Allowed

Canara Bank v. Nila Paper Mill rep by Managing Partner

DRT6 Mar 2024TA/770/2022

Case brief

AI extract

What is this about?

The DRT allowed the bank's application for a recovery certificate. Citing un-rebutted evidence and admissible documents, the court found the bank's claim proved within limitation, holding respondents jointly, severally, and personally liable for the debt and interest.

What did the court decide?

Recovery Certificate issued for Rs. 3,22,42,692.33P plus future interest @ 11% p.a. to be realized from defendants jointly and severally, including sale of mortgage properties.

Canara Bank versus Nila Paper Mill rep by Managing Partner — Income Tax | DRT (2024)

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IN THE DEBT RECOVERY TRIBUNAL –II CHENNAI

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Dated this 6^th day ofMarch, 2024

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PRESENT: SHRI T.RAJESH PRESIDING OFFICER

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T.A.No.770of 2022

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(Old OA.No.60/2022-DRT-I, Chennai)

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Canara Bank Egmore Branch, At No. 3, Sait Colony 1^st Street, Egmore, Chennai – 8

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…Applicant

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Vs.

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M/s. Nila Paper Mill PAN No: AAOFN5247Q Represented by its Managing Partner Mr. T. Mathipal, No. 1, Ground Floor, Mosque Street, Bells Road, Chepauk, Chennai – 600 005

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Mr.T. Mathipal, PAN No: BKQPM4437E S/o. Mr. Thangadurai, S. No. 63/5, Kattudevathur, Madurantakam Taluk, Kancheepuram District - 603 313

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Mrs. S. T. K. Bulbul Mala PAN No: CJBEB1367D S/o. Mr. S. T. K. Dhanapal, No. 1, Ground Floor, Mosque Street, Bells Road, Chepauk, Chennai – 600 005

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Mrs. M. Santhi PAN No: BSTPS3817F W/o. Mr. P. Marimuthu, No. 28/24B, NGO Colony, Srivilliputhur, Virudhunagar District – 626 125 ...Defendants

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Counsel for Applicant : M/s.S. Kesavan Defendants : Exparte ……

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ORDER

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The Application is filed Under Section 19(1) of the Recovery of DebtsAnd Bankruptcy Act,1993 seeking for issuance of a Recovery Certificate for a total sum of Rs.3,22,42,692.33P due under the Term Loan A/c. along with future interest and costs.

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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 Applicant Bank contends thata Term Loan credit facility of Rs. 2,52,00,000/- was availed by the 1^st defendant – a Partnership Firm. Whereas, the 2^nd Defendant –the Managing Partner of the Firm, 3^rd and 4^th Defendants stood as guarantors. It is also stated that the facilities are secured by mortgageof schedule mentioned properties by the 4^th Defendant and also hypothecation of schedule B mentioned assets.

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It is also stated that the above facilities were availed after execution of necessary loan documents by the defendants, obliging themselves to repay the amount promptly and regularly, without fail.

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The Applicant Bank further contends that despite availing the credit facilities by obliging to pay back the amounts, the defendants failed in compliance of the same and all the efforts of the Applicant Bank to make the defendants pay back the amounts failed, forcing the Applicant Bank to file this Application.

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Summons was taken out and defendants 1 and 3 were served. Substitute service by paper publicationwas taken out in respect of defendants 2 and 4. As the defendants failed to enter appearance, theywere set exparte on 31.01.2023.

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The Applicant Bank let in evidence through AW1, filed proof affidavit in confirmation with the pleadings and got marked Exhs.A1 to A34.

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Heard. The following issues arise for consideration.

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i. Whether the Applicant Bank had proved the TA claim?

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ii. What orders are to be passed?

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Both these issues are decided together.

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The Applicant Bank’s evidences remain un-rebutted and hence proved. The documents produced by the Applicant Bank are found to be admissible and are sufficient to prove the TA claim. Hence the Applicant Bank is found to be entitled for the TA claim. The TA claim is made within limitation and there is no capitalization of penal interest. Since the TA claim is arrived at by calculating interest at

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agreed rate, which is on the higher side, prayer for monthly restsis declined.

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In view of the above:

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i. TA. No: 770of 2022 stands allowed.

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ii. Applicant Bank is permitted to recover an amount of Rs.3,22,42,692.33P(Rupees Three Crores Twenty Two Lakhs Forty TwoThousand SixHundred Ninety Two and Thirty ThreePaise Only/-)together with future and pendentelite interest @ 11% p.a. (simple) from the date of filing of the TA till realization from the defendants jointly, severally and personally and also proceeding against and selling the schedule mentioned properties and their assets 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 due and payable to the Applicant Bank, the defendantsD2, 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 the course of the proceedings, shall be given due credit to the loan account of the defendants.

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i. 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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ii. 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 6^th day ofMarch, 2024)

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

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Canara Bank v. Nila Paper Mill rep by Managing Partner

Case brief

What is this about?

What did the court decide?

Canara Bank v. Nila Paper Mill rep by Managing Partner

Case brief

What is this about?

What did the court decide?

What the court decided

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