KARUR VYSYA BANK vs ARUNACHALAM on 3 August 2026

: - FINAL ORDER- :

1. This Original Application is filed on 29.09.2021 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.34,93,376/- (Rupees Thirty Four Lakhs Ninety Three Thousand Three Hundred and Seventy Six only) due in respect of KVB WHRL

Loan (A/c No.1786795000000226) repayable together with further interest @ 13.00% p.a. with monthly rests from the date of Application till the date of realization in full and for costs of this OA.

2. Originally, this Application was filed before DRT-II, Chennai, assigned OA No. 417 of 2021, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.417 of 2021 stood transferred to this Tribunal and renumbered as TA No.576 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 Wholesale Trader on Cereals and Pulses and the organisation type is storing and marketing of Agri produce. The 1st defendant approached the applicant bank in the year 2017 and requested for Warehouse Receipt Loan (Trade) (one time) loan for a sum of Rs.40,00,000/- (Rupees Forty Lakhs) to meet Working Capital against warehouse receipts.

5. It is submitted that considering the request of the defendants, the applicant bank sanctioned the sum of Rs.40,00,000/- vide Sanction Communication dated 20.02.2017. The said loan is repayable in bullet payment within 9 months together with an interest @10.00% p.a.

compounded with monthly rests or at such rates and rests as may be revised by the bank from time to time.

6. In order to secure the loan, the 1st defendant executed the following necessary loan documents on 21.02.2017 in favour of applicant bank: i) Demand promissory note ii) Agreement for warehouse loan iii) Security delivery letter iv) Indemnity bond

7. The 1st defendant had pledged the pledge of stocks under commodity arrival report receipt (SR) issued by Star Agri for the stocks stored at approved godown situated at M/s Rajkumar Go-down, Pudhukamoor Road, Arni-632 301.

8. The applicant bank submits that the 1st defendant had executed the documents in his mother language i.e. Tamil. However, the documents were explained read over and translated into vernacular language and had understood the contents and had executed a vernacular language/L.T.I certificate on 21.02.2017 to that effect. Besides that, the 2nd defendant herein stood Guarantor and executed Guarantee Agreement dated 21.02.2017 towards the loan availed by the 1st defendant.

9. The applicant submits that even though the defendants had executed necessary documents towards the loan availed, the repayment towards the said loan was highly irregular and despite various demands and reminders made by the applicant bank the defendant had failed and neglected to repay the amount dues. Hence the loan account had become

Non-Performing Asset (NPA) on 20.02.2018 as per the RBI norms.

10. The applicant bank submits that the 1st defendant remitted a sum of Rs.8,80,000/- on 17.03.2018 and Rs.6,00,000/- for which the applicant had released 270 bags and 435 bags of rice respectively. Since the account turned NPA, the applicant bank sold the remaining bags through auction to Mr.K.S.Kathiravan, Paddy & Rice Wholesale Merchant and the sale proceeds of Rs.7,50,000/- was duly credited into the account of the 1st defendant on 24.01.2019.

11. It is submitted by the applicant bank that the defendants availed the facilities for commercial activity and therefore they have to pay only the contracted rate of interest. The statement of accounts does not contain capitalization of penal interest. The 1st defendant being the borrower and the 2nd defendant being the guarantor are equally liable to repay the outstanding dues. Even after repeated reminders the defendants did not come forward to settle the issues. Hence, the present Original Application (OA) has been filed by the applicant bank for recovery of its dues from the defendants

12. After the filing of the OA, summons was sent to the Defendants 1 and 2 through Registered Post with Acknowledgment Due, which was duly served in respect of D-1 and D-2. Applicant Bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 21.06.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 and 2 were placed ex-parte on 21.06.2022.

Heard the submissions of Applicant Bank and perused the records.

13. To prove the case of the Applicant Bank, Mr. P.S. Sundaravarathan, 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-8.

14. A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-8 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.

15. The defendants were set ex-parte on 21.06.2022, 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.

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 1 and 2, for recovery of a total sum of Rs.34,93,376/- (Rupees Thirty Four Lakhs Ninety Three Thousand Three Hundred and Seventy Six only) due in respect of KVB WHRL Loan (A/c No.1786795000000226) repayable together with further interest @ 13.00% p.a. with monthly rests from the date of Application till the date of realization in full along with costs of this application.

(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.

18. 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 03rd day of August, 2026) ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Mr.P.S. Sundaravarathan, Chief Manager of the Applicant Bank Exhibits on the part of the Applicant:

Sl. No. Date Description of Documents Exhibit No.

1. 20.02.2017 Sanction communication A-1

2. 21.02.2017 Demand promissory note A-2

3. 21.02.2017 Agreement for warehouse loan A-3

4. 21.02.2017 Security delivery letter A-4

5. 21.02.2017 Indemnity bond A-5

6. 21.02.2017 Vernacular language/LTI certificate A-6

7. 21.02.2017 Agreement of guarantee A-7

8. - Statement of accounts A-8

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