BANK OF MAHARASHTRA vs M/S VETRI ENTERPRISES on 14 August 2026

: - FINAL ORDER- :

1. This Original Application is filed on 24.02.2020 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, jointly and severally for recovery of a total sum of Rs.1,32,78,990/- (Rupees One Crore Thirty Two lakhs Seventy Eight Thousand Nine Hundred and Ninety only) due in respect of Credit facility (A/c No.60104339460) repayable together with further interest @ 12% p.a. with monthly rests from the date of Application till the date of realization in full, for sale of schedule mentioned immovable property and for costs of this OA.

2. Originally, this Application was filed before DRT-II, Chennai, assigned OA No. 245 of 2020, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No. 245 of 2020 stood transferred to this Tribunal and renumbered as TA No.172 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 and is represented by its Proprietor E. Sankar. The 1st defendant approached the applicant seeking various credit facilities. The applicant submits that the defendants 1 and 2 vide its letter dated 07.08.2012 requested the applicant to sanction them Term Loan/Cash Credit facilities to the tune of Rs.75.00 lakhs. The same was sanctioned and pursuant to such sanction, the 1st defendant executed a Demand Promissory Note to repay the applicant or its order a sum of Rs.75.00 lakhs together with interest @3.25% above bank rate on 7.8.2012. On the same day 1st defendant executed Composite Deed of Hypothecation for all facilities in terms of which the movable properties set out in the schedule to the Composite Deed was hypothecated in favour of the applicant.

5. The applicant submits that the 2nd defendant represented to the applicant that he is the absolute and exclusive owner of the immovable property more particularly set out in schedule A of the Mortgagor’s declaration. Accordingly as security for due repayment of the facilities extended to the 1st defendant, the 2nd defendant had deposited the title deeds relating to its immovable properties at Madipakkam village in Ramnagar with applicant’s branch at Broadway with an intention to create an equitable mortgage in respect of the same.

6. It is submitted by the applicant bank that subsequent to availing of loan, the defendants were irregular in repayment of the loan advanced to them, despite repeated requests and demands. Accordingly, the account of the 1st defendant was declared as Non Performing Asset (NPA) on 29.11.2013 as per the prudential norms issued by the Reserve Bank of India.

7. The applicant submits that the Authorised Officer of the applicant in exercise of the powers vested of him under Section 13(2) of the SARFAESI Act issued a notice to the 2nd defendant on 21.02.2014 calling upon the defendants to clear the amounts payable to the applicant. Since the said notice did not elicit any response, the authorised officer of the applicant had taken symbolic possession under the SARFAESI Act.

8. The applicant submits that pursuant to SARFAESI action the property was brought to sale and one

1. K.Senthilkumar,

2. V.Bhuvaneswaran, 3. K.Rajendran, 4. A. Velmurugan became the successful auction purchasers in the e-auction held on 30.12.2014. The said auction purchasers had purchased the said property for a sum of Rs.1,60,30,000/- and the bid was confirmed in their favour and they had deposited 25% bid amount on 30.12.2014 and balance 75% was deposited within 15 days from the date of confirmation of sale. Accordingly the entire amount due to the bank was paid by the auction purchasers on 14.01.2015 and the authorised officer of the applicant had issued sale certificate in favour of the above said e-auction purchasers.

9. The applicant submits that these are the circumstances when the auction purchasers attempted to take possession of the said property the same was resisted by one Sridhar, which resulted in complaints among the parties. It was understood that the said Sridhar was also having one set of original documents in respect of same property auctioned by the applicant. There were rival claimants in respect of the property which was offered as security by the defendants. The applicant addressed a detailed letter to the Inspector of Police S-7, Madipakkam Police station, Keelkattalai, Chennai on 03.11.2015 and also Commissioner of Police, Bank Fraud cell on 30.03.2019 inter alia bringing it to the notice of the Inspector of Police the fraud committed by defendants 1 and 2 and requested for action.

10. It is relevant to submit that even prior to the complaint on

30.03.2014, the applicant had addressed a letter to Sub Inspector of police, Central Crime Branch on 18.6.2018 requesting them to take appropriate action. While these are the circumstances the successful auction purchaser wanted the refund of money paid by them in as much as there were disputes with regard to title. The applicant had returned a sum of Rs.1,60,30,000/- with 4% interest on 27.07.2018. It is relevant to submit that the auction purchaser had approached the Madras High Court by filing a Writ Petition being WP No. 13269/2016 inter alia praying for the reliefs of mandamus directing the applicant to refund the sum of Rs.1,60,30,000/- with interest @12% per annum and for the other reliefs. The Madras High Court vide order dated 18.09.2019 had directed the applicant to refund the amount and the applicant had refunded the amount paid to the auction purchaser. In the event of the applicant was compelled to pay the auction purchaser with interest as per the orders of the High Court the applicant reserves its right to claim the said amount from the defendants.

11. The applicant submits that a perusal of the documents filed by the applicant would reveal that it had taken appropriate action under SARFAESI within the time prescribed under law and in as much as the amount due to the applicant had been received by enforcing security interest no original application was filed before this tribunal. As a matter of fact, the SARFAESI sale was challenged by the defendants by way of filing of S.A. No. 396/2014 which was allowed by this Tribunal. Challenging the order of this Tribunal, an appeal was filed before the

Hon’ble DRAT by the applicant and the appeal was allowed.

12. It is submitted by the applicant bank that the circumstances set out in the preceding paragraph would reveal that the applicant bank did not file the original application for recovery of the amount due to it since it had received the entire money by sale of secured assets. However the bank had to refund the entire amount to the auction purchaser due to the fraud committed by the defendants and in view of disputes between the parties. The applicant had paid the amount to the successful e-auction purchasers on 27.07.2018. In these circumstances the applicant is left with no other alternatives except to file the present suit for recovery of the amount due to it. Hence, the present Original Application (OA) has been filed by the applicant bank for recovery of its dues from the defendants.

13. 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 ‘No such addressee’ in respect of D-1, while summons to D-2 returned with endorsement as ‘Unclaimed’. 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.

14. To prove the case of the Applicant Bank, Sh. Tulsiram Sahoo, Chief Manager / Authorised Signatory 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-17.

15. A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-17 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.

16. 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.

17. 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 :

18. The OA is allowed with costs,

(a) The applicant bank is allowed to recover from the Defendants jointly and severally, a total sum of Rs.1,32,78,990/- (Rupees One Crore Thirty Two lakhs Seventy Eight Thousand Nine Hundred and Ninety only) due in respect of Credit facility (A/c No.60104339460) repayable together with further interest @ 12% p.a. with monthly rests from the date of Application till the date of realization in full along with costs of this application.

(b) In the event of default in payment of amount as ordered above by the defendants, the applicant bank is at liberty to sell the personal assets of the Defendants (both movable and immovable) to recover the balance dues as required under law for which the Defendants to disclose to the Tribunal particulars of other properties or assets owned by the Defendants.

(c) 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.

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

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

19. 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 14th day of August, 2026) ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Sh. Tulsiram Sahoo, Chief Manager / Authorised Signatory of the Applicant Bank Exhibits on the part of the Applicant:

Sl. No. Date Description of Documents Exhibit No.

1. 07.08.2012 Application for making credit facility A-1

2. 03.08.2012 Sanction letter A-2

3. 07.08.2012 Demand promissory note A-3

4. 07.08.2012 Composite deed of hypothecation of all facilities A-4

5. 07.08.2012 Mortgagor’s declaration for proposed equitable mortgage A-5

6. 10.08.2012 Memorandum of record of deposit of title deeds by the guarantor A-6

7. 14.08.2012 Mortgagor’s letter of confirmation of equitable mortgage A-7

8. 14.08.2012 Memorandum of deposit of title deeds A-8

9. 21.02.2014 Demand notice under Sec.13(2) of SARFAESI Act A-9

10. 14.01.2015 Sale certificate A-10

11. 03.11.2015 Letter conversation No.AV12/ADV/VE/2015-16 dated 03.11.2015 A-11

12. 28.06.2018 Letter conversation A-12

No.AV12/ADV/VE/2015-16 dated 03.11.2015

30.03.2019 The complaint given by the applicant A-13

14. 24.08.2017 Order in RA (SA) 51/2017 A-14

15. 18.09.2019 Order in W.P. No. 13269 of 2016 A-14(A)

16. 27.07.2018 Letter of receipt given by the auction purchasers A-15

17. 27.07.2018 Demand drafts A-16

18. Certified copy of statement of accounts A-17

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