Allowed

Indian Overseas Bank v. Mr. v Pachamuthu

DRT9 Feb 2024TA/810/2023

Case brief

AI extract

What is this about?

A Transfer Application filed under Section 19(1) of the RDB Act by Indian Overseas Bank seeking issuance of a Recovery Certificate was allowed. Borrower and guarantor were declared personally liable; penalty interest was rejected in favor of pendentente interest.

What did the court decide?

Recovery certificate issued for Rs. 29,35,964/- with future interest at 9% p.a.; penalty interest rejected; mortgaged properties directed to be sold.

Indian Overseas Bank versus Mr. v. Pachamuthu — Contract and Commercial Disputes | DRT (2024)

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IN THE DEBT RECOVERY TRIBUNAL –II CHENNAI

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Dated this 9^th day of February, 2024

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PRESENT: SHRI T.RAJESH PRESIDING OFFICER

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T.A.No.810 of 2023

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(Old OA.No.705/2019-DRT-I, Chennai)

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Indian Overseas Bank, Chinnaselam Branch (IFSC: IOBA0000119) No. 378, Salem Main Road, Chinnaselam, Villupuram District, Pincode : 606 201

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…Applicant

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Vs.

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Mr. V. Pachamuthu S/o. Mr. Venkatachalam Thagamtheerthapuram Village Chinnaselam Taluk, Villupuram District – 606 201

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Mr. D. Murugan S/o. Mr. Dharmalingam 63, Middle Street, Vasudevanur Chinnaselam Taluk, Villupuram District – 606 201 …Defendants

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Counsel for Applicant : M/s. Ananda Gomathy Murugesan Defendants : Exparte.

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ORDER

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The above Transfer Application is filed Under Section 19(1) of the Recovery of Debts And Bankruptcy Act, 1993 seeking for issuance of a Recovery Certificate for Rs.29,35,964/-with future interest @11.95% p.a. with half yearly rests along with 2% penal interest from the date of filing of the TA till the date of realization and also by allowing the same to be recovered from defendants jointly and severally and for sale of schedule mentioned properties with 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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3. The case of the Applicant Bank can be encapsulated as follows:

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a) The 1^st defendant being the borrower and 2^nd defendant being the guarantorhadapplied for and availed an agricultural Term loan of Rs.15,00,000/- from the Applicant Bank.

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

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c) Apart from execution of necessary loan documents, the 1^st defendant had created security by way of equitable mortgage over the schedule mentioned properties.

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d) Even though the defendants had obliged themselves to repay the amount promptly and regularly, they failed to do so resulting in defaults in the account and the same being declared as NPAon 31.03.2019.

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e) The Applicant Bank, 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 over to pay back the amount. Even as no repayment was made despite repeated requests, the Applicant Bankhad on 23.04.2019 caused to issue a recallnotice for repayment of the amount due in the account.

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f) It is also the case of the Applicant Bank that despite repeated reminders and requests, the defendants had failed to make the repayment forcing the Applicant Bank to file this TAforseeking recovery of the amount due in the account with further interest and cost.

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g) Summons was taken out andas the defendants failed to enter appearance, they were set exparte on 05.07.2023.

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h) The Applicant Bankhad let in evidence through AW1who had sworn to a Proof Affidavit in terms of the pleadings in the TA and also produced Exbs A1 to A10 and got the same marked as evidence.

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Heard the counsel for the Applicant Bank and considered the contentions as taken in the 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 case put forth by the Applicant Bank in the Application remains unrebutted as no defense evidence were forth comingand defendants remain exparte. The evidence tendered by the Applicant Bank remains uncontroverted and undisputed. The evidences put forth by the 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 mentionedproperty and

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hypotheca).The claim of the Applicant Bank is well within the period of limitation and there is no Capitalization of penal interest.Since the credit facility is for agricultural purpose,pendentelite and future interest is awarded @9% p.a. (simple). The prayer for penal interest is rejected.

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In view of the findings as entered above:

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i. TA No:810 of 2023 stands allowed.

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ii. Applicant Bank is permitted to recover an amount of Rs. 29,35,964/-(Rupees Twenty Nine Lakhs Thirty Five Thousand Nine Hundred and Sixty Four Only/-) with future and pendentelite interest @ 9%p.a. (simple)from the date of filing of the TA till realization from the defendants as aforementioned after giving credit to all the amount recovered and received during the pendency of the TA.

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iii. It is made clear that the defendants are personally liable for all such amounts due in the Loan accounts.

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iii. The schedule mentioned properties to be proceeded against and sold and if the sale proceeds are not sufficient, the defendants and their other assets are liable to be proceeded against.

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iv. 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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v. 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 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 9^th day of February, 2024)

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

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Indian Overseas Bank v. Mr. v Pachamuthu

Case brief

What is this about?

What did the court decide?

Indian Overseas Bank v. Mr. v Pachamuthu

Case brief

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What did the court decide?

What the court decided

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