KARUR VYSYA BANK vs PRASHANTH on 28 October 2026

: - FINAL ORDER- :

1. This Original Application is filed on 13.04.2021 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, for recovery of a total sum of Rs.27,10,722.56p (Rupees Twenty Seven Lakhs Ten Thousand Seven Hundred and Twenty Two and Fifty Six paise only) as follows: i. Directing the 1st and 2nd defendants to pay a sum of Rs.19,21,199.55p (Rupees Nineteen Lakhs Twenty One Thousand One Hundred and Ninety Nine and Fifty Five paise only) due in respect of Flexi Mobile Loan (A/c No.1257717000015449) repayable together with further interest @ 12.40% p.a. with monthly rests from the date of Application till the date of realization in full; ii. Directing the 1st, 3rd, 4th and 5th defendants to pay a sum of Rs.7,89,523.01p (Rupees Seven Lakhs Eighty Nine

Thousand Five Hundred and Twenty Three and One paise only) due in respect of Term loan (A/c No.1257722000000092) repayable together with further interest @ 14.65% p.a. with monthly rests from the date of Application till the date of realization in full; for sale of hypothecated vehicle 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. 297 of 2021, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No. 297 of 2021 stood transferred to this Tribunal and renumbered as TA No.1528 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 approached the applicant bank in the year 2017 and requested for Flexi Mobile Loan in a sum of Rs.20,00,000/- for the purchase of Lanson Toyota Innova Crysta car. The applicant bank considering the request, sanctioned the said loan for a sum of Rs.20,00,000/-vide Credit Sanction Intimation dated 31.05.2017. The said loan is repayable in 84 Equated Monthly

Instalments of Rs.32,687.96p each together with an interest @9.50% p.a. compounded at monthly rests or at such rates as may be revised by the bank from time to time together with all costs, charges etc.

5. It is submitted that in order to secure the loan, the 1st defendant executed the following loan documents towards the loan availed on 31.05.2017 in favour of the applicant bank: i. Demand Promissory Note ii. Take delivery letter (TDL)-cum-continuity letter iii. Letter of undertaking to hypothecated vehicle iv. Letter of authority to make payment to the suppliers v. Letter to undertake to repay in instalments vi. Right to seize letter

6. The applicant bank submits that the 1st defendant executed Hypothecation of Motor Vehicle Agreement dated 31.05.2017, hypothecating the said vehicle as a security towards the loan availed. Further the 2nd defendant stood as guarantor and executed Guarantee Agreement dated 31.05.2017 towards the loan availed by the 1st defendant.

7. It is the further case of the applicant bank that the 3rd defendant M/s Murugan Car Spa, represented by its Partners, the 4th and 5th defendants approached the applicant bank in the year 2017 and requested for Term Loan in a sum of Rs.6,00,00/- towards the construction of car workshop shed, office room. The applicant bank considering the request sanctioned the said sum of Rs.6,00,000/- vide Credit Sanction Intimation dated 19.09.2017. The said loan is repayable in 84 Equated Monthly Instalments of Rs.10,592/- together with an interest @12.00% p.a. compounded at monthly rests.

8. The applicant bank submits that in order to secure the loan, the 3rd defendant executed the following necessary loan documents towards the loan availed on 19.09.2017 in favour of the applicant bank: i. Machinery loan agreement ii. Agreement of hypothecation of movable /other assets

9. It is submitted that the 1st, 4th and 5th defendants stood as guarantors and executed Guarantee Agreement dated 19.09.2017 towards the Term Loan availed by the 3rd defendant.

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

11. In view of continuous default, the account of the 3rd defendant became Non-Performing Asset (NPA) on 19.12.2018 as per RBI norms. The applicant bank submits that since the account turned NPA the applicant bank issued a seizure notice to the 3rd defendant on 25.06.2019 towards the hypothecated vehicle towards the Term Loan availed by the 3rd defendant. It is further submitted that the account of the 1st defendant turned into NPA on 29.09.2019.

12. The applicant has not debited interest for the aforesaid credit facility of the defendants since the date of the NPA in view of the directions regarding Income Recognition and assets classification of loan accounts according to which an account irregular for more than 90 days becomes classified as NPA. Even after repeated reminders made by the applicant bank, the defendants have failed and neglected to repay the amount 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 to 5 through Registered Post with Acknowledgment Due, which was returned with postal endorsement as ‘Door locked’ in respect of D-1 and D-2, summons to D-3 returned as ‘Left’, while summons to D-4 & D-5 were duly served. Applicant Bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 12.10.2023 even after giving sufficient time, there was no appearance or representation from the Defendant. Hence, Defendants 1 to 5 were placed ex-parte on 12.10.2023. Heard the submissions of Applicant Bank and perused the records.

14. To prove the case of the Applicant Bank, Mr. P.S. Sundaravarathan, Chief Manager, Asset Recovery Branch 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-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 12.10.2023, 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, a total sum of Rs.27,10,722.56p (Rupees Twenty Seven Lakhs

Ten Thousand Seven Hundred and Twenty Two and Fifty Six paise only) as follows: i. A sum of Rs.19,21,199.55p (Rupees Nineteen Lakhs Twenty One Thousand One Hundred and Ninety Nine and Fifty Five paise only) due in respect of Flexi Mobile Loan (A/c No.1257717000015449) repayable by 1st and 2nd defendants, together with further interest @ 12.40% p.a. with monthly rests from the date of Application till the date of realization in full; ii. A sum of Rs.7,89,523.01p (Rupees Seven Lakhs Eighty Nine Thousand Five Hundred and Twenty Three and One paise only) due in respect of Term loan (A/c No.1257722000000092) repayable by 1st, 3rd, 4th and 5th defendants, together with further interest @ 14.65% 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 vehicle and assets morefully detailed in the OA schedule.

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

(d) 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.

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

(f) 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 28th day of October, 2026) ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Mr. P.S.Sundaravarathan, Chief Manager, Asset Recovery Branch of the Applicant Bank Exhibits on the part of the Applicant:

Sl. No. Date Description of Documents Exhibit No.

1. 31.05.2017 Credit sanction intimation A-1

2. 31.05.2017 Demand promissory note A-2

3. 31.05.2017 Take delivery letter to DPN A-3

4. 31.05.2017 Letter of undertaking to hypothecated vehicle A-4

5. 31.05.2017 Letter of authority to make payment to the suppliers A-5

6. 31.05.2017 Letter of undertaking to repay in instalments A-6

7. 31.05.2017 Right to seize letter A-7

8. 31.05.2017 Hypothecation of motor vehicle agreement A-8

9. - Form of certificate of registration A-9

10. 31.05.2017 Agreement of guarantee A-10

11. 19.09.2017 Credit sanction intimation A-11

12. 19.09.2017 Agreement of hypothecation of movables/other assets A-12

13. 19.09.2017 Machinery loan agreement A-13

14. 19.09.2017 Agreement of guarantee A-14

15. 25.06.2019 Seizure notice A-15

16. - Statement of accounts A-16

17. - Statement of accounts A-17

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

:-SCHEDULE-: PARTICULARS OF VEHICLE NO.1

Vehicle Number: TN 06T 5622 Type of Vehicle: 2/LMV Makers name: LANSON TOYOTO Class of vehicle: L.M.V (CAR) Type of body: TIPPER Month & year: 4/2017 Chassis Number: MBJAA3EM400769608 Engine number: IGA088361

DESCRIPTION OF THE MATERIALS GIVEN AS SECURITY

S.NO DESCRIPTION OF MATERIAL QUANTITY

1. Reciprocating air compressor, tank mounted two stage, electric motor driven

2. Pipeline including fittings and plumbing max length 30 feet seamless pipe

3. Vehicle washer, base mounted driven 4 hp motor with 16 mtrs, Hose & 2 Nos, brass gun DOL starte

4. Single post hydraulic lift consisting of bottom cylinder assy

5. Hydraulic oil-68 for the above 210 its barrel

6. Air operated grease pump, 50 ltrs drum cpat with wheels, follower plate, 3 mtrs long grease hose, dispensing pistol, complete branch

Sd/- (S.V. GOWRAMMA)

PRESIDING OFFICER, DRT-III, CHENNAI