STATE BANK OF INDIA vs RED ROCK FITNESS WORLD on 11 November 2026

: - FINAL ORDER- :

1. This Original Application is filed on 24.01.2023 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, for recovery of a total sum of

Rs.43,55,090/- (Rupees Forty Three Lakhs Fifty Five Thousand and Ninety only) as follows: i. A sum of Rs.31,89,106/- due in respect of Term Loan (A/c No.38782166930) repayable together with further interest @13.65% p.a. with monthly rests from the date of Application till the date of realization in full; ii. A sum of Rs.5,67,566/- due in respect of GECL I (A/c No.39384812213) repayable together with further interest @7.65% p.a. with monthly rests from the date of Application till the date of realization in full; iii. A sum of Rs.5,98,418/- due in respect of GECL II (A/c No. 40248493926) repayable together with further interest @7.80% p.a. with monthly rests from the date of Application till the date of realization in full; for sale of immovable property morefully detailed in the schedule to the OA 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, represented by its Proprietrix engaged in the business of running a Gym, approached the applicant and submitted a proposal seeking for credit facility. Considering the said request, the applicant bank had sanctioned the following credit facilities to the defendants:

(i) Term Loan – A/c No.38782166930 – Rs. 30 lakhs sanctioned on 09.09.2019;

(ii) GECL I – A/c No.39384812213 – Rs.5,29,000/- sanctioned on 04.06.2020;

(iii) GECL II – A/c No.40248493926 – Rs.5,73,000/- sanctioned on 15.06.2021.

4. The applicant bank submits that the 2nd defendant submitted an application for the Term Loan on 07.06.2019. The period of term loan is 74 months, GECL I is 60 months and for GECL II is 72 months. The EMI to be paid for the Term Loan at Rs.1,07,293/- for GECL I at Rs.19,905/- and GECL III at Rs.14,292/-. After accepting the terms and conditions of the applicant bank, the defendant had executed the loan documents.

5. The 2nd defendant, as the proprietor of 1st defendant, had executed Letter of Arrangement and Agreement of Loan cum Hypothecation dated 20.09.2019, 04.06.2020 & 30.09.2021 in favour of the applicant bank.

6. In evidence of the availing the loan, the defendants executed the following documents in favour of applicant bank: i. Loan application dated 06.09.2019 ii. Agreement of loan cum hypothecation dated 20.09.2019 iii. Letter of arrangement dated 20.09.2019

iv. Offer letter dated 29.05.2020 v. Letter of arrangement dated 06.06.2020 vi. Supplemental agreement of loan cum hypothecation dated 06.06.2020 vii. Letter of arrangement dated 19.06.2021 viii. Supplemental agreement of loan cum hypothecation dated 19.06.2021

7. The primary security is hypothecation of plant and machinery. The applicant bank submits that during regular inspection on 15.09.2022, it was found that the name board of the unit was changed as LIME FITNESS WORLD. When enquired the staff working in the fitness centre, they informed that the entire Gym equipment was disposed of. Without the consent or intimation of the applicant bank, the defendants have disposed of the stocks and thus the applicant bank was constrained to lodge a police complaint before Guindy Police Station on 29.10.2022. The complaint is still pending. The applicant bank submits that above facilities availed by the defendants were renewed reduced by the bank time to time at the request of the defendants.

8. The applicant submits that after availing the aforesaid loan facility, the defendants were irregular in repayment of instalments and servicing the monthly rest from the date of sanction towards the loan account of defendants. The defendant was irregular in repaying the EMIs and thus the applicant bank was constrained to classify the loan accounts as Non- Performing Asset (NPA) on 06.11.2022 & 08.11.2022 respectively.

9. The applicant submits that it could not succeed in its efforts in recovering dues from the defendants even after making a demand various occasions advising and cautioning the defendants to regularize the loan accounts of the defendants by repaying the entire loan dues through the aforesaid notice from the defendants. The defendants remained with callous and supine attitudes without talking any serious steps to settle the loan dues to the applicant bank. The applicant bank had caused Lawyer’s Notice on 17.11.2022 calling upon the defendants to pay the dues. The defendants, after receipt of the said notice, issued a reply on 25.11.2022 stating that during Corona they could not run the GYM due to restrictions and they have not sold the gym to any one and they have changed the name of the business and sought rescheduling the loan by waiving the interest during the time period of 19 months when the purpose of the contract was frustrated. Thereafter the defendant did not approach the applicant bank. All the efforts taken by the applicant bank to recover the loan dues to the applicant bank from the aforesaid defendants did not yield the desired results.

10. The applicant bank submits that the defendants have undertaken to repay the loan amount together with interest as per the terms and conditions of the loan documents executed by 1st defendant in favour of the applicant bank. However, the defendants did not adhere to those terms of repayment. Hence, the present Original Application (OA) has been filed by the applicant bank for recovery of its dues from the defendants.

11. After the filing of the OA, summons were sent to the Defendants 1 and 2 through Registered Post with Acknowledgment Due, which was duly served in respect of D-1 and D-2. D-2, party in person representing the D- 1 company appeared on 28.11.2023 and sought time for filing vakalat. Despite giving several opportunities, vakalat was not filed by the defendants. When OA was taken up on 27.03.2024 even after giving sufficient time, counsel representing the defendants sought time for filing vakalat, which was refused by the Tribunal as already four adjournments were availed. Hence, Defendants 1 and 2 were placed ex-parte on 27.03.2024. Heard the submissions of Applicant Bank and perused the records.

12. To prove the case of the Applicant Bank, Mr. K. Ranjeethkumar, City Case Officer, SARB-II 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.

13. 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.

14. The defendants were set ex-parte on 27.03.2024, 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.

15. 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 :

16. The OA is allowed with costs,

(a) The applicant bank is allowed to recover from the Defendants 1 and 2, a total sum of Rs.43,55,090/- (Rupees Forty Three Lakhs Fifty Five Thousand and Ninety only) as follows: i. A sum of Rs.31,89,106/- due in respect of Term Loan (A/c No.38782166930) repayable together with further interest @13.65% p.a. with monthly rests from the date of Application till the date of realization in full; ii. A sum of Rs.5,67,566/- due in respect of GECL I (A/c No.39384812213) repayable together with further interest @7.65% p.a. with monthly rests from the date of Application till the date of realization in full; iii. A sum of Rs.5,98,418/- due in respect of GECL II (A/c No. 40248493926) repayable together with further interest @7.80% 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 the OA schedule.

(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 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.

17. 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 11th day of November, 2026) ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Mr. K. Ranjeethkumar, City Case Officer, SARB – II, of the Applicant Bank Exhibits on the part of the Applicant:

Sl. No. Date Description of Documents Exhibit No.

1. 15.04.2025 Index page A-1

2. 15.04.2025 Proof Affidavit A-2

3. 06.09.2019 Loan application A-3

4. 20.09.2019 Agreement of loan cum hypothecation A-4

5. 20.09.2019 Letter of arrangement A-5

6. 29.05.2020 Offer letter A-6

7. 06.06.2020 Letter of arrangement A-7

8. 06.06.2020 Supplemental agreement for loan cum hypothecation A-8

9. 19.06.2021 Letter of arrangement A-9

10. 19.06.2021 Supplemental agreement for loan cum hypothecation A-10

11. 29.10.2022 Complaint given by plaintiff to Inspector of police A-11

12. 29.10.2022 CSR copy A-12

13. 17.11.2022 Legal notice A-13

14. 18.11.2022 Acknowledgement cards A-14

15. 25.11.2022 Reply notice given by defendant 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 OF PROPERTY-: SCHEDULE-A

HYPOTHECATION OF PLANT & MACHINERY (GYM EQUIPMENTS)

Commercial treadmill, Cirve treadmill, Assault Air bike, commercial elliptical cross trainer, commercial Recumbent cycle, commercial Upright cycle, commercial Spin bike, 360-Synergy A, stretch machine, seated- leg curl-extension, AB Crunch, Biceps curl, LAT PULL DOWN/MID ROW, Triceps press, Hp Abduction, Functional trainer, Assisted Dip chin, Standing calf, Prone leg curl, 3TM07 (Calf Raise) Olympic weight lift, SMITH MACHINE, OLYMPIC WEIGHT LIFT, LEG PRESS HACK SQUAT, Sand Bags, Speed Cutre, Agility cones, Massage Gird Roller, Peanut Swiss ball, Push & Pull Sleds, Boxing glove, Boding pad, TRX FLY, Trap Bar, SWISS BAR, Safety squat bar, Tire Flip 180, Pearl Delt, Cross over cables, Multi- Adjustable bench, flat bench, Vertical Knee Raise/Dip, Back extension, Dumbbell Rack, Flat Olympic bench, Decline Olympic bench, Preacher

Curl, Utility bench, Fixes Barbells, Round Dumbbell, Chest press, Shoulder press, Low row, Lat Pull down, TRICEPS, Olympic plates.

Sd/- (S.V. GOWRAMMA)

PRESIDING OFFICER, DRT-III, CHENNAI