Allowed

Indian Overseas Bank v. Sivakumar

DRT25 Jul 2024TA/1773/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the bank's application under S. 19 RDB Act for recovery of Rs.39,24,891 as a Housing Loan. It reduced interest to 9% simple due to investigation delays and directed sale of attached property. The defendant was tried ex-parte.

What did the court decide?

Recovery of Rs.39,24,891 with 9% simple interest from application date; directive to sell the schedule property; costs awarded to Applicant.

Indian Overseas Bank versus Sivakumar — Contract and Commercial Disputes | DRT (2024)

TA No.1773 / 2023

25.07.2024

IN THE DEBTS RECOVERY TRIBUNAL – III, CHENNAI

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Dated this the 25^th day of July, 2024

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Present: SHRI A.S. JAYACHANDRA Presiding Officer (In–charge)

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TRANSFERRED APPLICATION No. 1773 of 2023

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(Originally filed before DRT-II, Chennai and numbered as OA 859/2019 and thereafter transferred to this Tribunal and renumbered as TA 1773/2023)

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M/s. Indian Overseas Bank Ashok Nagar Branch No.9, Dr. Natesan Road, Chennai – 600 083 Rep by its Chief Manager .... Applicant -VsMr. D. Sivakumar S/o. Devadas, No.18a/62, 1^st Extension, Venkatesh Nagar, Virugambakkam, Chennai – 600 092. ..... Defendant

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Counsels on record / appeared: Counsel for Applicant Bank : M/s. K. Radhakrishnamurthy Defendant was set ex-parte on : 15.07.2021

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O R D E R

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This application is filed by the applicant bank under Section 19 of Recovery of Debts due and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendant for recovery of a total sum of Rs.39,24,891/- (Rupees Thirty nine lakh Twenty Four thousand Eight hundred and Ninety one only) due under Housing Loan Facility repayable together with interest at the rate of 11.95% per annum with monthly rests from the date of application till the date of realization in full and for sale of schedule mentioned property along with costs of this application.

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Originally the application was filed before DRT-II, Chennai, assigned OA

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No.859/2019, and thereafter in pursuance to the notification from Ministry of Finance, DFS, dated 04.10.2022, OA No.859/2019 stood transferred to this Tribunal and renumbered as TA No.1773/2023.

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Brief facts of the case :- The sole defendant approached the applicant bank for a Housing Loan of Rs.20 lakhs by way of his application dated 10.01.2011. The same was sanctioned on 18.01.2011 under Subha Gruha Housing Scheme for purchase of a Flat. It is the allegation that the entire loan amount was availed by the defendant on 19.01.2011 and the defendant executed Demand Promissory Note, Letter of Undertaking to repay in instalments and also Housing Loan agreement. The loan was to be repaid in 180 equal monthly instalments of Rs.20,286/- per month from July, 2011.

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It is alleged that the defendant had deposited the title deeds on 03.03.2011 in token of having obtained the loan and the same was deposited with an intention to create equitable mortgage, which is also registered vide Document No.1795/2011 dated 03.03.2011, before the Sub Registrar, Virugambakkam.

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It is further alleged that the defendant was irregular in payments and the account is classified as NPA on 01.01.2013.

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Applicant bank also submits that there was a case registered with CBI in RC No.16A 2013 CBI / ACB Chennai and certain documents were seized by the CBI for investigation.

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Summons was ordered to sole defendant and the same was returned with remark as ‘not known’. Applicant bank had caused paper publication and filed proof thereof. Defendant remained absent and no written statement was also filed and hence was placed ex-parte on 15.07.2021 by the Ld. Predecessor.

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IA No.1140/22 was filed by applicant bank to dispense with production of original documents and to adduce secondary evidence on the ground that the same were handed over to Inspector of Police, Anti Corruption Branch, Shastri Bhavan, Chennai by Proceeding No.Rc.No.16A 2013 CBI/ACB/Chennai dated 08.11.2013 and the same was allowed by the Ld. Predecessor on 07.07.2022, subject to replacement of the same with the original documents as and when received from CBI.

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The applicant bank examined Mrs. Soumyashree Rout, Manager as AW-1 and deposed to the facts of the case. Ex A-1 to Ex A-10 filed by applicant bank were taken on record and marked as secondary evidence.

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With the available material evidence on record, the only point that arises for consideration in this application is:-

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Whether the applicant bank is entitled for the recovery of the amount

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claimed in the application from the defendant? If so, what relief?

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Heard the Ld. Counsel for applicant bank. During the course of hearing, perused the OA averments and the evidence available on record. Ld. Counsel for applicant bank was directed to produce a copy of complaint with the CBI in RC/16A/2013 as found in the pleadings at Para 4 of the OA and to submit with regard to the gist of the complaint and the present status of the investigation. The AR of the bank was directed to furnish summary of the status of the compliant and the circumstances in which the original documents were taken into possession by the CBI.

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Accordingly applicant bank had filed affidavit of Ms. Dipa Kumari, Chief Manager of applicant bank dated 12.07.2024 submitting therein that upon request of

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25.07.2024

defendant, Housing Loan of Rs.20 lakhs was sanctioned, which was availed by defendant after duly executing loan and security documents in favour of applicant bank on 19.01.2011. It is also deposed that thereafter, as defendant committed default in repayment, loan account became NPA on 01.01.2013. It is further submitted that by routine inspection, it was found out that this defendant along with other home loan borrowers, with the help of the then Senior Manager and Builders had committed fraud and obtained loans. Upon complaint given by Chief Regional Manager to SP, Anti Corruption Wing, CBI on 20.04.2013 vide letter dated ROII/VIGI/86/2012-2013, CBI had registered the case vide FIR No.RC/16A/2013 (RC MAI 2013 A0016 CBI ACB) dated 20.04.2013 and all the original documents were seized by CBI on 08.11.2013 from the branch and the case is still pending before CBI. It is further submitted that subsequent to filing of OA, applicant bank had sent request letters dated 24.03.2022 and 09.05.2022 requesting CBI authorities to provide certified copies of documents pertaining to the Housing Loans. Applicant bank had enclosed copies of complaint dated 20.04.2013, FIR dated 20.04.2013 and request letters dated 24.03.2022 and 09.05.2022 in support of their contentions.

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13. Answer to the Point:-

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To prove its claim, the applicant bank examined the witness AW1 and got marked 10 documents, which are marked as Exhibits A-1 to A-10. The proof affidavit of the applicant bank remains unchallenged and the say of the witness AW1 remains unrebutted.

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AW1 in her affidavit had re-iterated the facts on oath and she relied on Exh.A1 to A10. Ex A1 is Application by defendant dated 10.01.2011, Ex A2 is Sanction Letter dated 18.01.2011, Ex A3 is Demand Promissory Note for Rs.20 lakhs dated

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19.01.2011, Ex A4 is Letter of undertaking and repayment dated 19.01.2011, Ex A5 is Housing Loan Agreement dated 19.01.2011, Ex A6 is MOD executed by defendant dated 03.03.2011, Ex A7 is Statement of Account, Ex A8 is Sale Agreement dated 25.12.2010 executed between Anandan and Mr. D. Sivakumar, Ex A9 is Construction Agreement dated 25.12.2010 executed between the borrower and M/s Vishnuram Builders. Ex A10 is Sale Deed in favour of D. Sivakumar Doc No.252/2011 dated 19.04.2011.

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This Tribunal has carefully perused the pleadings and also evidence available on record. Ld. Counsel for applicant bank submits that since this Tribunal has permitted vide order dated 07.07.2022 for production of secondary evidence, the same is perused. The allegations found in the OA goes unrebutted. Defendant remained ex-parte.

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In the light of the facts brought before this Tribunal by the further affidavit of Ms. Dipa Kumari, Chief Manager of applicant bank dated 15.07.2024 and 23.07.2024 and during the course of arguments, applicant bank had produced three documents, from which it is made clear that the SB Account 30047 belongs to defendant. Second document evidencing release of funds, a total of Rs.20 lakhs has been disbursed as Rs.15 lakhs on 19.01.20211, Rs.1 lakh on 19.02.2011 and Rs.1 lakh on 14.09.2011. Third document had empowered the bank to directly release the sum of Rs.3 lakhs to the builder, for which defendant had given unequivocal undertaking authorising the bank to release Rs.3 lakhs, which be from his loan account and the bank had produced copy of the DD in the name of M/s Vishnu Builders.

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The additional documents are now marked as Court documents in T series – T-1 - Account statement showing the disbursement of Rs.17 lakhs to SB account of borrower, T-2 Request letter from defendant to bank for disbursement of Rs.3 lakhs to M/s Vishnuram Builders, T-3 – copy of DD for Rs.3 lakhs.

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After careful appreciation of the evidence available on record, this Tribunal is constrained to note that the pleadings are insufficient as regards the consideration of the amount under the Pronote at Ex A-3. However, considering the further affidavit of the Chief Manager, namely Ms. Dipa Kumari, it is clear that a total sum of Rs.17 lakhs is released to the SB account and a sum of Rs.3 lakhs were paid to the builder for which the defendant had consented to as per the documents at ‘T’ series. Thus, it is clear that the pronote is proof of record and the statement of account at Ex A-7 supported by the Certificate issued under Banker’s Book Evidence Act cannot be disbelieved. However, the defendant having remained ex-parte, the entire evidence adduced by the applicant bank is unrebutted. Thus the applicant bank is entitled for the amount claimed in the Suit.

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As far as the interest lis pendens and future interest is concerned, the same is to be considered in the light of the following circumstances:

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(a) This being a Housing Loan, which rate of interest varies from time to time, cannot be lost sight of;

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(b) The averments in the OA itself says that there has been some kind of defalcation of funds or fraud having been committed with the help of the then Senior Manager and the builders, for which the defendant cannot be saddled with future interest at the contractual rates.

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(c) There has been delay in disposal of the case for nearly five years for various reasons. This Tribunal being vested with additional charge from 11.06.2024 has taken note of that the defendant is not responsible for the delay in disposal of the case.

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For the above reasons, it is just and necessary that the interest from the date of filing of the OA till the date of realisation on the sum adjudged shall be at the rate of 9% (simple)

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In the result, application is allowed granting recovery certificate as follows:

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(a) The applicant bank is entitled for Recovery of a total sum of Rs.39,24,891/- (Rupees Thirty nine lakh Twenty Four thousand Eight hundred and Ninety one only) due under Housing Loan facility together with further interest @ 9% per annum (simple) from the date of application till the date of realization against the defendant.

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(b) It is further ordered that in case of default of payment by the defendant, the applicant bank is entitled to sell the schedule mentioned property in terms of the order in para (a) supra and appropriate the sale proceeds towards the amount due.

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(c) It is further ordered that amount remitted or realized, if any, during the course of the proceedings, shall be given due credit to the loan account of the defendant.

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(d) The applicant bank is entitled for costs of this application.

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(e) Schedule mentioned in the OA shall form part of this final order

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The applicant bank is directed to file costs memo within two weeks of the receipt of this order.

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Issue recovery certificate in favour of the applicant bank in terms of this final order.

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Communicate a copy of the order to the parties concerned in terms of

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Rule 16 read with Rule 2(c) of DRT (Procedure) Rules, 1993.

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Sd/(A.S.JAYACHANDRA) PRESIDING OFFICER (In-charge) DRT-III, CHENNAI

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(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this 25^th day of July, 2024)

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Annexure:-

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List of Exhibits marked by Applicant

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Detailed Schedule of Immovable Property.

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Exhibits marked by applicant bank

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Sl. No.	Descriptionof Documents	ExhibitNo.
1.	ApplicationbyDefendant dated10.01.2011	A-1
2.	Sanction LetterbyApplicantBankdated18.01.2011	A-2
3.	Demand Promissory Note for Rs.20 lakhs dated 19.01.2011	A-3
4.	LetterofUnderrating andrepayment dated19.01.2011	A-4
5.	HousingLoan Agreement dated19.01.2011	A-5
6.	Memorandumofdeposit oftitle deed dated 03.03.2011	A-6
7.	Statement of Accounts	A-7
8.	Sale Agreement executed between Mr. Anandan and Mr. D.Sivakumar, the defendant dated25.12.2010	A-8
9.	Construction Agreement executed between Mr. D. SivakumarandM/sVishnuram Builders dated25.12.2010	A-9
10.	Sale Deed in favour of Mr. D. Sivakumar – Doc No.252/2011dated19.01.2011	A-10
11.	Account statement showing the disbursement of Rs.17 lakhs to SBaccount ofborrower	T-1
12.	Request letter from defendant to bank for disbursement of Rs.3lakhs toM/sVishnuram Builders	T-2
13.	Copy of DD for Rs.3lakhs dated 07.02.2011	T-3

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Sd/(A.S.JAYACHANDRA) PRESIDING OFFICER (In-charge) DRT-III, CHENNAI

TA No.1773 / 2023

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Schedule of immovable property

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All that piece and parcel of land & building bearing Flat No.1, First Floor, measuring 745 sq.ft. along with 7.45% undivided share out of 4200 sq.ft. at land bearing Plot No.1, second Street, M.G. Chakrapani Nagar, Krishna Nagar, Maduravoyal Village, Ambattur Taluk, Thiruvallur District, comprised in Survey No. 302/2, situated within the Sub- Registration District of Virugambakkam, Registration District of Chennai Boundary Areas:

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North by	:	Property belongs to Mr. Ramamurthy
South by	:	Road
East by	:	Property belongs to Mr. Ponnusamy
West by	:	Survey No. 303

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The property lies in the Sub Registration District of Virugambakkam, Registration District of Chennai South.

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Sd/(A.S.JAYACHANDRA) PRESIDING OFFICER (In-charge) DRT-III, CHENNAI

Indian Overseas Bank v. Sivakumar

Case brief

What is this about?

What did the court decide?

Indian Overseas Bank v. Sivakumar

Case brief

What is this about?

What did the court decide?

What the court decided

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