INDIAN OVERSEAS BANK vs Ms UV Mechz Tech Ventures And Two Others on 30 October 2026

: - FINAL ORDER- :

1. This Original Application is filed on 08.11.2018 by the applicant bank under Section 19(1) 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.78,47,509.80p (Rupees Forty Lakhs Twenty Two Thousand Five Hundred and Eighty Seven and Eighty Seven Paisa only) due in respect of Cash Credit Loan (A/c No.1630200000027) repayable together with further interest @13.45% p.a. with monthly rests from the date of Application till the date of realization in full and for costs of this OA. Brief Facts of the case:

2. 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.

3. It is the case of the applicant bank that the 1st Defendant is M/s.UVMECHZ Tech Ventures, a Firm, having address at No.163C &B, Kunrathur Main Road, Rapid Nagar, Gerugambakkam, Chennai – 602101, consisting of two partners, viz., J. Mohanakrishnan S/o.M.Janarthanam, the 2nd Defendant herein and K.Kalyanasundraram S/o.S. Karuppiah, the 3rd Defendant herein. The 1st defendant was doing the business of Marketing Agents for selling the products of M/s.Chennai Clamptech Designer.

4. It is submitted that the Defendants have approached the applicant bank and requested to provide financial assistance in the form of Cash Credit. The applicant, after considering their request and financial standing, sanctioned Cash Credit Loan of a sum of Rs.20,00,000/- (Rupees Twenty

Lakhs only) on 12.11.2012.

5. The applicant submits that in consideration to the afore-stated Cash Credit Loan sanctioned to the defendants, the 1st Defendant represented by its Partners, the 2nd and 3rd Defendants herein, executed the following documents in favour of the applicant on 12.11.2012:

a) Demand Promissory Note for Rs.20,00,000/-(Rupees Twenty Lakhs only) at the Base Rate of 10.50 % plus 1.75 % per annum, with monthly rests.

b) An Undertaking Letter to repay the said loan.

c) Letter of Hypothecation.

d) Hypothecation of Book Debts.

6. It is submitted by the applicant bank that the 2nd and 3rd Defendants have executed separate Guarantee documents for a sum of Rs.20,00,000/- on 12.11.2012, guaranteeing repayment of the loan availed by the 1st Defendant. Further, the 2nd and 3rd Defendants have jointly executed the following documents on 12.11.2012 in favour of applicant bank:

(i) Partnership Letter cum Letter of Authority;

(ii) Letter of Authority.

7. It is the further case of the applicant bank that the Defendants have sought for an additional Cash Credit loan of Rs.40,00,000/- vide their letter dated 08.03.2014. The Applicant, in pursuance of the same, had sanctioned additional Cash Credit loan of Rs.38,50,000/- as per the Sanction Letter dated 15.09.2014. In consideration to the aforesaid additional Cash Credit

Loan sanctioned to the defendants, the Defendants executed the following documents in favour of the applicant on 15.09.2014: a). Demand Promissory Note for Rs.38,50,000/- (Rupees Thirty Eight Lakhs Fifty Thousand only) at the Base Rate of 10.50 % + 1.75 & per annum, with a minimum of 12.25 % p.a. with monthly rests. b). Letter of Hypothecation. c). Hypothecation of Book Debts.

8. The Applicant submits that the 2nd and 3rd defendants have executed Balance Confirmation Letters separately on behalf of the 1st defendant firm on 04.04.2014, confirming the then balance in the loan of Rs.56,93,048.86p as on 31.03.2015.

9. It is submitted that the 1st Defendant had executed Revival Letter on 11.11.2015 for the purpose of Section 18 of Indian Limitation Act,1963; Similarly, the Guarantors, i.e., the 2nd and 3rd defendants herein have also executed Revival Letters separately on 11.11.2015, for the purpose of Section 18 of the Limitation Act,1963.

10. The Applicant Bank submits that the 2nd and 3rd Defendants had executed Balance Confirmation Letter dated 12.04.2016 separately, whereby they have confirmed the then balance of Rs.64,07,416.50p as on 31.03.2016.

11. It is submitted by the Applicant Bank that the Defendants by availing the Cash Credit Loan, was doing the marketing business and had enriched themselves. However, subsequent to availing of loan, the defendants were

not regular in repayment of the dues. Inspite of repeated demands and personal calls made by the applicant’s officials, the defendants never bothered to repay the loan amount. Therefore, the account of the defendants was classified as Non Performing Asset (NPA) on 30.06.2017. Inspite of repeated demands by the applicant, they could not realize the due amount from the defendants. Therefore, the applicant was constrained to issue Recall Notice on 29.10.2018, calling upon the defendants to pay the outstanding dues of Rs.81,28,752.22p in the Cash Credit Loan Account as on 29.10.2018, together with interest thereon (including penal interest) till the date of repayment of the entire loan outstanding. The applicant submits that the notice sent to the 1st defendant was returned and the notices were received by the 2nd & 3rd defendant on 01.11.2018. In spite of having received the said recall notices, the defendants have failed to repay the dues.

12. The applicant submits that they are charging interest for the loan sanctioned to the applicant as per Reserve Bank of India guidelines. The interest rate is subject to variation from time to time as per the directions of the Reserve Bank of India. The interest/compounded interest has been charged at such rates and capitalization has been made at such periodical rests as permitted by the Reserve Bank of India and the amount claimed do not run counter to its directives. The defendant is liable to pay interest as per the agreement and the present rate of interest for the said Cash Credit loan of the defendant is 13.45 % per annum compounded with monthly rests. Despite repeated requests and demands, as defendants did not come

forward to repay the dues, 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 3 through Registered Post with Acknowledgment Due, which was returned with postal endorsement as ‘left’ in respect of D-1, while summons to D-2 and D-3 were duly served. Advocate Mr. Krishnamoorthy, filed Vakalat for defendants on 12.04.2019. Despite availing several adjournments, the defendants did not choose to file written statement and contest the claim. When OA was taken up on 27.10.2021 even after giving sufficient time, the defendants did not file written statement. Hence opportunity to file written statement by the defendants was closed on 27.10.2021. Heard the submissions of Applicant Bank and perused the records.

14. To prove the case of the Applicant Bank, Mr. Vinuraj M.P., Chief Manager, ARM 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-25.

15. A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-25 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 Defendant.

16. The Tribunal reminds itself that the RDB Act is a special enactment, enacted with the purpose of providing expeditious adjudication and recovery of debts due to Banks and Financial Institutions. Time is the essence in quick disposal of Original Applications to avoid locking up of huge amount of public money in litigation which prevents proper utilization and recycling of the funds for the economic development of the country.

17. For better understanding S.19[5] is reproduced reads as under: "The defendant shall within a period of thirty days from the date of service of summons, present a written statement of his defence including claim for set-off under sub-section (6) or a counter-claim under sub- section (8), if any, and such written statement shall be accompanied with original documents or true copies thereof with the leave of the Tribunal, relied on by the defendant in his defence:

Provided that where the defendant fails to file the written statement within the said period of thirty days, the Presiding Officer may, in exceptional cases and in special circumstances to be recorded in writing, extend the said period by such further period not exceeding fifteen days to file the written statement of his defence"

18. Thus, a reading of S.19(5) makes it clear that the written statement/ counter-claim is required to be filed mandatorily within 30 days from the date of service of summons. Another period of 15 days maximum can be granted, only in exceptional cases and in special circumstances, which are to be found and recorded in writing by the Presiding Officer while granting extension by up to 15 days. These strict timelines of 30 days, and 15 days as mandated in section 19(5) are in consonance with the objective sought to be achieved by the Recovery of Debts and Bankruptcy Act, 1993.

19. In the present case, though the defendants have file vakalat, they failed to file Written Statement within the prescribed period. Consequently, the opportunity afforded to the Defendant to file Written Statement was closed by this Tribunal on 27.10.2021. The Defendants have neither taken steps to set aside the said order nor participated in the proceedings thereafter. Therefore, the matter is required to be considered on the basis of the pleadings, the evidence adduced by the Applicant Bank, and the documents placed on record.

20. The failure of the Defendants to file Written Statement does not absolve the Applicant Bank of its burden to establish its claim through legally admissible evidence. Accordingly, this Tribunal has independently examined the pleadings, the Proof Affidavit and the documents marked as Exhibits A-1 to A-25, including the duly certified Statement of Accounts, and is satisfied that the Applicant Bank has established its claim against the Defendant. 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 Defendant are produced or filed to dispute the claim of applicant bank. Hence, it can be concluded that applicant bank has proved its claim against Defendant.

21. 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 :

22. The OA is allowed with costs,

(a) The applicant bank is allowed to recover from the Defendants, a total sum of Rs.78,47,509.80p (Rupees Forty Lakhs Twenty Two Thousand Five Hundred and Eighty Seven and Eighty Seven Paisa only) due in respect of Cash Credit Loan (A/c No.1630200000027) repayable together with further interest @13.45% p.a. with monthly rests from the date of Application till the date of realization in full along with for costs of this OA.

(b) In the event of failure of the Defendants to pay the aforesaid amount, the applicant bank is at liberty to sell the personal assets of the Defendants 2 and 3(both movable and immovable) to recover the balance dues as required under law for which the Defendants 2 and 3 to disclose to the Tribunal particulars of other properties or assets owned by the Defendants 2 and 3.

(c) The applicant bank shall file the latest memo of calculation of OA amount together with interest, costs etc., to be paid by the Defendant 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 Defendant 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.

23. A copy of this order be communicated to the parties concerned.

Sd/- (S.V. GOWRAMMA)

PRESIDING OFFICER, DRT-III, CHENNAI

(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this the 30th day of October, 2026) ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Mr. Vinuraj M.P., Chief Manager, ARM Branch of the Applicant Bank Exhibits on the part of the Applicant: Sl. No. Date Description of Documents Exhibit No.

1. 12.11.2012 Sanction letter A-1

2. 12.11.2012 Demand Promissory Note for Rs. 20 lakhs A-2

3. 12.11.2012 Undertaking Letter A-3

4. 12.11.2012 Letter of Hypothecation A-4

5. 12.11.2012 Hypothecation of Book Debts A-5

6. 12.11.2012 Guarantee by the 2nd Defendant A-6

7. 12.11.2012 Guarantee by the 3rd Defendant A-7

8. 12.11.2012 Partnership Letter cum Letter of Authority A-8

9. 12.11.2012 Letter of Authority A-9

10. 08.03.2014 Request Letter for additional Loan A-10

11. 15.09.2014 Sanction Letter A-11

12. 15.09.2014 Demand Promissory Note for Rs.38.50 Lakhs A-12

13. 15.09.2014 Letter of Hypothecation A-13

14. 15.09.2014 Hypothecation of Book Debts A-14

15. 04.04.2015 Balance Confirmation A-15

16. 04.04.2015 Balance Confirmation A-16

17. 11.11.2015 Revival Letter by the firm A-17

18. 11.11.2015 Revival Letter by the 2nd Defendant A-18

19. 11.11.2015 Revival Letter by the 3rd Defendant A-19

20. 12.04.2016 Balance confirmation by the 2nd Defendant A-20

21. 12.04.2016 Balance confirmation by the 3rd Defendant A-21

22. 26.05.2006 Partnership Deed A-22

23. 29.10.2018 Recall Notice A-23

24. Acknowledgment / India Post Tracker Report A-24

25. Statement of Account A-25

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

:- SCHEDULE -: NIL

Sd/- (S.V. GOWRAMMA)

PRESIDING OFFICER, DRT-III, CHENNAI