Allowed

Canara Bank v. M/s Indo Shoes

DRT18 Mar 2024TA/746/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal disposed of an application for recovery of a loan of approximately Rs. 1.42 crore. Finding the claim substantiated and undisputed, the Tribunal allowed the application, permitting recovery with future interest and costs, while rejecting the prayer for penal interest.

What did the court decide?

Applicant permitted to recover Rs. 1,42,09,895 with future interest @16.90% p.a. monthly rests, costs, and by sale of schedule properties; penal interest prayer rejected.

Canara Bank versus M/s Indo Shoes — Banking and Recovery | 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

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PRESIDING OFFICER

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TA No.746 of 2023

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(Originally filed before DRT-I Chennai as OA No.257 of 2020 and thereafter transferred to this Tribunal and renumbered as TA No.746 of 2023)

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Canara Bank (Erstwhile Syndicate Bank) Nungambakkam Branch Rep. by its Branch Manager No.7, “Satya Plaza” Dr. Thirumurthy Nagar Main Road Nungambakkam, Chennai – 600 035 …Applicant

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Versus

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M/s Indo Shoes

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Represented by its Partners No.6A/13, Sheik Ali Subedar Street Periamet, Chennai – 600 003

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Also at M/s Indo Shoes SF No.10, Ambur Gudiyattam Road Chinnavarigam Ambur, Vellore – 635 811

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Mr. V.G. Shaik Fareed

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S/o Mr. Abdul Gafoor Sahib No.61.23, Mohammedpura Mosque Street Ambur, Vellore – 635 811

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Mr. K. Rayees Ahamed S/o Faziur Rahman Sahib No.3/2, Small Mosque Street, 2^nd Lane Ambur, Vellore – 635 802

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Mrs. A. Nazneen Kowsar W/o Mohammed Azam No.32/82, Mosque Street Sethuvalai Village, Anikattu Taluk Vellore – 632 104

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Mrs. N. Faizuniisa W/o V.G. Shaik Fareed No.61/23, Mohammedpura Mosque Street Ambur, Vellore – 635 811 …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 a sum of Rs.1,42,09,895/- together with interest at the rate of 16.9% per annum with monthly rests plus 2% penal interest 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, a Partnership Firm, represented by defendants 2 to 4 as its Partners approached the erstwhile Syndicate bank by submitting application dated 20.04.2017 to meet its Working Capital requirements and the erstwhile Syndicate Bank considering the said request vide sanction dated 05.05.2017 sanctioned SOD Synd MSE Loan of Rs.2,00,00,000/-. The 1^st defendant represented by defendants 2 to 4 executed necessary loan documents on 22.05.2017. The defendants 2 to 5 also executed guarantee agreements on

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22.05.2017 thereby guaranteeing due repayment of the credit facility availed by the 1^st defendant.

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(b) The defendants 2 and 4 deposited the title deeds of their property more fully described in the Schedule to the TA on 22.05.2017 with an intention to create equitable mortgage over the same in favour of the applicant and confirmed the same by executing Memorandum of Deposit of Title deeds dated 24.05.2017 registered as Doc. No.1516/2017, SRO, Pallikonda.

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It is further stated that even though the defendant had obliged 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 29.10.2018.

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It is also 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 applicant issued the legal notice on 03.03.2020.

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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 02.08.2022.

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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-21 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 for business purpose this Tribunal is not inclined to interfere with the interest rates claimed by the applicant, however, proceed to reject the prayer for award of penal interest.

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13, 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.746 of 2023 stands allowed.

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(b) Applicant is permitted to realize an aggregate amount of Rs.1,42,09,895/with future and pendentelite and future interest @16.90% p.a., with monthly rests from the 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 to 5 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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Canara Bank v. M/s Indo Shoes

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/s Indo Shoes

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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