Allowed

Karur Vysya Bank v. Palanisamy

DRT4 Mar 2024TA/919/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the bank's application for a recovery certificate of Rs. 43,67,863.04 along with future simple interest at 11% p.a., despite the defendants' contentions regarding NPA classification and mortgage terms.

What did the court decide?

Recovery certificate for Rs. 43,67,863.04 with future simple interest at 11% p.a. to be issued for recovery from respondents jointly and severally.

Karur Vysya Bank versus Palanisamy — Contract and Commercial Disputes | DRT (2024)

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IN THE DEBT RECOVERY TRIBUNAL –II CHENNAI

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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.919of 2023

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(Old OA.No.413/2019-DRT-I, Chennai)

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M/s. The Karur Vysya Bank Ltd. Shree Bhavan, T.S. No: 5504/05, Marthandapuram 1^st Street, Pudukottai – 622 001

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…Applicant

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Vs.

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Mr. K. Palanisamy, Son of Karupaiah, No. 2/48, Paraiyer Street, Kotur Post, Kotur, Nachandupatti, Pudukottai – 622 404

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Mr. S. Pandian, Son of Sambanathan, No. 7/72A, Mada Koil Street, Virachilai PO, Thirumayam, Pudukottai – 622 412

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Mr. K. Senthilkumar, Son of Karuppaiah, No. 8/19, Theradi Street, Virachilai, Thirumayam, Pudukottai – 622 412

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Mrs. K. Vijayakumari, Wife of Mr. R. M. Karuppaiah, No. 8/19, Theradi Street, Virachilai, Thirumayam, Pudukottai – 622 412

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Mr. R. M. Karuppaiah,

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Son of Mr. Ramaiyah Thevar, No. 8/19, Theradi Street, Virachilai, Thirumayam, Pudukottai – 622 412

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Mrs. S. Subashini, Wife of Mr. K. Senthilkumar, No. 8/19, Theradi Street, Virachilai, Thirumayam, Pudukottai – 622 412

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Mrs. Annie, Wife of Mr. John, No. 22, Rosery Church 1^st Street, Mylapore, Chennai – 600 004

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Mr. A. Kathiravan, Son of Late. Mr. Anthony, No. 21, Dr. Ambedkar 2^nd Street, Vellanur Village, Chennai – 600 062

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...Defendant

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Counsel for Applicant : M/s.R. Umasuthan Counsel for Defendants : M/s. Genicon& Associates ……

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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.43,67,863.04Pdue under the Warehouse Loan Facility A/calong with future interest and costsand for sale of schedule mentioned properties along 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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The Applicant Bank contends thata Warehouse Loan credit facility to the tune of Rs.37,69,000/- was availed by the 1^st Defendant. Defendants D2 to D8 stood as guarantors. It is also stated that the facilities are secured by mortgage of schedule mentioned properties by the 4^th and 7^th Defendants.

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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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The defendants had filed a reply statement contending that the account was classified as NPA without following the guidelines of RBI. It is also stated that mortgage was executed on the undertaking that the repayment period will be extended. The defendantsare also putting forward a contention that the Bank had sold the stock for a lower price and is liable for the loss on that count. The defendants

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are also disputing the rate of interest as claimed by the Applicant Bank.

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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 A14.Even after being afforded with sufficient opportunity, no defence evidence was forthcoming.

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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. Even though a reply statement was filed by the defendants, there was no specific denial of pleadings and the availment of credit facility, creation of security and defaults are admitted. 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 agreed rate, which is on the higher side, prayer for monthly rests is declined and interest is awarded at 11% p.a. (simple).

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In view of the above:

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i. TA. No: 919of 2023 stands allowed.

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ii. Applicant Bank is permitted to recover an amount of Rs.43,67,863.04P(Rupees Forty Threelakhs Sixty Seven thousand Eighthundred Sixty Three and Four PaiseOnly/)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 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 defendantsare 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 accounts of the defendant.

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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

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(Procedure) Rules, 1993.

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(Dictated to PA-2, transcribed by him, corrected, signed and pronounced by me in the Open Court, this4^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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Karur Vysya Bank v. Palanisamy

Case brief

What is this about?

What did the court decide?

Karur Vysya Bank v. Palanisamy

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

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