Allowed

Union Bank of India v. Skp Traders

DRT18 Aug 2025OA/184/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the Original Application filed by Union Bank of India against M/s SKP Traders and the proprietor, Mrs. S. Kokila. The bank sought recovery of dues totaling Rs. 20,43,363/- arising from a Cash Credit Facility and a COVID Loan. Since the defendants failed to appear, the Tribunal passed a final order quantifying the recovery with interest.

What did the court decide?

Recovery of a total sum of Rs. 20,43,363/- representing Cash Credit and COVID Loan dues with further interest at specified rates from the date of application.

Union Bank of India versus Skp Traders — Banking and Recovery | DRT (2025)

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O.A. No. 184 of 2022

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18.08.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 18^th day of August, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No. 184 of 2022

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Union Bank of India Rep. by its Authorized Signatory Thiruvallur Branch

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Plot No.3573, Thiruvallur Kakkalur Bye Pass Road, Thiruvallur 602 001

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….Applicant

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-Vs-

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M/s SKP Traders, Rep. by its Proprietrix, Mrs. S. Kokila No.17, Uzhaippalar Nagar, 4^th Street Pattabiram

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Chennai – 600 072

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Mrs. S. Kokila Daughter of Dhanapal No.2, Kamarajar Street Gandhi Nagar Pattabiram

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Thiruvallur 600 072 …Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. S. Parthasarathy

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Defendants 1 and 2 were set ex-parte on 05.09.2022

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: - FINAL ORDER - :

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This Original Application is filed on 21.04.2022 by the applicant bank

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under Section 19 of Recovery of Debts and Bankruptcy Act, 1993

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O.A. No. 184 of 2022

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18.08.2025

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(formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendants 1 and 2, jointly and severally for recovery of a total sum of Rs.20,43,363/- (Rupees Twenty Lakhs Forty Three

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Thousand Three Hundred and Sixty Three only) as follows:

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(i) A sum of Rs.17,42,861/- due in respect of Cash Credit Facility (Account No.635406170000153) repayable together with further interest @ 9.90% p.a., with monthly rests from the date of Application till the date of realization in full,

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(ii) A sum of Rs.3,00,502/- due in respect of COVID Loan (Account No.635406990000115) repayable together with further interest @ 7.50% p.a., with monthly rests from the date of Application till the date of realization in full and for costs of this OA.

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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 1^st defendant represented by its proprietrix, the 2^nd defendant had approached the Applicant Bank for sanction of Cash Credit for the purpose of running a Retail Shop in the name and style of M/s SKP Traders under Credit Guarantee Fund Trust for Micro Small Enterprises (CGTMSE).

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O.A. No. 184 of 2022

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18.08.2025

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It is submitted that the applicant bank considered the defendant’s request and sanctioned the Cash Credit facility of Rs.15.00 lakhs under Union Progress on 19.12.2019 in Loan Account No.635406170000153 with repayment terms at the rate of interest @ 9.9% p.a.,

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The applicant submits that in order to secure the loan, the 2^nd defendant being Proprietrix of 1^st defendantm had executed the loan documents in favour of the applicant as detailed below:

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a) Demand Promissory Note, dated 19.12.2019 for Rs.15.00 lakhs in favour of the applicant

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b) Letter of continuity in pursuant to the Demand Promissory note for Rs.15.00 lakhs addressed to the applicant.

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c) Composite Hypothecation Deed, Dated 19.12.2019 in favour of the applicant

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d) Composite Hypothecation Deed, dated 19.12.2019 agreeing to transfer any sum or sums standing to the credit of any one or more of such accounts in or towards satisfaction of any of her liability to the applicant.

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e) Interest agreement, dated 19.12.2019 in favour of the applicant.

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It is submitted by the applicant bank that the 2^nd defendant had approached the applicant for renewal of Cash Credit vide her application dated 07.01.2020 and the applicant has renewed the limit vide their

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O.A. No. 184 of 2022

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18.08.2025

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Sanction/Renewal letter, dated 07.01.2020 for Rs.15.00 lakhs. No collateral security was obtained from the defendants, since the sanction was made under CGTMSE Scheme.

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It is further submitted that it is agreed by the defendants that if the defendants defaulted in the payment of any instalment of the loan which has fallen due as per the repayment terms, or any other amounts as directed by the Applicant Bank, and such default continues for a period of three months, compound interest shall be charged on a quarterly basis on the outstanding liability.

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The applicant submits that in the event of such default by the defendants, in making payment of any amounts which have fallen due as stipulated in the Loan Agreement, the defendants shall be liable to pay additional interest @ 2% p.a., over and above the interest rate stipulated here in above on such defaulted amounts, from the date of such default till regularizing or clearing the account in full.

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It is further submitted that the defendants had approached the applicant for sanction of Working Capital Term Loan to meet the liquidity crunch and cash flow mismatch on account of outbreak of COVID-19, the applicant has sanctioned a sum of Rs.2.29 lakhs to the defendants vide their Sanction letter dated 10.06.2020 with repayment terms of 48 monthly instalments with the moratorium period of 12 months.

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The Applicant states that in order to secure the loan, the 2^nd

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O.A. No. 184 of 2022

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18.08.2025

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defendant being Proprietrix of 1^st defendant had executed the following loan documents:

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a) Demand Promissory Note, dated 10.06.2020 for Rs.2.29 lakhs in favour of the Applicant promising to pay on demand to the Applicant together with interest on such sum from this date at interest rate of 7.50% p.a., with quarterly rests for value received.

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b) Undertaking dated 10.06.2020 for Rs.2.99 lakhs in favour of the

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applicant

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c) Interest agreement dated 10.06.2020 in favour of the applicant.

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It is submitted that subsequent to availing of aforesaid credit facilities, the defendants committed default in repayment of dues as per the terms of contract. The applicant further submits that applicant has sent a legal notice to the defendants on 07.04.2022 calling upon them to pay the outstanding under the aforesaid credit facilities and the same was served. In spite of the above notice, the defendants have not taken any steps to pay or regularize the aforesaid personal loan facility. The Defendants have closed the business after defaulted in repayment and no stocks are available in the business premises. Hence the present Original Application (OA) has been filed by the applicant bank for recovery of its dues from defendants.

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After the filing of the OA, summons were sent to the Defendants 1 and 2 through Registered Post with Acknowledgment Due, which was duly

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O.A. No. 184 of 2022

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18.08.2025

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served in respect of D-1 and D-2. When OA was taken up on 05.09.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 and 2 were placed ex-parte on 05.09.2022.

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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, Sh. K. Venkata Ratnam, Debt Manager of the Applicant Bank, has filed his 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-13 . 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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a total sum of Rs.20,43,363/- (Rupees Twenty Lakhs Forty Three Thousand Three Hundred and Sixty Three only) as follows:

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O.A. No. 184 of 2022

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18.08.2025

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(i) A sum of Rs.17,42,861/- due in respect of Cash Credit Facility (Account No.635406170000153)

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

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(b) The applicant bank shall file the latest memo of calculation of

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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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(d) Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of the final order.

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O.A. No. 184 of 2022

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18.08.2025

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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 Steno (Mogesh), transcribed by him, corrected, signed and pronounced by me on this the 18^th 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. Venkata Ratnam, Debt 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 dated 07.01.2020	A-1
2.	Letter of Sanction for Rs.15.00 lakhs dated 07.01.2020	A-2
3.	Demand Promissory Note for Rs.15.00 lakhs dated 19.12.2020	A-3
4.	Letter of continuity in favour of the Bank for Rs.15.00 lakhs	A-4
5.	Composite Hypothecation Deed dated 19.12.2019	A-5
6.	Simple Agreement dated 19.12.2019	A-6
7.	Interest Agreement dated 19.12.2019	A-7
8.	Letter of Sanction for Rs.2.99 lakhs dated 10.06.2020	A-8
9.	Demand Promissory Note for Rs.2.99 lakhs dated 10.06.2020	A-9
10.	Interest Agreement dated 10.06.2020	A-10
11.	Undertaking from the Borrower dated 01.07.2020	A-11
12.	Statement of Accounts for Loan A/c No.635406170000153 along with Certificate under Bankers Book Evidence Act	A-12
13.	Statement of Accounts for Loan A/c	A-13

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O.A. No. 184 of 2022

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18.08.2025

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No.635406990000115 along with Certificate under Bankers Book Evidence Act

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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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NIL

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

Union Bank of India v. Skp Traders

Case brief

What is this about?

What did the court decide?

Union Bank of India v. Skp Traders

Case brief

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What did the court decide?

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