Allowed

M/s Pridhvi Asset Reconstruction and Securitisation Company Ltd., v. M/s Smart Shoppers Pvt. Ltd., Rep. by its Director, M. Senthikumar

DRT27 Mar 2024TA/20/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the transfer application filed by Pridhvi Asset Reconstruction Company for recovery of Rs. 9.64 crore against five respondents. Recognizing the business loan nature, it awarded 12% simple interest instead of the claimed monthly rests and allowed the sale of schedule properties.

What did the court decide?

Application allowed; recovery of Rs.9,64,74,857/- with 12% simple interest from the date of filing; permission to sell schedule properties and arrest respondent 2 and 3 for deficiency.

M/s Pridhvi Asset Reconstruction and… — Contract and Commercial Disputes | DRT (2024)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 27^th day of March, 2024

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PRESENT: SHRI T. RAJESH

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PRESIDING OFFICER

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TA No.20 of 2022

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(Originally filed before DRT-I Chennai as OA No.130 of 2021 and thereafter transferred to this Tribunal and renumbered as TA No.20 of 2022)

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M/s Pridhvi Asset Reconstruction and

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Securitisation Company Ltd., 1-55, Raja Praasadamu, 4^th Floor Wing-I, Masjid Banda Road Kondapur, Hyderabad – 500 084 Represented by its Vice President Mr. K.V. Ramakrishna Prasad …Applicant

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Versus

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M/s Smart Shoppers Pvt. Ltd., Rep. by its Director, M. Senthikumar No.346, Ground Floor Sindhu Pantheon Plaza Pantheon Road, Egmore Chennai – 600 008

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Also at

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No.A-176, 5^th Street, Shanthi Colony Anna Nagar, Chennai – 600 040

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M. Senthil Kumar, Son of Muthu No.346, Ground Floor Sindhu Pantheon Plaza Pantheon Road, Egmore Chennai – 600 008

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Mrs. G. Kavitha Wife of Rajagopal V. No.42/6, Flat BG2, Shubiksha Apartments Choolaimedu, Chennai – 600 0094

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Mr. R. Subramani Son of Mr. Ramasamy No.4/159, Kuttakadu Veerapandi, Salem – 636 001 …Defendants

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Counsel for the Applicant Bank : M/s S. Namasivayam Defendants : Ex- parte

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FINAL ORDER

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This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 against the defendants for recovery of a sum of Rs.9,64,74,857/- together with interest at the rate of 19.55% per annum with monthly rests plus from the date of filing of the application till the date of realization in full along with costs of this application and also by proceeding against the schedule mentioned properties.

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The above Original Application is filed before DRT-I Chennai and stood transferred to this Tribunal and renumbered as above.

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The case of the applicant can be encapsulated as follows: -

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(a) The 1^st defendant approached the erstwhile M/s Karur Vysya Bank Ltd., Egmore Branch for taking over the loans availed from M/s Yes Bank and SVC Bank. The applicant considering the said request sanctioned OCC facility of Rs.5,00,00,000/- with a fresh sub limit of Rs.20 lakhs in the nature of Bank Guarantee within the overall total limit of Rs.5,00,00,000/-. The 1^st defendant executed an undertaking letter dated 27.10.2015 and the defendants also executed an Agreement dated 27.10.2015 for take over of liabilities from another bank / institutions. The 1^st defendant hypothecated its movable assets by executing Deed of Hypothecation of current assets on 27.10.2015. The defendants executed agreement of guarantee dated 27.10.2015 thereby

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guaranteeing the repayment of credit facility availed by 1^st defendant. Towards the sub limit of Rs.20 lakhs the 1^st defendant executed supplemental agreement on 27.10.2015. The defendants also executed various other loan and security documents on 27.10.2015.

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(b) The defendants 2 to 4 created equitable mortgage over the schedule mentioned properties and confirmed the same by executing Memorandum of Deposit of Title deeds dated 20.11.2015, 27.10.2015 and 01.12.2015 registered as Doc. Nos. 4486/2015, 3612 of 2015 and 2968 of 2015 on file of SRO, Mannachanallur, Veerapandi and T. Nagar respectively.

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It is further stated that even though the defendants were obliged to repay the amount promptly and regularly, they had failed to do so resulting in defaults in repayment and hence the account was classified as NPA on 28.09.2017.

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It is stated that the Karur Vysya Bank assigned the debt along with its securities in favour of the applicant vide Assignment Agreement dated 30.09.2019, registered as Doc. No.2763 of 2019, SRO, T. Nagar, Chennai

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It is contended by the applicant that 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 or to pay back the amount. It is stated that as no repayment was forthcoming despite repeated requests, the applicant invoked the provisions of SARFAESI Act and issued the demand notice on 14.10.2019 calling upon the defendants to clear the outstanding dues.

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

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The defendants remained absent and hence were called absent and set ex-parte on 19.05.2022.

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The applicant had let in evidence through AW-1, who had sworn to a Proof Affidavit in terms of the pleading in the OA and also produced Exhibits A-1 to A-27 and got the same marked in evidence.

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Heard the Ld. Counsel for the Applicant and considered the contentions as taken in the OA in the light of documentary evidence and proof affidavit.

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The following issues arise for consideration in this matter: -

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

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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 evidences put forth by the applicant were found admissible. From the statement of accounts as produced by the applicant,

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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 defendants and their assets (including the schedule mentioned properties). The claim of the applicant is well within the period of limitation and there is no capitalization of penal interest.

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In view of the fact that the subject loan is a business loan and the applicant has charged interest at contractual rates till the date of filing of the OA and further as the interest rates have come down the Tribunal is inclined to reject the interest with monthly rests and award simple interest at reduced rates and prayer for award of penal interest is rejected.

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During the pendency of the TA the applicant filed a part satisfaction memo that the applicant has realized a sum of Rs.85,10,000/- by sale of Schedule ‘B’ property and prayed for recording part satisfaction of the TA claim. This Tribunal by its proceedings dated 27.03.2024 recorded part satisfaction of the TA claim to the tune of Rs.85,10,000/-.

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In view of the afore mentioned discussions, the only conclusion this Tribunal can draw is that the applicant had clearly proved the disbursement of the loan, which the applicant is entitled to realize and defaults committed by the defendants. Hence, TA is disposed off in the following manner: -

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(a) TA No.20 of 2022 stands allowed.

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(b) Applicant is permitted to realize an aggregate amount of Rs.9,64,74,857/with future and pendentelite interest @12% p.a., simple from the defendants jointly and severally, from the date of filing of the OA till realization, after deducting all the amounts received by them during the pendency of OA, and also by selling the schedule properties (except for Schedule ‘B’) and other assets of the defendants. It is made clear that the sum of Rs.85,10,000/- realized by the applicant bank by sale of Schedule ‘B’ property be given credit to on its respective date.

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(c) If the sale proceeds are not found sufficient to cover the amount due and payable to the Applicant Bank, the defendants 2 and 3 are personally liable for all such amounts due under the Loan Accounts.

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(d) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 7 days from the date of the order.

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(e) The Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of this final 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 16 of DRT (Procedure) Rules, 1993.

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(Dictated to PS, transcribed by him, corrected, signed and pronounced by me in Open Court, on this the 27^th day of March, 2024)

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

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M/s Pridhvi Asset Reconstruction and Securitisation Company Ltd., v. M/s Smart Shoppers Pvt. Ltd., Rep. by its Director, M. Senthikumar

Case brief

What is this about?

What did the court decide?

M/s Pridhvi Asset Reconstruction and Securitisation Company Ltd., v. M/s Smart Shoppers Pvt. Ltd., Rep. by its Director, M. Senthikumar

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

Coram

Case details

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