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Judgment
This Original Application has been filed by applicant bank against defendants for recovery of a sum of Rs.1,59,40,230.24p (Rupees One Crore Fifty Nine Lakhs Forty Thousand Two Hundred Thirty and Paise Twenty Four only), due under Cash Credit facility repayable together with interest @ 13.25% p.a. with monthly rests from the date of filing of this O.A. till the date of realization and for costs of the application.
Summons to D1 served & D2 returned unserved. Applicant Bank issued fresh notice and effected Paper Publication in respect of D2.Despite which defendants neither chose to enter appearance nor filed written statement. Hence, D1 & D2 were called absent and set ex-parte on 13.03.2017.Applicant bank by way IA No.283/20 had impleaded the proprietorship concern as first defendant to overcome the procedural issue, as the proprietorship concern is the constituent of the bank in whose name the documents are all duly executed. Notices sent to said proprietorship concern also returned unserved as 'addressee left'. As the said Proprietorship concern is arrayed as first defendant, the existing defendants have become the subsequent defendants and arrayed as defendants 2 and 3 respectively. Applicant bank filed its Proof Affidavit along with 11 documents, which were marked as Ex.A-1 to A-11. O.A. was finally heard and stood over this day for passing ex-parte final order.
The facts leading to filing of this O.A. are :-
a) First defendant approached applicant bank for Cash Credit (Hypothecation) for a sum of Rs.1.18 Crore for existing business of trading in Industrial Chemicals and Solvents. Based on such request, applicant bank sanctioned the said facility to defendant vide sanction letter dated 26.08.2013 (Ex.A-1) ;First defendant executed Sole Proprietorship Letter on 26.08.2013 (Ex.A-2) ; Agreement of Hypothecation of Assets is marked as Ex.A-3 and Common Agreement (Ex.A-4) ; Third defendant stood as Guarantor for loan availed by first defendant and executed Agreement of Guarantee on 26.08.2013 (Ex.A-5).
b) Third defendant offered her property in Saligramam Village morefully described in Schedule to OA and executed Memorandum of Deposit of Title Deeds in favour of applicant bank.
c) First defendant represented by second defendant visited applicant bank branch on 18.03.2015 and executed Balance Security Confirmation document, which is marked as Ex.A-6, confirming the outstanding balance in loan accounts as on 17.03.2015.
d) After availing loan, defendants failed and neglected to repay the dues as per terms of sanction, inspite of repeated demands and reminders from applicant bank. Applicant bank issued legal notice on 03.11.2015 (Ex.A-7), calling upon defendants to repay the outstanding dues. As there was no response from defendants nor repayments, applicant bank classified the loan account as NPA on 30.09.2014.
e) Following title documents are deposited by 3rd defendant with applicant bank :
(i) Agreement for Sale of UDS of land and construction entered into between 3rd defendant and M/s.SAS Realtors Pvt. Ltd. and Madhusudhana Rao and others for construction of schedule described flat property, which is marked as Ex.A-8 ;
(ii) Registered Sale Deed bearing Doc.No.5011/2007 of SRO, Virugambakkam executed in favour of 3rd defendant in respect of the undivided share of land (Ex.A-9) ;
(iii) Memorandum of Deposit of Title Deeds registered as Doc.No.5294/2013 with SRO, Virugambakkam executed by third defendant in favour of applicant bank (Ex.A-10) ;
f) Subsequent to availing of aforesaid loan, defendants committed default in repayment of both Principal and Interest, the loan account was classified as N.P.A on 30.09.2014. Despite efforts of Applicant Bank, defendants did not make any repayment.
g) Hence above O.A. has been filed for recovery of a sum of Rs.1,59,40,230.24p (Rupees One Crore Fifty Nine Lakhs Forty Thousand Two Hundred Thirty and Paise Twenty Four only), together with further interest thereon, as evidenced by Statement of Account (Ex.A-11) filed along with O.A.
Points for Consideration :-
(i) Whether applicant bank is entitled to the relief sought for in the present OA ?
(ii) If so, to what relief ?
Points :-
A careful examination of the pleadings in the Proof Affidavit and documents viz. Exhibits A-1 to A-11 evidence that the borrowal of credit facilities and execution of loan and security documents are true, in terms of averments made in Original Application as well as Proof Affidavit filed by applicant bank establishing its claim. Applicant bank filed Statement of Accounts duly certified under Bankers' Book Evidence Act, evidencing amount claimed against defendants. Defendants were set ex-parte on 13.03.2017, but till this day did not take any action to set aside the ex-parte order and did not choose to contest the claim. Further, a careful scrutiny of records makes it clear that present application is filed well within limitation and this Tribunal possess necessary and proper jurisdiction to entertain and adjudicate the claim. No oral or documentary evidence on the side of defendants are produced or filed to dispute the claim of applicant bank. Defendants neither confronted nor rebutted the documents produced and relied upon by applicant bank. Hence, it can be concluded that applicant bank has proved its claim against defendants.
In view of what has been discussed above, it is observed that applicant bank has proved its O.A. claim against defendants and applicant is entitled to Recovery Certificate in O.A. in terms of the direction given below. Points (i) & (ii) are answered accordingly.
In the result :-
a) Applicant is entitled for a Recovery Certificate as against defendant 1 to 3, for a sum of Rs.1,59,40,230.24p (Rupees One Crore Fifty Nine Lakhs Forty Thousand Two Hundred Thirty and Paise Twenty Four only), due under Cash Credit together with further interest thereon at the rate of 12% per annum (simple), on the amount as determined above and remained unpaid from the date of this O.A. till the date of its realization with costs.
b) It is further ordered that any amount remitted by defendants or realised by the applicant bank during pendency of this O.A., shall be given due credit to the respective loan account of defendants.
c) It is ordered that in case of default by the defendants to pay the amount adjudged, applicant bank is entitled to sell all or that part of schedule mentioned property and hypotheca as is sufficient to answer the claim of Recovery Certificate and appropriate the sale proceeds towards amount due.
d) If sale proceeds are not found sufficient, after defraying expenses of such sale for the payment of all such amounts, second and third defendants are personally liable for the deficiency of adjudged amount with interest and costs until realisation.
e) Schedule mentioned in the OA shall form part of the Recovery Certificate.
It is further ordered that 15 days time is granted to applicant bank to file Costs Memo from the date of receipt of this order, to enable Registry to prepare Recovery Certificate as directed above. If in case, Costs Memo is not filed within the above mentioned time, Recovery Certificate shall be prepared based on available records and forwarded to the Recovery Officer for execution in accordance with law.
Recovery Certificate be prepared as per the directions given above of this final order and issued accordingly. A copy of the order be communicated to the parties concerned in terms of Rule 16 read with Rule 2(c) of DRT (Procedure) Rules, 1993.
(Dictated to Steno (KN), transcribed by her, corrected, signed and pronounced by me in the Virtual Court, through Video Conference on this the 20th day of October, 2020)