Allowed

Union Bank of India v. M/s. Jaya Enterprises

DRT1 Aug 2025OA/139/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the Original Application filed by Union Bank of India for recovery of dues. The bank claimed Rs.51,92,977/- comprising overdraft and term loan amounts along with accrued interest from the accounts of M/s. Jaya Enterprises and guarantors.

What did the court decide?

Recovery of a total sum of Rs.51,92,977/- with interest, costs, and liberty to sell mortgaged/movable assets if payment is not made.

Union Bank of India versus M/s. Jaya Enterprises — Company and Corporate | DRT (2025)

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O.A. No. 139 of 2022

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01.08.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 01^st day of August, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No. 139 of 2022

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Union Bank of India, Pallavaram Branch-3, No.11, Jawaharlal Nehru Road, Pammal Main Road,

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Pallavaram, Chennai -600 075.

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Rep. by its Manager and Constituted Attorney. ….Applicant

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-Vs-

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M/s. Jaya Enterprises,

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Proprietor Mr. C.P. Sudharson,

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No.5B, Thiruneermalai Road, Pammal,

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Chennai-600 075.

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Mr. C.P. Sudharson,

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No.5B, Thiruneermalai Road, Pammal, Chennai-600 075.

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Mrs. S. Rajeswari, W/o C.P. Sudharson,

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Plot No.7, VOC Nagar, Pammal, Chennai -600 075. …..Defendants

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Counsels on record / appeared:

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Counsel for Applicant : Sh. K. Radhakrishnamurthy Defendants were set ex-parte on 05.08.2022

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: - FINAL ORDER - :

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This Original Application is filed on 08.12.2021 by the Applicant

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Bank under Section 19 (1) of Recovery of Debts and Bankruptcy Act, 1993

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O.A. No. 139 of 2022

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01.08.2025

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(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.51,92,977/- (Rupees Fifty One Lakhs Ninety Two

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Thousand Nine Hundred Seventy Seven Only) as follows:-

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(i) A sum of Rs.49,38,860/- due in respect of OD facility (A/c No.560361000044796) repayable together with further interest @ 10.65%, p.a. with monthly rests from the date of filing the OA, till date of realization in full;

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(ii) A sum of Rs.2,54,117/- due in respect of Term Loan (A/c No.560726000027885) repayable together with further interest @ 10.70%, p.a., with monthly rests from the date of filing the OA, till date of realization in full;

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for sale of immovable property morefully detailed in Schedule to the OA and for costs of this application.

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Brief Facts of the case:

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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 First Defendant is the Proprietorship concern, engaged in manufacturing of construction

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O.A. No. 139 of 2022

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material, wherein the Second Defendant is the Proprietor and also the guarantor. The 3^rd defendant is the guarantor and mortgagor. The second defendant has executed all the loan documents on behalf of the First Defendant.

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It is submitted by the applicant bank that at the request of the Defendants by their application dated 16.08.2016, the applicant bank has sanctioned the Over Draft facility of Rs.68.40 lakhs to the Defendants on 10.08.2016 for their business purpose under corporation Vyapar scheme. The second defendant has availed and executed the following documents on 16.08.2016 to secure the above facility:

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a) Demand Promissory Note for Rs.68.40 Lakhs promising to repay the amount together with interest at which 11% per annum, being 1.35% below/over and above the base rate which is 9.65% at present, rising or falling therewith, compounded monthly rest over Union Bank of India’s Bench Mark Prime Lending Rate or such other

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rates as may be prescribed by the Bank from time to time with a minimum of 11% per annum with monthly rests for value received.

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b) Take delivery letter to DPN

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c) Common deed of hypothecation of movables

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d) Letter of undertaking/declaration from borrower

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The applicant submits that by way of further security to the said credit facility, the second and third defendants have jointly executed a

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Letter of Guarantee on 16.08.2016 for Rs.68.40 lakhs guaranteeing the due repayment of the amount due and payable by the First Defendant with further interest and costs.

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The Applicant submits that as security for the advances made to the First Defendant, the Second and third Defendants have separately deposited on 16.08.2016 with the Applicant’s branch Chennai the Title Deeds relating to their property more fully described in schedule hereunder with an intent to create an Equitable Mortgage as security for the advances made to the First Defendant. The deposit of Title Deeds was confirmed by them by way of memorandum of agreement and MOD. The above mortgage properties have been also registered before the Sub Registrar, Pammal, on 16.08.2016 vide registered Doc.No.5514/2016 by way of Memorandum of Deposit of Title deeds by third defendant.

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The applicant further submits that the defendants have executed an Acknowledgement of Debt/liability on 15.12.2018 wherein they have admitted their liabilities.

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It is further submitted that at the request of the defendants by their application dated on 15.12.2018 applicant bank has renewed the account on 26.09.2019 and also sanctioned FITL (Funded Interest Term Loan) of Rs.2,26,828/- to the Defendants on 30.09.2020 for their shorttime working capital purpose. The Second defendant had availed and executed the following documents on 30.09.2020 to secure the above

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facility:

a) Demand Promissory Note for Rs.2,26,828/- promising to repay the amount together with interest at 9% over Union Bank of India’s Bench Mark Prime Lending Rate or such other rates as may be prescribed by the bank from time to time with a minimum of 8.50%

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per annum with monthly rests for value received.

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b) Letter of continuity

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c) General term loan agreement

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d) Term loan agreement (Hypothecation of movables)

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e) Letter of lien

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f) Letter of undertaking not alienate hypothecated goods

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g) Format of letter undertakings.

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The applicant submits that by way of further security to the said credit facility, the second and third defendants have jointly executed a Guarantee for line of credit and term loan on 30.09.2020 guaranteeing the due repayment of the amount due and payable by the First Defendant with further interest and costs.

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The applicant further submit that the 2^nd defendant requested the applicant to release his property already mortgaged and retained another property belonged to his wife the 3^rd defendant herein, and reduced the limit to Rs.45 lakhs. Accordingly, the applicant bank has reduced the limit

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from Rs.68.40 lakhs to Rs.45 lakhs and released the property belonging to the 2^nd defendant on 30.10.2019.

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It is submitted by the applicant bank that subsequent to availing of loan, the defendants failed to maintain financial discipline and the operation of account was out of order and gradually the repayment became irregular. In spite of repeated reminders the Defendants did not regularize the account. The applicant made several demands to the defendants. But the defendants did not comply with the demands. The account was classified as Non-Performing Asset (NPA) on 31.03.2019 in accordance to RBI guidelines. The applicant also sent demand notices dated 04.07.2019, 12.01.2020, 07.11.2020, 07.12.2020 and 16.12.2020 to the defendants. But there was no response. The applicant also sent notice dated 30.04.2021 under Section 13(2) of SARFAESI Act to the defendants. The 1^st defendant by its letter dated 23.06.2021 admitted their liabilities and requested time to pay the outstanding dues. However, did not come forward to clear the dues. Hence the present Original Application (OA) has been filed by applicant bank for recovery of its dues from defendants.

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After the filing of the OA, Summons were sent to Defendants 1 to 3 through Registered Post with Acknowledgment Due, summons to D1 returned as ‘Unclaimed’, while Summons to D2 and D3 returned as ‘Left’.

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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 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 records.

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To prove the case of the Applicant Bank, Sh. MLR. Sreekanth, Assistant General Manager representing the Applicant Bank, has filed his Affidavit by way of evidence and same was considered as evidence of AW1 and list of documents came to be marked as Ex A-1 to A-35. As the Defendants remained ex-parte, the OA claim remains unchallenged. There is no contra evidence available on 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

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jointly and severally a total sum of Rs.51,92,977/- (Rupees Fifty

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One Lakh Ninety Two Thousand Nine Hundred Seventy Seven

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Only) as follows:-

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(i) A sum of Rs.49,38,860/- due in respect of OD facility (A/c No.560361000044796) repayable together with further interest @ 10.65%, p.a. with monthly rests from the date of filing the OA, till date of realization in full;

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(ii) A sum of Rs.2,54,117/- due in respect of Term Loan (A/c No.560726000027885) repayable together with further interest @ 10.70%, p.a., with monthly rests from the date of filing the OA, till date of realization in full along with costs.

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(b) In the event of failure of the Defendants to pay the aforesaid

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amount, the bank is at liberty to recover the amount by sale of the schedule mentioned immovable property.

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(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 Defendants 2 and 3 (both movable and immovable) to recover the balance dues as required

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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.

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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 Defendant to the applicant bank.

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(f) The applicant bank shall file memo of costs within ten days

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from the date of receipt of this final order.

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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/(S.V. GOWRAMMA)

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PRESIDING OFFICER, DRT-III, CHENNAI

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

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sh. MLR Sreekanth, Assistant General Manager representing 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.	Loan application dated 16.08.2016.	A-1
2.	Sanctioned Letter dated 10.08.2016.	A-2
3.	DPN by 1^stdeft dated 16.08.2016.	A-3
4.	Take delivery letter dated 16.08.2016.	A-4
5.	Common deed of hypothecation dated 16.08.2016.	A-5
6.	Letter of undertaking dated 16.08.2016.	A-6
7.	Guarantee agreement by 2^nd& 3^rddefendants dated 16.08.2016.	A-7
8.	Memorandum of agreement by 2^nddeft dated 16.08.2016.	A-8
9.	Memorandum of agreement by 3^rddeft dated 16.08.2016.	A-9
10.	MOD by 3^rddefendant dated 16.08.2016.	A-10
11.	Registered MOD by 3^rd defendant dated 16.08.2016.	A-11
12.	Acknowledgement of debt dated 15.12.2018.	A-12
13.	Application by 1^stdefendant dated 07.08.2019.	A-13
14.	Renewal letter dated 26.09.2019.	A-14
15.	Applicant’s letter dated 30.10.2019.	A-15
16.	DPN for Rs.2,26,828/- by the 1^stdefendant dated 30.09.2020.	A-16
17.	Letter of continuity by the 1^stdefendant.	A-17
18.	General term loan agreement by 1^stdefendant dated 30.09.2020.	A-18
19.	Term loan agreement (Hyp of movables and goods) by defendants dated 30.09.2020.	A-19
20.	Letter of lien by the 1^stdefendant dated 30.09.2020.	A-20
21.	Letter of undertaking not alienate by 1^st defendant dated 30.09.2020.	A-21
22.	Format of Letter of undertaking by defendants dated 30.09.2020.	A-22
23.	Guarantee for line of Credit dated 30.09.2020.	A-23
24.	Demand Notice by Applicant dated 04.07.2019.	A-24
25.	Demand Notice by applicant dated 12.01.2020.	A-25
26.	Demand Notice by applicant dated 07.11.2020.	A-26
27.	Demand Notice by applicant dated 07.12.2020.	A-27
28.	Demand Notice by applicant dated 16.12.2020.	A-28

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29.	13(2) SARFAESI Notice dated 30.04.2021.	A-29
30.	Reply letter by 1^stdefendant dated 23.06.2021.	A-30
31.	Gazette dated 04.03.2020.	A-31
32.	Certified statement of accounts.	A-32
33.	Agreement for sale entered between M. Raja gopal Rama Subramaniam represented by his power agent Mr. G. Ganesh and Mrs. S. Rajeswari dated 18.06.2008.	A-33
34.	Construction for sale entered between M. Rajagopal Rama subramaniam represented by his power agent Mr. G. Ganesh and Mrs. S. Rajeswari dated 18.06.2008.	A-34
35.	Sale Doc.No.2395 of 2008 by M. Rajagopal Rama Subramaniam represented by his power agent Mr. G. Ganesh to and in favour of Mrs. S. Rajeswari dated 18.06.2008.	A-35

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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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:- SCHEDULE -:

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All that piece and parcel of land and building bearing Plot No.7, VOC Nagar (Sri Baba Nagar) Pammal, Chennai -600 073, comprised in Sy.No.132/6 and as per patta Sy.No.132/27 and 132/28 situate in pammal village, Tambaram Taluk, Kancheepuram district, Sub-Division approval bearing No.2/07-08 dated 11.04.2007 by Pammal Municipality representing CMDA and measuring an extent of 1180 sq.ft., or there abouts and bounded on the

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North by : 20 feet road East by : Plot No.6 & 6A West by : Plot No.8 South by : Plot No.7A

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Measuring to On the Northern side by : 40’6” On the Southern side by : 40’0” On the Eastern side by : 31’0” On the Western side by : 28’0”

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In all admeasuring to 1180 sq.ft., (109.7 sq.mts) situate within the Registration District of South Chennai and Sub-Registration District of Pammal.

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

Union Bank of India v. M/s. Jaya Enterprises

Case brief

What is this about?

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Union Bank of India v. M/s. Jaya Enterprises

Case brief

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