ANDHRA BANK SAIFABAD BRANCH Vs. VALLURIPALLI NAGARJUN

JUDGEMENT

(1.) The Petitioner-Bank filed this writ petition against the order dated 12.09.2003 passed in R.A. No. 36 of 2003 made by the Debt Recovery Appellate Tribunal, (DRAT) Chennai, insofar as the order granting interest pendente lite in lump sum instead of at the rate agreed to by the Respondents.

(2.) The Respondents herein were sanctioned a term loan of Rs. 600 lakhs, secured by an equitable mortgage by deposit of title deeds of the property consisting of 5th and 6th floors of the premises called "My Home Sarover Plaza" situated at Saifabad, Hyderabad, through the General Power of Attorney (GPA) holder Smt. V. Hemalata (mother of the first Respondent). The Respondents availed the said loan with an undertaking to repay with interest at Prime Lending Rate (PLR) of the Petitioner-Bank + 2%, with quarterly rests in 72 monthly installments commencing from February, 2000. It was also agreed that the rate of interest might be revised by the Bank from time to time as per the directions of the Reserve Bank of India. An agreement dated 28.12.1999 was accordingly entered into, inter alia, with a stipulation in Clause 5 of the said agreement that the Petitioner-Bank would have a right to recall the entire loan amount outstanding in the account by a written notice, notwithstanding the loan was repayable in monthly installments. The Respondents defaulted on the repayment schedule from June 2000 and also a portion of interest payable for March 2002 and the loan was liable to be recalled as provided in Clause 5 of the agreement. The efforts made by the Petitioner-Bank to impress upon the Respondents to pay the overdue installments and regularize the account in order to avoid classification of the account as a non-performing asset by 30.03.2002, did not yield results. The Respondents were advised through a legal notice dated 23.02.2002, telegram and fax as well, to repay the overdue amount of Rs. 1,08,29,080/- on or before 30.03.2002, duly cautioning that on the failure to regularize, the loan amount would be recalled and proceedings would be initiated for the recovery of the entire outstanding amount. The Respondents received the said notice.

(3.) The first Respondent set up a plea before the DRT, Hyderabad that he availed loan for Rs. 3 crores only. He denied that the loan was jointly sanctioned along with the second Respondent and pleaded that his property was given in security only for Rs. 3 crores and therefore his liability would not extend beyond Rs. 3 crores. He further pleaded that he made a proposal for One Time Settlement (OTS). The second Respondent filed separate written statement and put the Petitioner to strict proof of various averments made in the O.A. relating to execution of documents and creation of mortgage.