Allowed

Indian Overseas Bank v. Muthukumar

DRT25 Mar 2024TA/787/2022

Case brief

AI extract

What is this about?

Applicant bank formally recovered loan against defendant for unpaid term loan and cash credit under NEEDS scheme. Court allowed application permitting recovery with simple interest and sale of hypothecated assets.

What did the court decide?

Order allowed. Permit realization of Rs.39,02,765.40 plus simple interest from filing date. Allow sale of hypothecated assets. Defendant personally liable. Issue Recovery Certificate.

Indian Overseas Bank versus Muthukumar — Specific Performance | DRT (2024)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 25^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.787 of 2022

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(Originally filed before DRT-I Chennai as OA No.221 of 2021 and thereafter transferred to this Tribunal and renumbered as TA No.787 of 2022)

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Indian Overseas Bank Represented by its Chief Manager Aminjikarai Branch Pachaiappa’s Trust Board Building Pachaiappa’s College Campus Harrington Road, Chennai – 600 030 …Applicant

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Versus

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M. Muthukumar 3, V.J. Flats, 4^th Seward Road Valmiki Nagar, Thiruvanmiyur Velachery, Chennai – 600 041

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Also at No.18/7, Lal Bahadhur Shastri 5^th Street Lakshmipuram, Thiruvanmiyur Velachery, Chennai – 600 041 …Defendant

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Counsel for the Applicant Bank : M/s S.R. Sundaram Defendant : 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 defendant for recovery of a sum of Rs.39,02,765.40p together with interest at the rate of 10.35% per annum with monthly rests from the date of filing of the OA till the date of realization in full along with costs of this application and for sale of hypotheca.

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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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It is stated that the Regional Joint Director, District industries Center of Department of Industries and Commerce by their letter in Ref. R.C. No.3055/A4/2017 dated 27.02.2018 addressed to the Chief Manager, IOB, Aminjikarai Branch recommending the application for sanction and disbursement of loan under the NEEDS Scheme 2017-2018 for the defendant to meet the project cost for manufacturing of Electronic Protection Device. A tripartite agreement dated 13.3.2018 between the Government of India represented by General Manager, District Industries Centre – Regional Joint Director, District Industries Center of the Department of Industries and Commerce. Considering the same the applicant sanctioned a Term Loan of Rs.35,00,000/- and Cash Credit Loan of Rs.5,00,000/- vide sanction dated 8.5.2018. The defendant executed necessary loan documents and letter of hypothecation for hypothecation of Machineries and book debts on 8.5.2018.

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It is further stated that even though the defendant had obliged to repay the amount promptly and regularly, he failed to do so resulting in default in repayment and hence the account was classified as NPA on 31.10.2019.

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It is contended by the applicant that the applicant’s officials had on many occasions approached the defendant requesting them to regularize the account and despite the same no effort was made by the defendant to get the account

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regularized or to pay back the amount. Hence the applicant issued a recall notice dated 19.11.2019 calling upon the defendant to clear the outstanding dues.

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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 defendant remained absent and hence was called absent and set ex-parte on 31.01.2023.

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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-14 and got the same marked in evidence, however, Exhibits A1 & A-11 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 defendant?

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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 defendant 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 defendant and her assets. 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 applicant has charged interest at contractual rates till the date of filing of the OA 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.787 of 2022 stands allowed.

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(b) Applicant is permitted to realize a sum of Rs.39,02,765.40p with future and pendente lite interest @10% p.a., simple from the defendant, from the date of filing of the OA till realization, after deducting all the amounts received or recovered by them during the pendency of OA, and also by selling the hypotheca and other assets of the defendant.

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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 25^th day of March, 2024)

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Sd/-

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

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Indian Overseas Bank v. Muthukumar

Case brief

What is this about?

What did the court decide?

Indian Overseas Bank v. Muthukumar

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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