Allowed

Canara Bank v. Janani Agencies

DRT1 Sept 2025OA/133/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal, Chennai, allowed the original application filed by Canara Bank for recovery of dues amounting to Rs. 24,28,349.25p from three Defendants representing a proprietary concern and a guarantor. The bank claimed dues from an Overdraft Facility and a Term Loan. As the Defendants were present ex-parte, the Tribunal accepted the bank's evidence and final order. Permission was gr

What did the court decide?

Recovery of Rs. 24,28,349.25p with interest, costs, and permission to sell mortgaged immovable property and third Defendant's personal assets.

Canara Bank versus Janani Agencies — Banking and Recovery | DRT (2025)

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O.A. No. 133 of 2022

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01.09.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 01^st day of September, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No. 133 of 2022

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CANARA BANK

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SME Branch, Perambalur Rep. by its Manager No.170, NSR Complex, Trichy Main Road, Madhana Gopalapuram, Perambalur – 621 212 Perambalur District …Applicant

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-Vs-

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M/s Janani Agencies Rep. by its Proprietrix Mrs. E. Suganthi No.2/229, Middle Street, Athur Main Road, Koneripalayam, Perambalur District – 621 212

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Also at:

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M/s Janani Agencies Rep. by its Proprietrix Mrs. E. Suganthi Ward 6/255 DA-37H, Nadesan Pillai Complex Elambalur Main Road, Perambalur 621 212

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Mrs. E. Suganthi, W/o Mr. R. Eswaran No.2/229, Middle Street, Athur Main Road, Koneripalayam, Perambalur District – 621 212

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Mr. P. Selvaraj, S/o Shri. Periyasamy No.1-283, Keelatheru, Valikandapuram Veppanthattai Taluk, Perambalur District 621 115

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…Defendants

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Counsels on record / appeared:

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Counsel for Applicant : Mr. M. MuthuKumaran

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Defendants 1 to 3 were set ex-parte on 05.08.2022

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O.A. No. 133 of 2022

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01.09.2025

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: - FINAL ORDER - :

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This Original Application is filed on 27.01.2022 by the applicant bank

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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 to 3, jointly and severally for recovery of a total sum of Rs.24,28,349.25p (Rupees Twenty Four Lakhs Twenty Eight Thousand Three Hundred and Forty Nine and Twenty Five

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Paisa only) due in respect of:

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i. A sum of Rs.16,45,328/- due in respect of Over Draft Facility (Account No.4519255000002) repayable together with further interest @ 16.35% p.a. with monthly rests and penal interest @ 2% p.a., from the date of Application till the date of realization in full;

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ii. A sum of Rs.7,83,021.25p due in respect of Term Loan facility (Account No.4519768000278) repayable together with further interest @ 9.90% p.a., with monthly rests and penal interest @ 2% p.a., from the date of Application till the date of realization in full;

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for sale of schedule mentioned immovable property and for costs of this OA.

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Brief Facts of the case:

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O.A. No. 133 of 2022

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01.09.2025

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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.

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It is the case of the applicant bank that the 1^st defendant represented by 2^nd defendant had approached applicant for availing Working Capital in (OCC) of Rs.6,00,000/- with an undated application for loans to Micro & Small Enterprises (MSEs) during January 2017. The 1^st defendant also executed the following documents:

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a) Form – B, Certificate of Registration dated 31.08.2012

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b) Form – D, Certificate of Registration dated 31.08.2012

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It is submitted by the applicant bank that after considering the potentials and experience of 2^nd defendant and on hypothecation of stocks of raw materials, had granted Overdraft facility of Rs.6,00,000/- vide Sanction Memorandum dated 10.01.2017 to defendants 1 & 2 with certain terms and conditions to the adhered strictly by them and the tenability of this facility was until 24.04.2016

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The applicant further submits that 1^st defendant represented by 2^nd defendant had availed OCC facility of Rs.6,00,000/- from applicant under Loan Account No.4519255000002 and executed following loan documents as security in favour of the applicant on 10.01.2017:-

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O.A. No. 133 of 2022

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01.09.2025

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a) Request for Overdraft Facilities

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b) Pronote for Rs.6,00,000/-

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c) Cash Credit Agreement

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d) Letter of Undertaking

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It is submitted that without prejudice to rights of the applicant to demand repayment of entire Overdraft Facility from 1^st and 2^nd defendants, they had agreed to service interest as and when it fell due together with interest @ 10.00 % p.a., with monthly rests. The 3^rd defendant had personally guarantee Overdraft (OCC) facility availed by 1^st defendant proprietary concern and executed a Guarantee Agreement on 10.01.2017.

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The applicant submits that 1^st defendant represented by 2^nd defendant had approached the applicant for enhancement of OCC from Rs.6,00,000/- to Rs.10,00,000/- and a Term Loan of Rs.4,95,000/- with updated application for MSEs. The applicant considered potentials of defendants and mortgage of immovable properties by 2^nd defendant in favour of applicant had enhanced the credit facility as per the Sanction Memorandum dated 09.10.2017 to 1^st and 2^nd defendant with certain terms and conditions.

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It is submitted that tenability of this OCC facility was for 3 years, 1^st defendant represented by 2^nd defendant had availed OCC facility of

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O.A. No. 133 of 2022

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01.09.2025

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Rs.10,00,000/- from applicant under Loan Account No.4519255000002 and executed following loan documents as security in favour of applicant on 09.10.2017:

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a) Pronote for Rs.10,00,000/-

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b) Supplemental Agreement

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c) Letter of renewal

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d) Letter of undertaking

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e) Link letter

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The applicant submits that without prejudice to right of applicant to demand repayment of entire overdraft facility from defendants at any time, they had agreed to service interest as and when it fell due together with interest at rate of 10.45% p.a., with monthly rests. The 3^rd defendant had personally guaranteed OCC facility availed by 1^st defendant proprietary concern and executed a Guarantee Covering Letter cum Guarantee Agreement on 09.10.2017

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The Applicant further considered the potentials and experience of 2^nd defendant and on mortgage of immovable property in favour of applicant and granted a Term Loan of Rs.4,95,000/- vide Sanction Memorandum dated 09.10.2017 to 1^st and 2^nd defendant with terms and conditions. Applicant has sanctioned the Term Loan of Rs.4,59,000/under Loan Account No.4519768000278 and the 1^st defendant

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represented by 2^nd defendant had executed agreement cum Deed of Hypothecation dated 09.10.2017 in favour of applicant as security.

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It is submitted that without prejudice to rights of applicant to demand payment of entire loan amount at any time, 1^st defendant proprietary concern, represented by 2^nd defendant as proprietor and agreed to repay the loan in 60 EMIs together with interest @ 10.85% p.a., with monthly rests or may be decided by RBI from time to time. The 2^nd defendant has offered her property as collateral security to Term Loan availed by 1^st defendant proprietary concern and deposited title deeds, morefully described in the schedule to create an equitable mortgage in favour of applicant and the same is registered as Doc.No.4155 of 2017 at the office of SRO, Perambalur dated 09.09.2009.

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The applicant further submits that subsequent to availing of Term Loan and renewed OCC facility, the defendants were not regular in repayments and servicing of interest has been completely stopped. The applicant has sent two letters dated 23.03.2018 and 25.05.2018, acknowledgement card is also produced. The 1^st defendant represented by 2^nd defendant has not replied for these letters and acknowledged the balance in enhanced OCC facility of Rs.10,00,000/- and Term Loan of Rs.4,95,000/- and executed Acknowledgment of Debt and Security on 18.12.2019.

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The applicant submits that in view of default in repayment, Term

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O.A. No. 133 of 2022

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01.09.2025

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Loan (Account No.4519768000278) was classified as NPA on 01.04.2018 and OCC facility (Account No.4519255000002) was classified as NPA on 17.05.2019. Though there was no response and transactions have also been stopped, Term loan and OCC facility of 1^st defendant have been recalled. As defendants did not come forward to repay the dues, despite repeated demands, the present Original Application (OA) has been filed by the applicant bank for recovery of its dues from the defendants.

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After the filing of the OA, summons were sent to the Defendants 1 to 3 through Registered Post with Acknowledgment Due, which was duly served to D-1 and summons to D-2 and D-3 could not be effected, substituted service was ordered. Applicant Bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 05.08.2022 even after giving sufficient time, there was no appearance

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or representation from the defendants. Hence, Defendants 1 to 3 were placed ex-parte on 05.08.2022.

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Heard the submissions of Applicant Bank and perused the

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record s.

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To prove the case of the Applicant Bank, Ms.A. Devaki, Manager of the Applicant Bank, has filed her 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-26 . As the Defendants remained ex-parte, the OA claim remains unchallenged. There is no contra evidence available on

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O.A. No. 133 of 2022

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record to repudiate the claim of the Applicant Bank.

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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:

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: O R D E R :

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The OA is allowed with costs,

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(a) The applicant bank is allowed to recover from the Defendants 1 to 3 jointly and severally, a total sum of Rs.24,28,349.25p (Rupees Twenty Four Lakhs Twenty Eight Thousand Three

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Hundred and Forty Nine and Twenty Five Paisa only) due in respect of:

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(i) A sum of Rs.16,45,328/- due in respect of Over Draft Facility (Account No.4519255000002) repayable together with further interest @ 16.35% p.a. with monthly rests and penal interest @ 2% p.a., from the date of Application till the date of realization in full;

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(ii) A sum of Rs.7,83,021.25p due in respect of Term Loan facility (Account No.4519768000278)

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repayable together with further interest @ 9.90% p.a., with monthly rests and penal interest @ 2% p.a., from the date of Application till the date of realization in full

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O.A. No. 133 of 2022

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01.09.2025

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along with costs of this application;

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(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 schedule mentioned immovable property more fully detailed in the OA schedule.

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(d) If the sale proceeds of the immovable property is not sufficient to satisfy the dues as ordered above, the applicant bank is at liberty to sell the personal assets of the 3^rd Defendant (both movable and immovable) to recover the balance dues as required under law for which the 3^rd Defendant to disclose to the Tribunal particulars of other properties or assets owned by the 3^rd Defendant.

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(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.

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

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O.A. No. 133 of 2022

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(g) Recovery Certificate shall be drawn up and issued to the

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Recovery Officer in terms of the final order.

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

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Sd/-

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(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

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(Dictated to Steno (Mogesh), transcribed by him, corrected, signed and pronounced by me on this the 01^st day of September, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Ms. A. Devaki, Manager of the Applicant Bank

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Exhibits on the part of the Applicant:

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Sl. No.	Description of Documents	Exhibit No.
1.	Application form for loans to Micro & Small Enterprises (MSEs) by defendants 1 & 2 to applicant	A-1
2.	Form – B, Certificate of Registration of 1^st defendant dated 31.08.2012	A-2
3.	Form – D, Certificate of Registration of 1^st defendant dated 31.08.2012	A-3
4.	Sanction Memorandum of Applicant dated 10.01.2017	A-4
5.	Request for Overdraft Facilities – defendants 1 & 2 to applicant dated 10.01.2017	A-5
6.	Pronote for Rs.6,00,000/- by defendants 1 & 2 to applicant dated 10.01.2017	A-6
7.	Cash Credit Agreement by defendants 1 & 2 to applicant dated 10.01.2017	A-7
8.	Letter of Undertaking by defendants 1 & 2 to applicant dated 10.01.2017	A-8
9.	Guarantee Agreement by 3^rd defendant to	A-9

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	applicant dated 10.10.2017
10.	Application form for loans to Micro & Small Enterprises (MSEs) by defendants 1 & 2 to applicant	A-10
11.	Sanction Memorandum of Applicant dated 09.10.2017	A-11
12.	Pronote for Rs.4,00,000/- by defendants 1 & 2 to applicant dated 09.10.2017	A-12
13.	Supplemental Agreement by defendants 1 & 2 to applicant dated 09.10.2017	A-13
14.	Letter of Renewal by defendants 1 & 2 to applicant dated 09.10.2017	A-14
15.	Letter of undertaking by defendants 1 & 2 to applicant dated 09.10.2017	A-15
16.	Link letter by defendants 1 & 2 to applicant dated 09.10.2017	A-16
17.	Guarantee covering letter cum Guarantee Agreement by 3^rddefendant to applicant dated 09.10.2017	A-17
18.	Agreement cum Deed of Hypothecation by defendants 1 & 2 to applicant dated 09.10.2017	A-18
19.	Memorandum of Deposit of title deeds by 2^nd defendant to applicant – Doc.No.4155/2017 dated 12.10.2017	A-19
20.	Sale deed executed in favour of 2^nddefendant – Doc.No.6216/2009	A-20
21.	Letter by applicant to 1^stdefendant dated 23.03.2018	A-21
22.	Postal acknowledgement Card–1	A-22
23.	Letter by applicant to 1^stdefendant dated 25.05.2018	A-23
24.	Acknowledgment of Debt and Security by defendants 1 & 2 to applicant dated 18.12.2019	A-24
25.	Statement of accounts Over Draft Facility A/c. No.4519255000002	A-25
26.	Statement of accounts Term Loan A/c. No.4519768000278	A-26

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Witness Examined for the Defendants: -Nil-

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List of Documents Exhibited for the Defendants: -Nil –

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O.A. No. 133 of 2022

01.09.2025

:-SCHEDULE-:

Property belonging to 2^nd Defendant

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All that piece and parcel of land and building with land bearing Plot No.80 and measuring an extent of 1500 sq.ft., of land from and out of larger extent of 1 Acre and 63 cents (Hectares 0.66.0 Ares) comprised in Survey No.380/2 as per previous UDR S.F.No.380/2H measuring Hectares 0.55.85 Ares (part) & now formed part of New S.F.No.380/2H1 measuring Hectare 0.55.85 Ares (part) comprised in Patta No.2625 of Keelakarai Village, Perambalur Taluk & District together with building with boundaries, bounded on the

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North by: Plot No.79 belonging to Fathima South by: Plot No.81 belonging to Annavu East by: Sumathi’s Land West by: 20 feet wide North – South Street

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Situated within the Registration District of Ariyalur and SubRegistration District of Perambalur.

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Sd/(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

Canara Bank v. Janani Agencies

Case brief

What is this about?

What did the court decide?

Canara Bank v. Janani Agencies

Case brief

What is this about?

What did the court decide?

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