DRT allows Karur Vysya Bank to recover ₹99.81 Lakh from Defaulting Borrower, Issues Recovery Certificate [Read Order]

The Debts Recovery Tribunal (DRT) has allowed an Original Application filed by the applicant, which has enabled the recovery of ₹99,81,419.26 from the defaulting borrower and will issue a Recovery Certificate under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993.

The Original Application (OA No.1471/2023) was filed by the Karur Vysya Bank’s Basavangudi Branch against M/s Electronics Marvel, a proprietary concern, for the recovery of outstanding dues towards an overdraft facility.

The defendant had availed an overdraft facility of ₹1 crore, which was later renewed and reduced to ₹95 lakhs. To facilitate the credit facility the borrower executed a number of loan agreements including a demand promissory note, a hypothecation agreement, a letter of undertaking, and other security agreements. In addition, the security interest was registered at CERSAI.

Despite renewal of the facility and repeated communications the borrower did not regularize the account. Defaults continued resulting in the classification of the account as a Non-Performing Asset (NPA). The Bank sent out recall notices and legal notices before approaching the Tribunal.

Despite service of summons on the defendant, the latter failed to appear, and the case was decided ex parte.The Bank led evidence through its authorised representative by filing a proof affidavit and producing documentary evidence.

Whether the Bank had established the debt owed to it by the respondent and default on the respondent's part.

The Tribunal comprising Shri T. Rajesh, Presiding Officer, held that after perusing the unrebutted documentary evidence led by the Bank through its authorised representative.

It was satisfied that the Bank had established the sanction of credit facilities, the execution of loan documents, and default on the respondent's part.It was further held that the claim was within the limitation period and legally sustainable.

Accordingly, the Tribunal allowed the OA and issued a Recovery Certificate for ₹99,81,419.26 along with interest at 12% per annum (simple) from the date of filing of the OA till realisation.