Allowed

Union Bank of India v. Ars Natural Products

DRT1 Mar 2024TA/486/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the applicant bank's application for a recovery certificate against two defendants for an outstanding loan amount of Rs. 28,80,460/- along with interest, permitting sale of secured properties for dues.

What did the court decide?

Recovery certificate issued for Rs. 28,80,460/- with future interest; permission to sell secured properties; personal liability of second defendant for insufficient proceeds.

Union Bank of India versus Ars Natural Products — Banking and Recovery | DRT (2024)

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IN THE DEBT RECOVERY TRIBUNAL –II CHENNAI

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Dated this 1^st day ofMarch, 2024

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PRESENT: SHRI T.RAJESH PRESIDING OFFICER

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T.A.No.486of 2022

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(Old OA.No.212/2022-DRT-I, Chennai)

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Union Bank of India, Vadapalani Branch, TSS Plaza No. 14, Arcot Road, Vadapalani, Chennai – 600 026

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…Applicant

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Vs.

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M/s. ARS NATURAL PRODUCTS, Rep. by its Proprietor Aakash Kumar B. No. 2, Srinivasa Building, Pm Sakthi Nagar, Pattravakkam Service Road, Chennai – 600 053

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Aakash Kumar B. No. 2, Srinivasa Building, Om Sakthi Nagar, Pattravakkam Service Road, Chennai – 600 053

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...Defendants

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Counsel for Applicant : M/s.K. Radhakrishnamurthy Defendants : Exparte

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ORDER

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The Application is filed Under Section 19(1) of the Recovery of DebtsAnd Bankruptcy Act,1993 seeking for issuance of a Recovery Certificate for a total sum of Rs.28,80,460/-due under the two credit facilities i.e. Rs. 13,39,507/- under the Term Loan A/c and Rs. 15,40,953/- under the Cash Credit A/c. along with future interest and costsand 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 thata Term Loan credit facility of Rs.14,00,000/- and a Cash Credit facility of Rs. 15,00,000/- were availed by the 2^nd Defendant – proprietor on behalf of the 1^st Defendant – Proprietary concern. It is also stated that the facilities are secured by hypothecationof schedule mentioned properties.

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It is also stated that the above facilities were availed after execution of necessary loan documents by the defendants, obliging 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 amounts, the defendants failed in compliance of the same and all the efforts of the Applicant Bank to

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

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Summons was taken out and as defendants failed to enter appearance, theywere set exparte on 16.05.2023.

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The Applicant Bank let in evidence through AW1, filed proof affidavit in confirmation with the pleadings and got marked Exhs.A1 to A27.

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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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1. 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. Since the TA claim is arrived at by calculating interest at agreed rate, which is on the higher side, prayer for monthly rests and penal interest is declined.

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In view of the above:

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i. TA. No: 486of 2022 stands allowed.

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ii. Applicant Bank is permitted to recover an amount of Rs.28,80,460/- (Rupees Twenty Eight Lakhs EightyThousand FourHundred and SixtyOnly/-)together with future and pendentelite interest @ 8.55 % p.a. (simple)on Rs 13,39,507/and @ 11.05% p.a. (simple) on Rs. 15,40,953/- from the date of filing of the TA till realization from the defendantsand also proceeding against and selling the schedule mentioned properties and appropriate the sale proceeds towards the decretal dues.

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iii. If the sale proceeds are not found sufficient to cover the amounts due and payable to the Applicant Bank, the defendantD2 is personally liable for all such amounts due.

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iv. 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.

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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 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.

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Communicate a copy of the order to the parties concerned in

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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 PA-2, transcribed by him, corrected, signed and pronounced by me in the Open Court, this 1^st day ofMarch, 2024)

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Sd/- (T. RAJESH)

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PRESIDING OFFICER DRT–II, CHENNAI

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Union Bank of India v. Ars Natural Products

Case brief

What is this about?

What did the court decide?

Union Bank of India v. Ars Natural Products

Case brief

What is this about?

What did the court decide?

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