Allowed

Canara Bank v. M/s. Dreams to Visuals

DRT27 Mar 2024TA/946/2023

Case brief

AI extract

What is this about?

Canara Bank sought recovery of a business loan under Section 19(1) RDB Act against partners of M/s Dreams to Visuals who were absent. The Tribunal allowed the application, rejecting monthly rests in favor of simple interest at 10% per annum.

What did the court decide?

Allowed recovery of Rs.23,54,415.23 plus simple interest at 10% p.a. from date of filing. Granted recovery certificate against defendants jointly, severally, and individually.

Canara Bank versus M/s. Dreams to Visuals — Contract and Commercial Disputes | DRT (2024)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 27^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.946 of 2023

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(Originally filed before DRT-I Chennai as OA No.476 of 2019 and thereafter transferred to this Tribunal and renumbered as TA No.946 of 2023)

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Canara Bank

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(Erstwhile Syndicate Bank) Represented by its Senior Branch Manager No.16, Arni Road, Kosapet Vellore – 632 001

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…Applicant

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Versus

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M/s Dreams to Visuals

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Represented by its Partners

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R. Vivek, H. Deepak and S.P. Dinesh No.33, Kannigaparameswari Vani Street Vellore, Tamil Nadu – 632 004

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Also at

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M/s Dreams to Visuals Represented by its Partners R. Vivek, H. Deepak and S.P. Dinesh No.2/1, 1^st Floor, Auxillium College Road Katpadi, Gudiyatham Taluk Vellore District

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Also at

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M/s Dreams to Visuals Represented by its Partners R. Vivek, H. Deepak and S.P. Dinesh No.16, SIDCO Industry Road Gandhi Nagar, Katpadi Vellore – 632 007

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Mr. R. Vivek, S/o Mr. Ravikumar 33, Kannika Parameswari Koil Street Vellore, Tamil Nadu – 632 004

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Mr. H. Deepak No.19B, 4^th East Cross Street Gandhi Nagar, Vellore Tamil Nadu – 632 007

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Mr. S.P. Dinesh 36 633 South Avenue Road Phase II, Sathuvachery Vellore, Tamil Nadu – 632 009 …Defendants

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Counsel for the Applicant Bank : M/s K.V. Subramanian Associatez Defendants : 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 defendants for recovery of a sum of Rs.23,54,415.23p together with interest at the rate of 11% per annum with monthly rests from the date of filing of the TA till the date of realization in full along with costs of this application.

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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 is as follows: -

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The 1^st defendant, a Partnership Firm represented by defendants 2 to 4 as its partners approached the applicant for grant of credit facilities by submitting application dated 7.7.2015 for purchase of Laser Printing Machine and the applicant considering the said request sanctioned Term Loan of Rs.25,00,000/vide sanction dated 11.07.2015. The defendants executed the loan and security

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documents on 11.7.2015. The defendants 2 to 4 executed guarantee agreements on 11.7.2015 in their individual capacity.

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It is further stated that even though the defendant had obliged to repay the amount promptly and regularly, they failed to do so resulting in default in repayment and hence the account was classified as NPA on 28.3.2017.

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It is contended by the applicant that the applicant’s officials 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 or to pay back the amount

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It is also the case of the applicant that despite repeated reminders and requests the defendants failed to make the repayment forcing the applicant to file this TA seeking recovery of the amount due in the account with further interest and costs.

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The defendants remained absent and hence were called absent and set ex-parte on 29.01.2020.

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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 TA and also produced Exhibits A-1 to A- 8 and got the same marked in evidence. However, Exhibits A-6 to A-8 are 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 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 had succeeded in proving the TA claim as against the defendants?

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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 defendants 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 TA is outstanding in the account, which the applicant is entitled to get recovered from the defendants and their 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 subject loan is a business loan and the applicant has charged interest at contractual rates till the date of filing of the TA 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.946 of 2023 stands allowed.

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(b) Applicant is permitted to realize a sum of Rs.23,54,415.23p with future and pendentelite interest @10% p.a., simple from the defendants jointly and severally, from the date of filing of the TA till realization, after deducting all the amounts received or recovered by them during the pendency of TA, and also by selling the other assets of the defendants.

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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 receipt 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 27^th day of March, 2024)

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

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Canara Bank v. M/s. Dreams to Visuals

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/s. Dreams to Visuals

Case brief

What is this about?

What did the court decide?

What the court decided

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