STATE BANK OF INDIA vs ABINAYA TRADERS on 21 July 2026

: - FINAL ORDER- :

1. This Original Application is filed on 09.09.2021 by the applicant bank under Section 19 of Recovery of Debts and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendants 1 and 2, for recovery of a total sum of Rs.49,79,482/- (Rupees Forty Nine Lakhs Seventy Nine Thousand Four Hundred and Eighty Two only) as follows:

(a) A sum of Rs.5,11,276/- due in respect of Cash Credit Facility (A/c No. 38568061638) repayable together with further interest @10.25% p.a. with monthly rests from the date of Application till the date of realization in full; (b) A sum of Rs.9,69,880/- due in respect of Term Loan Facility (A/c No. 38180350252) repayable together with further interest @10.25% p.a. with monthly rests from the date of Application till the date of realization in full;

(c) A sum of Rs.5,06,292/- due in respect of GECL Account

(A/c No. 39366263455) repayable together with further interest @7.40% p.a. with monthly rests from the date of Application till the date of realization in full; (d) A sum of Rs.2,65,471/- due in respect of CCECL (A/c No. 39330589091) repayable together with further interest @7.40% p.a. with monthly rests from the date of Application till the date of realization in full; (e) A sum of Rs.26,18,730/- due in respect of WCTL (A/c No. 39936698173) repayable together with further interest @7.45% p.a., with monthly rests from the date of Application till the date of realization in full; (f) A sum of Rs.1,07,833/- due in respect of FITL (A/c No. 39936572841) together with further interest @6.95% p.a., with monthly rests from the date of Application till the date of realization in full; and for costs of this OA. Brief Facts of the case:

2. 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.

3. It is the case of the applicant bank that the defendants approached the applicant bank and requested for a loan for development of their TNEB

Suppliers and Government Contractor business and submitted the loan application dated 17.12.2018 for MSME loan upto Rs.2.00lakhs. The defendant have accepted all the terms and conditions of the applicant bank.

4. It is submitted that the applicant bank, after scrutinizing the application of the defendants and considering their application favourably, sanctioned the Term Loan to the limit of Rs.10,00,000/- on 03.01.2019 subject to the terms and conditions of the Term Loan.

5. The applicant submits that to secure the said loan amount the defendants executed the necessary loan documents on 10.01.2019 in favour of applicant bank viz., Letter of arrangement, Agreement of loan- cum hypothecation in favour of the applicant and agreed to repay the loan with interest @11.30% p.a. at monthly rests with incidental expenses, costs, charges etc on demand. The interest rate will be subject to changes as per the RBI directives and as per the discretion of the bank from time to time.

6. The applicant further submits that the above Term Loan is repayable in 60 months instalments with one month moratorium. For the first 58 months, installment of Rs.16,950/- each and the 59th installment of Rs.16,900/- starting from 05.02.2019. The defendants have hypothecated machinery purchased out of bank finance. The sanction is valid for 6 months and non-payment of installment/interest 5% p.a. penal interest on irregular portion for the period of irregularity will be collected.

7. It is the further case of the applicant bank that the defendants have approached the applicant bank and requested to sanction Cash Credit loan facility to them when the Term Loan was already sanctioned to them and they have submitted an application also to that effect. In turn the Manager forwarded the defendant’s application along with recommendation letter dated 27.05.2019 to the SMECC, Teynampet for sanction.

8. The applicant further submits that based on the request of the defendants, the applicant bank considered their request and sanctioned the Cash Credit loan to the limit of Rs.28,00,000/- and renewed the Term Loan to the limit of Rs.9,46,000/- and totally sanctioned to the limit of Rs.37,46,000/- vide Sanction Letter dated 28.06.2019 subject to the terms and conditions of the above loans. The Cash Credit loan is repayable on demand with interest @11.60% p.a. with monthly rests and the Term Loan is to be repaid as per earlier sanction terms and conditions. The interest and other charges to be serviced separately as and when applied.

9. It is submitted by the applicant bank that to secure the said loan amount the defendants executed the necessary loan documents on 28.06.2019 in favour of applicant bank viz., Letter of Arrangement, Agreement of Loan cum Hypothecation and Supplemental Agreement of Loan cum Hypothecation in favour of the applicant. Moreover, the defendants executed the Acknowledgement of Debt for Cash Credit Account on 31.03.2020 in favour of the applicant.

10. It is the case of the applicant bank that during Covid-19 pandemic period, the defendants have approached the applicant and conveyed that they were suffering to pay the dues including interest for their loan accounts. By considering their situation arose out of Covid-19 pandemic, the applicant bank had sanctioned the Common COvid-19 Emergency Credit Line (CCECL) to the limit of Rs.2,80,000/- to the defendants subject to the terms and conditions. The said loan is to be repaid as stipulated in the Sanction Letter dated 18.05.2020 with interest @7.25%. Further the interest rate will be reset after one year.

11. It is submitted that in order to secure the said loan amount, the defendants have executed the D.P. Note and D.P. Note delivery letter dated 18.05.2020 in favour of the applicant. Moreover, in terms of Government of India’s Emergency Credit Line Guarantee Scheme (ECLGS), the applicant bank offer the Guaranteed Emergency Credit line (GECL) by way of Working Capital Term Loan (WCTL) to the defendants vide an Offer Letter dated 28.05.2020 to the limit of Rs.4,82,400/- subject to terms and conditions and totally sanctioned to the limit of Rs.43,88,400/- to the defendants. To secure the said loan amounts, the defendants have executed the necessary loan documents on 31.05.2020 in favour of applicant bank viz., Letter of Arrangement, Supplemental Agreement of Loan cum Hypothecation and Link Letter.

12. The applicant submits that in addition to the above loan, the applicant sanctioned Funded Interest Term Loan (FITL) to the limit of Rs.1,01,665/- during the Covid-19 pandemic period and totally sanctioned

Rs.46,64,065/- to the defendants and secure the said loans the defendants executed the Letter of Arrangement dated 29.09.2020.

13. It is further submitted by the applicant bank that the loan account of the defendants have been renewed to the limit of Rs.45,26,000/- for which the defendants have executed the necessary loan documents on 13.10.2020, Letter of Arrangement, Supplemental Agreement of Loan cum Hypothecation & Link Letter.

14. The Applicant submits that subsequent to availing of loan, the operation and conduct of the accounts of the defendants were irregular and unsatisfactory. However, the defendants repeatedly failed to honour the same and the act committed by defendants is deliberate and wilful with an intention to cheat and defraud the applicant. Consequenlty, the defendant’s account was classified as Non Performing Asset (NPA) on 28.04.2021 due to non payment of instalments/interest in accordance with the directives/guidelines relating to Asset Classification issued by the Reserve Bank of India and the defendants loan account is now maintained by State Bank of India, SMEC, Teynampet for the purpose of maintenance, administration and recovery of loan.

15. It is submitted that the applicant bank had issued several Demand Notices dated 10.03.2021 and 19.03.2021 calling upon the defendants to regularize/close the account, but the defendants have not come forward to repay the outstanding due amount. Therefore, the applicant handed over the above matter to their Recovery Agents vide letter dated 19.04.2021 for recovery of the aforesaid loans. Finally, the applicant caused a Registered Legal Notice dated 30.04.2021 to the defendants but all the notices were returned with endorsement ‘Left’ and ‘Unclaimed’. Hence, the present Original Application (OA) has been filed by the applicant bank for recovery of its dues from the defendants

16. After the filing of the OA, summons were sent to the Defendants 1 and 2 through Registered Post with Acknowledgment Due, which was returned with postal endorsement as ‘unclaimed’ at first address of D-11 and as ‘No such company’ in respect second address of D-1, while summons to D-2 returned with remarks ‘Left /No such person’. Applicant Bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 21.02.2024 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 and 2 were placed ex-parte on 21.02.2024. Heard the submissions of Applicant Bank and perused the records.

17. To prove the case of the Applicant Bank, Mr. S. Mathiyazhagan, Deputy 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-35.

18. A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-35 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.

19. The defendants were set ex-parte on 21.02.2024, 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.

20. 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 :

21. The OA is allowed with costs,

(a) The applicant bank is allowed to recover from the Defendants 1 and 2, total sum of Rs.49,79,482/- (Rupees Forty Nine Lakhs Seventy Nine Thousand Four Hundred and Eighty Two only) as follows:

(i) A sum of Rs.5,11,276/- due in respect of Cash Credit Facility (A/c No. 38568061638) repayable together with further interest @10.25% p.a. with monthly rests from the date of Application till the date of realization in full;

(ii) A sum of Rs.9,69,880/- due in respect of Term Loan Facility (A/c No. 38180350252) repayable together with further interest @10.25% p.a. with monthly rests from the date of Application till the date of realization in full;

(iii) A sum of Rs.5,06,292/- due in respect of GECL Account (A/c No. 39366263455) repayable together with further interest @7.40% p.a. with monthly rests from the date of Application till the date of realization in full;

(iv) A sum of Rs.2,65,471/- due in respect of CCECL (A/c No. 39330589091) repayable together with further interest @7.40% p.a. with monthly rests from the date of Application till the date of realization in full;

(v) A sum of Rs.26,18,730/- due in respect of WCTL (A/c No. 39936698173) repayable together with further interest @7.45% p.a., with monthly rests from the date of Application till the date of realization in full;

(vi) A sum of Rs.1,07,833/- due in respect of FITL (A/c No. 39936572841) together with further interest @6.95% p.a., with monthly rests from the date of Application till the date of realization in full along with costs of this OA.

(b) 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 Defendant 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.

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

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

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

Sd/-

(S.V. GOWRAMMA)

PRESIDING OFFICER, DRT-III, CHENNAI

(Dictated to Roshnee, transcribed by her, corrected, signed and pronounced by me on this the 21st day of July, 2026) ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Mr. S. Mathiyazhagan, Deputy Manager of the Applicant Bank Exhibits on the part of the Applicant:

Sl. No. Date Description of Documents Exhibit No.

1. - Loan application for Pradhan Mantri Mudra Yojan A-1

2. 17.12.2018 Application for MSME loan upto Rs.200 lakhs A-2

3. 03.01.2019 Sanction letter for Term Loan of Rs.10 lakhs A-3

4. 10.01.2019 Letter of arrangement A-4

5. 10.01.2019 Agreement of loan cum hypothecation A-5

6. 27.05.2019 Forwarding letter from State Bank of India, Bharathi salai branch to SMECC Teynampet intimating that the defendants requested for CC loan facility A-6

7. 28.06.2019 Sanction letter for Cash Credit loan of Rs.28 lakhs along with renewal of Term Loan for Rs.9.46 lakhs A-7

8. 28.06.2019 Letter of arrangement A-8

9. 28.06.2019 Agreement of loan cum hypothecation A-9

10. 28.06.2019 Supplemental agreement of loan cum hypothecation A-10

11. 31.03.2020 Acknowledgement of debt for Cash Credit account accepted by the borrower A-11

12. 18.05.2020 Sanction letter for CCECL (Demand loan) A-12

13. 18.05.2020 D.P. Note and D.P. Note delivery letter A-13

14. 28.05.2020 Offer letter issued by the applicant for WCTL loan to the defendant A-14

15. 31.05.2020 Letter of arrangement A-15

16. 31.05.2020 Supplemental agreement of loan cum hypothecation A-16

17. 31.05.2020 Link letter A-17

18. 29.09.2020 Letter of arrangement A-18

19. 13.01.2021 Letter of arrangement A-19

13.01.2021 Agreement of loan cum hypothecation A-20

21. 13.01.2021 Link letter A-21

22. 13.01.2021 Letter of arrangement A-22

23. 13.01.2021 Agreement of loan cum hypothecation A-23

24. 13.01.2021 Revival letter A-24

25. 10.03.2021 Notice issued by the applicant to the defendant for overdue/irregular for overdue/irregular loan account for CC A/c No.38568067638 A-25

26. 19.03.2021 Notice issued by the applicant to the defendant for overdue /irregular loan accounts. A-26

27. 19.04.2024 Letter to recovery agent for recovering the outstanding amount from the defendants A-27

28. 30.04.2021 Legal notice issued by the defendants A-28

29. - Returned cover from defendants A-29

30. 08.07.2021 Statement of account for Cash Credit (A/c No. 38568061638) including BBE certificates A-30

31. 08.07.2021 Statement of account for Term Loan (A/c No. 38180350252) including BBE certificates A-31

32. 08.07.2021 Statement of account for GECL (A/c No.39366263455) including BBE certificates A-32

33. 08.07.2021 Statement of account for CCECL (A/c No.39330589091) including BBE certificates A-33

34. 08.07.2021 Statement of account for WCTL (A/c No.39936698173) including BBE certificates A-34

35. 08.07.2021 Statement of account for FITL (A/c No.39936572841) including BBE certificates A-35

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

:-SCHEDULE-: -NIL-

Sd/- (S.V. GOWRAMMA)

PRESIDING OFFICER, DRT-III, CHENNAI