Allowed

Canara Bank v. M/s Sri Venkateswara Timber and Saw Mill

DRT13 Mar 2024TA/687/2022

Case brief

AI extract

What is this about?

The Tribunal allowed an application for recovery of dues exceeding Rs.51 lakh against the borrowers and legal heirs of a deceased borrower. The bank successfully established the loan facilities, defaults, and mortgage creation. Legally heirs' liability is restricted to their share of the estate, while personal borrowers remain fully liable.

What did the court decide?

Allowed the appeal; permitted recovery of Rs.51,98,707 plus future simple interest at 11% p.a.; ordered issue of Recovery Certificate.

Canara Bank versus M/s Sri Venkateswara Timber and Saw Mill — Banking and Recovery | DRT (2024)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 13^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.687 of 2022

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(Originally filed before DRT-I Chennai as OA No.338 of 2020 and thereafter transferred to this Tribunal and renumbered as TA No.687 of 2022)

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Canara Bank (Erstwhile Syndicate Bank) Arni Road Branch Rep. by its Senior Branch Manager No.16, Arni Road, Kosapet Vellore – 632 001

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…Applicant

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Versus

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M/s Sri Venkateswara Timber and Saw Mill Represented by its Proprietor

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Mr. K. Boobalan

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No.162, Vallimalai Road Tharapadavedu, Katpadi Taluk Vellore – 632 007

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Mr. K. Boobalan S/o C.V. Krishnamoorthy No.162, Vallimalai Road Tharapadavedu, Katpadi Taluk Vellore – 632 007

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Mr. Gopinath S/o C.V. Krishnamoorthy No.162, Vallimalai Road Tharapadavedu, Katpadi Taluk Vellore – 632 007

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Mrs. K. Kasthuri W/o C.V. Krishnamoorthy No.162, Vallimalai Road Tharapadavedu, Katpadi Taluk Vellore – 632 007

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Mrs. K. Vijaya W/o C.V. Krishnamoorthy No.162, Vallimalai Road Tharapadavedu, Katpadi Taluk Vellore – 632 007

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Mrs. M. Thilagavathy W/o Mr. Moorthy Veppamara RAtchai Street Chinna Varikkam Vellore – 635 811

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Mrs. S. Dhanalakshmi W/o Mr. Saravanan No.1, Saraswathi Nagar Tharapadavedu, Old Katpadi Vellore – 632 007

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Mrs. S. Parimala W/o Mr. Sundaresan No.29, Ponnusami Gounder Street Pallikuppam, Katpadi Vellore – 632 007

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Mrs. K. Valli W/o Mr. Karthikeyan No. 2/178, Alamara Street Keezh Aalathur Vellore – 632 803

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Mrs. U. Jothilakshmi W/o Mr. Udayakumar No.1, S. Papparapatti Kallavi Soolakarai, Krishnagiri – 635 304

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Mr. Subash S/o C.V. Krishnamoorthy No.162, Vallimalai Road Tharapadavedu, Katpadi Taluk Vellore – 632 007 …Defendants

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Counsel for the Applicant Bank : M/s K.V. Subramanian Associatez 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.51,98,707/- comprising a sum of Rs.23,96,730/- together with interest at the rate of 12% per annum with monthly rests being the amount due under SOD Loan Account; a sum of Rs.23,52,336/- together with interest at the rate of 10.55% per annum with monthly rests being the amount due under OSL Loan Account and a sum of Rs.4,49,641/- together with interest at the rate of 10.80% per annum with monthly rests being the amount due under OSL Loan Account, from the date of filing of the application till the date of realization in full along with costs of this application and for sale 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 can be encapsulated as follows: -

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(a) The 1^st defendant represented by the 2^nd defendant vide application dated 29.12.2014 approached the erstwhile Syndicate Bank for grant of credit facilities and considering the said representation of the 1^st defendant the erstwhile Syndicate Bank vide sanction letter dated 12.01.2015 sanctioned SOD facility of Rs.20,00,000/- and OSL Limit of Rs.25,00,000/-. It is stated that the 1^st defendant represented by 2^nd defendant executed Composite Hypothecation Agreement for Rs.20,00,000/- on 27.01.2015 for SOD facility and other loan and security documents on 16.05.2015.

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(b) The 2^nd defendant in his individual capacity availed a vehicle loan of Rs.4,16,000/- on 23.01.2015 and the 2^nd defendant executed necessary loan and security documents on 23.01.2015.

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(c) It is stated that Mr. C.V. Krishnamoorthy, during his life time executed letter handing over the title deeds of the properties to the applicant on 02.01.2015 with an intention to create equitable mortgage over the properties and also executed Memorandum of Deposit of Title Deeds dated 8.1.2015 registered as Doc. No.133 of 2015. Further, on 9.1.2015, during his life time, Mr. C.V. Krishnamoorthy executed a confirmation of deposit of title deeds, confirming the creation of mortgage and deposit of title deeds in favour of the applicant in respect of scheduled property dated 4.2.2013 registered as Doc. No.3325 of 2013. Mr. C.V. Krishnamoorthy died on 24.01.2018 and the defendants 4 to 11 are the legal heirs of the deceased Mr. C.V. Krishnamoorthy.

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It is further stated that even though the defendants had obliged to repay the amount promptly and regularly, they failed to do so resulting in default in repayment and hence the applicant classified the loan account as NPA on 29.06.2019 and the applicant issued the demand notice under Section 13(2) of the SARFAESI At on 16.07.2019 followed by Possession Notice under Section 13(4) of the SARFAESI Act on 23.09.2019.

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It is also stated that the defendants caused a legal notice on 16.10.2018 to the applicant admitting the creation of mortgage by C.V. Krishnamoorthy and requested the applicant to inform the balance outstanding in the loan accounts.

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The applicant thereafter sent a recall notice to the 1^st defendant on 4.12.2019 and 16.03.2020 calling upon the defendants to clear the outstanding dues.

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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.

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It is also the case of the applicant that despite repeated reminders and requests the defendant failed to make the repayment forcing the applicant to file this application seeking recovery of the amount due in the account with further interest and costs.

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The defendants remained absent and hence were called absent and set ex-parte on 09.01.2023. However, in the interregnum the 8^th defendant had filed her reply statement with certain vague averments and without denying the liability.

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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 OA and also produced Exhibits A-1 to A-29 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 OA 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 OA 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 OA 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 subject loan is business loan availed by the defendants and the applicant has claimed interest at contractual rates till the time of filing of the application and the interest rates have also considerably come down, this Tribunal is inclined to reject the prayer of the applicant for award of interest with monthly rests and award the pendent lite and future interest at simple and reduced rates.

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During the pendency of the TA, the applicant filed a part satisfaction memo vide SR No.1927 of 2022 dated 15.6.2022 stating therein that the bank has realized a sum of Rs.50,10,000/- by sale of the schedule mentioned property under

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SARFAESI Act in an e-auction held on 22.03.2022 and the same has been appropriated to the loan account. This Tribunal vide its proceedings dated 09.01.2023 recorded part satisfaction of the TA claim.

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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 and the defaults committed by the defendants, which the applicant is entitled to realize. Hence, TA is disposed off in the following manner: -

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(a) TA No.687 of 2022 stands allowed.

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(b) Applicant is permitted to realize an aggregate sum of Rs.51,98,707/together with interest at the rate of 11% simple per annum from the defendants jointly and severally from the date of filing of the application till the date of realization in full along with costs of this application and for sale of other assets of the defendants. However, the liability of defendants 4 to 11 is restricted to the extent of estates derived from Late Mr. C.V. Krishnamoorthy.

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(d) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 15 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

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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 13^th day of March, 2024)

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

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Canara Bank v. M/s Sri Venkateswara Timber and Saw Mill

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/s Sri Venkateswara Timber and Saw Mill

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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