STATE BANK OF INDIA vs IPC TECHNOLOGIES AND ANOTHER on 22 September 2026

: - FINAL ORDER- :

1. This Original Application is filed on 12.11.2021 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, jointly and severally for recovery of a total sum of *Rs.23,83,172/- (Rupees Twenty Three Lakhs Eighty Three Thousand One Hundred and Seventy two only) as follows: i. A sum of Rs.22,79,655/- due in respect of Cash Credit Facility (A/c No.32270871073) 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.1,03,517/- due in respect of Term Loan (A/c No.35643313707) repayable together with further interest @10.55% p.a. with monthly rests from the date of Application till the date of realization in full; for sale of hypothecated assets morefully detailed in schedule to the OA and for costs of this OA.

* (claim amount amended vide order in IA No.18112023 dated 29.07.2024)

2. Originally, this Application was filed before DRT-II, Chennai, assigned OA No.93 of 2022, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No. 93 of 2022 stood transferred to this Tribunal and renumbered as TA No.650 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 Sole

Proprietary Concern carrying on the business of manufacture of UPS, Solar Inverter and Solar Device Systems etc. The 2nd defendant is the sole proprietor of the 1st defendant. The 1st defendant approached the applicant during the year 2012 seeking loan for its business purpose.

5. The applicant bank submits that considering the said request, Cash Credit facility of Rs.20,00,000/- was sanctioned to the 1st defendant on 27.03.2012 vide Sanction Letter dated 27.03.2012. The applicant also issued Letter of Arrangement dated 29.03.2012 in respect of the aforesaid facility to the 1st defendant. The 1st defendant executed Arrangement of Loan cum Hypothecation on 29.03.2012 in favour of the applicant bank in respect of the above facility.

6. It is submitted by the applicant bank that the dues under the above facility are repayable on demand and are secured by hypothecation of assets created out of bank finance, stocks, raw materials, goods, book debts, receivables and current assets, fixed assets etc of the 1st defendant morefully described in the schedule-A to the OA. The dues under the aforesaid facility are repayable together with interest at 4.25% above base rate with monthly rests. The effective rate of interest on the date of availing the facility was 14.25% p.a. with monthly rests. The rate of interest is subject to changes from time to time as per the directives of RBI.

7. The applicant bank submits that the Cash Credit limit was renewed by the applicant at the request of the 1st defendant in 2014 vide Letter of Arrangement dated 08.07.2014. The dues under the renewed facility are repayable on demand and are secured by hypothecation of the schedule A assets. The dues under the aforesaid facility are repayable together with interest at 3.25% above base rate with monthly rests. The effective rate of interest on the date of availing the facility was 13.25% p.a. with monthly rests.

8. It is the further submitted that at the request of the 1st defendant, the applicant renewed the existing Cash Credit Limit again in 2016 and also sanctioned Term Loan of Rs.4,50,000/- for purchase of spare parts vide Letter of Arrangement dated 18.03.2016. The 1st defendant executed Supplemental Agreement of Loan-cum-Hypothecation dated 18.03.2016 in favour of the applicant towards the renewed Cash Credit facility and Term Loan. The due under the Cash Credit facility was secured by Hypothecation of assets morefully detailed in Schedule A. The dues under the Term Loan are secured by hypothecation of assets created out of bank finance morefully described in schedule-B.

9. The applicant bank submits that the dues under the Cash Credit facility are repayable on demand and the dues under the Term Loan are repayable in 60 monthly instalments of Rs.10,500/- commencing from June, 2016. The dues under the Cash Credit facility are repayable together with interest at 12.55%. The dues under the Term Loan are repayable together with interest at 3.15% above base rate which was 9.30% with the effective rate on the date of the loan being 12.45% with monthly rests. The rate of interest is subject to changes from time to time as per the directives of the RBI and as per the discretion of the bank from time to time. The present rate of interest payable by the defendants is 10.25% per annum with monthly rests with respect to the dues under the Cash Credit facility and 10.55% p.a. with monthly rests with respect to the dues under the term loan. The applicant is also entitled to charge enhanced rate of interest at 2% delayed non-submission of financial data, financial statement, stock statements, excess drawings and in case of any irregularity and non observance of terms and conditions on the above limits.

10. It is submitted by the applicant bank that Cash Credit limit and the outstanding of Rs.2,68,000/- out of the Term Loan of Rs.4,50,000/- were renewed on 22.11.2018 by the applicant vide Letter of Arrangement dated 22.11.2018. The dues under the Cash Credit facility are secured by Hypothecation of schedule-A properties. The dues under the Term Loan are secured by hypothecation of schedule-B properties.

11. The dues under the Cash Credit facility are repayable on demand. The dues under the renewed Cash Credit facility are repayable together with interest at 4% above base rate of 8.50% p.a. with monthly rests, the effective rate of interest being 12.50% on the date of renewal. The dues under the Term Loan are repayable together with interest at 3.15% above base rate which was 9.30% with the effective rate on the date of the loan being 12.45% with monthly rests. The rate of interest is subject to changes from time to time as per the directives of the RBI and as per the discretion of the bank from time to time. The present rate of interest payable by the defendants is 10.25% per annum with monthly rests with respect to the dues under the Cash Credit facility and 10.55% p.a. with monthly rests with respect to the dues under the Term Loan. The applicant is also entitled to charge enhanced rate of interest at 2% delayed non-submission of financial data, financial statement, stock statements, excess drawings and in case of any irregularity and non observance of terms and conditions on the above limits.

12. The applicant bank submits that subsequent to availing of loan, the defendants failed to pay the dues properly and consequently, the accounts became Non Performing Assets (NPA) on 18.02.2020. The defendants executed Revival Letters on 08.07.2014, 18.03.2016, 16.06.2021 acknowledging their liabilities towards the above loans. The applicant caused to be issue counsel’s notice dated 23.11.2020 to the defendants demanding payment. The defendants neither replied to the notice nor settled the dues. The applicant caused another counsel’s notice dated 20.03.2021 to the defendants, for which they had sent a reply dated 19.04.2021 admitting the default and promising to close the Term Loan within three months and paid Rs.2,000/- towards the Cash Credit limit. Despite repeated requests and demands, defendants did not come forward to repay the dues. 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 were returned with postal endorsement ‘Door locked' in respect of D-1 while summons to D-2 returned as ‘No Such person’. Applicant Bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 18.08.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 and 2 were placed ex-parte on 18.08.2022. Heard the submissions of Applicant Bank and perused the records.

14. To prove the case of the Applicant Bank, Sh. Ilankumaran S, 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-15.

15. A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-15 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 18.08.2022, 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 1 and 2 jointly and severally, a total sum of Rs.23,83,172/- (Rupees Twenty Three Lakhs Eighty Three Thousand One Hundred and Seventy two only) as follows: i. A sum of Rs.22,79,655/- due in respect of Cash Credit Facility (A/c No.32270871073) 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.1,03,517/- due in respect of Term Loan (A/c No.35643313707) repayable together with further interest @10.55% p.a. with monthly rests from the date of Application till the date of realization in full along with costs of this OA.

(b) 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 hypothecated assets morefully detailed in Schedule A and B to the OA.

(c) OA Schedule shall be appended to this final order.

(d) If the sale proceeds of the hypothecated assets are not sufficient to satisfy the dues as ordered above, 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.

(e) 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.

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

(g) 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 22nd day of September, 2026) ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Sh. Ilankumaran S, Chief Manager of the Applicant Bank Exhibits on the part of the Applicant:

Sl. No. Date Description of Documents Exhibit No.

1. 27.03.2012 Sanction letter (CC) A-1

2. 29.03.2012 Letter of arrangement A-2

3. 29.03.2012 Agreement of loan cum of hypothecation A-3

4. 08.07.2014 Letter of arrangement A-4

5. 18.03.2016 Letter of arrangement (CC Renewal+TL) A-5

6. 18.03.2016 Supplemental agreement of loan cum hypothecation A-6

7. 22.11.2018 Letter of arrangement (CC+TL) A-7

8. 08.07.2014 Revival letter A-8

9. 18.03.2016 Revival letter A-9

10. 16.06.2021 Revival letter A-10

11. 23.11.2020 Notice A-11

12. 20.03.2021 Notice A-12

13. 19.04.2021 Letter A-13

14. 04.04.2012 to 01.11.2021 Statement of accounts (CC) A-14

15. 18.03.2016 to 01.11.2021 Statement of accounts (TL) A-15

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

:- SCHEDULE-A -: Stocks, raw materials, machinery, goods, book debts, vehicles, receivables, current assets belonging to the 1st defendant lying at 5/39, Kannimoola Ganapathy Street, Ganapathy Nagar, Thirumullaivoyal Chennai- 600 062 :- SCHEDULE-B -: Assets created out of bank finance belonging to the 1st defendant lying at

Kannimoola Ganapathy Street, Ganapathy Nagar, Thirumullaivoyal Chennai- 600 062

Sd/- (S.V. GOWRAMMA)

PRESIDING OFFICER, DRT-III, CHENNAI