1. The applicant bank i.e., Andhra Bank, 7 Tombs Road Branch, Shaikpet, Hyderabad filed this Original Application u/s. 19 of the Recovery of Debts and Bankruptcy Act, 1993 for recovery of a total sum of Rs. 25,75,220/- from the defendant with future interest @13.75% p.a. with monthly rests from the date of application till the date of realization together with costs.
2. The case of the applicant, in brief, is;- that defendant represented by its proprietrix Smt. N. Janaki availed term loan facility of Rs. 25 lakhs vide sanction letter dated 18.08.2017. The terms of sanction have been accepted and acknowledged by the defendant. She executed composite agreement agreeing to repay the loan amount with interest @11.95% p.a. with monthly rests with penal interest @2% in case of default, in 60 EMIs commencing from 18.02.2018. After availing term loan facility, the unit of the defendant has been closed. Since the defendant failed to pay the instalments, the applicant bank classified the loan account as IMPA on 30.06.2018 and issued legal notice dated 15.01.2019 and sent the notice to the Unit address as well as residential address. In spite of the legal notice, defendant failed to liquidate the loan amount hence, this application.
3. The defendant filed written statement. The submissions of the defendant as per the written statement, in brief, are that;- after availing the loan facility, the defendant had been regularly paying the amounts till 01.10.2018 and a total sum of Rs. 4,72,075/- was paid on various dates and thereafter due to break-down of machinery, the defendant could not pay the instalments. The applicant bank has not issued any legal notice and the same is created for the purpose of filing this application. The applicant bank has not calculated the amounts paid by the defendant and therefore, the OA claim is incorrect, there is no cause of action to file the OA and no application was filed before the Arbitrator prior to filing this OA. Therefore, the OA is not maintainable.
4. In order to prove its case, the applicant bank examined Surendra Kumar Suman, Senior Branch Manager as AW-1 and marked 7 documents through him as Ex. A.1 to A.7.
5. In order to substantiate her defence, Ms. N. Janaki as Proprietrix of defendant proprietary concern examined herself as DW-1 and marked 1 document through her as Ex. B.1.
6. Heard learned counsel appearing for the applicant bank, learned counsel appearing for the defendant. Perused the written arguments filed by the defendant and the material brought on record.
7. It is contended by learned counsel appearing for the applicant bank that 1st defendant is a proprietary concern and it is represented by its proprietrix Ms. N. Janaki. The defendant concern carries on business of manufacturing injection moulding items. The defendant availed term loan of Rs. 25 lakhs to purchase machinery. The defendant executed the loan documents on 18.08.2017. The loan amount is repayable in 60 equal monthly instalments. The defendant having availed the loan, committed default in payment of instalments, Thereupon, the applicant bank classified the loan account as NPA on 30.06.2018. The applicant bank examined Surendra Kumar Suman, Senior Branch Manager as AW-1 and marked 7 documents through him as Exs. A.1 to A.7. According to learned counsel, the evidence of AW-1 coupled with recitals in Exs. A.1 to A.7 amply proves the OA claim against the defendant and therefore OA deserves to be allowed.
8. Per contra, learned counsel appearing for defendant submits that the AW-1 is not competent to swear chief evidence affidavit filed on behalf of the applicant bank. The defendant paid instalments till October, 2018 totalling to a sum of Rs. 4,72,075/-. The balance instalments could not be paid by the defendant due to break-down of the machinery. The applicant bank did not issue any notice prior to filing the OA. The learned counsel refers the evidence of DW-1 and Ex. B.1 in support of his submissions and sought for dismissal of the OA.
9. Now, the points that arise for adjudication are:-
i) Whether the applicant bank proved the OA claim against the defendant?
ii) To what relief?
Point No. (i):-
10. DW-1 is the proprietrix of defendant proprietary concern. She admits availment of term loan of Rs. 25 lakhs from the applicant bank. For better appreciation, I may refer paras 5 and 6 of the chief evidence affidavit of DW-1 and they read as hereunder;
"5. I submit that, I approached the Applicant bank for availing financial assistance to purchase Machinery for an amount of Rs. 25,00,000/-. The Applicant has considered the loan application after due verification and value of the business the applicant bank sanctioned loan to me and the same was signed and acknowledged by me and agreeing the terms and conditions thereof. I am also executed Loan cum Hypothecation Agreement and purchased the Machinery.
6. I submit that, it is false to state that I utilized the entire loan facility but failed and neglected to repay the liability in accordance with the agreed terms. I submit that, after availing the loan I repay the amounts without fail till 1st October 2018 a total sum of Rs. 4,72,075/- to the Applicant in various dates thereafter due to break-down of the Machinery I was unable to pay the instalments, but I am not neglected to pay the instalments and not liable to pay the amounts mentioned in the application as stated by the applicant."
11. Ex. B1 is the statement of account filed by the defendant. Ex. A.7 is the extract of statement of account filed by the applicant bank. As per the Ex. B.1 and Ex. A.7 statement of accounts, the part payment made by the defendant is Rs. 4,72,075/-. Subsequent to 01.08.2018, there is no part payment entry in Ex. B.1 account extract filed by the defendant. Therefore, I do not find any force in the plea advanced by the defendant that she made payments subsequent to August, 2018 till October, 2018. The other plea advanced by the defendant is Surendra Kumar Suman, Senior Branch Manager is not competent to swear the chief evidence affidavit filed on behalf of the applicant bank. AW-1 enclosed the authorization letter issued by the Zonal Manager of the applicant bank to the chief evidence affidavit of AW-1. As per the authorization letter, Surendra Kumar Suman, Senior Branch Manager of the applicant bank is authorized to sign vakalatnama and all other necessary papers/documents etc. In view of the authorization letter, the plea advanced by the defendant does not deserve acceptance.
12. The evidence of AW-1 coupled with recitals in Exs. A.1 to A.7 substantiates the OA claim against the defendant and accordingly OA deserves to be allowed.
Point No. (i):-
13. In the result, the present Original Application is allowed with costs, as under:-
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defendant is liable to pay to the applicant bank a sum of Rs. 25,75,220/- with future interest @11.75% p.a. simple from the date of filing of the OA till the date of realization; ii) The applicant bank is entitled to proceed against the person and properties of defendant towards realization of its debt; iii) The applicant bank is entitled to the costs of the OA. 14. The applicant bank is directed to file cost memo within 2 weeks from the date of this Order. 15. Issue Recovery Certificate accordingly. 16. Communicate a copy of this order to the parties concerned. (Dictated to the PS, transcribed by him, corrected, signed and pronounced by me in the open court on this the 06th February, 2020).