Thomas George vs South Indian Bank Ltd

S. Ravi Kumar, Chairperson

This Appeal is preferred under Section 20 of the Recovery of Debts Due to Bank and Financial Institution Act, 1993 against judgment dated 26.6.2019 in TA No.130/2016 (OA No.260/2012) on the file of DRT-II, Ernakulam. The appellants herein are defendants in above referred TA. Brief averments leadings to this appeal are as follows.

Respondent bank herein filed Original Application No.260/2012 (renumbered as TA 130/2016) for recovery of Rs.20,68,659.76p with future interest at 15% p.a. with monthly rests and penal interest at 2% p.a. from the date of application till realisation and by sale of application schedule properties, contending that defendants availed a Housing Loan on 26.7.2005, executed necessary documents and mortgaged schedule property by deposit of title deeds. It is further contended that defendants acknowledged liability on 22.1.2008, 11.6.2009 and on 6.8.2010 but failed to repay the amount, therefore, respondent bank initiated SARFAESI proceedings and also filed this TA for recovery of dues. Defendants filed their written statement contending that they made repeated requests to the bank to regularize their accounts, but the bank failed to do so. Defendants also contended that rate of interest was re-fixed with effect from 12.6.2009 and interest claimed in the TA is not tenable. Tribunal below, on consideration of pleadings accepted the claim of the bank and allowed the TA, by granting a recovery certificate for Rs.20,68,659.76p and future interest at 13% p.a. from 8.6.2012 till realisation.

Aggrieved by above referred judgment, appellants herein preferred this appeal, contending that impugned order of Tribunal below is not sustainable and liable to be set aside. Appellants contended that Tribunal below ought to have found that after settlement talks that took place on 10.6.2009, there was novation of contract between parties and respondent bank cannot arbitrarily proceed. Appellants also contended that Tribunal below has not taken into consideration the pleadings that were taken in the written statement and without considering the same passed the impugned order. Appellants also contended that order of Tribunal below is liable to be set aside.

Respondent bank filed written arguments stating that final order of Tribunal below is based on evidence, both oral and documentary. It is submitted that appeal is filed beyond statutory period without giving any reasons for delay. It is also contended that appellants resorted to all sorts of delaying tactics to prevent the secured creditor from recovering its dues and that the appellants have not remitted even a single pie towards loan account in compliance of recovery certificate. It is contended that for these reasons, appeal is liable to be dismissed.

Heard advocate for respondent bank, who reiterated written arguments at the time of oral arguments. No arguments are advanced on behalf of appellants in spite of granting ample opportunity, appellants did not utilise the same. As the matter is posted to this date as a last chance, it is taken up and decided on merits.

I have perused material papers including impugned order dated 26.6.2019. As seen from pleadings, appellants have not disputed availment of loan facility and execution of documents. From pleadings and also written arguments of respondent bank, both parties mainly agitated on SARFAESI action, which is not the subject matter in a TA. Even in written statement,  main objection taken by defendants/appellant is that declaration of account as ‘NPA’ is not proper and legal, which cannot be an issue to be decided in OA/TA. Admittedly, appellants filed SARFAESI application and the same was dismissed and finally adjudication is arrived as to SARFAESI action. Main aspect that has to be decided in the present case is whether bank has proved its claim of Rs.20.68,659.76p or not. On behalf of respondent bank, Chief Manager filed his proof affidavit and through him Ex.A1 to A11 are marked. Evidence of Chief Manager of respondent bank and documents Ex.A1 to A11 are not rebutted by appellants and evidence produced on behalf of Bank remained unchallenged. Appellants did not adduce any evidence in support of defence taken in their written statement to the claim of respondent bank. Mere taking of objection in the written submission is not sufficient as that objection has to be substantiated with evidence, either oral or documentary. Therefore, Tribunal below, on consideration of evidence of AW1 and documents Ex.A1 to A11 recorded a finding that respondent bank has proved its claim and entitled for a recovery certificate, which, in my view, is a correct finding and there is absolutely no illegality in the said finding.

On a scrutiny of material, I am of the considered view that Tribunal below was right in allowing the TA and granting a recovery certificate in favour of respondent bank and there are absolutely no grounds to interfere with the judgment of Tribunal below dated 26.6.2019 and that the appeal is devoid of any merits.

For the above reasons, appeal RA 24/2020 is dismissed with costs.

All pending IAs, if any, stand closed.