Allowed

State Bank of India v. Millen Tech Industries

DRT30 Nov 2023TA/375/2022

Case brief

AI extract

What is this about?

In a transfer application filed under Section 19 of the Recovery of Debts and Bankruptcy Act, the Debt Recovery Tribunal allowed the State Bank of India's suit for recovery of nearly Rs. 4 Crores from defendants owing on secured credit facilities. The court awarded principal, interest at 12%, and costs, noting the case was unrestricted due to respondents appearing ex parte.

What did the court decide?

Recovery of Rs. 3.90 Crores with future interest at 12% p.a. and decree of sale of scheduled properties.

State Bank of India versus Millen Tech Industries — Banking and Recovery | DRT (2023)

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IN THE DEBT RECOVERY TRIBUNAL –II CHENNAI Dated this 30^th day of November, 2023

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PRESENT: SHRI T.RAJESH PRESIDING OFFICER

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TA.No.375 OF 2022

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(Old OA.No.211/2019–DRT-I, Chennai)

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STATE BANK OF INDIA,

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Pudukottai Branch, Rep. by City Case Officer, Stressed Assets Recovery Branch, Egmore,

Chennai – 600 008 .

… Applicant.

Vs.

M/S. MILLEN TECH INDUSTRIES,

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S.F. No. 104/1,2 & 3,

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Rasipuram Road,

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Mathur Post,

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Pudukottai Taluk & District – 622 515.

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M. NEDUNCHEZIAN,

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S/o.P.Murugesan,

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No. 264, Periyar Nagar,

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Rajagopalapuram Housing Unit,

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Pudukottai – 622 003.

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R. KALYANAKUMAR,

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S/o.P.Ramasamy,

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2/50, North Street, Vengur,

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Tiruchirapalli – 620 013.

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4. N.LAKSHMI,

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W/o.M.Nedunchezhian, No.264, Periyar Nagar, Rajagopalapuram Housing Unit, Pudukottai – 622 003.

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5. P.MURUGESAN,

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S/o.Periannaswamy, No. 264, Periyar Nagar, Rajagopalapuram Housing Unit, Pudukottai – 622 003. … Defendants.

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Counsel for Applicant : Mr.D.Mukundan. Defendants : Exparte.

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ORDER

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The above Transfer Application is filed under section 19 of the Recovery of Debt and Bankruptcy Act seeking recovery of Rs. Rs. 3,90,73,859/- with further interest from the date of filing of the TA and also by allowing the same to be recovered from the defendants jointly and severally and primarily by sale of the schedule mentioned properties.

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The above original application is filed before the DRT-I and stood transferred to this Tribunal and renumbered as above.

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The case of the applicant can be encapsulated as follows:

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The 2^nd defendant, Managing Partner of 1^st defendant approached the

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applicant and availed various credit facilities which were revised and

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enhanced. The facilities were enhance to Rs.3,00,00,000/- in Cash Credit and Stand by Line of Credit of Rs.45,00,000/-. It is also stated that a bank guarantee for Rs.20,00,000/- was also approved, these by increasing the limit to Rs. 365 Lakhs. The facilities were availed agreeing to pay interest @ 12.70% and @13.70% for Cash Credit and Stand by Line of Credit respectively. It is also stated that various facilities were closed.

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It is also stated that the above facilities were availed after execution of necessary loan documents by defendants obliging themselves to repay the amount promptly and regularly, without fail.

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Apart from execution of the necessary loan documents, the 2^nd and 5^th defendants had created security by way of equitable mortgage over the schedule mentioned properties.

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Even though the defendants had obliged themselves to repay the amount promptly and regularly, they failed to do so resulting defaults in the account and the same being declared as NPA on 30.11.2016.

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The applicant’s officials had on many occasions approached the defendants requesting them to regularize the account and despite the same, no effort was made by the defendants to get the account regularized over to pay back the amount. It is also stated that some

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deposits lying in the account of 1^st defendants were adjusted to the credit on the maturity.

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It is also the case of the applicant that despite repeated reminders and requests, the defendants had failed to make the repayment forcing the applicant to file this OA seeking recovery of the amount due in the account with further interest and cost. The applicant though contents that

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the Bank guarantee was invoked by BHEL the same was not claimed in the TA.

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Even as the defendants failed to enter appearance, they were set exparte on 22.01.2020.

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The applicant had let in evidence through AW1 who had sworn to a Proof Affidavit in terms of the pleadings in the TA and also produced Exhibits A1 to A49 and got the same marked as evidence.

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Heard the counsel for the applicant and considered the contentions as

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taken in the TA in the light of documentary evidence and proof affidavit.

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The following issues arise for consideration in this matter.

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i) Whether the applicant had succeeded in proving the OA claim?

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ii) What orders are to be passed?

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Both these issues are gone into and decided together.

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The case put forth by the applicant in the Application remains unrebutted as defendants remain exparte. The evidence tendered by the applicant remains uncontroverted and undisputed. The evidences put forth by the applicant were found admissible. From the statement of accounts as produced by the applicant, it is evident that the amount as claimed in the TA is outstanding in the account, which the applicant is entitle to get recovered from the defendants and their assets. The claim of the applicant is well within the period of limitation and there is no Capitalization of penal interest. The applicant had filed a part satisfaction memo recording receipt of Rs.43,20,000/- and the same is recorded by proceedings dated 10.12.2020. Since the interest claimed is at higher side, future interest is awarded @12% (simple).

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In view of the finding as entered above

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i) TA No.375/2022 stands allowed.

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ii) Applicant is permitted to recover the total amount of Rs.3,90,73,859.40/-(Rupees Three Crores Ninety Lakhs Seventy Three Thousands Eight Hundred Fifty Nine and Forty Paisa only) with future and pendentelite interest @ 12% p.a. (simple) from the date of filing of the TA till realization from the defendants after giving credit to all the

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amount recovered and received during the pendency of the TA including the amount of Rs. 43,20,000/- recorded as per part satisfaction memo.

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iii) A Recovery Certificate is to be drawn and issued to the recovery officer to enable recovery of the amount as per the above terms.

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iv) Applicant is allowed to realize cost of the proceedings for which cost memo is to be filed in 7 days’ time from the date of receipt of the copy of the order.

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Communicate a copy of the order to the parties concerned in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure)

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Rules, 1993.

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(Dictated to PA, transcribed by him, corrected, signed and pronounced by me in the Open Court, this 30^th day of November, 2023)

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Sd./- (T. RAJESH) PRESIDING OFFICER DRT-II, CHENNAI

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State Bank of India v. Millen Tech Industries

Case brief

What is this about?

What did the court decide?

State Bank of India v. Millen Tech Industries

Case brief

What is this about?

What did the court decide?

What the court decided

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