant to file this TA seeking recovery of the amount due in the account with further interest and cost.

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Even as the defendant failed to entered appearance despite taking out summons through paper publication they were cold absent and set exparte on 9.1.2023.

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The applicant had let in evidence through AW1 who had sworn to a Proof Affidavit in terms of the pleadings in the TA and also produced Exhibits A1 to A12 and got the same marked in evidence.

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Heard the counsel for the applicant and considered the contention as taken in the TA in the light of documentary evidence and proof affidavit. The following issues arise for consideration in this matter: -

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(i) Whether the applicant had succeeded in proving the OA claim?

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(ii) What orders are to be passed?

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Both these issues are gone into and decided together.

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The case put forth by the applicant in the Application remains unrebutted as defendants remained ex-parte. The evidence tendered by the applicant remains uncontroverted and undisputed. The evidence put forth by the applicant were found admissible. From the statement of accounts as produced by the applicant, it is evident that the amount as claimed in the OA is outstanding in the account, which the applicant is entitled to get recovered from the defendant and its assets. The claim of the applicant is well within the period of limitation and there is no Capitalization of penal interest.

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Since the TA claim is arrived at by calculating interest at agreed rate and the same is not interfered with pendente lite and future interest is awarded at simple rate.

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In view of the finding as entered above, the following order is passed: -

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(a) TA No.144 of 2022 stands allowed.

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(b) Applicant is permitted to recover an amount of Rs. 25,74,577.68 being the total due amount with future and pendent lite interest @9.25% (simple) from the date of filing of the TA till realization from the defendant and its assets including the hypotheca, after giving credit to all the amount recovered and received during the pendency of the TA. It is made clear that the proprietor being the same entity of the concern is also personally liable to be proceeded against.

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(c) A Recovery Certificate is to be drawn and issued to the recovery officer to enable recovery of the as per the above terms.

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(d) Applicant 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 terms of section 19(21)(i) of the RDB Act, read with Rule 6 of DRT (Procedure) Rules, 1993.

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(Dictated to PS, transcribed by him, corrected, signed and pronounced by me in the Open court, this 7^th day of February, 2024)

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

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Indian Overseas Bank v. Suns Food Company

Case brief

What is this about?

What did the court decide?

Indian Overseas Bank v. Suns Food Company

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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Case details

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