Allowed

Punjab National Bank v. Mrs. D. Bhuvaneswary

DRT13 Mar 2024TA/713/2022

Case brief

AI extract

What is this about?

The DRT allowed the bank's application for a recovery certificate against two defaulting borrowers. The court reduced compound interest on agricultural loans to simple interest at lower rates while permitting recovery of principal and costs.

What did the court decide?

Recovery Certificate issued for repayment of principal amounts and interest calculated at reduced simple interest rates pending realization.

Punjab National Bank versus Mrs. D. Bhuvaneswary — 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.713 of 2022

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(Originally filed before DRT-I Chennai as OA No.334 of 2020 and thereafter transferred

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to this Tribunal and renumbered as TA No.713 of 2022)

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Punjab National Bank Punalkulam Branch Rep. by its Manager No.530/1, Main Road ThethuvasalpattiMelpathi Post Gandarvakottai Pudukottai – 613 303 … Applicant

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Versus

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Mrs. D. Bhuvaneswary W/o Mr. P. Shanmugam No.1/531, Keela Street KurungulamMelpathi, Punalkulam Thethuvasalpatti PO Gandarvakottai Taluk Pudukottai – 613 303

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Mr. Thirunavukarasu S/o Mr. Govindaraj No.199, Crescent Nagar 1^st Street, Kajamalai Trichy – 620 023 …Defendants Counsel for the Applicant Bank : M/s M.L. Ganesh Counsel for 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’ seeking issuance of a Recovery Certificate for recovery of an aggregate sum of Rs.41,64,995.13p with further interest from the date of filing of the application

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till the date of realisation in full in the following manner and for sale of schedule mentioned properties: -

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(a) A sum of Rs.15,64,099.47p together with interest at the rate of 9.5% per annum with monthly rests from 1^st defendant being the amount due under Agriculture Cash Credit Facility; (b) A sum of Rs.9,83,621.48p together with interest at the rate of 11.15% per annum with monthly rests from defendants 1 and 2 being the amount due under Agriculture Term Loan Minor Irrigation account;

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(c) A sum of Rs.15,40,265.37p together with interest at the rate of 11.15% per annum with monthly rests from defendants 1 and 2 being the amount due under Agriculture Term Loan (Poultry) Account; and

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(d) A sum of Rs.77,008.81p together with interest at the rate of 9.20% per annum with monthly rests from 1^st defendant being the amount due under Term Loan Dairy Loan Account.

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The brief facts of the case may be stated as follows: -

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(a) The 1^st defendant by loan application dated 31.12.2016 approached the applicant bank for grant of agriculture loan and the applicant considering the said request sanctioned Term Loan – Dairy Loan of Rs.1,00,000/- on 31.12.2016 and the 1^st defendant executed necessary loan document on 31.12.2006 and balance and security confirmation letter on 26.11.2019.

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(b) The 1^st defendant by loan application dated 26.04.2017 approached the applicant bank for grant of agriculture loan and the applicant considering the said request sanctioned Term Loan Facility (Poultry) of Rs.12,50,000/- on 26.04.2017. It is stated that the 1^st defendant hypothecated the assets

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purchased from and out of the loan funds availed from the applicant. It is also stated that the 2^nd defendant deposited the title deeds of the schedule mentioned property with the applicant with an intention to create equitable mortgage over the same. It is stated that the 2^nd defendant executed guarantee agreement on 26.04.2017 thereby guaranteeing due repayment of the facility availed by the 1^st defendant.

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(c) It is the case of the applicant that the 1^st defendant had also approached the applicant by loan application dated 23.06.2017 for grant of KCC Loan for raising crops and the applicant considering the said request sanctioned a loan of Rs.12,49,000/- on 23.06.2017. The defendants executed necessary loan and security documents on 23.6.2017.

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(d) It is also the case of the applicant that the 1^st defendant had also approached the applicant vide loan application dated 23.06.2017 for grant of Term Loan for installing irrigation facility and the applicant considering the said request sanctioned Term Loan (Minor Irrigation) facility of Rs.7,50,000/on 23.06.2017. The defendants executed necessary loan and security documents on 23.06.2017.

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(e) It is the further case of the applicant that the defendants executed Memorandum of Deposit of Title deeds on 21.04.2017, 23.06.2017 registered as Doc. Nos.713/2017 and 1174/2017, SRO, Gandharvakottai and confirmed creation of equitable mortgage over the schedule mentioned property to secure the credit facilities availed by the defendants.

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It is the case of the applicant that the defendants defaulted in repayment despite repeated demand and hence the applicant issued letters on

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16.12.2017, 07.02.2018, 31.03.2019 to the defendants requesting them to clear the outstanding dues. As the defendants did not come forward to clear the outstanding dues, the applicant issued legal notice on 16.11.2019 but in vain.

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It is also stated that the facilities were availed after execution of necessary loan documents obliging themselves to repay the amount promptly and regularly without fail. Apart from the execution of necessary loan documents, the defendants deposited the title deeds of the schedule mentioned property with an intention to create equitable mortgage over the same and confirmed the same by executing Memorandum of Deposit of Title deeds dated 21.04.2017 and 23.06.2017 registered as Doc. No.713 of 2017 and 1174/2017 on the file of SRO, Gandharvakottai respectively.

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It is further stated that even though the defendants had obliged themselves 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 on 30.06.2019.

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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 defendants failed to make the repayment forcing the applicant to file this OA seeking recovery of the amount due in the account with further interest and costs.

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It is the further case of the applicant that the defendants failed to enter appearance he was called absent and set ex-parte on 01.06.2022.

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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 OA and also produced Exhibits A-1 to A-26 and got the same marked in evidence, however, Exhibits A-4, A-11, A- 17 to A-20 were marked subject to proof and relevancy.

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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 (including the scheduled property). 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 an agricultural loan and 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.713 of 2022 stands allowed.

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(b) Applicant is permitted to realize an aggregate sum of Rs.41,64,995.13p with further interest from the date of filing of the application till the date of realisation in full, after deducting all the amounts received by them during the pendency of OA, and also by selling the schedule mentioned properties and other assets of the defendants in the following manner: -

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(i) A sum of Rs.15,64,099.47p together with pendente lite and future interest at the rate of 9% simple per annum from 1^st defendant being the amount due under Agriculture Cash Credit Facility;

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(ii) A sum of Rs.9,83,621.48p together with pendente lite and future interest at the rate of 9% simple per annum from defendants 1 and 2 being the amount due under Agriculture Term Loan Minor Irrigation account;

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(iii) A sum of Rs.15,40,265.37p together with pendente lite and future interest at the rate of 9% simple per annum from defendants 1 and 2 being the amount due under Agriculture Term Loan (Poultry) Account; and

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(iv) A sum of Rs.77,008.81p together with pendente lite and future interest at the rate of 9.20% per annum with monthly rests from 1^st defendant being the amount due under Term Loan Dairy Loan Account.

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(c) If the sale proceeds are not found sufficient to cover the amount due and payable to the Applicant Bank, 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 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 13^th day of March, 2024)

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

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Punjab National Bank v. Mrs. D. Bhuvaneswary

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. Mrs. D. Bhuvaneswary

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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