Allowed

City Union Bank Limited v. Selvaraj

DRT25 Mar 2024TA/514/2023

Case brief

AI extract

What is this about?

Applicant bank filed a time application for recovery of loan dues totaling approximately Rs. 98 lakh from three defendants who defaulted on housing and term loans. Defendants were absent. The Tribunal accepted the evidence as uncontroverted.

What did the court decide?

Direction to defendants to pay an aggregate sum of Rs. 98,49,380 along with future and pendente lite interest at 10% per annum via sale of assets.

City Union Bank Limited versus Selvaraj — Contract and Commercial Disputes | 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.514 of 2023

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(Originally filed before DRT-I Chennai as OA No.132 of 2021 and thereafter transferred to this Tribunal and renumbered as TA No.514 of 2023)

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City Union Bank Limited Rep. by its Branch Manager Vadakuthu Branch No.13A/1, 40 Feet Road Gandhi Gramam, Gandhi Nagar Vadakuthu – 607 308 …Applicant

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Versus

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K. Selvaraj S/o Kaliyaperumal Door No.144, Ward No.3 East Car Street, Chidambaram Cuddalore District – 608 001

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Mrs. S. Sujatha W/o K. Selvaraj Door No.144, Ward No.3 East Car Street, Chidambaram Cuddalore District – 608 001

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M/s SKR Agency Rep. by its Proprietor, Mrs. S. Sujatha R.S. No.9/3, 4, 5, Main Road Nallathannikulam, Erumbur Post Sethiathope Cross Road Chidambaram Taluk Cuddalore District – 608 704 …Defendants Counsel for the Applicant Bank : M/s R. Sriram 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 an aggregate sum of Rs.98,49,380/- comprising a sum of Rs.2,33,267/- together with interest at the rate of 13.50% per annum with monthly rests being the amount due under Loan Account No.501312030000743; a sum of Rs.3,56,711/together with interest at the rate of 13.50% per annum with monthly rests being the amount due under Loan Account No.501312030000740; a sum of Rs.2,55,201/- together with interest at the rate of 16.25% per annum with monthly rests being the amount due under Loan Account No.501382080000350 and a sum of Rs.19,68,065/- together with interest at the rate of 15.50% per annum with monthly rests being the amount due under Loan Account No.501812080050452 and sum of Rs.70,36,136/- together with interest at the rate of 18.25% per annum with monthly rests being the amount due under Loan Account No. 501812080053435 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 along with 2^nd defendant approached the applicant bank

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in May 2014 for grant of housing loan facility and the applicant considering the

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said request sanctioned an housing loan of Rs.16,50,000/- vide its sanction dated 19.5.2014. The defendants 1 and 2 executed necessary loan and security documents on 20.05.2014.

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(b) The 1^st defendant along with 2^nd defendant approached the applicant bank in May 2014 for grant of another housing loan facility and the applicant considering the said request sanctioned a housing loan of Rs.19,00,000/- vide its sanction dated 19.5.2014. The defendants 1 and 2 executed necessary loan and security documents on 20.05.2014.

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(c) The 3^rd defendant represented by its Proprietor the 2^nd defendant along with 1^st defendant approached the applicant in May 2014 for a OSL Term Loan facility and the applicant considering the said request vide its sanction dated 21.5.2014 sanctioned OSL Term Loan of Rs.18,00,000/-. The defendants 1 to 3 executed the loan documents on 24.06.2014.

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(d) Apart from the above facilities, the 3^rd defendant had also availed an OLCC facility of Rs.2,08,000/- from the applicant.

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(e) The defendants 1 and 2 deposited the title deeds of their property more fully described in the schedule to the OA with the applicant on 21.6.2014 with an intention to create equitable mortgage over the same in favour of the applicant and confirmed the same by executing Memorandum of Deposit of Title deeds dated 23.6.2014 registered as Doc. No.2435/2014 on the file of Joint I Sub Registrar, Chidambaram.

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(f) The OLCC facility was enhanced to Rs.30 lakhs and the defendants 1 and 2 extended the mortgage created earlier to secure the enhanced facility by executing Memorandum of extension of equitable mortgage by way of deposit of title deeds dated 19.01.2015 registered as Doc. No.148 of 2015 on the file of Joint I Sub Registrar, Chidambaram.

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(g) The defendants executed revival letter and confirmation of balance letters on 11.1.2017.

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(h) The 1^st defendant along with 2^nd defendant approached the applicant bank and availed a loan of Rs.55,00,000/- in March 2019 and executed necessary loan documents on 27.3.2019. The 1^st defendant along with 2^nd defendant again approached the applicant bank and availed a loan of Rs.16,00,000/- in June 2019 and executed necessary loan documents on 29.06.2019.

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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.

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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 demand notice on 18.11.2019 calling upon the defendants to clear the outstanding dues. Despite the issuance of demand notice the defendants executed revival letters and confirmation of balance letters on 11.12.2019.

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In the meantime, the property belonging to the 2^nd defendant was sold under SARFAESI Act and a sum of Rs.65,00,000/- was realized and out of which a sum of Rs.45,00,000/- was credit to OLCC Account No.512020010003571 and a sum of Rs.10,00,000/- was adjusted towards Loan Account No.501312030000743 and a sum of Rs.10,00,000/- was adjusted towards Loan Account No.501312030000740

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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 05.08.2022.

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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-38 and got the same marked in evidence.

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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 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 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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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.514 of 2023 stands allowed.

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(b) Applicant is permitted to realize an aggregate sum of Rs.98,49,380/- in the following manner: -

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(i) A sum of Rs.2,33,267/- with future and pendente lite interest @10% p.a., simple from the defendants 1 and 2 jointly and severally, from the date of filing of the TA till realization, after deducting all the amounts received or recovered by them during the pendency of TA, and also by selling the schedule mentioned properties and other assets of the defendants 1 and 2.

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(ii) A sum of Rs.3,56,711/- with future and pendente lite interest @10% p.a., simple from the defendants 1 and 2 jointly and severally, from the date of filing of the TA till realization, after deducting all the amounts received or recovered by them during the pendency of TA, and also by selling the schedule mentioned properties and other assets of the defendants 1 and 2.

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(iii) A sum of Rs.2,55,201/- with future and pendente lite interest @10% p.a., simple from the defendants 1 to 3 jointly and severally, from the date of filing of the TA till realization, after deducting all the amounts received or recovered by them during the pendency of TA, and also by selling the schedule mentioned properties and other assets of the defendants 1 to 3.

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(iv) A sum of Rs.19,68,065/- with future and pendente lite interest @10% p.a., simple from the defendants 1 and 2 jointly and severally, from the date of filing of the TA till realization, after deducting all the amounts received or recovered by them during the pendency of TA, and also by

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selling the schedule mentioned properties and other assets of the defendants 1 and 2.

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(v) A sum of Rs.70,36,136/- with future and pendente lite interest @10% p.a., simple from the defendants 1 and 2 jointly and severally, from the date of filing of the TA till realization, after deducting all the amounts received or recovered by them during the pendency of TA, and also by selling the schedule mentioned properties and other assets of the defendants 1 and 2.

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(c) It is made clear that the defendants are personally liable for all such amounts due under the respective Loan Accounts.

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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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City Union Bank Limited v. Selvaraj

Case brief

What is this about?

What did the court decide?

City Union Bank Limited v. Selvaraj

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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