Allowed

Kotak Mahindra Bank Limited v. vel logistics

DRT27 Jan 2025OA/195/2022

Case brief

AI extract

What is this about?

The DRT allowed the Original Application filed by Kotak Mahindra Bank under RDB Act, 1993 for recovery of dues. Finding no contra evidence from the ex-parte defendants, the tribunal directed the respondents to pay principal and interest and authorized recovery via sale of hypothecated vehicles.

What did the court decide?

Order allowed directing respondents to pay Rs. 26,06,808.23 plus interest; authorized recovery through sale of hypothecated vehicles if payment fails.

Kotak Mahindra Bank Limited versus vel logistics — Contract and Commercial Disputes | DRT (2025)

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OA. No. 195 of 2022 (E)

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27.01.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 27^th day of January, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No. 195 of 2022

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M/s. Kotak Mahindra Bank Ltd., 8^th Floor, Zone-2, TVH Agnitio Park, No.141, Old Mahabalipuram Road, Kandhanchavadi, Chennai – 600 096. Rep by its Manager ….Applicant

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-Vs-

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Mrs. A. Uma, Proprietor of M/s. VEL Logistics, W/o. Arunkumar, No.9, Ganesh Nagar, Jankiram Reddy Colony, Villivakkam, Chennai – 600 049. 2. Mr. Arunkumar, S/o. Shanmugavel, No.9, Ganesh Nagar, Jankiram Reddy Colony, Villivakkam, Chennai – 600 049. 3. M/s. VEL Logistics No.9, Ganesh Nagar, Jankiram Reddy Colony, Villivakkam, Chennai – 600 049. ….Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. Ramalingam & Associates Defendants 1 to 3 were set ex-parte on 30.08.2022

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OA. No. 195 of 2022 (E)

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27.01.2025

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: - FINAL ORDER - :

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This original application is filed on 18.10.2021 by the applicant bank 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 for recovery of a total sum of Rs.26,06,808.23p (Rupees Twenty Six Lacs Six Thousand Eight Hundred Eight and Paise Twenty Three only), as on 21.09.2021 out of which :-

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(a) The defendants 1 and 2 are jointly and severally liable to pay the applicant bank a sum of Rs.21,03,485.37p due in respect of Short Term Loan (L oan Account No. LCV1425299) together with interest thereon @ 12.79% per annum from the date of filing of this original application, till the date of realization in full;

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(b) The 1^st defendant is liable to pay a sum of Rs.5,03,322.86p due in respect of WCTL ( Loan account No. LCV1539209) together with interest thereon @ 8% per annum from the date of application till the date of realization in full;

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and for sale of hypothecated items morefully described in schedule of 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 Hon’ble Tribunal.

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OA. No. 195 of 2022 (E)

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27.01.2025

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3 The case of the applicant bank is that the 1^st defendant is a Borrower and the 2^nd defendant is the guarantor and the 3^rd defendant is the proprietorship concern M/s. VEL Logistics represented by its Proprietor, 1^st defendant approached them and submitted an application on 22.09.2019, seeking for short term Loan for business purpose.

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It is submitted that upon request of defendants 1 and 2 the applicant bank had sanctioned the Short Term Loan of Rs.27,38,000/- and the same was disbursed Vide Loan Account No. LCV1425299 on 23.10.2019.

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It is further submitted by applicant bank that to secure the said sanctioned limit, the defendants 1 and 2 executed the following documents on 23.10.2019 in favor of applicant bank:

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(i) Demand Promissory Note, executed by the first defendant in favor of the Applicant bank agreeing to repay a sum of Rs.27,38,000/- at the rate of 12.79% p.a on reducing balance method.

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(ii) Loan cum guarantee agreement, executed by both the defendants in favor of the applicant bank.

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It is submitted by applicant bank that the defendants had utilized the amount disbursed by the applicant bank, in their business activities and had hypothecated the scheduled mentioned vehicle as collateral favoring the applicant bank to secure the facility availed.

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It is submitted by the applicant bank that the defendants agreed with the terms and conditions to repay the Light Short Term Loan by paying installment each month

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27.01.2025

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OA. No. 195 of 2022 (E)

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lasting for a tenure of 30 months starting from 20.11.2019 to 20.09.2022, with interest @ 12.79%p.a.

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It is further submitted by applicant bank that in the year 2020 an Emergency Credit Line Guarantee Scheme (ECLGS) was implemented by the Ministry of Finance, Government of India to aid Eligible Business Enterprises/ MSMEs sector in view of the economic distress caused by the COVID-19 pandemic. Accordingly, applicant bank had sanctioned a WCTL credit facility dated 16.07.2020 under the special scheme of ECLGS to the first defendant for a sum of Rs. 4,83,700/- in Loan Account No. LCV1539209.

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It is further submitted by applicant bank that to secure the said sanctioned limit, the 1^st defendant executed the following documents on 17.07.2020 in favor of applicant bank:

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(i) Term Loan Agreement in favor of the applicant bank .

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(ii) Deed of Hypothecation in favor of the applicant bank.

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It is also submitted by applicant bank that the 1^st defendant had agreed to repay the said Short term loan, with interest @ 8% p.a. in 48 equated monthly installments starting from 07.08.2021 to 07.07.2024 along with 12 months of Loan Moratorium.

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It is submitted by the applicant bank that the defendants had agreed to pay both the credit facilities availed by them as per the loan agreements and the contractual rate of interest. The Applicant Bank further submits that in case of the non-compliance of the agreements agreed upon, the bank shall have the right of repossession and to sell the hypothecated assets.

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OA. No. 195 of 2022 (E)

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27.01.2025

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The Applicant Bank submitted that the Defendants, after availing the sanctioned credit facilities, violated the terms of the sanction, including the repayment schedule, and defaulted on the repayment of the loan despite repeated reminders. Consequently, the loan account of the first defendant was classified as a Non-Performing Asset (NPA) on 18.06.2021. Despite the default and persistent non-compliance, the Defendants failed to respond positively. In light of this, the Applicant Bank issued a Recall Notice dated 28.07.2021; however, the Defendants failed to settle the dues. 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 was sent to the Defendant Nos.1 to 3 through Registered Post with Acknowledgment Due, which was duly served. When OA was taken up on 30.08.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants 1 to 3 were placed ex-parte on 30.08.2022.

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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, Sri.R. Vasu, Assistant Manager, 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 A1 to A14. 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

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27.01.2025

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OA. No. 195 of 2022 (E)

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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, a total sum of Rs.26,06,808.23p (Rupees Twenty Six Lacs Six Thousand Eight Hundred Eight and Paise Twenty Three only), out of which :-

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(i) The defendants 1 and 2 are jointly and severally liable to pay the applicant bank a sum of Rs.21,03,485.37p due in respect of Short Term Loan (L oan Account No. LCV1425299) together with interest thereon @ 12.79% per annum from the date of filing of this original application, till the date of realization in full;

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(ii) The 1^st defendant is liable to pay a sum of Rs.5,03,322.86p due in respect of WCTL ( Loan account No. LCV1539209) together with interest thereon @ 8% per annum from the date of application till the date of realization in full.

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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 hypothecated movables more fully detailed in the OA;

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(d) Schedule mentioned hypothecated movables in the OA shall be appended to this final order;

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

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27.01.2025

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OA. No. 195 of 2022 (E)

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

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

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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 Saranya, transcribed by her, corrected, signed and pronounced by me on this the 27^th day of January, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Shri. R.Vasu, Assistant Manager of Kotak Mahindra 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 submitted by the defendants to the applicant bankdated22.10.2019	A-1
2.	Demand Promissory Note Executed by the first defendant in favour of the Applicant Bank dated 23.10.2019	A-2
3.	Loan cum guarantee Agreement executed Defendant in favouroftheApplicantBankdated23.10.2019	A-3

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OA. No. 195 of 2022 (E)

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27.01.2025

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4.	Term Loan agreement executed by Defendant in favour oftheApplicantBankdated17.07.2020	A-4
5.	Deed of Hypothecation executed by Defendant in favour oftheApplicantBankdated17.07.2020	A-5
6.	Copy of the online printout of the registration certificate in Vehicleno.TN18AD4255	A-6
7.	Copy of the online printout of the registration certificate in Vehicleno.TN02BC0174	A-7
8.	Copy of the online printout of the registration certificate in Vehicleno.TN18AE1189	A-8
9.	Copy of the online printout of the registration certificate in Vehicleno.TN18AE1072	A-9
10	Copy of the online printout of the registration certificate in Vehicleno.TN1802BB2134	A-10
11	Copy of the online printout of the registration certificate in Vehicleno.TN02BB2098	A-11
	Recall Notice issued by the Applicant Bank to the	A-12
12	Defendants dated28.07.2021
13	Statement of Account	A-13
14	Statement of Account	A-14

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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

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OA. No. 195 of 2022 (E)

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27.01.2025

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-: SCHEDULE :-

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Sl. No.	Details of the Hypothecated Vehicles/assets purchased from the loan	Register No.	Chassis No.	Engine No.
1.	Ashok Leyland Limited AL Boss 912	TN18AD4255	MB1ANPAC2FP BM6385	FBPZ111522
2.	Ashok Leyland Limited DOSTGOODS	TN02BC0174	MB1AA22E0FR A01669	AFH019914P
3.	TATA Motors LTD TATA ACE	TN18AE1189	MAT445082FZ G28278	275IDI06G UYS58077
4.	TATA Motors LTD TATA ACE	TN18AE1072	MAT445082FZ G29992	275IDI06G UYS61670
5.	Ashok Leyland Limited DOSTGOODS	TN02BB2134	MB1AA22E4FR E90402	FEH033267P
6	Ashok Leyland Limited DOSTGOODS	TN02BB2098	MB1AA22E1FR E91877	EFH010411P

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Sd/(S.V. GOWRAMMA)

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PRESIDING OFFICER, DRT-III, CHENNAI

Kotak Mahindra Bank Limited v. vel logistics

Case brief

What is this about?

What did the court decide?

Kotak Mahindra Bank Limited v. vel logistics

Case brief

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