Allowed

Indian Overseas Bank v. M/s.Suriya Sahar Industries Pvt. Ltd. Managing Director Mr S Thirumalai

DRT25 Mar 2024TA/480/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an application by Indian Overseas Bank for recovery of a loan facility availed by M/s Suriya Sahar Industries Pvt. Ltd. and its guarantors. The Tribunal reduced the interest rate to 10% p.a. simple interest and directed realization of dues including proceeds from prior property sale.

What did the court decide?

Allowed TA No.480 of 2023. Directed realization of Rs.64,34,068.65p plus future interest @10% simple per annum from defendants jointly and severally, with credit for Rs.56.43 lakhs already recovered.

Indian Overseas Bank versus M/s.Suriya Sahar Industries Pvt… — Specific Performance | DRT (2024)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 25^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.480 of 2023

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(Originally filed before DRT-I Chennai as OA No.669 of 2019 and thereafter transferred to this Tribunal and renumbered as TA No.480 of 2023)

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Indian Overseas Bank Ranipet IC Branch Plot No.28, Commercial Complex SIPCOT Industrial Estate Ranipet – 632 403

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…Applicant

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Versus

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M/s Suriya Sahar Industries Pvt. Ltd., Rep. by its Managing Director

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Mr. S. Thirumalai

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Old S. No.328, New S. No.328/1 Kathiyavadi Raod, Melvisharam Village

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Arcot Taluk, Vellore District

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Mr. S. Thirumalai

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S/o Late M.R. Srinivasan

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No.3-9-134, Main Road, Lakshmipuram Periyakulam, Theni – 625 523

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Mr. R. Balasubramaniam S/o Ramasamy No.35, 3^rd Cross Road Golden Nagar, Katpadi Vellore – 632 007

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Mr. D. Balaji, S/o D. Dhanapal Savalpet Town Hall, 1^st Street Arakonam Town & Taluk Vellore District – 631 003

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Mr. G.K. Sesha Narayana Babu S/o Kamalakannan No.34, TNHB Phase I Back Side SRT Nagar, Masapettai Vepoor Taluk, Arcot – 632 503

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Mr. K. Sridhar S/o Kamalakannan 5/115B, Sathya Nagar Bharathi Nagar, SIPCOT Walaja Taluk …Defendants

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Counsel for the Applicant Bank : M/s Y.T. Aravind Gosh 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.64,34,068.65p together with interest at the rate of 12.20% per annum with monthly rests plus 2% penal interest from the date of filing of the TA till the date of realization in full along with costs of this application and for of 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 is as follows: -

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(a) The 1^st defendant, a Private Limited Company, engaged in the business of Leather and allied business approached the applicant for grant of financial assistance to meet its working capital requirements and the applicant considering the said request vide its sanction dated 26.8.2013 sanctioned Cash Credit Facility of Rs.60 lakhs and Letter of Credit Inland facility of Rs.50 lakhs. The 1^st defendant represented by defendants 2 and 3 executed necessary loan documents on 29.08.2013. The defendants 2 to 6 executed guarantee

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agreements on 29.8.2013 thereby guaranteeing due repayment of the credit facility availed by the 1^st defendant.

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(b) The 1^st defendant deposited the title deeds of its property more fully described in Schedule ‘A’ to the TA with the applicant on 19.3.2014 with an intention to create equitable mortgage over the same and confirmed the same by letter dated 19.3.2014 and executed Memorandum of Deposit of Title deeds dated 08.08.2014 registered as Doc. No.5995 of 2014.

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It is further stated that even though the defendant had obliged to repay the amount promptly and regularly, they failed to do so resulting in default in repayment and hence the account was classified as NPA on 31.05.2019.

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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. Hence the applicant issued a legal notice on 05.02.2019 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 defendants failed to make the repayment forcing the applicant to file this TA seeking recovery of the amount due in the account with further interest and costs.

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The defendants remained absent they were called absent and set ex-parte on 03.01.2020.

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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 TA and also produced Exhibits A-1 to A-21 and got the same marked in evidence. However, documents A-15, A-16 & A-20 were marked subject to proof.

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Heard the Ld. Counsel for the Applicant and considered the contentions as taken in the TA 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 TA 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, it is evident that the amount as claimed in the TA is outstanding in the account, which the applicant is entitled to get recovered from the defendants and their

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assets. 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 loan for development of business and the applicant has charged interest at contractual rates till the date of filing of the TA 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.

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During the pendency of the TA, the applicant filed a memo stating therein that the Schedule ‘A’ property was brought for sale under SARFAESI Act and had realized a sum of Rs.57 lakhs and credited a sum of Rs.56.43 lakhs to the loan account and prayed for recording part satisfaction of the TA claim. This Tribunal vide its proceedings dated 17.08.2023 recorded part satisfaction of the TA claim for a sum of Rs.56,43,000/-.

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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. Hence, TA is disposed off in the following manner: -

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(a) TA No.480 of 2023 stands allowed.

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(b) Applicant is permitted to realize an aggregate sum of Rs.64,34,068.65p with future and pendente lite interest @10% p.a., simple from the defendants jointly and severally, from the date of filing of the TA till realization, after deducting all the amounts received or recovered by them

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during the pendency of TA, and also by selling the schedule ‘B’ mentioned properties (hypotheca) and other assets of the defendants. It is made clear that the sum of Rs.56.43 lakhs (after deducting statutory tax from the sale price of Rs.57 lakhs) realized by sale of schedule ‘A’ mentioned property be given credit to on its respective date.

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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 receipt 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 25^th day of March, 2024)

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

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Indian Overseas Bank v. M/s.Suriya Sahar Industries Pvt. Ltd. Managing Director Mr S Thirumalai

Case brief

What is this about?

What did the court decide?

Indian Overseas Bank v. M/s.Suriya Sahar Industries Pvt. Ltd. Managing Director Mr S Thirumalai

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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