Allowed

Canara Bank v. M/s. India Trust

DRT7 Feb 2024TA/47/2022

Case brief

AI extract

What is this about?

The DT allowed the bank's application for a Recovery Certificate under the RDB Act, finding the loan claim proven and un-rebutted. The court permitted recovery of the principal sum with specific future interest rates and directed issuance of the certificate for enforcement against assets.

What did the court decide?

Issuance of Recovery Certificate permitting recovery of Rs.2,48,41,626.41 with specified future interest rates against defendants and their assets.

Canara Bank versus M/s. India Trust — Insolvency and Bankruptcy | DRT (2024)

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IN THE DEBT RECOVERY TRIBUNAL –II CHENNAI

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Dated this 7^th day of February, 2024

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PRESENT: SHRI T. RAJESH PRESIDING OFFICER

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T.A.No.47 of 2022

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(Old OA.No.29/2022-DRT-I, Chennai)

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Canara Bank Egmore Branch At No. 3, Sait Colony, 1^st Street, Egmore, Chennai – 8,

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…Applicant

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Vs.

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M/s. India Trust Represented by its Proprietor Mr. A. Vijayakumar, (PAN No: ACBPV8092J) R2, 13^th Street, Santham Colony, Anna Nagar West Extension, Thirumangalam, Chennai – 600 101

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Mr. A. Vijayakumar S/o. Mr. Athinathan, F6, Mookambigai Apartments 1^st Floor, 12A, Redhills High Road, Kolathur, Chennai – 600 099 …Defendants

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Counsel for Applicant : M/s. S. Kesavan 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 a total sum of Rs.2,48,41,626.14Pdue in the following credit facilities: i.e., Rs. 2,31,22,624.14P in theMSME Overdraft Account, Rs. 10,49,434/- in theCovid Funded Interest Term Loan Account and Rs. 6,69,568/- in the Working Capital Term Loan Account availed by the defendants along with future interest and for sale of schedule mentioned properties.

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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 Applicant Bank contends that credit facilities of Rs. Rs.6,00,000/under Working Capital Term Loan, Rs.9,88,024/- under Covid Funded Interest Term Loan and Rs.2,00,00,000/- under MSME overdraft facility -totalling to an amount of Rs. 2,15,88,024/wasavailed by the 1^st defendant which is duly represented by 2^nd defendant; its proprietor. It is also stated that the facility is secured by mortgage of schedule properties and hypothecation.

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

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The Applicant Bank further contends that despite availing the credit facilities by obliging to pay back the amount, the defendants failed in compliance of the same and all the efforts of the Applicant Bank to make the defendants pay back the amount failed, forcing the Applicant Bank to file this Application after declaring the account as NPA on 30.03.2021.

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Summons was taken out and as the defendants failed to enter appearance,they were setexparte on 10.08.2022.

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The Applicant Bank let in evidence through AW1, filed proof affidavit in confirmation with the pleadings and got marked Ext A1 to A29.

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Heard.The following issues arise for consideration:

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i. Whether the Applicant Bank 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 Bank’s evidence remains 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.Since the TA claim is arrived at by calculating interest at

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agreed rate, which is on the higher side, the prayer for monthly rests

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is declined.

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In view of the above:

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i. TA. No: 47 of 2022stands allowed.

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ii. Applicant Bank is permitted to recover an amount of Rs.2,48,41,626.41(Rupees Two Crores Forty Eight Lakhs Forty One Thousand Six Hundred Twenty Six and Forty One Paise Only/-) with future and pendentelite interest @ 9.30%p.a. (simple) on Rs.2,31,22,624.14P, @ 9.30% p.a. (simple) on Rs.10,49,434/- and @14.35% p.a. (simple) on Rs.6,69,568from the date of filing of the TA till realization from the defendantsand also by proceeding against hypothecated assets after giving credit to all the amounts recovered and received during the pendency of the TA.

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iii. It is made clear that the defendants are personally liable for all such amounts due in the Loan accounts.

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iv. The schedule property to be proceeded against and sold and if the sale proceeds are not sufficient, the defendants and their other assets are liable to be proceeded against.

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v. 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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vi. Applicant Bankis 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-2, 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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Canara Bank v. M/s. India Trust

Case brief

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Canara Bank v. M/s. India Trust

Case brief

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