ORDER
1.0 This application is filed 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) for recovery of a sum of Rs.18,22,434/- due as on 22.04.2016 with further interest at 13.00% p.a. with half yearly rests from the
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date of application till the date of realization in full and for sale of schedule mentioned properties along with costs of this application.
2.0 Brief facts of the Application may be tersely stated as follows.
2.1 Defendants 1 and 2 approached the applicant bank for sanction of Agriculture Farm Development Term Loan for the purpose of land development / pipe line / drip system / banana / coconut cultivation etc. Considering the said request, applicant bank sanctioned Agricultural Farm Development Term Loan of Rs.7,00,000/- on 11.03.2009 in Loan Account No.0959883012046 repayable in 10 yearly installments with a holiday period of 12 months from the disbursement of loan. The loan repayment shall being from 11.03.2010 to 11.02.2020.
2.2 The defendants 1 and 2 executed Memorandum of Agreement for Agricultural Loans dated 11.03.2009 undertaking to remit the installments till the outstanding in the loan account is fully adjusted. Further, it was agreed that in the event of default in payment of any installment of the loan which has fallen due as per the repayment terms, or any other amounts as directed by the applicant bank, and if such defaults continue for a period of three months, interest will be charged on quarterly basis on the outstanding liability. Further, in the event of such default, the defendants shall be liable to pay overdue interest 2% p.a. over and above the interest rate stipulated hereinabove on such defaulted amounts, from the date of such default till regularizing or clearing the same in full as the case may be.
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2.3 Defendants 1 and 2 signed letter of declaration in favour of applicant on 14.03.2009 for the receipt of the assets in good condition. 1stdefendant executed acknowledgement of debt- cum - security on 10.08.2011, 05.03.2012 and 02.03.2015.
2.4 Defendants 1 and 2 deposited the title deeds of the properties more fully described in schedule to this application and created equitable mortgage in favour of applicant bank by executing Memorandum of Deposit of Title Deeds registered as Doc. No.1495 of 2009 dated 11.03.2009.
2.5 The defendants defaulted in repayment and failed to regularize the loan account despite repeated demands and reminders. Therefore, the account was classified as NPA on 01.10.2010. Applicant, thereafter caused legal notice dated 22.04.2016 calling upon the defendants to repay the entire outstanding of Rs.18,06,428/- as on 31.03.2016. Thus the defendants are due and payable to the applicant in a sum of Rs.18,22,434/- as on 22.04.2016 together interest @13% p.a. plus 2% overdue interest.
3.0 Defendants 1 and 2 filed a common reply statement denying each and every averments contained in the application and stated that the claim is unsustainable in law. It is stated that the claim of the applicant is barred by limitation and it is not correct to state that the application is filed within the limitation as prescribed under Section 24 of the Act.
3.1 It is stated that at the time of sanctioning the loan the applicant bank has taken signatures in blank forms and papers and the same have been filled up later for
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the purpose of filing this OA. It is stated that the defendants are not liable to pay the amount claimed in the application. It is also stated that the claim has been instituted with false and frivolous allegations on the basis of illegal, invalid and unenforceable documents produced in support of the same. It is stated that the claim put forth by the applicant is wholly illegal and unjust.
3.2 It is stated that the defendants had not acknowledge the liability on 05.03.2013 and 02.03.2015 and has not signed any letter acknowledging their liability. It is stated that the defendant was properly maintaining the account without any difficulty. Applicant bank all of a sudden recalled the entire liability and denied to accept any transaction in the account, which resulted in cash crunch for the defendant and hence the cultivation failed.
3.3 It is stated that the bank is not entitled to claim interest for the period from 11.03.2009 to 22.04.2016 as per the sanction letter, however, the applicant has charged interest from 11.03.2009 and compounded the same and has also charged penal interest for which it is not entitled to.
3.4 It is stated that there is no cause of action for the applicant to file the claim. The statement of account filed in the application does not disclose the rate of interest and the period for which the interest has been charged.
4.0 In the light of the above, the points that arise for consideration by this Tribunal are:
1. Whether the applicant bank has established its claim against the defendants? If so, for what amount?
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2. Whether the applicant bank is entitled for pendent lite and future interest, if so, at what rate?
5.0 Point No.1 Whether the applicant bank has established its claim against the defendants? If so, for what amount?
5.1 The applicant bank in its endeavor to establish its claim against the defendant examined its official as AW1 and got marked exhibits Ex. A-1 to A-14. Ld. Counsel for Applicant placing reliance on the proof affidavit of AW-1, besides Exhibits A-1 to A-14 strenuously contended that the claim of the applicant stands established, as such, the applicant is entitled for a recovery certificate.
5.2 Ld. Counsel for Applicant Bank would further submit that even as per the Reply Statement filed, the defendant has not denied availing of credit facility and as such, the said admission is sufficient enough to allow the claim of the applicant. It is further stated that the contentions put forth in the written statement that the interest charged was exorbitant is neither tenable nor sustainable. Ld. Counsel also contended that the interest charged was as per terms and conditions of the contract. Ld. Counsel would contend that the contention of the defendants that the applicant had got the signatures of the defendants on blank printed forms and were later on filled and used for the purpose of filing OA is a usual defence raised by all the borrowers and the same is not tenable. Thus contending, the Ld. Counsel prayed the Tribunal to allow the claim.
5.3 In so far as the plea of obtaining signatures of the defendants by the officials of the applicant bank on blank printed forms is concerned, in the light of the ruling as
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per the ruling of Hon'ble DRAT, Mumbai in the matter of Sangli Bank Ltd. Vs. Prabha K.Maheshwari and others reported in MANU/DM/0025/2005 held in paragraph 8 that;
"8. The grant of loan as alleged by the Bank and defendant Nos.6 to 10 having signed a guarantee agreement is an admitted position. Their contention is that on 30thJuly, 1992, defendant Nos. 1 to 5 had sent blank letter of lien, demand note for grant of Rs.30 lacs to the Bank, which indeed, appears to be correct. However, it has to be pointed out that settled legal position is that the person who signs blank standard documents takes responsibility for the same and the plea of non est factum is not available to him"
Therefore, the said plea is unsustainable.
5.4 As regards the plea of the defendants that the statement of accounts filed by the applicant is improper, the applicant has charged interest usuriously and the penal interest has been capitalized are concerned, the applicant bank has filed the statement of accounts duly certified under Bankers' Book Evidence Act. Further, the defendants have not filed any evidence to substantiate their claims.
5.5 Therefore, in the light of the discussion as aforesaid, it is clear that the proof affidavit and the documents filed along with by the applicant remain unchallenged and unrebutted.
5.6 That apart, the Tribunal on careful perusal of the unrebutted Proof Affidavit of AW-1 besides Exhibits A-1 to A-14 is fully satisfied that the applicant has established its claim. This point is answered accordingly.
6.0 Point No.2 Whether the applicant bank is entitled for pendent lite and future interest, if so, at what rate?
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6.1 In terms of Sec. 19 (20) of the RDB Act, the Tribunal has been empowered to pass an order regarding payment of interest from the date on or before which payment of the amount is found due, up to the date of realisation or only payment, as it think fit to meet the ends of justice.
6.2 Hon'ble Supreme Court, in its recent judgement ( reported in II 2009 BC pg. 696) in the matter of State Bank of India - vs - Sarath Textiles, held that "Sec. 19 (20) of the RDDB & FI Act confers discretion on the Tribunal to award interest on the applicant being as it thinks fit to meet the ends of justice."
6.3 Hon'ble Supreme Court of India in the matter of Central Bank of India - vs - N. Raveendra (reported in 2002 [1] SCC pg. 367) held that "Sec. 34 of CPC confers discretion on the Court to award or not to award interest or to award interest at such rate as it deems fit de-horse notwithstanding the contract between the parties." Sec. 19 (20) of the RDDB & FI Act is akin to Sec. 34 CPC.
6.4. While it is the case of the applicant that the applicant bank is entitled for contractual rate of interest till discharge of the entire outstanding dues, however, the defendants would contend that as the subject loan is a Housing Loan and the defendants have paid part amount, in so far as pendente lite and future interest is concerned, the contractual rate of interest may not be applied. It is to be stated that the claim of the applicant bank includes the rate of interest and other charges payable as per the contract. The Tribunal already held that the applicant bank is entitled for the amount claimed in the OA. Further the loan is
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an Agricultural Loan for carrying out agricultural activities. In respect of agricultural loans, both Government of India and Reserve Bank of India have announced several sops for the borrowers availing agricultural loan. As alredy stated, the Tribunal has awarded contractual rate of interest as claimed by the applicant bank till the date of filing the OA. Therefore, under these circumstances, the Tribunal is inclined to grant pendente lite and future interest @10% p.a. simple on the OA claim amount from the date of filing till the date of realization. Point No.2 is answered accordingly.
7.0 For the reasons stated as above, I find that the applicant bank has successfully proved its OA claim against the defendant and it is held that the applicant bank is entitled for a Recovery Certificate for the amounts claimed in the OA with pendente lite and future interest at and 10% per annum (simple), from the date of the application till the date of realization, from the defendant, for sale of the application schedule mentioned property along with costs of the application. The defendant is also personally liable for the TA claim to the extent specified hereunder.
8.0 In the result, application is allowed as under:
(a) The applicant bank is entitled to recover a sum of Rs.18,22,434/- together with interest at the rate of @10% p.a. (simple) from the date of the application till the date of its realization in full, from the defendants jointly and severally.
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(b) It is further ordered that in case of default of payment by the defendants, the Applicant Bank is at liberty to sell the application schedule mentioned property in terms of the order in (a) supra and appropriate the sale proceeds towards the decreetal dues.
(c) If the sale proceeds are not found sufficient to cover the amount due and payable to the Applicant Bank, defendants are personally liable for all such amounts due.
(d) It is further ordered that any amount remitted or realized if any, during the course of the proceedings, shall be given due credit to the loan account of the defendants.
(e) The applicant bank is entitled for costs of this application.
9.0. The applicant bank is directed to file costs memo within two weeks of the receipt of this order.
10.0 Issue recovery certificate in favour of the applicant bank in terms of this final order.
11.0. Communicate a copy of the order to the parties concerned in terms of Rule 16 read with Rule 2(c) of DRT (Procedure) Rules, 1993. th (Dictated to PS, transcribed by him, corrected, signed and pronounced by me in the Open Court, this 30 day of January, 2020)
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(Dr. N.V.BADARINATH)
PRESIDING OFFICER
DRT-I, CHENNAI
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