Allowed

M/s Encore Asset Reconstruction Company Private Limited Limited v. Kasim Energy Resources Pvt. Ltd.

DRT1 Feb 2024TA/61/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the Transfer Application filed by an Asset Reconstruction Company seeking recovery of debt against borrowers and guarantors. The court rejected the defense regarding low property sale prices under SARFAESI, upheld the adjusted amount and modified future interest to 12% simple.

What did the court decide?

Applicant permitted to recover Rs. 10,21,30,136 with future interest at 12% p.a. (simple) from date of filing; Defendants 2 and 3 held personally liable.

M/s Encore Asset Reconstruction Company Private… — Contract and Commercial Disputes | DRT (2024)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 1^st day of February, 2024

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PRESENT: SHRI T. RAJESH PRESIDING OFFICER

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TA No.61 of 2023

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(Originally filed before DRT-I Chennai as OA No.238 of 2021 and thereafter transferred

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to this Tribunal and renumbered as TA No.61 of 2023)

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M/s Encore Asset Reconstruction Company Private Limited Having its Registered Office at Caddie Commercial Tower Regus Business Centre, 5^th Floor

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Aerocity (Dial), New Delhi – 110 037

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Corporate Office at 5^th Floor, Plot No.137, Sector 44 Gurugram, Haryana – 122 001

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…Applicant

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Versus

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Kasim Energy Resources Pvt. Ltd., T1, 2^nd Floor, Yasei Super Market Building 4^th Main Road, Anna Nagar

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Chennai – 600 040

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Y. Syed Abuthahir T101, Plot No.4979, 3^rd Avenue Anna Nagar, Chennai – 600 040

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Mohamed Salman

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No.2/31, Jayalakshmipuram 1^st Street, Nungambakkam Chennai – 600 034 …Defendants

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Counsel for the Applicant Bank : M/s S. Sathiyanarayanan Counsel for Defendants : M/s P. Jesus Moris Ravi

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FINAL ORDER

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The above Transfer Application is filed under Section 19 of the Recovery of Debt and Bankruptcy Act seeking recovery of Rs.10,21,30,136/- with further interest at the rate of 16.55% per annum with monthly rests from the date of filing of the OA and also by allowing the same to be recovered from the

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defendants jointly and severally and also by ordering sale of the schedule mortgaged properties.

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The above original application is filed before DRT I and stood transferred to this Tribunal and renumbered as above.

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The applicant case is as follows:-

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The 1^st defendant through 2^nd and 3^rd defendants availed credit facility of Secured Over Draft loan for Rs.275 Lakhs from Karur Vysya Bank Anna Nagar Branch. Apart from the guarantee executed by defendants 2 and 3, the 2^nd defendant had also mortgaged his properties in lieu of the security to the credit facilities.

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It is further submitted by the applicant that, despite the undertaking to payback amount promptly and regularly, the defendants failed to pay back the amount resulting the account being classified as NPA on 12.6.2018.

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It is also stated that Karur Vysya Bank had assigned the financial assistance pertaining to debt along with all rights, title and interest and underlying security vide assignment deed registered as document no.2769 of 2019 of T Nagar SRO. Hence by virtue of said assignment applicant steped into the shoes of the lender bank.

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It is also stated that the applicant had on 24.8.2020 demanded the amount due from the defendants being the due amount Rs.7,79,67,321 as on 21.09.2019. It is the further case of the applicant that despite repeated reminders and requests, no repayments were forth coming and hence this OA.

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The defendants entered appearance and defendants 1 and 2 and the 3^rd defendant filed separate written statement. However as the contentions are same, though not verbatim reproduction of the other, the same can be encapsulated as follows. The defendants have no dispute as to the execution of loan documents and availment of credit facilities. The defendants contend that the secured asset had already been sold and the amounts were not duly credited to the account. All the defendants are putting forward the contention that the entire due amounts is already realized and hence the OA is not maintainable. It is also stated that the property was sufficient to wipe out the liability and the property was sold for a throw away price.

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The applicant had let in evidence through AW1, who sworn in the proof affidavit in terms with pleadings in the proof affidavit AW1 appeared on 25.9.2023 and got marked Ext.A1 to A14. No defense evidence was let in despite being given sufficient opportunities.

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The following issue arise for consideration in the matter: -

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(i) Whether the applicant had proved the OA claim?

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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 defendants are not disputing the availment and disbursement of credit facilities. They are virtually admitting the creation of security and the execution of loan documents. Their main dispute is that despite the sale of mortgage properties the amount realized was not duly given credit to the loan account. In this regard, it is to be noted that the applicant had on 9.6.2023

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filed a part satisfaction memo stating that during the pendency of OA, the scheduled property was sold and an amount of Rs.5,50,50,000/- was adjusted to the loan account. The said part satisfaction is recorded.

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The defendants though put forward a contention that the property which was sufficient to satisfy the liability and sold for a lower price, the same cannot be gone into in this proceedings as the sale was conducted resorting to SARFAESI and there was no successful challenge as to the same. Even otherwise no evidence was let in the present proceedings as to the valuation of the property.

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Hence taking into consideration the above facts this Tribunal is to look into the evidences let in by the applicant and to check whether the same is sufficient to prove the OA claim. The documents produced by the applicant were found admissible and sufficient to prove the availment of credit facilities. The defendants do not dispute the sanctioning and availment of credit facility. The execution of loan documents is proved by applicant. The defaults occurred in the account is also proved by recall notices and statement of accounts.

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In view of the above, this Tribunal is of the view that the applicant had successfully proved the OA claim and is entitled for the recovery of due amount in the loan account.

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The applicant is claiming interest @16.55% pa with monthly rest and also seeking for penal interest. The OA claim is arrived at by calculating interest at agreed rate, which is on the higher side. This Tribunal is not interfering with the applied interest till the date of filing of the OA. However taking note of the fact that property given in as security is already sold and applied interest is on

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the higher side, this Tribunal is of the considered opinion that pendantalite and future interest is to be awarded at a lower rate and according the same is allowed 12% simple. Apart from that applicant is also entitled for cost of the proceedings.

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In view of the findings as entered above: -

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(a) TA.61 of 2023 stands allowed.

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(b) Applicant is permitted to recover and amount of Rs. Rs.10,21,30,136/with future interest @ 12% PA (simple) from the date of filing of the TA till realization from the defendants after giving credit to all the amount recovered and received during the pendency of the OA including the amount of RS.5,50,50,000/- recorded by part satisfaction memo on 9.6.2023.

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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 1^st day of February, 2024)

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

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M/s Encore Asset Reconstruction Company Private Limited Limited v. Kasim Energy Resources Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

M/s Encore Asset Reconstruction Company Private Limited Limited v. Kasim Energy Resources Pvt. Ltd.

Case brief

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