Allowed

Canara Bank v. M/s. Sri Raam Oil Mills

DRT27 Mar 2024TA/409/2023

Case brief

AI extract

What is this about?

In a debt recovery proceeding under the RDB Act, the Tribunal allowed the bank's application for a recovery certificate due to un-rebutted evidence. The court rejected the request for monthly rests due to high interest rates and granted recovery of the principal, future interest, and related costs.

What did the court decide?

Recovery Certificate issued for Rs. 1,61,15,802.86/- with future interest @9% p.a.; costs permitted to be finalized.

Canara Bank versus M/s. Sri Raam Oil Mills — Cheque Dishonour | DRT (2024)

¶1

IN THE DEBT RECOVERY TRIBUNAL –II CHENNAI Dated this 27^th day of March, 2024

¶2

PRESENT: SHRI T.RAJESH PRESIDING OFFICER

¶3

T.A.No.409of 2023

¶4

(Old OA.No.714/2019-DRT-I, Chennai)

¶5

Canara Bank Erstwhile Syndicate Bank Chennai Egmore Branch No. 16, Police Commissioner Office Road, Egmore, Chennai – 600 008 …Applicant

¶6

Vs.

¶7

M/s. Sri Raam Oil Mills, Rep. by its Partners Mrs. S. Shenbagalakshmi and Mr. M. Rajesh, No. 1, Murugesapuram, Rengasammy Street, Old Pallavaram, Chrompet, Chennai –600 117

¶8

Mrs.S. Shenbagalakshmi, W/o. R. V. Swamy, No. 18, Alamelupuram, Lakshmipuram Extension – II, Mudichur, Chennai – 600 045

¶9

Mr. M. Rajesh S/o. V. Mani, No. 1/64, Ponniamman Koil Street, Injambakkam, Chennai – 600 041 ...Defendants Counsel for Applicant : M/s.A. Ameen Defendants : Exparte ……

¶10

¶11

ORDER

¶12

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 a total sum of Rs.1,61,15,802.86Pdue under the Working Capital A/c along with future interest and costs and for sale of schedule mentioned properties.

¶13

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

¶14

The Applicant Bank contends that a Working Capital Loan credit facility of Rs. 1,20,00,000/-was availed by the 2^nd and 3^rd Defendants – Partners on behalf of the 1^st Defendant – Partnership Firm from erstwhile Syndicate Bank which later got amalgamated with the Applicant Bank. The 2^nd and 3^rd Defendants also stood as the Guarantors. It is also stated that the facilities were secured by mortgage of schedule mentioned properties.

¶15

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

¶16

The Applicant Bank further contends that despite availing the credit facilities by obliging to pay back the amounts, the defendants failed in compliance of the same and all the efforts of the Applicant Bank to

¶17

¶18

make the defendants pay back the amounts failed, forcing the Applicant Bank to file this Application.

¶19

6. Summons was taken out and as defendantsD1 and D2 failed to enter appearance, they were set exparte on 06.07.2023 . Though D3 entered appearance, failed to file reply statement, hence, subsequently held exparte on 06.07.2023.

¶20

The Applicant Bank let in evidence through AW1, filed proof affidavit in confirmation with the pleadings and got marked Exhs.A1 to A14.

¶21

Heard. The following issues arise for consideration.

¶22

i. Whether the Applicant Bank had proved the TA claim?

¶23

ii. What orders are to be passed?

¶24

Both these issues are decided together.

¶25

The Applicant Bank’s evidences remain un-rebutted and hence proved. The documents produced by the Applicant Bank are found to be admissible and are sufficient to prove the TA claim. Hence the Applicant Bank is found to be entitled for the TA claim. The TA claim is made within limitation and there is no capitalization of penal interest. During the pendency of the TA, the applicant has filed a part satisfaction memo stating that schedule mentioned properties were sold under SARFAESI Act and realized a sum of Rs.1,27,00,000/- and the same is recorded. Since the TA claim is arrived at by calculating

¶26

¶27

interest at agreed rate, which is on the higher side, prayer for monthly rests is declined.

¶28

In view of the above:

¶29

i. TA. No: 409of 2023 stands allowed.

¶30

ii. Applicant Bank is permitted to recover an amount of Rs.1,61,15,802.86P (Rupees One Crore Sixty One Lakhs Fifteen Thousand Eight Hundred Two and Eighty Six Paise Only/)together with future and pendentelite interest @9%p.a. (simple)from the defendants jointly, severally and personally and also by proceeding against the assets of the defendants after giving credit to all the amounts recovered and received during the pendency of the TA including the amount of part satisfaction of Rs. 1,20,00,000/-.

¶31

iii. It is further ordered that any amount remitted or realized during the course of the proceedings, shall be given due credit to the loan account of the defendants.

¶32

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

¶33

¶34

v. Applicant Bank 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.

¶35

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.

¶36

(Dictated to PA-2, transcribed by him, corrected, signed and pronounced by me in the Open Court, this 27^th day of March, 2024)

¶37

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

¶38

Canara Bank v. M/s. Sri Raam Oil Mills

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/s. Sri Raam Oil Mills

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

Similar cases

Canara Bank versus G. Edison

Bank of Baroda versus Jayakandan

State Bank of India versus Mr. S. Natarajan

State Bank of India versus Paramesh

State Bank of India versus Sri Vivekananda Builders

Canara Bank versus Mr. S. Pannerselvam