Allowed

Canara Bank v. C R Malarvannan

DRT24 Jan 2025OA/141/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application filed by Canara Bank under Section 19 of the RDB Act. The court determined that the bank was entitled to recover the outstanding loan amount of Rs. 22,48,573.75 with interest from the defendants jointly and severally, permitting the sale of their assets for realization.

What did the court decide?

Recovery of Rs. 22,48,573.75 with interest; liberty to sell defendants' assets; issuance of recovery certificate.

Canara Bank versus C R Malarvannan — Banking and Recovery | DRT (2025)

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OA No.141/2022 (E)

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24.01.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 24^th day of January, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No. 141 of 2022

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Canara Bank SME Branch,Perambalur, No.170,NSR Complex, Trichy Main Road, Madhana Gopalapuram, Perambalur-621212

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…. Applicant

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-Vs-

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Mr.C R Malarvannan

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No.2/79,North Street,Agaramsigoor PO, Kunnan Taluk, Perambalur-621108

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Also at:

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No.281/7,Ariyalur main Road Near RMK Blue Metalsa,Kowlpalayam Village,Thuraimangalam PO, Perambalur-621212

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M/s. Sree Hari Flyash Bricks, Represented by its Proprietor Mr. C R Malarvannan No.281/7,Ariyalur main Road Near RMK Blue Metalsa,Kowlpalayam Village,Thuraimangalam PO, Perambalur-621212 …Defendants

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Counsels on record / appeared:

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Counsel for Applicant Bank : Sh. M. Muthukumaran

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Defendants 1 & 2 were set ex-parte on 04.07.2022.

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: - FINAL ORDER - :

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This original application is filed on 25.11.2022 by the applicant bank under

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OA No.141/2022 (E)

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24.01.2025

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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 for recovery of a total sum of Rs.22,48,573.75p (Rupees Twenty-Two Lakhs Forty-Eight Thousand Five Hundred Seventy-Three Rupees and Seventy-Five Paise only) due in respect of MSME-MFG Loan Account No.4519766000018 together with further interest @ 10.15% per annum compounded with monthly rests and penal interest at the rate of 2% per annum from the date of application till the date of realization in full 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 Hon’ble Tribunal.

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It is the case of applicant bank that the 1^st defendant, the proprietor of the 2^nd defendant, engaged in the business of manufacturing flyash bricks, approached the bank on 06.03.2015 and submitted an application for an MSME-MFG loan.

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It is submitted that the defendants had annexed a quotation dated 24.01.2015 from M/s. Benny Enterprises, Coimbatore, for the purchase of machinery and have requested financial assistance to enhance their business operations.

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It is submitted that upon request of defendants and considering the potential and experience of the 2^nd defendant, the applicant bank had sanctioned the Loan of Rs.17,77,000/- vide Sanction Letter dated 06.03.2015.

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OA No.141/2022 (E)

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24.01.2025

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The applicant bank submits that upon availing of the MSME-MFG-Loan credit facility, which was covered under the CGTMSE Scheme, the defendants executed the following loan documents on 06.03.2015:

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a) Agreement Cum Deed of Hypothecation executed by the 1^st Defendant.

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b) Deed of hypothecation Re: Machinery duly signed and executed by the 1^st Defendant.

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c) Letter of Undertaking duly signed and executed by the 1^st Defendant.

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It is submitted that the defendants had agreed to repay the said loan in 60 equated monthly installments of Rs.40,174/- together with interest @ 11.20% p.a. compounded with monthly rests or at such rates as may be decided by Reserve Bank of India from time to time.

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It is submitted that after obtaining the MSME-MFG-Loan, the defendants purchased machinery from M/s. Benny Enterprises and submitted the following documents, dated 07.04.2015, as proof of purchase.

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a) VAT Tax invoice No.38 dated 07.04.2015

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b) VAT Tax invoice No.54 dated 07.04.2015

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It is submitted that the defendants had also hypothecated machineries purchased from and out of loan availed from applicant bank and executed particulars of Hypothecation on 07.04.2015 in favour of applicant bank.

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Applicant bank submits that the defendants were not regular in their payments which became intermittent and slow. The defendants could not keep their

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OA No.141/2022 (E)

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24.01.2025

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account healthy and hence, became overdue. They had remitted Rs. 15,486/towards the MSME-MFG-Loan and executed an acknowledgment of debt and security on 04.03.2017.

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It is submitted that the defendant’s account was not upgraded, and the interest servicing was insufficient, resulting in its classification as a Non-Performing Asset on 01.04.2018.

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It is further submitted that the 2^nd defendant had subsequently visited the applicant bank acknowledged balance and executed acknowledgment of debt and security on 07.12.2019. However, the defendants failed to settle the dues. The applicant bank submits that while on their inspection of defendant’s premises being place of work, no hypothecated movables were available and hence, no prayer is made for seizure and sale of hypothecated movables. Therefore, the Applicant Bank has filed this Original Application (OA) seeking recovery of the outstanding dues from the Defendants.

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After the filing of the OA, summons were sent to Defendant Nos. 1 and 2, which were duly served; however, there was no representation. When OA was taken up on 04.07.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants 1 and 2 were placed exparte on 04.07.2022.

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Heard the submissions of Applicant Bank and perused the records.

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OA No.141/2022 (E)

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24.01.2025

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To prove the case of the Applicant Bank, Mrs. A. Devaki, Manager SMEPerambalur Branch, 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 A1 to A12. 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 due to the applicant bank, 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 Defendants No.1 and 2 jointly, severally a sum of Rs.22,48,573.75 /- (Rupees Twenty-Two Lakhs Forty-Eight Thousand Five Hundred Seventy-Three Rupees and Seventy-Five Paise only) due in respect of MSME-MFG Loan Loan Account No.4519766000018 together with further interest @ 10.15% per annum with monthly rests from the date of filing this application till the date of realization.

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(b) The applicant bank is at liberty to sell the personal assets of the defendants (both movable and immovable) to recover the dues as required under law;

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OA No.141/2022 (E)

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24.01.2025

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amount together with interest, costs etc., to be paid by the defendants duly considering the amounts, if any, paid by the defendants 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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(d) The applicant bank shall file memo of costs within ten days from the date of this final order.

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(e) Recovery Certificate shall be drawn up and issued to the 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) PRESIDING OFFICER, DRT-III, CHENNAI

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(Dictated to Prasobh Sankar, transcribed by him, corrected, signed and pronounced by me on this the 24^th day of January, 2025)

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OA No.141/2022 (E)

24.01.2025

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: A.Devaki, Manager SME-Perambalur Branch

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Exhibits on the part of the Applicant:

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Sl. No.	Description of Documents	Exhibit No.
	AW-1
1.	Loan Applicationdated 06.03.2015	A-1
2.	Quotation issued by M/s.Benny Enterprises dated 24.01.2015	A-2
3.	Sanction Memorandumdated 06.03.2015	A-3
4.	Agreement Cum Deed of Hypothication dated 06.03.2015	A-4
5.	Deed of hypothecation Re: Machinery dated 06.03.2015	A-5
6	Letter of Undertaking dated 06.03.2015	A-6
7	VAT InvoiceNo.38 dated 07.04.2015	A-7
8	VAT Invoice No.54 dated 07.04.2015	A-8
9	Particulars of Hypothecationdated 07.04.2015	A-9
10	Acknowledgment of debt and security dated 04.03.2017	A-10
11	Acknowledgment ofdebt and security dated 07.12.2019	A-11
12	Statement of Account	A-12

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

Canara Bank v. C R Malarvannan

Case brief

What is this about?

What did the court decide?

Canara Bank v. C R Malarvannan

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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