Indian Overseas Bank vs M/s. Vishnu Battery Company on 25 August 2026

FINAL ORDER

1. This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 against the defendant seeking issuance of a Recovery Certificate for recovery of a sum of Rs.35,18,209/- together with interest at the rate of 11.20% p.a. with monthly rests from the date of the application till the date of realisation along with costs of the application and for sale of schedule mentioned properties.

2. The subject matter of the case is the Cash Credit Limit availed by the defendant from the Applicant Bank.

3. It is the case of the applicant that the defendant is a Proprietary concern represented by its Sole Proprietor Mr. N. Kathiravan. It is also the case of the applicant that the defendant approached the applicant for grant of credit facility for development of its business and the applicant considering the said request the applicant sanctioned a Cash Credit Limit of Rs.24.79 lakhs on 06.02.2015. It is stated that the defendant executed loan documents on 06.02.2015 in favour of the applicant bank.

4. It is also the case of the applicant that the defendant deposited the title deeds of the schedule mentioned properties with the applicant bank on 21.03.2016 with an intention to create equitable mortgage over the same in favour of the applicant and confirmed the same by executing Memorandum of Deposit of Title deeds on 24.03.2016 registered as Doc. No.2407/2016, SRO, Katpadi.

5. It is also the case of the applicant that the defendant defaulted in repayment and failed to regularize the loan account despite repeated demands and hence the loan account was classified as NPA on

31.10.2018 and the applicant bank invoked the provisions of SARFAESI Act and issued the demand notice dated 08.11.2018 requiring the applicant to clear the outstanding dues, but in vain. The defendant did not come forward to clear the dues but acknowledgment of debt on 12.11.2018 and 14.03.2019. Hence the present OA is filed for recovery of its dues.

6. Summons was taken out to the defendant is served with notice by way of substituted service. As the defendant was continuously absent and as there was no representation for the defendant on 27.06.2022, the sole defendant was set ex-parte on that day. Applicant Bank filed Proof Affidavit along with 12 documents, which were marked as Ex. A-1 to A-12 on 08.03.2024, however, Exhibits A-1 to A-7 are marked subject to proof and relevancy. The Ld. Counsel for Applicant Bank made his submissions on 25.06.2026 and thereafter the matter stood till this date for passing final orders.

7. The following issues arise for consideration in the matter: - (a) Whether the applicant had succeeded in proving the liability of the defendant?

(b) What order as to cost of the proceedings need be passed?

These issues are considered together.

8. Heard the Ld. Counsel for the applicant, perused the OA averments and the record placed before the Tribunal.

9. The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-12 along with the proof affidavit. The documents produced in evidence are all found admissible. The proof affidavit of the applicant bank remained unchallenged and unrebutted. Therefore, on careful consideration of proof affidavit along with exhibits filed on behalf of the applicant bank, besides the material placed before the Tribunal, the Tribunal is satisfied that the applicant bank has successfully proved the OA claim against the defendant. Further, the statement of accounts in respect of the loan account produced and certified under the Banker’s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendant. It is clear from the statement of accounts that penal interest is not capitalized.

10. In view of the foregoing, it is clearly evident that the application filed by the applicant bank is well within the period of limitation and this Tribunal possesses the territorial and pecuniary jurisdiction to entertain this OA.

11. In view of the fact that the loan facility availed by the defendant is a cash credit facility for development of business and the applicant has claimed interest at contractual rate till the date of filing of the OA, this Tribunal is of the view that the pendente lite interest can be awarded at reduced rates.

12. In view of the afore mentioned discussions, the only conclusion this Tribunal can draw is that the applicant had clearly proved the disbursement of the loan, which the applicant is entitled to realize. Hence, OA is disposed off in the following manner: - (a) TA No.701 of 2023 stands allowed.

(b) Applicant is permitted to realize a sum of Rs.35,18,209/- with further interest @10% per annum (simple) from the date of filing of the application till the date of realization in full, from the defendant after deducting all the amounts received / realized by them during the pendency of OA and by selling the schedule mentioned properties and other assets of the defendant.

(c) If the sale proceeds are not found sufficient to cover the amount due and payable to the Applicant Bank, the defendant is personally liable for all such amounts due as ordered above.

(d) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 15 days from the date of receipt of the copy of the order.

(e) The Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of this final order.

13. Communicate a copy of the order to the parties concerned in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

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(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 25th day of August, 2026)

EXHIBITS MARKED BY APPLICANT BANK

S. No. Date Description of Documents Exhibit Nos.

1. 06.02.2015 Sanction letter of the applicant bank A-1

2. 06.02.2015 Demand Promissory Note for Rs.24.79 lakhs executed by the defendant A-2

3. 06.02.2015 Letter of continuity to the DPN for Rs.24.79 lakhs executed by the defendant A-3

4. 06.02.2015 Deed of hypothecation of stocks executed by defendant. A-4

5. 06.02.2015 Deed of hypothecation of book debts executed by defendant. A-5

6. 06.02.2015 Deed of hypothecation for securing machineries / Vehicles / goods / book debts for Rs.24.79 lakhs executed by the defendant. A-6

7. 24.03.2016 Memorandum of Deposit of Title deeds by the defendant in respect of application property A-7

S. No. Date Description of Documents Exhibit Nos.

8. 30.12.2013 Settlement deed registered as Doc. No.11515 of 2013.

9. 12.11.2018 Acknowledgement of debt executed by the defendant.

10. 14.03.2019 Acknowledgement debt executed by the defendant

11. 08.11.2018 Demand notice form the applicant

12. 20.01.2020 Statement of Accounts along with certificates under Bankers’ Book Evidence Act.

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DESCRIPTION OF PROPERTY

All that piece and parcel of the House sites bearing Plot Nos.1, 2, 3, 4, 8, 21, 22 & 23 situated in a residential layout known as “Aadi Nagar” comprised in Survey No.439, of Kangeyanallur Village, Katpadi Taluk, Vellore District, measuring to the total extent of 13766 Sq. ft. and bounded on the: For Plot No.1, measuring 1769 Sq. ft. North by

: Property of Mr. Selvam South by

: Plot No.2 East by

: Layout of Mr. Venkatesan and Mr. Babu West by

: 20 feet wide public Road

Admeasuring East to West on the Northern side : 50 Feet and 6 inches East to West on the Southern side : 50 feet North to South on the Eastern side : 39 Feet and 6 inches North to South on the Western side : 32 feet For Plot No.2, measuring 1500 Sq. ft. North by

: Plot No.1 South by

: Plot No.3 East by

: Layout of Mr. Venkatesan and Mr. Babu West by

: 20 feet wide public Road

Admeasuring East to West on the Northern side : 50 Feet East to West on the Southern side : 50 feet North to South on the Eastern side :

North to South on the Western side : 30 feet For Plot No.3, measuring 1500 Sq. ft. North by

: Plot No.2 South by

: Plot No.4 East by

: Layout of Mr. Venkatesan and Mr. Babu West by

: 20 feet wide public Road

Admeasuring East to West on the Northern side : 50 Feet East to West on the Southern side : 50 feet North to South on the Eastern side : 30 feet North to South on the Western side : 30 feet

For Plot No.4, measuring 1500 Sq. ft. North by

: Plot No.3 South by

: Plot No.5 East by

: Layout of Mr. Venkatesan and Mr. Babu West by

: 20 feet wide public Road

Admeasuring East to West on the Northern side : 50 Feet East to West on the Southern side : 50 feet North to South on the Eastern side : 30 Feet North to South on the Western side : 30 feet

For Plot No.8, measuring 1500 Sq. ft. North by

: Plot No.7 South by

: Plot No.9 East by

: Layout of Mr. Venkatesan and Mr. Babu West by

: 20 feet wide public Road

Admeasuring East to West on the Northern side : 50 Feet East to West on the Southern side : 50 feet North to South on the Eastern side :

North to South on the Western side : 30 feet

For Plot No.21, measuring 1820 Sq. ft. North by

: Plot No.22 South by

: Plot No.20 East by

: 20 Feet wide Road West by

: Lay out in Kannan Nagar

Admeasuring East to West on the Northern side : 52 Feet East to West on the Southern side : 52 feet North to South on the Eastern side : 35 Feet North to South on the Western side : 35 feet

For Plot No.22, measuring 1816 Sq. ft. North by

: Plot No.23 South by

: Plot No.21 East by

: 20 feet wide road West by

: Layout in Kannan Nagar

Admeasuring East to West on the Northern side : 51 Feet and 9 inches East to West on the Southern side : 52 feet North to South on the Eastern side : 35 Feet North to South on the Western side : 35 feet

For Plot No.23, measuring 2334 Sq. ft. North by

: Land of Mr. Selvam South by

: Plot No.22 East by

: 20 feet wide road West by

: Layout in Kannan Nagar

Admeasuring East to West on the Northern side : 52 Feet and 3 inches East to West on the Southern side : 51 feet and 9 inches North to South on the Eastern side : 41 Feet North to South on the Western side : 48 Feet 9 inches Totaling in all measuring to an extent of 13766 Sq. ft. or thereabouts and situated within the Registration District of Vellore and the sub-registration district of Katpadi.

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