M/s. CITY UNION BANK LIMITED vs M/s SPR Cashews on 25 September 2025

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 defendants’ seeking issuance of a Recovery Certificate for recovery of an aggregate sum of Rs.82,14,510.88p comprising a sum of Rs.56,73.767.88p with further interest at the rate of 13% per annum being the amount due under Secured OD without DP under loan agreement No.512120020002728; a sum of Rs.10,74,907/- with further interest at the rate of 9.25% per annum being the amount due under ECLGS under loan agreement No.501812080070647; a sum of Rs.14,65,836/- together with interest at the rate of 11.75% per annum being amount due under Loan Against Property under loan agreement No.501812080061348 and a sum of Rs.67,989/- being the amount due under Credit Car bearing Account No.5337 XXXX 0005 0110 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 various credit facilities availed by the defendants from the Applicant Bank.

3. It is the case of the applicant that the 1st defendanta proprietorship concern represented by its Proprietors, the 2nd and 3rd defendant approached the applicant bank for grant of financial assistance for development of its business and considering the said request the applicant sanctioned Secured OD facility without DP facility of Rs.50,00,000/- under Loan Account No.512120020002728 on 30.12.2017, which was availed by the defendants on 17.8.2018.

4. It is also the case of the applicant that the 1st defendant represented by the defendants 2 & 3 as its Proprietors executed necessary loan and security documents on 17.8.2018. The defendants 5 to 11 executed guarantee agreements on 17.8.2018 thereby guaranteeing due repayment of the credit facility availed by the 1st defendant.

5. It is the further case of the applicant that during the pendency of the OA the 5th defendant died and her legal heirs being defendants 9 to 11 are already on record. It is stated that the defendants 6 to 8, the legal heirs of Mr. Shanmugam and defendants 9 to 11, the legal heirs of deceased 5th defendant executed letter confirming the continuation of equitable mortgage on 24.07.2018.

6. It is also the case of the applicant that the 1st defendant represented by defendants 2 and 3 also availed financial assistance of Rs.9,90,000/- under Emergency Credit Line Scheme pursuant to the sanction of the applicant dated 22.06.2020. The 1st defendant represented by defendants 2 and 3 as its Proprietors executed the application cum undertaking for loan in favour of the applicant bank for the ECLGS facility.

7. It is also the case of the applicant that the defendants 2 to 4 approached the applicant for grant of Loan against property and considering the said request the applicant vide sanction dated 13.02.2020 sanctioned a sum of Rs.13,00,000/- under Loan Account No.501812080061348 repayable in 84 equated monthly installments and the defendants 2 to 4 executed necessary loan documents on 26.02.2020.

8. It is the further case of the applicant that at the request of the 2nd defendant vide application dated 9.2.2018, the applicant sanctioned credit card against the loan facility with a spending limit of Rs.1,00,000/-.

9. It is the case of the applicant that as security to the loan facilities availed by 1st defendants, the defendants 2, 4, 5 to 11 deposited the title deeds of the schedule mentioned properties with an intention to create equitable mortgage over the same by executing Memorandum of Deposit of Title deeds dated 20.10.2014 registered as Doc. No.2740 of 2014, on 29.04.2015 registered as Doc. No.1148 of 2015, on 17.06.2015 registered as Doc. No.1577 of 2015; on 18.08.2016 registered as Doc. No.2110 of

2016, on 01.03.2017 registered as Doc. No.313 of 2017, on 23.07.2018 registered as Doc. No.1869 of 2018, on 21.8.2020 registered as Doc. No.1908 of 2020 by the 2nd defendant.

10. It is also the case of the applicant that as the 5th defendant deceased; defendants 6 to 11 i.e., legal heirs of deceased Kalimamurthy executed Memorandum of Deposit of Title deeds on 03.01.2018 registered as Doc. No.10 of 2018. The 4th defendant executed Memorandum of deposit of title deeds on 20.02.2020 registered as Doc. No. 405 of 2020 and the same was subsequently rectified through rectification deed registered as Doc. No.656 of 2020 on the file of SRO, Panruti.

11. It is the case of the applicant that the 1st defendant was not operating the loan account properly and failed to comply with the terms and conditions of sanction and hence the loan account was classified as NPA on 31.3.2021 and 05.12.2020.

12. As the defendants did not come forward to clear the outstanding dues the applicant issued legal notice on 11.8.2021 and the same was served on 1, 2, 4, 9 and 11; as the defendants 6, 7, 8 and 10 refused to receive the notice the same is deemed to be served.

13. It is also the case of the applicant that despite the said notice the defendants did not come forward to clear the outstanding dues, hence the present OA is filed for recovery of its dues.

14. Summons was taken out to the defendants and the same were served defendants 1 to 3 and were initially represented by a Ld. Counsel. The defendants 4, 6 to 11 were served notice by way of substituted service by causing paper publication. 5th defendant is deceased. As the defendants 1 to 3 did not file their written statement and further as there was no representation on behalf of the defendants continuously and on 10.08.2023 the defendants were called absent and placed ex-parte on that day. Applicant Bank filed Proof Affidavit along with 29 documents, which were marked as Ex. A-1 to A-29 on 17.12.2024. The Ld. Counsel for Applicant Bank made his submissions on 03.09.2025 and thereafter the matter stood till this date for passing final orders.

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

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

These issues are considered together.

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

17. The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-29 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 defendants. 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.

18. 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.

19. In view of the fact that the loan facility availed by the defendantscredit facilities for business purpose 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 and prayer for award of overdue interest is rejected.

20. During the pendency of the TA, the applicant bank filed a memo under Dy. No.3363 of 2024 dated 30.3.3024 stating therein that the 4th defendant approached the applicant bank vide letter dated 11.09.2023 for release of the property described in Schedule C to the OA and paid a sum of Rs.13,00,000/- and the said amount was appropriated to the loan account bearing No.501812080061348 maintained by the defendants and the same has been closed and released the ‘C’ schedule property from the purview of the OA. This Tribunal vide its proceedings dated 17.12.2024 recorded part satisfaction of the TA claim directed for deletion of 4th defendant from the array of properties.

21. 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.504 of 2022 stands allowed.

(b) Applicant is permitted to realize a sum of Rs.56,73.767.88p with further interest at the rate of 11% per annum (simple) being the amount due under Secured OD without DP under loan agreement

No.512120020002728; a sum of Rs.10,74,907/- with further interest at the rate of 9% per annum (simple) being the amount due under ECLGS under loan agreement No.501812080070647; and a sum of Rs.67,989/- being the amount due under Credit Car bearing Account No.5337 XXXX 0005 0110 from the date of filing of the application till the date of realization in full, from the defendants 1 to 3 and 6 to 11 jointly and severally after deducting all the amounts received / realized by them during the pendency of OA and also by selling the other assets of the defendants.

(c) If the sale proceeds are not found sufficient to cover the amount due and payable to the Applicant Bank, the defendants 2, 3, 6 to 11are 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.

22. 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 September, 2025)

EXHIBITS MARKED BY APPLICANT BANK

S. No. Date Description of Documents Exhibit Nos.

1. 30.12.2017 Sanction Ticket – Secured OD without DP Loan facility A-1

2. 30.12.2017 Sanction Letter – Secured OD without DP Loan facility A-2

3. 17.08.2018 Demand Promissory Note executed by defendants for secured OD without DP Loan facility A-3

4. 17.08.2018 OD Rules A-4

5. 24.07.2018 Letter of confirmation of deposit of title deeds by defendants 5 to 11 A-5

6. 17.08.2018 Guarantee agreements executed by defendants 5 to 11. A-6

7. 22.06.2020 Sanction Ticket – ECLGS Loan facility A-7

8. 22.06.2020 Sanction Letter – ECLGS Loan facility A-8

9. 25.08.2020 DPN executed by the defendants for ECLGS Loan facility A-9

10. 25.08.2020 Application cum undertaking of loan executed by defendants for ECLGS Loan facility A-10

11. 13.02.2020 Loan sanction for loan against property A-11

12. 26.02.2020 DPM executed by the defendant for loan against property A-12

13. 26.02.2020 Application cum undertaking of loan executed by the defendants for loan against property facility A-13

14. 12.04.2007 Partition deed executed in favour of 2nd defendant – Doc. No.1093 of 2007 A-14

15. 17.10.2007 Sale deed executed in favour of Late Mr. Kaliamurthy – Doc. No.2302 of 2007 A-15

16. 03.07.2014 Sale deed executed in favour of 4th defendant – Doc. No.1671 of 2014 A-16

17. 27.08.2019 14.12.2017 30.12.2019 Valuation report A-17

18. 20.10.2014 Memorandum of Deposit of Title deed executed by 2nd defendant – Doc No.2740 of 2014 A-18

19. 29.04.2015 Memorandum of Deposit of Title deed executed by 2nd defendant – Doc. No.1148 of 2015 A-19

20. 17.06.2015 Memorandum of Deposit of Title deed executed by 2nd defendant – Doc. No.1577 of 2015 A-20

21. 18.08.2016 Memorandum of Deposit of Title deed executed by 2nd defendant – Doc. No.2110 of 2016 A-21

22. 01.03.2017 Memorandum of Deposit of Title deed executed by 2nd defendant – Doc. No.313 of 2017 A-22

23. 23.07.2018 Memorandum of Deposit of Title deed executed by 2nd defendant – Doc. No.1869 of 2018 A-23

24. 21.08.2020 Memorandum of Deposit of Title deed executed by 2nd defendant – Doc. No.1908 of 2020 A-24

25. 03.01.2018 Memorandum of Deposit of Title deed executed by Late Mr. Kaliyamurthy – Doc. No.10 of 2018 A-25

26. 20.02.2020 Memorandum of Deposit of Title deed executed by 4thdefendant – Doc. No.405 of 2020 A-26

27. 17.03.2020 Deed of rectification executed by 4th defendant – Doc No.656 of 2020 A-27

28. 11.08.2021 Legal notice along with acknowledgment card and postal return cover A-28

29. Statement of Accounts A-29

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DESCRIPTION OF PROPERTY

(List of Immovable Property mortgaged with the Applicant Bank by the 2nd Defendant)

SCHEDULE ‘A’ Cuddalore registration district, Panruti sub-registration district, at sathipattu village in ayanpunja New survey No 219/3 ,0.04.0ares related old survey no 426/3 out of 024 cents boundaries of North of : Sekar land South of : velaiya Land

West of : Panchayat Road East of : Ramakrishanan land

Within this boundries 0.12 cents (5232 Sq.feet ) and the brick build terrace house constructed therein inclusive of door steps windows and electric service connection and in deposit SCHEDULE ‘B’ Property owned by late Mr. Kaliamurthy

Cuddalore registration district, Nllikuppam sub-registration district, at chennappaNickanPalayam village within the limit of cuddalore Panchayat union in ayanpunja Re.New survey No 191/10 -0.22.5 ares boundaries of North of : Gopal padayachi land South of : jayaramanpadayachi land West of : Odai( Now Cement Road ) East of : Kasiammal and Arumugam Land

Within this boundaries 0.09.0 ares its says Acr 0.22 cents as per latest sub division RS no 191/10 B and within the boundary excluding 0.11 cents of Tamilzhselvi Property

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