Allowed

Canara Bank, Hosur Sme Branch v. M/s Sri Vigneshwara Industries

DRT13 Nov 2025OA/257/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an application filed by Canara Bank seeking a Recovery Certificate against industrialists for default on Term and Overdraft loans, awarding 9% simple interest and rejecting the claim for penal interest as _pendente lite_.

What did the court decide?

Recovery Certificate issued for Rs.7,30,900/- plus 9% simple interest pending realization; penal interest rejected.

Canara Bank, Hosur Sme Branch versus M/s Sri Vigneshwara… — Banking and Recovery | DRT (2025)

¶1

BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

¶2

Dated this 13^th day of November, 2025

¶3

PRESENT: SHRI SHARANG DHAR UPADHYAY PRESIDING OFFICER

¶4

OA No.257 of 2022

¶5

Canara Bank, Hosur SME Branch Represented by its Senior Manager No.550/1, Bagalur Road Hosur – 635 109 Krishnagiri District …Applicant

¶6

Versus

¶7

M/s Sri Vigneshwara Industries Represented by its Proprietrix Mrs. V.S. Sujatha

¶8

Plot No.33/2, Anumepalli Layout Zuzuvadi (Village and Post) SIPCOT-I, Hosur Krishnagiri District – 635 126

¶9

Mrs. V.S. Sujatha W/o Mr. Saravanan 5/599, A, Kothur Road Muneeshwar Nagar Hosur – 635 109

¶10

Also at Mrs. V.S. Sujatha Prooprietrix – M/s Sri Vigneshwara Industries W/o Saravanan No.91C, Thally, HUDCO, Hosur Tamil Nadu ... Defendants

¶11

Counsels on Record / Appeared

¶12

Counsel for Applicant Bank : M/s K.V. Subramanian Associatez Defendants ex-parte on 16.08.2023

¶13

¶14

FINAL ORDER

¶15

This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 against the defendants seeking issuance of a Recovery Certificate for recovery of an aggregate sum of Rs.73,00,900/- comprising a sum of Rs.27,93,985/- together with interest at the rate of 9.55% per annum with monthly rests plus 2% penal interest being the amount due under Loan Account No.4385766000011; a sum of Rs.45,06,915/- together with interest at the rate of 9.40% per annum with monthly interest plus 2% penal interest being the amount due under Loan Account No.4385256000019 from the date of the application till the date of realisation along with costs of the application.

¶16

The subject matter of the case is the Term Loan and OD General (OCC facility) availed by the defendants from the Applicant Bank.

¶17

It is the case of the applicant that the 1^st defendant represented by 2^nd defendant as its Proprietrix approached the applicant for sanction of Term Loan of Rs.30 lakhs and Overdraft (Working Capital) of Rs.19 lakhs by submitting Loan Application dated 11.02.2014. Considering the said request the applicant sanctioned Term Loan of Rs.30 lakhs and Overdraft loan of Rs.19 lakhs. It is stated that the 2^nd defendant representing the 1^st defendant executed necessary loan and security documents on 19.02.2014.

¶18

¶19

It is also the case of the applicant that at the request of the 1^st defendant represented by 2^nd defendant for renewal of existing cash credit facility of 19 lakhs on 20.11.2015, the same was renewed. The 2^nd defendant representing the 1^st defendant executed letter of renewal on 25.11.2015.

¶20

It is the further case of the applicant that the 2^nd defendant approached the applicant bank with an application dated 25.11.2016 for renewal with increase of existing cash credit facility of Rs.19 lakhs to Rs.20 lakhs. It is stated that considering the said request the applicant renewed the facility and also enhanced the facility to Rs.20 lakhs. It is stated that the 2^nd defendant executed the loan and security documents on 3.12.2016. It is also stated that the defendants executed acknowledgement of debt and security on 23.05.2016, 03.05.2019 and 18.04.2020 in respect of Loan Account No.4385766000011 and on 25.11.2015, 03.12.2016, 12.06.2018 and 20.04.2020 in respect of Loan Account No.4385256000019.

¶21

It is the case of the applicant that having availed the loan the defendants defaulted in repayment and failed to regularize the loan account despite repeated request and hence the loan account was classified as NPA on 01.04.2019. As no payment was forthcoming the applicant issued a legal notice dated 25.01.2022. Despite the receipt of the said notice the defendants did not come forward to clear the dues. Hence the applicant is filing this OA for recovery of its dues.

¶22

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Summons was taken out to the 1^st defendant is served. Summons to 2^nd defendant returned unserved. Since 2^nd defendant is the Proprietrix of 1^st defendant, service on 1^st defendant is held sufficient. As there was no representation on behalf of the defendants continuously and on 16.08.2023, the defendants were called absent and placed ex-parte on that day. Applicant Bank filed Proof Affidavit along with 25 documents, which were marked as Ex. A-1 to A-25 on 04.04.2024, however, Exhibits A-22 and A-23 are marked subject to proof. The Ld. Counsel for Applicant Bank made his submissions on 29.09.2025 and thereafter the matter stood till this date for passing final orders.

¶24

8. The following issues arise for consideration in the matter: -

¶25

(a) Whether the applicant had succeeded in proving the liability of the defendants?

¶26

(b) What order as to cost of the proceedings need be passed?

¶27

These issues are considered together.

¶28

Heard the Ld. Counsel for the applicant, perused the OA averments and the record placed before the Tribunal.

¶29

The evidence of the applicant is led by AW1 who produced the documents

¶30

Exhibit A-1 to A-25 along with the proof affidavit. The documents produced

¶31

¶32

in evidence are all found admissible. The proof affidavit of the applicant bank remained unchallenged and unrebutted. Therefore, on careful consideration of proof affidavit along with exhibits filed on behalf of the applicant bank, besides the material placed before the Tribunal, the Tribunal is satisfied that the applicant bank has successfully proved the OA claim against the defendants. Further, the statement of accounts in respect of the loan account produced and certified under the Banker’s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendants. It is clear from the statement of accounts that penal interest is not capitalized.

¶33

In view of the foregoing, it is clearly evident that the application filed by the applicant bank is well within the period of limitation and this Tribunal possesses the territorial and pecuniary jurisdiction to entertain this OA.

¶34

In view of the fact that the loan facility availed by the defendant is a Term Loan and Overdraft facility and the applicant has claimed interest at contractual rate till the date of filing of the OA, this Tribunal is of the view that the pendente lite interest can be awarded at reduced rates and prayer for award of penal interest is rejected.

¶35

In view of the afore mentioned discussions, the only conclusion this Tribunal can draw is that the applicant had clearly proved the

¶36

¶37

disbursement of the loan, which the applicant is entitled to realize. Hence, OA is disposed off in the following manner: -

¶38

(a) OA No.257 of 2022 stands allowed.

¶39

(b) Applicant is permitted to realize an aggregate sum of Rs.73,00,9000/- together with interest at the date of 9% (Simple) from the date of filing of the application till the date of realization in full, from the defendants jointly and severally after deducting all the amounts received / realized by them during the pendency of OA and also by selling the other assets of the defendants.

¶40

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(d) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 15 days from the date of receipt of the copy of the order.

¶42

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

¶43

¶44

Communicate a copy of the order to the parties concerned in terms of

¶45

Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

¶46

Sd/(SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

¶47

(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 13^th day of November, 2025)

¶48

EXHIBITS MARKED BY APPLICANT BANK

¶49

S. No.	Date	Description of Documents	Exhibit Nos.
1.	11.02.2014	Application submitted by 1^st defendant represented by 2^nddefendant as Proprietrix for Term Loan and Overdraft facilities	A-1
2.	19.02.2014	Deed of hypothecation Re: Machinery	A-2
3.	19.02.2014	Letter of undertaking re: Loans / Advances	A-3
4.	19.02.2014	Stamped Pronote for Rs.19 lakhs	A-4
5.	19.02.2014	Cash Credit Agreement for Rs.19 lakhs	A-5
6.	19.02.2014	Guarantee agreement for Rs.49 lakhs	A-6
7.	05.03.2014	Particulars of vehicles / machinery / equipment / Livestock etc., hypothecated	A-7
8.	20.11.2015	Application for renewal of Cash Credit Facility for Rs.19 lakhs	A-8
9.	25.11.2015	Letter of renewal for Rs.19 lakhs	A-9
10.	25.11.2016	Application for renewal with enhancement of Cash Credit facility from Rs.19 lakhs to Rs.20 lakhs – an enhancement of Rs.1 lakh.	A-10

¶50

¶51

11.	03.12.2016	Letter of renewal for enhancement of Rs. 1 lakh i.e, Cash Credit facility from Rs.19 lakhs to Rs.20 lakhs.	A-11
12.	03.12.2016	Stamped Pronote for Rs.1 lakhs	A-12
13.	03.12.2016	Link letter in respect of enhancement of credit facilities from Rs.19 lakhs to Rs.20 lakhs – Cash Credit facility	A-13
14.	03.12.2016	Supplemental Agreement for enhancement of Rs.1 lakhs	A-14
15.	23.05.2016	Acknowledgement of Debt and Security for Term Loan Account No.4385766000011	A-15
16.	03.05.2019	Acknowledgement of Debt and Security for Term Loan Account No.4385766000011	A-16
17.	18.04.2020	Acknowledgement of Debt and Security for Term Loan Account No.4385766000011	A-17
18.	25.11.2015	Acknowledgement of Debt and Security for Overdraft Account No.4385256000019	A-18
19.	03.12.2016	Acknowledgement of Debt and Security for Overdraft Account No.4385256000019	A-19
20.	12.06.2018	Acknowledgement of Debt and Security for Overdraft Account No.4385256000019	A-20
21.	20.04.2020	Acknowledgement of Debt and Security for Overdraft Account No.4385256000019	A-21
22.	04.07.2020	Recall notice issued by the applicant	A-22
23.	25.01.2022	Legal notice issued by applicant	A-23
24.		Statement of Account of Term Loan Account No. 4385766000011	A-24

¶52

¶53

Statement of Accounts of Overdraft Loan A-25 Account No. 4385256000019

¶54

Sd/- (SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

¶55

DESCRIPTION OF PROPERTY

¶56

NIL

¶57

Sd/(SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

¶58

BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

¶59

Dated this 13^th day of November, 2025

¶60

PRESENT: SHRI SHARANG DHAR UPADHYAY PRESIDING OFFICER

¶61

OA No.257 of 2022

¶62

Canara Bank, Hosur SME Branch Represented by its Senior Manager No.550/1, Bagalur Road Hosur – 635 109 Krishnagiri District …Applicant

¶63

Versus

¶64

M/s Sri Vigneshwara Industries Represented by its Proprietrix Mrs. V.S. Sujatha Plot No.33/2, Anumepalli Layout Zuzuvadi (Village and Post) SIPCOT-I, Hosur Krishnagiri District – 635 126

¶65

¶66

Mrs. V.S. Sujatha W/o Mr. Saravanan 5/599, A, Kothur Road Muneeshwar Nagar Hosur – 635 109

¶67

Also at Mrs. V.S. Sujatha Prooprietrix – M/s Sri Vigneshwara Industries W/o Saravanan No.91C, Thally, HUDCO, Hosur Tamil Nadu ... Defendants

¶68

Counsels on Record / Appeared

¶69

Counsel for Applicant Bank : M/s K.V. Subramanian Associatez Defendants ex-parte on 16.08.2023

¶70

FINAL ORDER

¶71

This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 against the defendants seeking issuance of a Recovery Certificate for recovery of an aggregate sum of Rs.73,00,900/- comprising a sum of Rs.27,93,985/- together with interest at the rate of 9.55% per annum with monthly rests plus 2% penal interest being the amount due under Loan Account No.4385766000011; a sum of Rs.45,06,915/- together with interest at the rate of 9.40% per annum with monthly interest plus 2% penal interest being the amount due under Loan Account No.4385256000019 from the date of the application till the date of realisation along with costs of the application.

¶72

¶73

The subject matter of the case is the Term Loan and OD General (OCC facility) availed by the defendants from the Applicant Bank.

¶74

It is the case of the applicant that the 1^st defendant represented by 2^nd defendant as its Proprietrix approached the applicant for sanction of Term Loan of Rs.30 lakhs and Overdraft (Working Capital) of Rs.19 lakhs by submitting Loan Application dated 11.02.2014. Considering the said request the applicant sanctioned Term Loan of Rs.30 lakhs and Overdraft loan of Rs.19 lakhs. It is stated that the 2^nd defendant representing the 1^st defendant executed necessary loan and security documents on 19.02.2014.

¶75

It is also the case of the applicant that at the request of the 1^st defendant represented by 2^nd defendant for renewal of existing cash credit facility of 19 lakhs on 20.11.2015, the same was renewed. The 2^nd defendant representing the 1^st defendant executed letter of renewal on 25.11.2015.

¶76

It is the further case of the applicant that the 2^nd defendant approached the applicant bank with an application dated 25.11.2016 for renewal with increase of existing cash credit facility of Rs.19 lakhs to Rs.20 lakhs. It is stated that considering the said request the applicant renewed the facility and also enhanced the facility to Rs.20 lakhs. It is stated that the 2^nd defendant executed the loan and security documents on 3.12.2016. It is

¶77

¶78

also stated that the defendants executed acknowledgement of debt and security on 23.05.2016, 03.05.2019 and 18.04.2020 in respect of Loan Account No.4385766000011 and on 25.11.2015, 03.12.2016, 12.06.2018 and 20.04.2020 in respect of Loan Account No.4385256000019.

¶79

It is the case of the applicant that having availed the loan the defendants defaulted in repayment and failed to regularize the loan account despite repeated request and hence the loan account was classified as NPA on 01.04.2019. As no payment was forthcoming the applicant issued a legal notice dated 25.01.2022. Despite the receipt of the said notice the defendants did not come forward to clear the dues. Hence the applicant is filing this OA for recovery of its dues.

¶80

Summons was taken out to the 1^st defendant is served. Summons to 2^nd defendant returned unserved. Since 2^nd defendant is the Proprietrix of 1^st defendant, service on 1^st defendant is held sufficient. As there was no representation on behalf of the defendants continuously and on 16.08.2023, the defendants were called absent and placed ex-parte on that day. Applicant Bank filed Proof Affidavit along with 25 documents, which were marked as Ex. A-1 to A-25 on 04.04.2024, however, Exhibits A-22 and A-23 are marked subject to proof. The Ld. Counsel for Applicant Bank made his submissions on 29.09.2025 and thereafter the matter stood till this date for passing final orders.

¶81

¶82

The following issues arise for consideration in the matter: -

¶83

(a) Whether the applicant had succeeded in proving the liability of the defendants?

¶84

(b) What order as to cost of the proceedings need be passed?

¶85

These issues are considered together.

¶86

Heard the Ld. Counsel for the applicant, perused the OA averments and the record placed before the Tribunal.

¶87

The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-25 along with the proof affidavit. The documents produced in evidence are all found admissible. The proof affidavit of the applicant bank remained unchallenged and unrebutted. Therefore, on careful consideration of proof affidavit along with exhibits filed on behalf of the applicant bank, besides the material placed before the Tribunal, the Tribunal is satisfied that the applicant bank has successfully proved the OA claim against the defendants. Further, the statement of accounts in respect of the loan account produced and certified under the Banker’s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendants. It is clear from the statement of accounts that penal interest is not capitalized.

¶88

¶89

In view of the foregoing, it is clearly evident that the application filed by the applicant bank is well within the period of limitation and this Tribunal possesses the territorial and pecuniary jurisdiction to entertain this OA.

¶90

In view of the fact that the loan facility availed by the defendant is a Term Loan and Overdraft facility and the applicant has claimed interest at contractual rate till the date of filing of the OA, this Tribunal is of the view that the pendente lite interest can be awarded at reduced rates and prayer for award of penal interest is rejected.

¶91

In view of the afore mentioned discussions, the only conclusion this Tribunal can draw is that the applicant had clearly proved the disbursement of the loan, which the applicant is entitled to realize. Hence, OA is disposed off in the following manner: -

¶92

(a) OA No.257 of 2022 stands allowed.

¶93

(b) Applicant is permitted to realize an aggregate sum of Rs.73,00,900 /- **(Rs.73,90,0000/-) together with interest at the date of 9% (Simple) from the date of filing of the application till the date of realization in full, from the defendants jointly and severally after deducting all the amounts received / realized by them during the pendency of OA and also by selling the other assets of the defendants.

¶94

¶95

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(d) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 15 days from the date of receipt of the copy of the order.

¶97

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

¶98

**** Amended pursuant to the order of this Tribunal dated 4.2.2026.**

¶99

Communicate a copy of the order to the parties concerned in terms of

¶100

Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

¶101

Sd/(SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

¶102

(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 13^th day of November, 2025)

¶103

EXHIBITS MARKED BY APPLICANT BANK

¶104

S.	Date	Description of Documents	Exhibit
No.			Nos.
1.	11.02.2014	Application submitted by 1^st defendant	A-1
		represented by 2^nddefendant as Proprietrix for
		Term Loan and Overdraft facilities
2.	19.02.2014	Deed of hypothecation Re: Machinery	A-2

¶105

¶106

3.	19.02.2014	Letter of undertaking re: Loans / Advances	A-3
4.	19.02.2014	Stamped Pronote for Rs.19 lakhs	A-4
5.	19.02.2014	Cash Credit Agreement for Rs.19 lakhs	A-5
6.	19.02.2014	Guarantee agreement for Rs.49 lakhs	A-6
7.	05.03.2014	Particulars of vehicles / machinery / equipment / Livestock etc., hypothecated	A-7
8.	20.11.2015	Application for renewal of Cash Credit Facility for Rs.19 lakhs	A-8
9.	25.11.2015	Letter of renewal for Rs.19 lakhs	A-9
10.	25.11.2016	Application for renewal with enhancement of Cash Credit facility from Rs.19 lakhs to Rs.20 lakhs – an enhancement of Rs.1 lakh.	A-10
11.	03.12.2016	Letter of renewal for enhancement of Rs. 1 lakh i.e, Cash Credit facility from Rs.19 lakhs to Rs.20 lakhs.	A-11
12.	03.12.2016	Stamped Pronote for Rs.1 lakhs	A-12
13.	03.12.2016	Link letter in respect of enhancement of credit facilities from Rs.19 lakhs to Rs.20 lakhs – Cash Credit facility	A-13
14.	03.12.2016	Supplemental Agreement for enhancement of Rs.1 lakhs	A-14
15.	23.05.2016	Acknowledgement of Debt and Security for Term Loan Account No.4385766000011	A-15
16.	03.05.2019	Acknowledgement of Debt and Security for Term Loan Account No.4385766000011	A-16
17.	18.04.2020	Acknowledgement of Debt and Security for Term Loan Account No.4385766000011	A-17
18.	25.11.2015	Acknowledgement of Debt and Security for	A-18

¶107

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		Overdraft Account No.4385256000019
19.	03.12.2016	Acknowledgement of Debt and Security for Overdraft Account No.4385256000019	A-19
20.	12.06.2018	Acknowledgement of Debt and Security for Overdraft Account No.4385256000019	A-20
21.	20.04.2020	Acknowledgement of Debt and Security for Overdraft Account No.4385256000019	A-21
22.	04.07.2020	Recall notice issued by the applicant	A-22
23.	25.01.2022	Legal notice issued by applicant	A-23
24.		Statement of Account of Term Loan Account No. 4385766000011	A-24
25.		Statement of Accounts of Overdraft Loan Account No. 4385256000019	A-25

¶109

Sd/- (SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

¶110

DESCRIPTION OF PROPERTY

¶111

NIL

¶112

Sd/(SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

¶113

Canara Bank, Hosur Sme Branch v. M/s Sri Vigneshwara Industries

Case brief

What is this about?

What did the court decide?

Canara Bank, Hosur Sme Branch v. M/s Sri Vigneshwara Industries

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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