BANK OF BARODA vs M/S New Style Garments on 23 October 2026

: - FINAL ORDER- :

1. This Original Application is filed on 10.06.2020 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 1 and 2, jointly and severally for recovery of a total sum of Rs.73,42,644.34p (Rupees Seventy Three Lakhs Forty Two Thousand Six Hundred and Forty Four and Thirty Four paise only) due in respect of Cash Credit Facility (A/c No.068313023848) repayable together with further interest @11.10% p.a. with monthly rests along with penal interest @ 2% p.a. at simple interest from the date of Application till the date of realization in full, for sale of hypothecated assets morefully detailed in the schedule to the OA and for costs of this OA.

2. Originally, this Application was filed before DRT-II, Chennai, assigned OA No.271 of 2020, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.271 of 2020 stood transferred to this Tribunal and renumbered as TA No.581 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 Proprietary Concern represented by the 2nd defendant, as its Sole Proprietor, doing business of manufacturing of Readymade Shirts and Garments. The 1st defendant represented by the 2nd defendant applied to the applicant bank for Cash Credit Hypothecation Limit for Working Capital requirements.

5. It is submitted that after examining the loan application, the applicant bank sanctioned Cash Credit Hypothecation Facility of Rs.90,00,000/- on 18.09.2017, against security of Stock and Book Debts with interest at 2.30% above 1 year MCLR (8.40%) minus 0.50% (concession for CGTMSE) i.e., 2.30% +8.40% -0.50%= 10.20 p.a. with monthly rests repayable in 12 months subject to annual review for their working capital requirement.

6. The defendant agreed to the terms and conditions of the sanction and signified their acceptance by signing the Sanction Letter bearing Ref. No. DB/SEMUD/ADV/2017 dated 18.09.2017 with respect to Cash Credit Hypothecation Limit of Rs.90,00,000/- and availed facility for Rs.90,00,000/- on 18.09.2017 vide A/c No.068313023848 by executing the following documents: i. D.P. Note for (individual proprietor) dated for Rs.90,00,000/- executed by 1st defendant rep by the 2nd defendant ii. Letter of continuity executed by 1st defendant rep by the 2nd defendant iii. Agreement of hypothecation (Goods, Book debts and other movables) to secure multiple facilities dated 18.09.2017 e executed by 1st defendant rep by the 2nd defendant iv. Power of attorney from borrower (book debts) executed by 1st defendant rep by the 2nd defendant v. General letter of lien and security for borrowing arrangements from the borrowers dated 18.09.2017 executed by 1st defendant rep by the 2nd defendant vi. Letter of consent from borrowers dated 18.09.2017 executed by 1st defendant rep by the 2nd defendant vii. Declaration in respect of pending court cases of banks & financial institutions dated 18.09.2017 executed by 1st defendant rep by the 2nd defendant

7. In order to secure the loan, the 1st defendant represented by the 2nd defendant hypothecated the stock of Readymade Garments and Book- Debts which are morefully described in Schedule-A to the OA.

8. The applicant bank submits that subsequent to availing of loan, the defendants failed to operate the Cash Credit Hypothecation Limit satisfactorily, resulting in the account becoming sticky and Non- Performing and consequently was classified as Non-Performing Asset (NPA) on 31.01.2020. Inspite of various demands to regularize the liability account, the defendant failed to regularize the liability.

9. The applicant submits that the defendants failed to respond to the personal requests to regularize the account inspite of such request the defendants failed to pay the outstanding. On account of the default committed by the defendants in discharging their admitted liability in accordance with the terms accepted by them, the applicant bank called upon the defendants to discharge their liability. The defendants failed and neglected to discharge their liability. Hence, the present Original Application (OA) has been filed by the applicant bank for recovery of its dues from the defendants.

10. 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’ in respect of D-1 and D-

2. Advocate Mr. C.P. Sivamohan filed Vakalat for defendants. However, despite availing substantial adjournments, the defendants did not choose to contest the case by filing written statement. When OA was taken up on 18.05.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 and 2 were placed ex-parte on 18.05.2022. Heard the submissions of Applicant Bank and perused the records.

11. To prove the case of the Applicant Bank, Ms. Sushma Panigrahi, Senior Branch Manager of the Applicant Bank, filed 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

12. 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.

13. The defendants were set ex-parte on 18.05.2022, 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.

14. 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 :

15. 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.73,42,644.34p (Rupees Seventy Three Lakhs Forty Two Thousand Six Hundred and Forty Four and Thirty Four paise only) due in respect of Cash Credit Facility (A/c No.068313023848) repayable together with further interest @11.10% p.a. with monthly rests along with penal interest @ 2% p.a. at simple interest from the date of Application till the date of realization in full, for sale of hypothecated assets morefully detailed in the schedule to the OA along with costs of this application.

(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 the OA schedule.

(c) OA schedule mentioned properties 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 2nd Defendant (both movable and immovable) to recover the balance dues as required under law for which the 2nd Defendant to disclose to the Tribunal particulars of other properties or assets owned by the 2nd Defendant.

(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.

16. 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 23rd day of October, 2026) ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Ms. Sushma Panigrahi, Senior Branch Manager of the Applicant Bank. Exhibits on the part of the Applicant:

Sl. No. Date Description of Documents Exhibit No.

1. - Application for credit facilities executed by 1st defendant rep by 2nd defendant A-1

2. 18.09.2017 Sanction letter bearing Ref No.DB/SEMBUD/ADV/2017 dated 18.09.2017 A-2

3. 18.09.2017 Demand promissory note executed by 1st defendant rep by 2nd defendant and 2nd defendant A-3

4. - Letter of continuity executed by 1st defendant rep by 2nd defendant A-4

5. 18.09.2017 Agreement of hypothecation agreement (goods-book-debts and other movable asset) executed by 1st defendant rep by 2nd defendant A-5

6. - Power of attorney from borrowers executed by executed by 1st defendant rep by 2nd defendant A-6

7. 18.09.2017 General letter of lien and set off for borrowing arrangements executed by 1st defendant rep by 2nd defendant A-7

8. 18.09.2017 Letter of consent from borrowers executed by 1st defendant rep by 2nd defendant A-8

9. - Declaration in respect of pending court cases of banks & financial institutions dated 12.04.2017 A-9

10. 18.09.2017 Statement of accounts duly certified under Bankers book Evidence Act, 1891 in respect of cash credit under A/c No. 068313023848 A-10

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

:-SCHEDULE-: All that stock of readymade shirts and garments of different varieties kept at 78, III floor, Moore street, Mannady, Moore street Chennai- 600 001.

Sd/- (S.V. GOWRAMMA)

PRESIDING OFFICER, DRT-III, CHENNAI