Allowed

State Bank of India v. Karthikeyan

DRT28 Jan 2025OA/242/2022

Case brief

AI extract

What is this about?

DRT Chennai allowed the bank's original application for recovery of Rs. 29,70,091/- and permission to sell mortgaged property as the defendant failed to substantiate claims of inflated interest or admitted defaults. The bank was directed to file a cost memo.

What did the court decide?

Recovery of Rs. 29,70,091/- plus future interest and costs; liberty to sell the scheduled property for recovery.

State Bank of India versus Karthikeyan — Banking and Recovery | DRT (2025)

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OA No.242/2022 (C)

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28.01.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 28^th day of January, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No. 242 of 2022

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M/s. State Bank of India, Rep by its Manager Retail Asset Central Processing Centre (OMR) New No. 4/952 & 4/952A, 3^rd Floor, Rajiv Gandhi Salai, Perungudi, Chennai – 600 096.

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..Applicant

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-Vs-

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Mr. A. Karthikeyan, S/o. Mr. Anandaraj, 53, Nangooram Nagar, Nandivaram, Chennai – 603 202.

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Also at:

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Mr. A. Karthikeyan, S/o. Mr. Anandaraj, Flat No. S-2, Second Floor, Venishaa Flats, Plot No.6, Krishna Nagar, Madhavaram, Chennai – 600 060.

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Also at:

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Mr. A. Karthikeyan, S/o. Mr. Anandaraj, Office at Sai Dwaraka Enterprises, No.12, 4^th Street, Ganga Nagar, Kodabakkam, Chennai – 600 024.

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….Defendant

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Counsels on record / appeared:

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Counsel for Applicant Bank : Sh. S.Parthasarathy Counsel for Defendant : M/s R.Kubera Sampath

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OA No.242/2022 (C)

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28.01.2025

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: - FINAL ORDER - :

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This original application is filed on 16.07.2022 by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the sole defendant for recovery of a total sum of Rs.29,70,091/- (Rupees Twenty-nine lakh seventy thousand ninety-one only) due as on 07.06.2022 in respect of Housing Loan Facility (Loan Account No.34931026144) together with further interest @ 9.85% per annum with monthly rests and 2% additional interest chargeable for defaulted period in repayment, from the date of application till the date of realization in full, for sale of immovable property morefully described in OA Schedule and for costs of this application.

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Brief Facts of the case:

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The Applicant submits that the application is filed within the period of limitation as prescribed under Section 24 of the Recovery of Debts and Bankruptcy Act, 1993, and the subject recovery claim falls within the jurisdiction of this Hon’ble Tribunal.

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The applicant bank’s case is that defendant had approached the bank on 21.04.2015, seeking housing loan in a sum of Rs.30,00,000/- for the purpose of purchasing an Apartment.

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It is submitted that upon request of defendant, the applicant bank on 14.05.2015 had sanctioned the Housing Loan of Rs. 30,00,000/-, which is repayable with interest at the rate of 9.85% per annum with the repayment terms of 240

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OA No.242/2022 (C)

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28.01.2025

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equated monthly installments each amounting to Rs.27,050/- commencing from 15.06.2015, for purchase of Flat bearing No.S-2 in the 2^nd floor with super built up area measuring 710 sq.ft. morefully described in Schedule to OA.

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It is submitted by the applicant bank that on availing the credit facility, the defendant has executed the following loan documents on 14.05.2015 in favour of applicant bank:

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a) Memorandum of Loan Agreement for Home Loan Granted to Public for Rs.30,00,000/-;

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b) Affidavit undertaking not to hold the applicant bank responsible or liable for any loss or damage which may suffer as a result of any omission or commission amounting to negligence or default on the part of the Builder;

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c) Agreement to Mortgage;

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d) Deed of undertaking.

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It is submitted by applicant bank that on 06.07.2015, the defendant had executed a Memorandum of Deposit of Title Deeds in favor of the applicant bank, vide document no. 4131 of 2015.

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It is further submitted by the Applicant Bank that the Defendant, after availing the sanctioned credit facility, violated the terms of the sanction, including the repayment schedule, and defaulted on the repayment of the loan despite repeated reminders. Consequently, the loan account was classified as a Non-Performing Asset (NPA) on 14.12.2020 for Loan Account No. 34931026144. Despite the default and

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OA No.242/2022 (C)

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28.01.2025

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persistent non-compliance, the Defendants failed to respond positively. The Applicant Bank, through its Authorized Officer, issued a Demand Notice dated 30.12.2020 under Section 13(2) of the SARFAESI Act, calling upon the defendant to clear the outstanding dues, followed by the Possession Notice dated 17.04.2021 under Section 13(4). A Legal Notice dated 27.06.2022 was also issued to the defendant, despite which there was no response from the defendant. Therefore, the Applicant Bank has filed this Original Application (OA) seeking recovery of the outstanding dues from the defendant.

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After the filing of the OA, summons was taken out to the sole defendant and the same was duly served. Defendant, entered appearance through his counsel and filed written statement on 14.11.2022.

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Brief averments of Written Statement filed by the defendant:

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The defendant contends that the Original Application (OA) is not maintainable either in law or on facts. However, the defendant admits to having approached the applicant bank for financial assistance and availment of Housing Loan to the tune of Rs.30,00,000/- in the form of a housing loan to purchase a flat.

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It is contended by the defendant that the EMIs were repaid without any delay, which is evident from the statement of account filed by the applicant bank. However, defendant was unable to continue repaying the loan due to financial difficulties caused by the COVID-19 pandemic.

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The defendant submits that he had requested applicant bank to restructure

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OA No.242/2022 (C)

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28.01.2025

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the EMI under Covid-19 relief scheme as per guidelines issued by RBI. But applicant bank had not accepted the request made by defendant and had classified the loan account as a Non-Performing Asset (NPA).

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It is further contended by defendant that the applicant bank's claim is baseless, as the defendant has made several payments toward the loan amount even after the account was classified as a Non-Performing Asset (NPA), which are not reflected in the statement of account. Furthermore, the defendant alleges that the applicant bank has inflated the interest rates. The defendant submits that as per RBI norms, once a loan account is classified as NPA, no interest, including penal interest or other charges, can be levied on the account. Whereas the applicant bank had also capitalized the penal interest, contrary to the guidelines of the RBI.

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Despite availing time for filing Counter Proof Affidavit, the defendant did not choose to file CPA to repudiate the claim of applicant bank with documentary evidence. Hence the opportunity to file CPA was closed on 05.04.2023.

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Heard the submissions of Applicant Bank and perused the records.

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To prove the case of the Applicant Bank, Shri. A. Maniraja, Manager, Perungudi Branch, has filed his Affidavit by way of evidence and same was considered as evidence of AW-1 and list of documents came to be marked as Ex A-1 to A-13.

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The defendant, in his Written Statement, while admitting the borrowal and execution of loan and security documents in favour of applicant bank, has denied the

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OA No.242/2022 (C)

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28.01.2025

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claim of applicant bank. It is alleged that the applicant bank has inflated the interest rates and debited various costs to the defendant’s account, the applicant bank has also capitalized the penal interest which is against the RBI guidelines. Hence, it is submitted that the OA claim cannot sustain under law and is liable to be dismissed.

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On perusal of documents filed on behalf of applicant bank, as per the arrangement letter dated 29.06.2015, defendant had agreed to pay penal interest at the rate of 2% p.a. (over and above the applicable rate of interest) in case of default. There is no contra evidence available on record to repudiate the claim of the Applicant Bank, in as much as the allegation of defendant regarding capitalization of penal interest. As the defendant failed to file the counter-proof affidavit, the OA claim remains unchallenged.

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With regard to the amount due to the applicant bank, the interest applied, the conduct and operations in the account and the default committed, this Tribunal comes to the conclusion that the applicant bank is entitled for a final order on the following terms:

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: O R D E R:

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19. The OA is allowed with costs:

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(a) The applicant bank is allowed to recover from the Defendant a sum of

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Rs.29,70,091/- (Rupees Twenty-Nine Lakhs Seventy Thousand

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Ninety-One only) due in respect of Housing Loan Facility ( Loan Account No. 34931026144) together with further interest @ 9.85% per annum with monthly rests and 2% additional interest chargeable for the defaulted period in repayment, from the date of filing this application till

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OA No.242/2022 (C)

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28.01.2025

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the date of realization.

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(b) In the event of failure of the defendant to pay the aforesaid amount, the bank is at liberty to recover the amount by sale of the schedule mentioned property in the OA;

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(d) The applicant bank shall file the latest memo of calculation of OA amount together with interest, costs etc., to be paid by the defendants duly considering the amounts, if any, paid by the defendants and/or amount realized by sale of assets etc., during the intervening period after the filing of the OA, enabling the Registry to prepare Recovery Certificate for the amount to be paid by defendants to the applicant bank.

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(e) The applicant bank shall file memo of costs within ten days from the date of this final order.

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(g) Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of the final order.

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A copy of this order be communicated to the parties concerned.

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Sd/-

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(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

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(Dictated to Prasobh Sankar, transcribed by him, corrected, signed and pronounced by me on this the 28^nd day of January, 2025)

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OA No.242/2022 (C)

28.01.2025

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sri. A. Maniraja, Manager, RACPC, Perungudi.

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Exhibits on the part of the Applicant:

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Sl. No.	Description of Documents	Exhibit No.
	Proof Affidavit dated15.07.2022
1.	Application formoftheBorrowerdated21.04.2015	A-1
2.	Sanction letter for Rs. 30.00 Lakhs towards Housing Loandated14.05.2015	A-2
3.	Memorandumof Loan Agreement dated14.05.2015	A-3
4.	Affidavit for housing loans for purchase of Flat dated 14.05.2015	A-4
5.	Agreement to Mortgage dated 14.05.2015	A-5
6.	Deed ofUndertaking dated14.05.2015	A-6
7.	Sale Deed in Document No. 2918 of 2015 dated 15.05.2015	A-7
8.	Construction Agreement in Document No. 2917 of 2015 dated 26.02.2015	A-8
9.	Memorandum of Deposit of Title Deeds In Document No. 4131of 2015 dated 06.07.2015	A-9
10.	Demand Notice under Section 13(2) of SARFAESI Act dated 30.12.2020	A-10
11	Possession Notice under Section 13 (4) of the Act dated 17.04.2021	A-11
12	Legal Notice issued to the Defendant dated 27.06.2022	A-12
13	Statement of Account for Loan Account No. 34931026144 along with Certificate under Bankers Book EvidenceAct dated 07.06.2022	A-13

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Witness Examined for the Defendants: -Nil-

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List of Documents Exhibited for the Defendants: -Nil -

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Sd/(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

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OA No.242/2022 (C)

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28.01.2025

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SCHEDULE – A PROPERTY

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All the piece and parcel of vacant land measuring an extent of 2293 Sq.ft., bearing Plot No.6, situated in Krishna Nagar approved by C.M.D.A. vide P.P.D/L.O.No. 44/96, comprised in part of survey No.339/4A, Part (as per Patta 4270) and 340/ID (as per Patta 4274) as per Madhavaram Municipality town Survey Field Register Extract rpt – 7223/2013, Old Survey No. 340/ID, Part 339/4A Part. Situated in Madhavaram Village land measuring 2293.5 Sq.ft., and built up area measuring 710 Sq.Ft., together with an undivided share of land measuring 331 Sq.ft., in and out of 2293.5 Sq.ft., Madhavaram Taluk, Tiruvallur District. Chennai – South and bounded on the

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North by : Plot No.5 belonging Mr. N. Prabhakaran South by : Plot No.7. East by : Land in Survey No. 330 and 331 West by : 30 feet wide layout Road

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Admeasuring

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East to West on the Northern Side : 70 Feet East to West on the Southern Side : 69 Feet North to South on the Eastern Side : 33 Feet North to South on the Western Side : 33 Feet

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Registration on District of North Chennai and Sub Registration District of Madhavaram

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SCHEDULE – B

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An undivided share of 331 sq.ft., out of 2293.5 sq.ft title and interest in the above said Schedule –A mentioned property Flat S-2, in 2^nd floor, ‘Venishaa Flats’ bearing Plot No.6, Krishna Nagar together built up area measuring 710 sq.ft., out of 2293.5 Sq.ft. bearing Plot No.6, Krishna Nagar, Madhavaram in Madhavaram Taluk, on the Sub Registrar of Madhavaram, Tiruvallur District.

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The title deeds were deposited by the said Defendant by way of Memorandum of Deposit of Title deeds registered as Document No.4131 of 2015, dated 06.07.2015 on the file of the Office of Sub-Registrar, Madhavaram and Registration District of North Chennai.

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Sd/(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

State Bank of India v. Karthikeyan

Case brief

What is this about?

What did the court decide?

State Bank of India v. Karthikeyan

Case brief

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What did the court decide?

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