Allowed

City Union Bank Limited v. M/s. Mars Enterprises

DRT4 Mar 2024TA/753/2022

Case brief

AI extract

What is this about?

DRT-II Chennai allowed a Transfer Application filed by City Union Bank Ltd. for recovery of a loan default amounting to Rs.53.60 lakhs. The court decreed recovery jointly and severally from defendants with future interest and ordered sale of mortgage properties.

What did the court decide?

Recovery of Rs.53,60,664.64 with 13% p.a. future interest; joint and several liability; sale of scheduled properties; Recovery Certificate drawn.

City Union Bank Limited versus M/s. Mars Enterprises — Execution and Attachment | DRT (2024)

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IN THE DEBT RECOVERY TRIBUNAL –II CHENNAI Dated this 4^th day of March, 2024

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PRESENT: SHRI T. RAJESH PRESIDING OFFICER

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T.A. No. 753 of 2022 (Old OA. No. 454/2020-DRT-I, Chennai)

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City Union Bank Limited, Sengurichi Branch, #232/B/A, Ulunthoorpet Main Road, (Near to Sengurichi Toll Plaza), Sengurichi, Villupuram District, Tamil Nadu – 606 115

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... Applicant

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M/s Mars Enterprises, A partnership Firm, Represented by its partner Mr. M. ganesh, No. 17 & 18, Vallalar Nagar, East Pondy Road, Koliyanur, Villupuram – 605 602

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Mr. M. Magesh, Son of Mr. Michel, No. 33/7, Kandasamy Layout 2^nd Street, K. K. Road, Villupuram – 605 602

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Mrs. R. Jothi,

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Wife of Mr. Rajaram, No. 128/3, Maduramettupalayam, Sirugramam, Panruti – TK, Cuddalore – 607 101

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Mrs. M. Stellamary, Wife of Mr. M. Magesh, No: 33/7, Kandasamy Layout 2^nd Street, K. K. Road, Villupuram – 605 602

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… Defendants

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Counsel for Applicant : M/s. P. Srinivasan Counsel for Defendants :Exparte

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…

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ORDER

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The above Transfer Application is filed under section 19 of the Recovery of Debts and Bankruptcy Act seeking recovery of Rs.53,60,664.64P with further interest from the date of filing of the TA by allowing the same to be recovered from the defendants jointly and severally and also by sale of the schedule mentioned properties.

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

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The case of the Applicant Bank can be encapsulated as follows:

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The 1^st defendant-Partnership Firm represented by the Defendants D2 and D3 had applied for and availed an OLCC – Working Capital Facility

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Loan for Rs.42,00,000/- which was later extended to Rs. 46,00,000/-. D4

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stood as guarantor for the credit facility.

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It is also stated that theabove facilities were availed after execution of

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necessary loan documents by the defendants,obliging themselves to repay the amount promptly and regularly, without fail.

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Apart fromexecution of the necessary loan documents, the 2^nd and 3^rd defendants had created security by way of equitable mortgage over the schedule mentioned properties and also by hypothecation of movables.

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Even though the defendants had obliged themselves to repay the amount promptly and regularly, they failed to do so resultingdefaults in the account and the same being declared as NPAon 29.05.2019.

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The Applicant Bank’s officials had on many occasions approached the defendants requesting them to regularize the account and also sent several reminders and despite all these, no effort was made by the defendants to get the account regularized over to pay back the amount. Even as no repayment was made despite repeated requests, the Applicant Bankhad caused to issue a demand notice dated 12.07.2019 requiring repayment of the amount due in the account.

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It is also the case of the Applicant Bank that despite repeated reminders and requests, the defendants had failed to make the repayment forcing

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the Applicant Bank to file this TA seeking recovery of the amount due in the account with further interest and cost.

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Even though the Defendants entered appearance and filed reply statement, they failed to file counter proof affidavit and failed to appear hence, subsequently they were called absent and set exparte on 08.02.2024and the matter was heard exparte.

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The Applicant Bank had let in evidence through AW1 who had filed the Proof Affidavit in terms of the pleadings in the TA and got marked Exhs A1to A17.

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Heard the counsel for the Applicant Bank and considered the contentions as taken inthe TA 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 Bank had succeeded in proving the TA 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 evidence tendered by the Applicant Bank remains

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uncontroverted and undisputed. The evidence put forth by the

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Applicant Bank were found admissible. From the statement of accounts as produced by the Applicant Bank, it is evident that the amount as claimed in the TA is outstanding in the account, which the Applicant Bank is entitled to get recovered from the defendants and their assets (including the scheduled mentioned property).The claim of the Applicant Bank is well within the period of limitation and there is no Capitalization of penal interest. Since, the TA claim has been arrived at by calculating interest at agreed rate which is on the higher side, prayer for monthly rests and penal interest is declined.

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In view of the finding as entered above:

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i. TA No: 753/2022 stands allowed .

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ii. Applicant Bank is permitted to recover anamount of Rs.53,60,664.64P (Rupees Fifty Three Lakhs Sixty Thousand Six Hundred Sixty Fourand Sixty Four Paisa Only) with future and pendentelite interest @ 13%p.a.(simple) from the date of filing of the TA till realization from thedefendants jointly and severally and also proceeding against and selling the schedule mentioned properties and appropriate the sale proceeds towards the decretal dues.

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iii. If the sale proceeds are not found sufficient to cover the amounts

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due and payable to the Applicant Bank, the defendants D2,D3 and D4 are personally liable for all such amounts due.

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iv. It is further ordered that any amount remitted or realized during

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the course of the proceedings, shall be given due credit to the loan account of the defendants.

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v. A Recovery Certificate is to be drawn and issued to the Recovery Officer to enable recovery of the amounts as per the above terms.

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vi. Applicant Bank is allowed to realize cost of the proceedings for which cost memo is to be filed in 7 days’ time from the date of receipt of the copy of the order.

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Communicate a copy of the order to the parties concerned in

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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 PA-2, transcribed by him, corrected, signed and pronounced by me in the Open Court, this 4^th day of March, 2024)

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

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City Union Bank Limited v. M/s. Mars Enterprises

Case brief

What is this about?

What did the court decide?

City Union Bank Limited v. M/s. Mars Enterprises

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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