CENTRAL BANK OF INDIA vs M/s PREMIER MORARJI CHEMICALS CO. LTD. on 27 May 2026

1. M/s.Premier Morarji Chemicals Co. Ltd.,

(In liquidation) represented by the

Official Liquidator,

High Court of Kerala, Ernakulam.

2. K.M.George (Dead),

Kayalakkakam,

Kuravamkonam,

Trivandrum – 3.

3. K.M.Ignatious,

T.C.No.4/2393,

Vikramapuram Hills,

Kowdiar P.O.,

Trivandrum – 3.

…Defendants

4. Mary (Dead. LRs on record)

W/o.K.M.George,

Kuravankonam, Kayalkkakom,

Kowdiar P.O.,

Trivandrum – 695 003.

5. K.G.Kuruvilla,

S/o.late K.M.George,

Kayalkkakom, Kuravankonam, Kowdiar P.O.,

Trivandrum – 695 003.

6. K.G.Mathew,

S/o.late K.M.George,

T.C.4/2552 (3), Kayalkkakom,

East Pattom,

Trivandrum – 695 004.

7. K.G.Augustine,

S/o.late K.M.George,

T.C.4/2128, Kuravankonam,

Kowdiar P.O.,

Thiruvananthapuram – 695 003. …Additional defendants [Additional defendants 4 to 7 were impleaded as legal heirs of deceased 2nd defendant as per order dated 25.08.2022 in IA No.996/2001]

This Original Application having been heard on 29.04.2026 in the presence of Advocate Sri.Santhosh Kumar K. for the applicant bank and stood over to this day for consideration, the Tribunal delivered the following: F I N A L O R D E R

The applicant bank filed OS No.73/1995 before the Sub Court, Alappuzha for recovery of an aggregate sum of Rs.3,15,77,730.59 due under various loan accounts together with future interest and costs from the defendants jointly and severally and by sale of the plaint schedule properties.

Facts of the case:

2. The applicant is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its head office at Mumbai and one of its branches at Alappuzha.

3. The 1st defendant is a company incorporated under the Companies Act, 1956 which was wound up as per order dated 06.06.1994 of the Hon'ble High Court of Kerala in Company Petition No.17/1993 and Official Liquidator was appointed as provisional liquidator of the company. The 1st defendant company has been enjoying credit facilities from the applicant since 1978. The subject loans were availed by the 1st defendant after executing security documents on 09.03.1992 and defendants 2 and 3 stood as guarantors for the loans. As primary security for the facilities, the 1st defendant hypothecated various items of machinery described in ‘A’ schedule to the plaint and equitable mortgage was created over 9.20 Acres of land described in ‘B’ schedule by deposit of title deed with the bank.

4. Due to default in repayment, the applicant filed OS No.73/1995 before the Sub Court, Alappuzha on 08.03.1995 seeking relief to recover an aggregate sum of Rs.3,15,77,730.59, the details of which are furnished below, from defendants 1 to 3 jointly and severally and by sale of the plaint schedule properties:

1. Open loan Rs.42,51,200.05

2. Overdraft against book debts Rs.11,79,392.04

3. Working capital term loan-1 Rs.25,36,673.00

4. Working capital term loan-2 Rs.92,94,155.00

5. Funded loan-1 Rs.61,51,591.00

6. Funded loan-2 Rs.81,64,719.50 Total Rs.3,15,77,730.59

This case was transferred to Debts Recovery Tribunal, Chennai in 1997 and renumbered as TA No.1099/1997 and thereafter it was transferred to DRT, Ernakulam on its establishment on 01.10.1999. In May, 2016, it was transferred to this Tribunal for recovery of the aforesaid amount claimed by the applicant bank.

5. The official liquidator of the 1st defendant company filed written statement in OS No.73/1995 before the Sub Court, Alappuzha contending that he is only a formal respondent in the suit and any order against this defendant need not be passed and he prayed to dismiss the suit with costs.

6. The 2nd defendant filed written statement in OS No.73/1995 denying the claim of the applicant and contended that the suit is not maintainable in law and on facts and hence the same is liable to be dismissed with costs.

7. The 3rd defendant filed reply statement before the DRT, Chennai admitting that the 1st defendant company availed credit facilities from the bank from 1978 and he was one of the guarantors to the loan transaction. The company and its assets were attached on 13.07.1993 and the same are in the custody of the Recovery Officer of Provident Fund Commissioner for arrears of provident fund amount due to it. This defendant is not liable to pay any amount to the bank and hence the application may be dismissed with costs.

8. Pending the case, the 2nd defendant died and his legal heirs were impleaded as additional defendants 4 to 7 as per order dated 25.08.2022 in IA No.996/2001. The summons sent to the additional 4th defendant was returned with the postal endorsement ‘expired’. The applicant bank filed a memo on 20.12.2022 stating that legal heirs of deceased 4th defendant are already in the party array i.e., additional defendants 5 to 7 and hence there is no necessity to implead any other person in this case.

9. Despite service of summons, none appeared and represented for additional defendants 5 and 6 and hence they were set exparte on 30.10.2023 and 13.02.2025 respectively. The additional 7th defendant entered appearance in this case but he has not filed written statement despite time granted and thereafter remained absent from the proceeding. Proof Affidavit:

10. To establish the claim on behalf of the applicant bank, one Mr.S.S.Iyer, Senior Manager of the applicant has filed proof affidavit and produced the loan documents marked as Exhibits A1 to A28. The availing of loans by the 1st defendant company, execution of guarantee agreements by defendants 2 and 3, creation of mortgage over the subject matter property by the 1st defendant company are well established from the documents placed by the applicant bank.

11. The contesting defendants have not filed counter proof affidavit nor adduced any documentary evidence to prove their claim.

12. Heard arguments advanced by the learned counsel for the applicant bank. The defendants 1 and 3 remained absent from the proceeding from 29.05.2007. The additional 7th defendant did not appear in this case from 30.10.2025.

13. The sole issue arises for consideration is whether the applicant is entitled to recover the amount from the defendants as claimed in this case?

14. A perusal of the materials on record would reveal that the 1st defendant company availed the subject loans from the applicant bank and in renewal of the earlier documents, the defendants have executed fresh security documents on 09.03.1992 and the same are marked as Exts.A1 to A21, which includes guarantee agreements executed by defendants 2 and 3 guaranteeing due repayment of all amounts due and payable by the 1st defendant. The 1st defendant had deposited title deed marked as Ext.A22 in respect of 9.20 Acres of land described in ‘B’ schedule to the plaint towards collateral security for the loans.

15. As the dues were mounted up due to accrual of huge amount as interest on account of non-payment of the installments, the applicant bank being the secured creditor of the 1st defendant company had filed C.A.No.71/1995 in C.P.No.17/1993 before the Hon'ble High Court of Kerala seeking permission to file a suit against the defendants for enforcing the charge created on the properties of the 1st defendant in their favour. The Hon'ble High Court vide order dated 27.03.1995 had granted leave to file a suit against the defendants herein before the Sub Court, Alappuzha subject to the following terms and conditions: “1. The applicant shall not execute the decree without the leave of this Court;

2. The right of the Company in liquidation shall not in any way be affected by the filing of the suit; and

3. The applicant will be entitled to only to pro-rata distribution along with other secured creditors and workers.” Accordingly, the applicant bank filed OS No.73/1995 before the Sub Court, Alappuzha for recovery of a sum of Rs.3,15,77,730.59 due under the loan accounts as on 08.03.1995. Subsequently, OS No.73/1995 was transferred to Debts Recovery Tribunal, Chennai and renumbered as TA No.1099/1997.

16. The 2nd defendant filed IA No.481/1997 in TA No.1099/1997 before the Debts Recovery Tribunal, Chennai raising the question of maintainability of the case and the said application was dismissed by a reasoned order dated 05.08.1998, which was not challenged by him in any forum and the said order has attained finality. Evidently, the 1st defendant company had borrowed huge amount from the applicant bank. Even though the company is in liquidation, it cannot be absolved from the liability and the applicant bank also cannot be restrained from recovering its legally recoverable dues from the company and its assets. The account statements marked as Exts.A23 to A28 would prove the claim of the applicant bank and it is entitled to recover the sum of Rs.3,15,77,730.59 due under the loan accounts as on 08.03.1995 from the defendants. In view of the foregoing reasons, the issue is answered in the affirmative.

17. The applicant bank filed an affidavit on 26.11.2019 stating that after filing of the original suit, the applicant received a sum of Rs.70,90,800/- being the dividend after sale of the properties by the Official Liquidator appointed by the Company Court in C.P.No.17/1993 and the said amount was credited towards the loan account on 09.09.2005. In the course of hearing, learned counsel for the applicant bank also affirmed that the plaint schedule properties were already sold and no property is available to be proceeded against to recover the balance dues.

18. Considering the amount advanced, interest applied and default committed and partial recovery effected by sale of the properties, I am of the view that the applicant bank is entitled to get pendente lite and post-decree interest @10% per annum, which is reasonable in the facts and circumstances of the case.

19. The applicant bank, therefore, is entitled to get a final order on the following lines: In the result, the applicant bank is given a final order allowing it to recover:

(i) an aggregate sum of Rs.3,15,77,730.59 (Rupees three crores fifteen lakhs seventy seven thousand seven hundred and thirty and Paise fifty nine only), less the sum of Rs.70,90,800/- (Rupees seventy lakhs ninety thousand eight hundred only) received by the applicant bank on 09.09.2005, from defendants 1 and 3 and also from the assets, if any, inherited by additional defendants 5 to 7 from the deceased 2nd defendant;

(ii) pendente lite and post-decree interest @10% per annum on the sum of Rs.3,15,77,730.59 (Rupees three crores fifteen lakhs seventy seven thousand seven hundred and thirty and Paise fifty nine only) from 09.03.1995 till realization from defendants 1 and 3 and also from the assets, if any, inherited by additional defendants 5 to 7 from the deceased 2nd defendant; and

(iii) costs and expenses borne by it for realization of the loans from defendants 1 and 3.

20. The applicant bank shall file memo of costs within ten days from the date of this final order.

21. Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of the final order.

22. Communicate copy of this order to both parties as provided in R.16 r/w R.2(c) of the Debts Recovery Tribunal (Procedure) Rules, 1993. (Dictated to my PA, corrected and pronounced by me in the open Tribunal on this the 27th day of May, 2026)

[SOVAN KUMAR DASH] PRESIDING OFFICER

A P P E N D I X Witness for Applicant: AW1: Sri.S.S.Iyer, Senior Manager of the applicant bank. Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 09.03.1992 Demand promissory note for Rs.43 lakhs executed by defendants 1 and 2 in favour of the applicant bank. A2 09.03.1992 Interest escalation letter executed by the 1st defendant company. A3 09.03.1992 Letter of continuity executed by the defendants in favour of the applicant bank. A4 09.03.1992 Agreement of hypothecation executed by defendants 1 and 2. A5 09.03.1992 Declaration executed by defendants 1 and 2 in favour of the applicant bank. A6

09.03.1992 Power of attorney holder executed by the 1st defendant company in favour of the applicant bank. A7

09.03.1992 Declaration executed by the 1st defendant company. A8

09.03.1992 Letter of hypothecation of bills executed by the 1st defendant company. A9

09.03.1992 Letter of guarantee executed by defendants 2 and 3. A10 09.03.1992 Term loan agreement executed by the 1st defendant company. A11 09.03.1992 Letter of acknowledgement of debt executed by the defendants. A12 09.03.1992 Letter of guarantee executed by defendants 2 and 3. A13 09.03.1992 Term loan agreement executed by the 1st defendant company.

A14 09.03.1992 Letter of acknowledgement of debt executed by the defendants. A15 09.03.1992 Letter of guarantee executed by defendants 2 and 3. A16 09.03.1992 Term loan agreement executed by the 1st defendant company. A17 09.03.1992 Letter of acknowledgement of debt executed by the defendants. A18 09.03.1992 Letter of guarantee executed by defendants 2 and 3. A19 09.03.1992 Term loan agreement executed by the 1st defendant company. A20 09.03.1992 Letter of acknowledgement of debt executed by the defendants. A21 09.03.1992 Letter of guarantee executed by defendants 2 and 3. A22 … Copy of Patta relating to the mortgaged property. A23 … Certified copy of the statement of account relating to open loan. A24 … Certified copy of the statement of account relating to overdraft against book debts. A25 … Certified copy of the statement of account relating to working capital term loan-1. A26 … Certified copy of the statement of account relating to working capital term loan-2. A27 … Certified copy of the statement of account relating to funded loan-1. A28 … Certified copy of the statement of account relating to funded loan-2.

Defendants’ Exhibits – Nil

PRESIDING OFFICER

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

Dated the 27th May, 2026

TA No.214/2016 (TA No.1099/1997)

Between

Central Bank of India, Regional Office, Ernakulam.

…Applicant

And

M/s.Premier Morarji Chemicals Co. Ltd., (In liquidation) represented by the Official Liquidator, High Court of Kerala, Ernakulam & 6 others.

...Defendants

F I N A L O R D E R