Allowed

City Union Bank Limited v. M/s. Sri Balaji Enterprises

DRT21 Mar 2024TA/937/2023

Case brief

AI extract

What is this about?

The Tribunal allowed an application under Section 19(1) of the RDB Act for issuance of a Recovery Certificate. Finding the bank's evidence un-rebutted and approved, the court decreed the claim after accounting for prior SARFAESI realization and permitted recovery of the principal plus future interest via sale of mortgaged properties or personal action.

What did the court decide?

Recovery Certificate issued for Rs. 1,55,42,327/- with future interest @ 13.50% and 15.50% p.a. via sale of schedule properties or personal recovery.

City Union Bank Limited versus M/s. Sri Balaji Enterprises — Cheque Dishonour | DRT (2024)

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IN THE DEBT RECOVERY TRIBUNAL –II CHENNAI Dated this 21^st day of March, 2024

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PRESENT: SHRI T.RAJESH

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PRESIDING OFFICER

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TA.No.937 of 2023

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(Old OA.No.704/2019 - DRT-I, Chennai)

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City Union Bank Limited Represented by it Assistant General Manager Thanjavur Branch No.1658, South Main Street Thanjavur – 613 009

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… Applicant.

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Vs.

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M/s. Sri Balaji Enterprises Represented by its Partners (1)V. Karthika Eswari (2) S. Rajkumar & (3) M.K. Ramviswas 2/4 West Rajaveedhi

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Big Kanchipuram, Kanchipuram.

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Mrs. V.Karthika Eswari W/o. Late. S.V. Venkatesan No.6, SVN Pillai Street Kanchipuram.

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S. Rajkumar S/o Subburaman No. 1A, Railnagar Extension Medical College Road, Thanjavur.

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M.K. Ramviswas S/o R. Muthukrishnan No. 75, Gandhi Nagar, 10^th Street Tiruvannamalai.

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S. Thavasu W/o M. Srinivasan No.4/1095, MGR Nagar Melavasthachavadi Thanjavur

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… Defendants.

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Counsel for Applicant : M/s.R.Sriram. Defendant : Exparte. …… ORDER

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The 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.1,55,42,327/- due under the Term loan account along with future interest and cost and also for sale of the schedule mentioned properties.

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The Applicant contends that a Term Loan credit facility of Rs.20,00,000/- and Rs. 25,00,000/- and an OLCC credit facility of Rs. 70,00,000/- were availed by the 3^rd and 4^th defendants – partners and deceased - partner S.Venkatesh on behalf of the 1^st defendant partnership firm. The 5^th defendant stood as the guarantor. It is further stated that the said facilities are secured by mortgage of schedule mentioned properties. Subsequently D2 was inducted as a partner of the firm and hence the applicant bank made modifications by which D2 has become a borrower of the above credit facilities instead of late S. Venkatesh.

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

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The Applicant further contends that despite availing the credit facility

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by obliging to pay back the amount, the defendants failed in

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compliance of the same and all the efforts of the Applicant to make the defendants pay back the amount failed forcing the Applicant to file this Application.

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Summons was taken out and as the defendant failed to appear he was set exparte on 25.02.2020.

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The Applicant let in evidence through AW1, filed proof affidavit in confirmation with the pleadings and got marked Exhs.A1 to A60.

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Heard. The following issues arise for consideration:

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i) Whether the Applicant 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’s evidence remains un-rebutted and hence proved. The documents produced by the Applicant are found to be admissible and are sufficient to prove the TA claim. Hence, the Applicant 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 claim is arrived at by calculating interest at agreed rate which is on the higher side, the prayer for monthly interest is declined. During the course of proceedings the applicant bank had filed part satisfaction memo vide Sr.No. 12776/2019 dated 10.12.2019 stating that schedule mentioned Item No.3 has been sold in SARFAESI proceedings and realized a sum of Rs.35,00,000/-.

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In view of the above

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i) TA No.937/2023 stands allowed.

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ii) Applicant is permitted to recover an amount of Rs.1,55,42,327(Rupees One Crore Fifty Five Lakhs Forty Two Thousand Three Hundred and Twenty Seven Only)with future and pendentelite interest @13.50% p.a (simple) on Rs. 21,94,859/- and Rs. 31,62,516 and @15.50% p.a (simple) on Rs.1,01,84,952/-, from the date of filing of the TA till realization from the defendants jointly and severally and also by proceeding against and sale of schedule mentioned properties item No. 1 and item no.2, after giving credit to all the amounts recovered and received during the pendency of the TA and also giving consideration to the amount of part satisfaction of Rs. 35,00,000/-.

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iii) It is clear that defendants 2 to 5 are personally liable for all such amount due in the accounts.

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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 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

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Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure)

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Rules, 1993.

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(Dictated to stenographer, transcribed by her, corrected, signed and pronounced by me in the Open Court, this 21^st day of March, 2024)

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Sd/-

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

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City Union Bank Limited v. M/s. Sri Balaji Enterprises

Case brief

What is this about?

What did the court decide?

City Union Bank Limited v. M/s. Sri Balaji 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

Coram

Case details

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