Allowed

State Bank of India v. M/s.Nagalakshmi Petro Fuels

DRT18 Mar 2024TA/731/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed the bank's application for recovery of Rs.76 lakh dues arising from Cash Credit and Term Loan accounts after finding the claim unchallenged due to respondents' absence. Court reduced compound interest to simple interest at 14% p.a. and authorized sale of properties and personal recourse.

What did the court decide?

Recovery of Rs.76,40,872 with simple interest at 14% p.a.; authority to sell schedule properties; personal liability imposed on respondents 2 and 3.

State Bank of India versus M/s.Nagalakshmi Petro… — Contract and Commercial Disputes | DRT (2024)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 18^th day of March, 2024

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PRESENT: SHRI T. RAJESH PRESIDING OFFICER

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TA No.731 of 2023

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(Originally filed before DRT-I Chennai as OA No.789 of 2019 and thereafter transferred

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to this Tribunal and renumbered as TA No.410 of 2023)

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State Bank of India SME Branch, Villupuram No.595-597, 1^st Floor, Sri Suswani Towers Nehruji Nagar, Villupuram

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Pin: 605 602, Rep. by its Chief Manager …Applicant

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Versus

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M/s Nagalakshmi Petro Fuels

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Represented by its Proprietrix, Mrs. P. Nithya

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Business at Plot No.11

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S.F. No.23/3B, SVS Nagar, Villupuram – Pondy Highway Villupuram, Pin: 605 102

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Mrs. P. Nithya W/o J. Prakash

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Proprietrix, M/s Nagalakshmi Petro Fuels No.18, Thiru Nagar, Villupuram – 605 602

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Mr. J. Prakash

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S/o Jaganathan

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No.18, Thiru Nagar, Villupuram – 605 602 …Defendants

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Counsel for the Applicant Bank : Mr. Nattarajan Gopinath 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.76,40,872/- comprising a sum of Rs.2,64,811/- together with interest at the rate of 15.50% per annum with monthly rests being the

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amount due under Cash Credit Loan Account and a sum of Rs.73,76,061/together with interest at the rate of 15.65% per annum with monthly rests being the amount due under Term Loan Account from the date of filing of the application till the date of realization in full along with costs of this application and 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 defendants approached the applicant bank vide application dated 24.6.2013 for grant of credit facilities for the purpose of Working Capital Requirement and for purchase of materials. The applicant considering the said request vide sanction dated 24.06.2013 sanctioned Cash Credit Limit of Rs.26,00,000/- and Term Loan of Rs.75,00,000/-. The defendants executed necessary loan and security documents on 27.6.2013.

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(b) The defendants 1 and 2 deposited the title deeds of their properties more fully described in Schedule A1 to the OA with the applicant bank on 26.6.2013 with an intention to create equitable mortgage over the same and confirmed the same by executing Memorandum of Deposit of Title deeds dated 27.6.2013 registered as Doc No.2930/2013 on the file of Joint Registrar-II, Villupuram and further confirmed the same by letter dated 28.6.2013.

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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 and hence the loan account was classified as NPA on 15.9.2017.

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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 OA seeking recovery of the amount due in the account with further interest and costs.

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The defendants continuously remained absent and hence were called absent and set ex-parte on 27.02.2020.

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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-17 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 (including the schedule mentioned properties). 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 and the applicant has charged interest at contractual rates till the date of filing 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.731 of 2023 stands allowed.

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(b) Applicant is permitted to realize an aggregate amount of Rs.76,40,872/with future and pendentelite interest @14% p.a., simple from the

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defendants jointly and severally, from the date of filing of the OA till realization, after deducting all the amounts received by them during the pendency of TA, and also by selling the schedule properties and other assets of the defendants.

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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 2 & 3 are personally liable for all such amounts due under the 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 18^th day of March, 2024)

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

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State Bank of India v. M/s.Nagalakshmi Petro Fuels

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/s.Nagalakshmi Petro Fuels

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

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Case details

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