UNION BANK OF INDIA vs Ms Sri Venkateswara Enterprises and another on 18 March 2026

: - FINAL ORDER - :

1. This Original Application is filed on 14.07.2021 by the Applicant Bank under Section 19 (1) of Recovery of Debts and Bankruptcy Act,

1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendants jointly and severally for recovery of a total sum of Rs.1,18,22,742/- (Rupees One Crore Eighteen Lakhs Twenty Two Thousand Seven Hundred and Forty Two Only) due in respect of Secured Overdraft facility (A/c No.054431100000566), repayable together with further interest @9.90% p.a. with compounded monthly rests along with penal interest @ 2.00% p.a. from the date of filing the OA, till date of realization in full, for sale of Schedule A mentioned hypothecated items and Schedule B mentioned immovable property morefully detailed in the OA and for costs of this application.

2. Originally, this Application was filed before DRT-II, Chennai, assigned OA No.355 of 2021, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.355 of 2021 stood transferred to this Tribunal and renumbered as TA No.1744 of 2023. Brief Facts of the case:

3. The Applicant submits that the application is filed within the period of limitation as prescribed under Section 24 of the Recovery of Debts and Bankruptcy Act, 1993, and the subject recovery claim falls within the jurisdiction of this Tribunal.

4. It is the case of the Applicant Bank that the 1st defendant is a Proprietorship firm, represented by its Proprietor Mr.V.Kannan, engaged in Wholesale and retail trading of Chicken and Eggs. The 2nd defendant offered Personal guarantee to the loan amount availed by the 1st defendant.

5. It is submitted by the applicant bank that the 1st defendant had approached the applicant bank during October, 2017 and sought for sanction of Secured Overdraft Loan for Working Capital requirement for its business. The same was considered by the applicant bank and Secured Overdraft to the tune of Rs.85.00 lakhs was sanctioned to the 1st defendant by the applicant bank vide Letter of Sanction dated 12.10.2017 which was also acknowledged by the defendants.

6. The applicant bank submits that for the Secured Overdraft of Rs.85.00 Lakhs (Rupees Eighty Five Lakhs only) availed by the 1st defendant the following documents were executed by the 1st defendant on 12.10.2017:

a) Demand promissory note for Rs.85.00 lakhs with interest at the rate of 3.05% per annum above Base rate 8.40% with a minimum of 11.45% per annum compounded with monthly rests.

b) Composite Agreement for Rs.85.00 lakhs and hypothecating Stocks live chicken, eggs and Book debts more fully described in Schedule –“A”.

c) Consent letter from borrower for disclosure of information to CIBIL.

7. The applicant bank submits that towards the above facility availed by the 1st defendant, the 2nd defendant offered personal guarantee and executed the following documents on 12.10.2017 in favour of applicant bank:

a) General form of Guarantee for Rs.85.00 lakhs.

b) Consent letter from Guarantor for disclosure of information to CIBIL.

8. It is further submitted by the applicant bank that as a collateral security for the due repayment of the above Secured Overdraft facility availed by the 1st defendant, the 2nd defendant had deposited with applicant bank at Saidapet Branch on 12.10.2017, the title deeds pertaining to her property, being Land and Building measuring to an extent of Acres 0.46 cents ie 20,056 sq.ft (0.18.5.0 Ares) together with commercial shed on the part of the land, comprised in Punja Survey No.191/1 Patta No.952 situated at Vadamangalam Village, Sriperumbudur Taluk, Kancheepuram District within Sub Registration District of Sunkuvarchattram and Registration District of Chengalpattu morefully described in Schedule “B” and also executed Declaration with respect to mortgaged property on 09.10.2017.

9. The 2nd defendant also executed a Memorandum of deposit of title of deeds dated 13.10.2017 in favour of the applicant bank duly registered with the Sub Registrar, Sunguvarchattram as document No.2884/2017.

10. The applicant bank further submits that after availing the above facility, the defendants did not repay the amounts to the applicant bank. Inspite of repeated demands and incessant requests, the defendants did not keep their payment schedule. The operation of the accounts by the defendants was far from satisfactory and the account was finally classified as a Non Performing Asset on 25.02.2019. The applicant bank through its Authorised Officer had issued Demand Notice under Section 13(2) of SARFAESI Act on 02.03.2019, followed by Possession Notice dated 22.05.2019, and Sale Notice dated 17.08.2020, demanding the defendants to repay the loan. Inspite of repeated demands, incessant requests and issuance of statutory notices under SARFAESI Act, the defendants did not make any attempt to discharge the loan. Hence, the present Original Application (OA) has been filed by the applicant bank for recovery of its dues from the defendants.

11. After the filing of the OA, summons were sent to the Defendants 1 and 2 through Registered Post with Acknowledgment Due, summons to the D1 & D2 returned with the remarks “Left”. Applicant bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 08.07.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants 1 and 2 were placed ex-parte on 08.07.2022.

Heard the submissions of Applicant Bank and perused the records.

12. To prove the case of the Applicant Bank, Sh. J. Vetri Selvan, Chief Manager of the Applicant Bank, has filed his Affidavit by way of evidence and same was considered as evidence of AW-1 and list of documents came to be marked as Ex A-1 to A-10.

13. A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-10 evidence that the borrowal of credit facilities and execution of loan and security documents are true, in terms of averments made in Original Application as well as Proof Affidavit filed by applicant bank establishing its claim. Applicant bank filed Statement of Accounts duly certified under Bankers’ Book Evidence Act, evidencing the amount claimed against defendants.

14. The defendants were set ex-parte on 08.07.2022, but till this day they did not take any action to set aside the ex-parte order and did not choose to contest the claim. Further, a careful scrutiny of records makes it clear that present application is filed well within limitation and this Tribunal possesses necessary and proper jurisdiction to entertain and adjudicate the claim. No oral or documentary evidence on the side of defendants are produced or filed to dispute the claim of applicant bank. Hence, it can be concluded that applicant bank has proved its claim against defendants.

15. During the pendency of OA, the applicant bank had sold the property mentioned as Item No.1 of Schedule B property for a sum of Rs.60,50,000/- through public auction under SARFAESI Act conduced on 13.10.2023 and the applicant bank had handed over the related title deeds, Memorandum of deposit of Title Deeds to the auction purchaser.

16. With regard to the amount advanced, the interest applied, the conduct and operations in the account and the default committed, this Tribunal comes to the conclusion that the applicant bank is entitled for a final order on the following terms:

: O R D E R :

17. The OA is allowed with costs,

(a) The applicant bank is allowed to recover from the Defendants a total sum of Rs.1,18,22,742/- (Rupees One Crore Eighteen Lakhs Twenty Two Thousand Seven Hundred and Forty Two Only) due in respect of Secured Overdraft facility (A/c No.054431100000566), repayable together with further interest @9.90% p.a. with compounded monthly rests along with penal interest @ 2.00% p.a. from the date of filing the OA, till date of realization in full along with costs.

(b) The sum of Rs.60,50,000/- realised by way of sale of Item No.1 of Schedule B property under SARFAESI Act is directed to be given credit to the borrower’s loan account as on the date of realisation.

(c) In the event of failure of the defendants to pay the aforesaid amount, the bank is at liberty to recover the amount by sale of the schedule A mentioned hypotheca morefully detailed in the OA.

(d) Schedule ‘A’ shall be appended to this final order.

(d) The applicant bank shall file the latest memo of calculation of OA amount together with interest, costs etc., to be paid by the defendants duly considering the amounts, if any, paid by the defendants and/or amount realized by sale of assets etc., during the intervening period after the filing of the OA, enabling the Registry to prepare Recovery Certificate for the amount to be paid by defendants to the applicant bank.

(e) The applicant bank shall file memo of costs within ten days from the date of receipt of this final order.

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

18. A copy of this order be communicated to the parties concerned.

Sd/-

(S.V. GOWRAMMA)

PRESIDING OFFICER, DRT-III, CHENNAI

(Dictated to Steno (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 18th day of March, 2026) ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK:

AW-1: Sh. J. Vetri Selvan, Chief Manager representing the Applicant Bank. Exhibits on the part of the Applicant:

Sl. No. Description of Documents Exhibit No.

1. Letter of sanction for secured Overdraft of Rs.85.00 lakhs dated 12.10.2017. A-1

2. Demand Promissory Note for Rs.85.00 lakhs dated 12.10.2017. A-2

3. Composite Agreement for Rs.85.00 Lakhs dated 12.10.2017. A-3

4. Consent letter from borrower for disclosure of information to CIBIL dated 12.10.2017. A-4

5. General form of guarantee executed by the 2nd defendant dated 12.10.2017. A-5

6. Consent Letter from guarantor for disclosure of information to CIBIL dated 12.10.2017. A-6

7. Demand notice under sec.13(2) of SARFAESI issued by the applicant bank dated 02.03.2019. A-7

8. Possession notice issued by the applicant bank dated 22.05.2019. A-8

9. Sale Notice issued by the applicant bank dated 17.08.2020. A-9

10. Statement of accounts and BBE Certificate. A-10

Witness Examined for the Defendants: -Nil- List of Documents Exhibited for the Defendants: -Nil –

SCHEDULE –A

DESCRIPTION OF HYPOTHECATED ITEMS

Hypothecation of live Chicken, Eggs and Books debts at No.60, Jennis Road, Saidapet, Chennai -600 015.

SCHEDULE –B Secured asset has been sold under SARFAESI Act.

Sd/-

(S.V. GOWRAMMA)

PRESIDING OFFICER, DRT-III, CHENNAI