Allowed

Union Bank of India v. M/S. Sundaramoorthy Auto Care Centre

DRT6 Aug 2025OA/262/2023

Case brief

AI extract

What is this about?

In this Debt Recovery Tribunal order, the court allowed the Original Application filed by Union Bank of India for recovery of dues along with interest and costs against four defendants. The Bank claimed amounts arising from encashed bank guarantees and term loans secured by mortgaged properties. The court rejected the defendants' contentions regarding lack of knowledge or endorsement, relying on e

What did the court decide?

Defendants jointly and severally liable to pay Rs.98,92,129/- with interest; OA claim secured by mortgaged properties; Recovery Certificate issued.

Union Bank of India versus M/S. Sundaramoorthy Auto Care Centre — Banking and Recovery | DRT (2025)

¶1

IN THE DEBTS RECOVERY TRIBUNAL-II AT^HYDERABAD

¶2

DATED THIS THE SIXTH DAY OF AUGUST, 2025

¶3

PRESENT: SH. RAMESHWAR KOTHE, B.Com,^{L.LB. (Hons.), M'A.}

¶4

PRESIDING OFFICER

¶5

ORIGINAL APPLICATION NO. 262 OF 2023

¶6

Between: U nion Bank of India (Formerly Andhra Bank) SVU Campus Branch Tirupati, Chittoor Disttrict A.P. 517 501.

¶7

....APPlica nt

¶8

And

¶9

I4ls. Sundaramoorthy Auto Care Centre
A proprietary concern represented by its
Proprietor - I\4r. V. Sundara Moorthy
Opp: Ma hath i Stadium (Auditorium)
Alpirl Road, Tirupati-517 501
Chittoor District, A. P.
2. Mr. V. Sundara Moorthy
S/o V. Venkatachala m
Aged Major, Occ: Business
H. No. 15-4-215
G.M. Uttaramada Veedhi
Near Govindraju lu Temple
Tirupati- 517 001
Chittoor District, A. P.
3. Mr. V. Ajay Pratap
S/o Late V. Anjaneyulu Naidu
Aged: lvlajor, Occ: Business
D. no. 23-1-0-74, Royal Nagar
Near RC Road, Tirupatl-s17 001
'.1-

¶10

¶11

oa.262/2023

¶12

Mr. V. Vijay Dundi S/o Late V. Anjaneyulu Naidu Aged: Major, Occ: Business D. no. 23-70-74, Royat Nagar Near RC Road, Tirupati-s17 OO1 Chittoor District, A.p.

¶13

..... Defendants.

¶14

Counsel for the Applicant : M/s. V. Raghu. Defendants 1&2 : Exparte.Exparte.

¶15

: Exparte.Exparte.

¶16

Counsel for Defendants 3 & 4 : Sodasi Legal Services.

¶17

:: ORDER::

¶18

The Applicant Bank filed the present OA u/s 19 of The Recovery of Debts & Bankruptcy Act, 1993 for recovery of a total sum of Rs.98,92,129/- (i.e., four Term Loan accounts ot Rs.49,34,697, Rs.15,25,364l-, Rs.11,44,025 and Rs.22,84,043/- respectively) from defendants jointly and severally with future interest @12.30o/o^p.a. from 2t.06.2022 ti the date of realisation along with costs and sale of OA schedule mortgaged properties.

¶19

The averments of applicant bank as per the OA, briefly, are defendant No.1, a proprietary concern represented by defendant No.2 and his father late V. Anjaneyulu, engaged in the retail business of automotive fuel, have been enjoying credit facilities from the erstwhile Andhra Bank from the year 2003. During the year 2022, defendant No.1, availed additional bank guarantee to a tune of Rs.65 lakhs issued in favour of the HPCL, supplier of automotive fuel to the defendant No,1, vide sanction letter dated 10.12.2021. Defendants executed counter indemnity dated 08.12.2021 against their request for issuance of Bank Guarantee issued to HpCL. To secure the repayment of the limits, D.3 and D.4 extended theJlortgag.e of OA schedule //y'Y,x*'> / !^b'v

¶20

oA.26212023

¶21

A and B properties belonging to their father and already under mortgage with the applicant bank in respect of the credit facilities availed by defendant No.1, vide Memorandum of Deposit of Title Deeds bearing No.5546 of 2021 dated 08.12.2027. The Bank guarantees were invoked by HPCL under intimation vide letters dated 07.07.2022. Admittedty, defendants handed over the physical possession of the Retail out-let to the authorised representative of the HpCL under a Panchanama dated 21.O3.2022. Despite intimation of invocation of BGs and demanding payment towards invoked bank guarantees, defendants have not discharged the liability. However, applicant bank appropriated term deposits amounting to Rs.32.50 lakhs. Thereafter, defendant's account was classified as NPA on 20.06.2022, followed by securitisation proceedings and the same were challenged by the defendants by filing 5A.246 of 2022. Thereafter, applicant bank issued recall notice dated 05.72.2022. Defendants 3 and 4 got issued reply dated 79.L2.2022 to the recall notice dated 05.L2.2022, to which a rejoinder notice dated 20.72.2022 was issued. Hence, the present OA.

¶22

Defendants 1 and 2 were set exparte vide 04.03.2024 for nonrepresentation despite summons through paper publication.

¶23

Defendants 3 and 4 filed written statement. The submissions of the defendants as per the written statement, in brief, are; defendant No.z is the sole proprietor of defendant No.1 and it is incorrect to say that defendants, father late V. Anjaneyulu Naidu ran the business with defendant No.2. Defendants 3 and 4 have not endorsed or acknowledged the sanction letter of Rs.65 lakhs towards the additional bank guarantees dated

¶24

oa.26212023

¶25

70.L2.2O21. Defendants were not aware of the guarantee bond of Rs.65 lakhs dated 07.07.2022. While admitting creation of mortgage of properties belonging to their father and grandmother, defendants deny extension of said mortgage towards loans availed by defendant No.1. Defendants were not party to the invocation of bank guarantees worth Rs.130 lakhs nor were they informed of the same. Defendants were not served with the letter dated 22.03.2022. They deny of legal notice dated 05.12.2022, reply notice dated 19.12.2022 and rejoinder notice dated 20.12.2022. In view of the foregoing reasons, defendants pray for dismissal of OA.

¶26

Applicant bank filed Rejoinder vehemently denying the submissions made in the written statement. It is submitted that in fact the defendants deposited Rs.47,65,000/- in comptiance of the conditional order passed in 5A.246 of 2022. The defendants cannot deny execution of Indemnity in favour of the applicant bank.

¶27

Applicant Bank examined K.V. Subba Reddy, Chief Manager as AW-1 and marked 40 documents through him as Exs. A.1 to Ex. A.40. It is submitted that subsequent to filing of OA, an amount of Rs.47,65,000/- has been received from the defendants towards compliance of conditional orders in 5A.242 of 2022 and accordingly they are entitled for deduction of the same.

¶28

Defendants 3 and 4 examined V. Ajay Pratap, defendant No.3 as DW.1 and marked no documents. It is submitted that defendant No.2 is the sole proprietor of defendant No.1, whose whereabouts are not known since long. Therefore, at whose request the bank guarantees were extended is in question. /\M,,/ -^ |y'/ra$'

¶29

oa.25212023

¶30

Applicant bank filed written arguments.^{The right of defendant} No.1 to advance arguments was forfeited^vide docket^order dated 04.07.2025. Perused the^{written arguments filed by the} applicant bank and the^{materialplaced on record'}

¶31

The^point that arises^{for consideration is:-}

¶32

Whether the Applicant Bank^{is entitled} for the OA claim against^the Defendants 1 to 4?

¶33

According to the applicant bank, defendant^{No.1has been} availing credit facilities from^{timeto timesince2003. Defendant} No.1 is a proprietary concern and ls^{representedby its} proprletor defendant No.2. It was in this^process, defendant No.1 availed additional bank^guarantee to^{a tune of Rs.65 lakhs} in the year 2022. On the date of availment of^{additionalbank} guarantee of Rs.65 lakhs in 2002, defendant No.1 had already availed three bank^guarantees to the extent^{of Rs.65lakhs.} Defendants 3 and 4, extended the^{mortgage createdby their} father after his demise vide Ex.A.14 MODT dated^08.12.2021. In all, applicant bank issued four bank^guarantees in^favourof the Hindustan Petroleum Corporation^{Limited(HPCL).The} beneficiary Company i.e.,^HPCL,invoked the^{bank guarantee of} Rs.65 lakhs bearing No.103211GL000422 dated 07.0L.?022, vide letter dated 2t.03.2022 and other three bank^guarantees amounting to Rs.30,00,000/-, 15,00,000/- and^{Rs.20,00,000/-} bearing Nos.1032171GFINoo33 dated 12.06.2017,^7032161- GFIN0054 dated 01.11.2016 and 1032171GFIN001^dated 05.06.2013 respectively vide letter of even date.^Applicant bank demanded the amounts of invoked bank^{guaranteesvide} ,X)**,. , r- / rq5'rP

¶34

oa.262/2023

¶35

Ex.A.23 letter dated 22.03.2022 and Ex.A.28 legal notice dated 05.1,2.2022. Defendants sent repty dated 19.12.2022 denying the liability citing the pending 54.246 /2022 and vatid contractual obligations. Applicant bank issued rejoinder reply dated 20.t2.2O22 asserting its demand towards the encashed bank guarantees.

¶36

According to the contesting defendants, defendant No.2 was the sole proprietor of defendant No.1 and his whereabouts are not known since long. Defendants question the extension of bank guarantees in the absence of defendant No.2. However, Ex.A.1 letter dated 17.77.2O2L dealing with the request for sanction of additional bank guarantee of Rs.65 lakhs has been signed by defendant No.3 on behalf of defendant No.1 firm. This letter also refers to three more guarantees issued earlier. Exhibit A.g "Counter Indemnity (For letter of Guarantee),, and Exhibit A.14 Memorandum of Deposit of TiUe Deeds dealing with the security interest have been signed by defendants 3 and 4. These documents have not been disputed by the defendants. These documents amply prove defendants, consent and knowledge of subject bank guarantees. Therefore, defendants 3 and 4 cannot plead ignorance over the liability arisen out of encashment of bank guarantees by the beneficiary and the contentions raised on these issues are baseless and far from the truth. Hence, defendants' contentions deserve no acceptance. Under such facts and circumstances, the evidence affidavit of AW.1 coupled with the recitals in Exhibits A.1 to A.4O prove the claim of applicant bank against the defendants 1 to 4. Accordingly, I hold defendants 1 to 4 are joinfly and severally liable to pay the OA claim to the applicant bank alo^g, with future interest and costs. /42/^x"n !_,2p,".-

¶37

oA.26212O2?

¶38

¶39

L2. In the result, the^present Original Application No.26212023 is allowed as under:^-

¶40

i) the defendants No.1 to 4 are^jointly and severally are liable to pay to the applicant bank a sum of Rs.98,92,129l- along with interest @l2o/o p,a, simple from the date of application till the date of realization;

¶41

ii) the OA claim is secured by way of mortgage of properties described in the schedules annexed to the OA and the applicant bank is entitled to proceed against the same for realisation of its dues;

¶42

iii) applicant bank is also entitled to^proceed against the person and properties of defendants 1 and 2 for realization of its dues; and

¶43

iv) the applicant bank is entitled for the costs.

¶44

The Applicant Bank is directed to file Cost Memo within 2 weeks from the date of receipt of this Order.

¶45

t4. Issue Recovery Certificate accordingly.

¶46

Communicate a copy of this order to the^parties concerned and upload in Web Site.

¶47

(Dictated to the steno, signed and pronounced by me in the open court on this the 6rh day of August, 2025.)

¶48

PRESIDING OFFICER

Union Bank of India v. M/S. Sundaramoorthy Auto Care Centre

Case brief

What is this about?

What did the court decide?

Union Bank of India v. M/S. Sundaramoorthy Auto Care Centre

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

Similar cases

State Bank of India versus Vara Lakshmi

Abhilash Global Corporation Pvt. Ltd. versus Icici Bank Limited

Icici Bank Limited versus Adusumalli Surendra

Hdfc Bank versus a Ashwin

Pegasus Assets Reconstruction Private Limited versus Syed Masthan Babula

Sri Chenna Veera Ginning Factory versus Karur Vysya Bank