Allowed

Laxmi Vilas Bank v. M S Southern Textile Home Fashions Pvt. Ltd.

DRT27 Feb 2025MA/65/2025

Case brief

AI extract

What is this about?

DRT-III, Chennai allowed petitions seeking restoration of a default-dismissed original application and substitution of ARCIL as assignee applicant. The court condoned a 434-day delay relying on precedent, directed payment of costs, and mandated non-claim of interest during the delay period upon success.

What did the court decide?

MA Nos. 64/25, 65/25 & 66/25 allowed subject to payment of costs and filing of compliance report; TA restored.

Laxmi Vilas Bank versus M S Southern Textile Home… — Contract and Commercial Disputes | DRT (2025)

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MAs 64/25, 65/25 & 66/25 in TA No.1644/23

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27.02.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 27^th day of February, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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M.As64/25, 65/25 & 66/25 in T.A. No.1644 of 2023

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Asset Reconstruction Company (India) Limited (ARCIL) Branch Office at No.560-562, 1G, 1^st Floor Century Plaza, Anna Salai, Thiru Vi Ka Kudiyiruppu Teynampet, Chennai – 600 018 Rep. by its Authorised officer

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….Proposed Applicant / Assignee

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-Vs-

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DBS Bank India Limited Karanodai Branch D.No.103-B, Sri Dhanalakshmi Complex Bazaar Main Road (GNT) Karanodai, Chennai – 600 067 Rep. by its Branch Manager

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….1^st Respondent / Assignor

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M/s Southern Textile Home Fashions Pvt. Ltd.

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Rep. by its Proprietor Mr. T. Govindarajulu No.26/29, Salai Street, Santhome Mylapore,

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Chennai – 600 004

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Mr. T. Govindarajulu S/o Mr. Thiruvengadam No.26/29, Salai Street, Santhome Mylapore, Chennai – 600 004

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Mrs. G. Lalitha W/o Mr. T. Govindarajulu No.26/29, Salai Street, Santhome Mylapore, Chennai – 600 004

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….Respondents / Defendants 1 to 3

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Counsels on record / appeared:

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Counsel for Applicant

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: M/s L. Surya Associates

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MAs 64/25, 65/25 & 66/25 in TA No.1644/23

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27.02.2025

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: - ORDER ON MA NO.53 OF 2025- :

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The Original Application is filed by the Erstwhile The Lakshmi Vilas Bank Limited, subsequently merged with DBS Bank India Limited, against the Defendants, seeking main relief to order the Respondents 2 and 4, who are Defendant Nos.1 to 3 to pay jointly and severally a sum of Rs.68,38,587/(Rupees Sixty Eight Lakhs Thirty Eight Thousand Five Hundred and Eighty Seven only) with further interest and costs.

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The Applicant Bank has filed the present petitions i.e., MA No.64/2025, 65/2025 & 66/2025 along with affidavit of Authorised Representative – Mr. Yuvek J seeking to permit applicant herein to be added as Assignee Applicant in place of applicant bank viz., DBS Bank India Limited to conduct the case, seeking to condone delay of 434 days in filing restoration petition and to restore OA which was dismissed for default on 16.06.2023 respectively.

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It is submitted by applicant bank that before transfer of case to this Tribunal, OA was posted for carrying out amendment, in view of amalgamation before DRT-II, Chennai. On 07.04.2022, as there was no representation on behalf of applicant bank, OA came to be dismissed for non-prosecution. Thereafter, applicant bank had filed MA No.289/2022, in which notice was ordered to respondents followed by paper publication. In the meanwhile, case was transferred to this Tribunal due to bifurcation of jurisdiction. Case was posted on 16.08.2023 before this Tribunal, on which day, as counsel on record could not be present, OA was once again dismissed for default and non-prosecution. rectification of Proof Affidavit. As the erstwhile counsel did not prosecute the case diligently, OA came to be dismissed for default.

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MAs 64/25, 65/25 & 66/25 in TA No.1644/23

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27.02.2025

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In the meanwhile, applicant bank had assigned various loan accounts including the subject Loan of 2^nd to 4^th respondents, who are defendants / borrowers of credit facilities from Erstwhile The Lakshmi Vilas Bank Limited, which was merged with DBS Bank India Limited by way of an Assignment Agreement bearing Document No.104 / 2022 dated 23.12.2022.

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It is the case of proposed applicant / assignee that first respondent bank / applicant in OA had taken huge time to hand over the case papers along with previous counsel’s details. After obtaining the details only, the petitioner came to know that the OA has been dismissed for default on 16.08.2023. Hence immediately, the present counsel was engaged and steps were taken to file necessary petitions. Hence the delay of 434 days occurred, which is neither willful nor wanton but only due to the aforesaid reason. Thus submitting, counsel prayed for condonation of delay and restoration of TA and for substitution of proposed applicant in place of assignor bank.

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Heard and perused the records of the case .

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The applicant, being a financial institution has filed the present petition for recovery of a sum of Rs.68,38,587/- along with interest and for sale of mortgaged properties. It is seen that the applicant has not prosecuted the case before DRT-II and even after transfer of case to this Tribunal. Accordingly, OA / TA came to be dismissed for default and non-prosecution on 16.08.2023.

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In view of the fact that the ARCIL / proposed applicant being a financial institution is the custodian of the public money held under trust, the Tribunal relying on the judgment of Hon’ble High Court of Madras (At Madurai) in the judgment of V.P. Rajula -Vs.- K.J. Sakadeva Raja reported in LAWS (MAD)-2020-8-441 feels it

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apt to condone the delay and restore the OA and give last opportunity to applicant to

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MAs 64/25, 65/25 & 66/25 in TA No.1644/23

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27.02.2025

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permit the assignee to continue the TA in place of assignor bank, as per the Assignment Agreement.

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Accordingly, MAs No.64/25,65/25 & 66/25 stands allowed subject to payment of costs of Rs.1,000/- to the DRT & DRAT Bar Association, Chennai on or before 14.03.2025 by the applicant bank and to file the payment of compliance report before the Registrar Court on 17.03.2025.

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Further, the Tribunal, placing reliance on the judgment supra , directs that in case if applicant bank succeeds in the OA, applicant bank shall not claim interest for the said period of 434 days from the defendants and file a memo of calculation at the time of adjudication of OA claim. The copy of this order be placed in the OA enabling to claim the exemption of interest at the time of final adjudication of OA.

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In case of the applicant complying with the order, TA stands restored to file. Applicant to carry out amendment and file amended copy of TA for processing of proof affidavit and documents before the Registrar’s Court on 17.03.2025. It is clarified that in case if the applicant bank fails to comply with the conditional order above, MAs stand dismissed automatically without there being any need to pass separate order.

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Sd/(S.V. GOWRAMMA)

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PRESIDING OFFICER, DRT-III, CHENNAI

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(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this the 27^th day of February, 2025)

Laxmi Vilas Bank v. M S Southern Textile Home Fashions Pvt. Ltd.

Case brief

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Laxmi Vilas Bank v. M S Southern Textile Home Fashions Pvt. Ltd.

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Laxmi Vilas Bank versus M S Southern Textile Home Fashions Pvt. Ltd.