Canara Bank vs M/s Kanimozhi Chicken Center on 23 October 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 a sum of Rs.28,15,804.67p together with interest at the rate of 16.05% per annum with monthly rests plus 2% overdue interest from the date of the application till the date of realisation along with costs of the application and for schedule mentioned property.

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

3. It is the case of the applicant that the 1st approached the applicant for grant of loan for business purpose by depositing the title deeds of the schedule mentioned property on 20.07.2015 and executed a Memorandum of Deposit of Title deeds dated 21.07.2015 registered as Doc. No.8815/2015, SRO, Chengalpet. Considering the said request the applicant sanctioned Cash Credit Limit of Rs.15,00,000/- vide sanction dated 25.07.2015.

4. It is also the case of the applicant that the 1st defendant represented by 2nd defendant executed various loan and security documents on 25.07.2015. The 2nd defendant also deposited title deed Doc. No.6870/2015 dated 10.06.2015 in support of Memorandum of Deposit of Title deed dated 25.07.2015.

5. It is the further case of the applicant that at the request of the 1st defendant the applicant sanctioned additional Cash Credit Limit of Rs.3,00,000/- on

14.09.2016 and the 1st defendant executed the loan documents on 14.09.2016.

6. It is the case of the applicant that having availed the loan the defendants defaulted in repayment and failed to regularize the loan account despite repeated request and hence the loan account was classified as NPA on 11.06.2017. As no payment was forthcoming the applicant issued a demand notice dated 19.09.2017 under SARFAESI Act calling upon the defendants to pay the outstanding dues. Despite the said notice the defendants did not come forward to clear the dues. Hence the applicant is filing this OA for recovery of its dues.

7. Summons was taken out to the defendants are served. Though the defendants were initially represented by a Ld. Counsel, they did not choose to file their written statement and subsequently as there was no representation on behalf of the defendants on 20.09.2023, the defendants were called absent and placed ex-parte on that day. Applicant Bank filed Proof Affidavit along with 10 documents, which were marked as Ex. A-1 to A-10 on 20.05.2024. The Ld. Counsel for Applicant Bank made his submissions on 23.09.2025 and thereafter the matter stood till this date for passing final orders.

8. 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.

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

10. The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-10 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 defendants. It is clear from the statement of accounts that penal interest is not capitalized.

11. 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.

12. In view of the fact that the loan facility availed by the defendant is a Cash Credit facility 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 penal interest is rejected.

13. 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.711 of 2023 stands allowed.

(b) Applicant is permitted to realize a sum of Rs.28,15,804.67p together with interest at the rate of 10% (Simple) from the date of filing of the application till the date of realization in full, from the defendants jointly and severally after deducting all the amounts received / realized by them during the pendency of OA and also by selling the schedule mentioned property and 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 2nd 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.

14. 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 23rd day of October, 2025)

EXHIBITS MARKED BY APPLICANT BANK

S. No. Date Description of Documents Exhibit Nos.

1. 25.07.2015 Sanction Memorandum A-1

2. 25.07.2015 Cash Credit Agreement by 1st defendant A-2

3. 25.07.2015 Pronote executed by 1st defendant A-3

4. 21.07.2015 Memorandum of deposit of title deeds by 2nd defendant. A-4

5. 10.06.2015 Release deed executed in favour of 2nd defendant – Doc. No.6870/2015 A-5

6. 14.09.2016 Supplemental Agreement executed by 1st defendant A-6

7. 14.09.2016 Pronote executed by 1st defendant A-7

8. 11.07.2017 Acknowledgement of debt and security by 1st defendant A-8

9. 19.09.2017 Demand Notice issued under SARFAESI Act A-9

10. Statement of Accounts. A-10

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DESCRIPTION OF PROPERTY

All that piece and parcel of house and site, measuring extent 2174 sq. ft. o 202 Sq. mt. situated at Door No. 1, Thiruvallur Street, Palamathur Village, Mathuranthagam, comprised in Grama Natham S. No.215 Part as per Manaivari Patta No.299, Grama Natham, Patta New s.No.215/12, of No.7, Palamathur Village, Mathuranthagam Taluk, Kancheepuram District bounded on North By : Land in S.No.215/1 South by

: Land in S. No.215/14

East by

: Land in S. No.215/18 & Road and West by

: Land in S. No.215./11 and 215/13 Situated within the registration district of Chengalpattu and Sub Registration District of Joint II Chengalpattu

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