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Judgment
This Original Application has been filed by applicant bank against defendant for recovery of a sum of Rs.12,63,325.23p (Rupees Twelve Lakhs Sixty Three Thousand Three Hundred and Twenty Five and Twenty Three Paise only) together with interest @ 13.65% p.a. compounded with monthly rests from the date of filing application till date of realization, for sale of the schedule mentioned property, for costs of the application and to pass such other or further orders as this Tribunal may deem fit and proper in the circumstances of the case.
Summon to defendant returned unserved. Applicant bank issued fresh notice and caused paper publication in respect of defendant. As defendant did not choose to appear and file written statement, defendant was called absent and set ex-parte on 13.01.2017. Applicant Bank filed Proof Affidavit along with 11 documents which are marked as Ex. A-1 to A-11. OA was finally heard and stood over till this day for consideration.
Defendant approached applicant bank with a request to sanction Agricultural Term Loan facility for purchase of "Standard DI-345 Tractor". Considering the said request, applicant bank sanctioned Agricultural Term Loan facility of Rs.4,40,000/- to defendant on 26.03.2008. Loan is repayable in seven yearly installemnts of Rs.63,000/- each commencing from 26.03.2009 together with interest @12.75%p.a. Having availed the credit facility, defendant executed various loan and security documents detailed below and the applicant bank filed Proof Affidavit along with documents which are marked as exhibits as detailed below:-
Exhibits
Date
Description of Document
A-1
26.3.2008
Common Application cum Appraisal Form for Credit Facilities for Agricultural Loan executed by defendant
A-2
26.3.2008
Memorandum of Agreement for Agricultural Loan executed by defendant thereby agreeing to the terms of sanction
A-3
26.3.2008
Letter Evidencing Deposit of Title Deeds executed by defendant in favour applicant bank
A-4
18.1.2007
Deed of Partition registered as Doc.No.84 of 2007 before the office of SRO, Veppanthattai relating to schedule "A" mentioned property
A-5
6.8.2008
Photocopy of Form of Certificate of Registration relating to schedule "B" Exhibits Date Description of Document mentioned vehicle (Tractor)
A-6
6.9.2010
Acknowledgement of Debt executed by defendant thereby acknowledging the amount due and payable to applicant
A-7
15.3.2011
Acknowledgement of Debt executed by defendant thereby acknowledging the amount due and payable to applicant
A-8
13.3.2014
Acknowledgement of Debt executed by defendant thereby acknowledging the amount due and payable to applicant
A-9
20.03.2014
Legal Notice issued by applicant to defendant to discharge the loan liability
A-10
20.10.2014
Legal Notice issued by applicant calling upon the defendant to discharge the outstanding liability
A-11
16.5.2016
Statement of Accounts along with attested copy of Deed of General Power of Attorney issued by applicant in favour of deponent
A perusal of the above documents establish that defendant had availed loan facilities extended by the applicant bank and had defaulted in its repayments resulting in the applicant bank making the above said OA claim.
It is the case of applicant bank that all these agricultural loans are to be serviced with interest on half yearly basis keeping in view the harvesting season and the cropping pattern. From the pleading in the OA it is manifest that due to both external and internal exigencies including lack of rainfall, repayments could not be made, however, defendant had acknowledged the debt on 6.9.2010, 15.3.2011 and 13.3.2014 thus keeping the claims of the applicant bank alive.
Notwithstanding the continuous default of at least servicing the interest, applicant bank did not apply the Prudential Norms as laid down by the Reserve Bank of India from time to time in declaring the account as a NPA and consequently had kept the account alive. It is argued on behalf of the applicant bank that owing to the intervention of the Governmental agencies from time to time in declaring certain areas as drought hit or flood hit or out of any other natural crisis resulting in loss of crop and consequently income to the farmers, the act of declaring the account as a NPA had to be postponed from time to time and ultimately was declared as a NPA on 13.03.2014.
Not going into the merits of the case this Tribunal basing on the execution of documents and availing of loan funds by the borrowers and creation of mortgage over immovable property, the loan transaction has been proved and admittedly as it is for agricultural purposes the interest is chargeable predominantly either half yearly or yearly rests, definitely not compoundable on month to month basis as that of a commercial loan.
Applicant Bank has taken shelter under mortgage claim but however did not satisfy levy of penal interest. Admittedly the advance is an agricultural advance recoverable in half-yearly instalments as per contractual terms and conditions.
This Tribunal after considering the facts and circumstances as pleaded in the OA has observed that already the loans are levied with a high rate of interest (@13.65%) and in most cases additional penal interest of 2% is also being demanded on the surmise that defendants were defaulters in repayment. Also, bank has not explained as to why they have not declared the account as NPA in accordance to the guidelines of RBI and stopped levy of interest thereon. Applicant bank claimed interest till the date of filing of OA along with additional 2% penal interest thus aggregating to the OA claim. In the circumstances, substantial interest is already claimed and remained unpaid. Therefore, this Tribunal is not inclined to grant any further interest as it is only an agricultural loan.
As the applicant bank had established its OA claim which was never disputed by the defendants it would be imperative for this Tribunal to award the Recovery Certificate as the Tribunal had possessed jurisdiction and that the claim of the applicant bank is within limitation as the OA claim is based on mortgage. For the above reasons, the OA of the applicant bank is allowed.
In the result:-
(a) Applicant Bank is entitled for a Recovery Certificate as against the defendant for a sum of Rs.12,63,325.23p (Rupees Twelve Lakhs Sixty Three Thousand Three Hundred Twenty Five and Twenty Three Paise only) which remained unpaid from the date of this application till the date of realization with costs. No order as to interest.
(b) It is ordered that in case of default to pay the amount adjudged by the defendant, applicant bank is entitled to sell all or that part of the mortgage properties (immovable and movable) as detailed in Schedule A and B of OA, as is sufficient to answer the claim of the Recovery Certificate and appropriate the sale proceeds towards the amount due.
(c) It is ordered that any amount remitted by the defendant or realised by the applicant bank during the pendency of this OA, shall be given due credit to the respective loan account of the defendant.
(d) Schedules A and B mentioned in the OA shall form part of this Recovery Certificate.
It is further ordered that 15 days time is granted to the applicant bank to file costs memo from the date of receipt of this order, to enable the Registry to prepare the recovery certificate as directed above. If in case, the cost memo is not filed within the above mentioned time, Recovery Certificate be prepared based on the 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 as per the extant guidelines.
(Dictated to PS, transcribed by her, corrected, signed and pronounced by me in the Virtual Court, through Video Conference on this the 15th day of September, 2020)