Allowed

Tamilnad Mercantile Bank Limited v. Sri Simma Associates

DRT22 Mar 2024TA/338/2022

Case brief

AI extract

What is this about?

An application under Section 19(1) of the RDB Act for issuance of a Recovery Certificate against a deceased borrower and guarantors was allowed. The Tribunal evidenced TA claim, limited heirs' liability to inherited assets, and awarded interest at 12% p.a.

What did the court decide?

Issuance of Recovery Certificate for Rs.1,04,81,742.30 plus future interest @12% p.a., permitting recovery from heirs limited to inherited assets.

Tamilnad Mercantile Bank Limited versus Sri Simma Associates — Banking and Recovery | DRT (2024)

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IN THE DEBT RECOVERY TRIBUNAL –II CHENNAI

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Dated this 22^nd day of March, 2024

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PRESENT: SHRI T.RAJESH PRESIDING OFFICER

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TA.No.338 of 2022

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(Old OA.No.733/2019 - DRT-I, Chennai)

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Tamilnad Mercantile Bank, Mannargudi Branch, No.235/1, Ground Floor, Periakadai Street, Mannargudi – 614 001. Rep. by Branch Manager.

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… Applicant.

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Vs.

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M/s.Sri Simma Associates, Proprietor : Mr.D.Saravanakumar (Deceased) S/o.Durairaj Nattar.

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Mrs.S.Kavitha, W/o.D.Saravanakumar. No.5/2647, Pookara Third Street, Thanjavur – 613 001. Thanjavur District.

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Ms.S.Dharani, D/o.Late D.Saravanakumar, No.5/2647, Pookara Third Street, Thanjavur – 613 001. Thanjavur District.

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S.Guhan,

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S/o. Late D.Saravanakumar, No.5/2647, Pookara Third Street, Thanjavur – 613 001. Thanjavur District. … Defendants.

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Counsel for Applicant : Mr.N.K.S.Rukmangathan. 1^st Defendant : Deceased. 2^nd Defendant : Absent. 3^rd and 4^th Defendants : Exparte. ……

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ORDER

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The Application is filed Under Section 19 (1) of the Recovery of Debts And Bankruptcy Act, 1993 seeking for issuance of a Recovery Certificate for Rs.1,04,81,742.30 due in Term Loan and Overdraft Loan availed by 1^st and 2^nd defendants.

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The Applicant contends that the 1^st defendant represented by its Proprietor, Mr.D.Saravanakumar (deceased) availed Term Loan of Rs.70,00,000/- and Overdraft of Rs.20,00,000/- for which 2^nd defendant stood as guarantor. It is further stated that the said facilities were secured by mortgage of schedule mentioned properties and by hypothecation of movables.

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It is also stated that the above facilities were availed after execution of necessary loan documents by 1^st and 2^nd defendants obliging themselves to repay the amount promptly and regularly, without fail.

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The Applicant further contends that despite availing the credit facilities by obliging to pay back the amount, the 1^st and 2^nd defendants failed in compliance of the same and all the efforts of the Applicant to make the defendants pay back the amount failed forcing the Applicant to file this Application. During the pendency of the TA, the proprietor of 1^st defendant was expired and hence 3^rd and 4^th

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defendants were impleaded as his legal heirs, apart from the 2^nd defendant who is also the legal heir of deceased Saravanakumar .

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Summons was taken out and as the defendants failed to enter appearance 3^rd and 4^th defendants were set exparte on 10.08.2023 and as the 2^nd defendant was continuously absent the matter is proceeded exparte against 2^nd defendant also.

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The Applicant let in evidence through AW1, filed proof affidavit in confirmation with the pleadings and got marked Exhs.A1 to A95.

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Heard. The following issues arise for consideration:

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i) Whether the Applicant had proved the TA claim?

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ii) What orders are to be passed?

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Both these issues are decided together.

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The Applicant’s evidence remains un-rebutted and hence proved. The documents produced by the Applicant are found to be admissible and are sufficient to prove the TA claim. Hence, the Applicant is found to be entitled for the TA claim. The TA claim is made within limitation and there is no capitalization of penal interest. The claim against 3^rd and 4^th defendants is limited to the extent of assets inherited from deceased Mr.D.Saravanakumar. Since the claim is arrived at by calculating interest at agreed rate which is on the higher side, pendentelite and future interest is awarded @12% p.a. (simple).

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In view of the above

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i) TA No.338/2022 stands allowed.

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ii) Applicant is permitted to recover an amount of Rs.1,04,81,742.30 (Rupees One Crore Four Lakhs Eighty One Thousands Seven Hundred Forty Two and Paise Thirty only) with future and pendentelite interest @12% p.a (simple) from the date of filing of the TA till realization from the 2^nd defendant personally and from her assets and from the assets of the 1^st defendant proprietary concern and also by sale of schedule mentioned mortgaged properties and hypothecated movables after giving credit to all the amounts recovered and received during the pendency of the TA. The liability of 3^rd and 4^th defendant is limited to the extent of assets inherited from their father deceased D.Saravanakumar.

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iii) A Recovery Certificate is to be drawn and issued to the Recovery Officer to enable recovery of the amounts as per the above terms.

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iv) 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

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Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

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(Dictated to PA, transcribed by him, corrected, signed and pronounced by me in the Open Court, this 22^nd day of March, 2024)

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

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Tamilnad Mercantile Bank Limited v. Sri Simma Associates

Case brief

What is this about?

What did the court decide?

Tamilnad Mercantile Bank Limited v. Sri Simma Associates

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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