Allowed

Union Bank of India v. Mr. T. Kannan

DRT27 Mar 2024TA/553/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the applicant bank's application for a recovery certificate under the RDB Act. Evidence was found un-rebutted. The loan was secured by mortgage, and the court declined penal interest in favor of 10% simple interest while directing sale of properties for debt recovery.

What did the court decide?

Recovery Certificate issued; sum of Rs. 19,01,174/- with future interest @ 10% p.a. simple awarded; direction to sell schedule properties and proceed against defendants.

Union Bank of India versus Mr. T. Kannan — Money Laundering | DRT (2024)

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

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PRESENT: SHRI T.RAJESH PRESIDING OFFICER

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T.A.No.553of 2022

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(Old OA.No.827/2019-DRT-I, Chennai)

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Union Bank of India (Previously Corporation Bank) Chinna Salem Branch No. 562, Salem Main Road, Chinna Salem, Villupuram – 606 201 …Applicant

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Vs.

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Mr. T. Kannan S/o. Thangavel Pillai South Kattu Kottai, V. Alamblaam, Chinna Salem Taluk, Villupuram District – 606 201

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Mr. P. Kulanthaivel, S/o. Mr. Palanimuthu, South Street, V. Alambalam, Chinna Salem Taluk, Villupuram District – 606 201

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...Defendants

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Counsel for Applicant : M/s.A. Arun Babu 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. 19,01,174/-due under 2 credit facilities i.e. Rs. 12,61,498/- under the Land Development Loan A/c and Rs. 6,39,676/- under the Crop Loan A/calong with future interest and costsand for sale of schedule mentioned properties along with costs.

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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 Land DevelopmentLoan credit facility to the tune of Rs. 9,50,000/- and a Crop Loan credit facility of Rs. 5,00,000/- were availed by the 1^st Defendantfor whichthe 2^nd Defendant stood asGuarantor. It is also stated that the facilities are secured by mortgage of 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 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 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 on26.02.2020.

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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 A19.

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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 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 has been arrived at by calculating interest at agreed rate which is on the higher side, prayer for penal interest is declined, and interest is awarded at reduced rate of 10% p.a. (simple).

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In view of the above:

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i. TA. No: 553of 2022 stands allowed.

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ii. Applicant Bank is permitted to recover an amount of Rs.19,01,174/-(RupeesNineteen Lakhs One Thousand One Hundred and Seventy FourOnly/-)together with future and pendentelite interest @ 10% p.a. (simple)from the date of filing of the TA till realization from the defendants jointly and severally and 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, thedefendants are personallyliable 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 accounts of the defendant.

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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, this27^th day of March, 2024)

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

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Union Bank of India v. Mr. T. Kannan

Case brief

What is this about?

What did the court decide?

Union Bank of India v. Mr. T. Kannan

Case brief

What is this about?

What did the court decide?

What the court decided

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