Allowed

Indian Bank v. Vkn Imports and Exports

DRT11 Nov 2025OA/270/2022

Case brief

AI extract

What is this about?

In an ex-parte proceeding, the Tribunal allowed an original application filed by Indian Bank to recover outstanding loan amounts, interest, and costs from M/s VKN Imports & Exports based on proven documentary evidence including sanction letters and promissory notes.

What did the court decide?

Direction to respondent to pay total sum of Rs. 2,32,34,178.84p with interest, cost, and authorization to sell properties upon default.

Indian Bank versus Vkn Imports and Exports — Banking and Recovery | DRT (2025)

¶1

OA No. 270/2022

¶2

Fair Order

¶3

IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 11^TH DAY OF NOVEMBER, 2025 PRESENT: SEEMA SINHA, [PR. DISTRICT & SESSIONS JUDGE – Retd] PRESIDING OFFICER

¶4

OA No.270/2022

¶5

Between

¶6

Indian Bank, Thillai Nagar, C-40, Third Cross, Thillai Nagar East, Trichy – 620 018. Rep. By its Asst. Gen. Manager.

¶7

---Applicant Bank

¶8

And

¶9

VKN Imports & Exports, Prop. Er.KN.Kannappan, S/o V.K.N. Kannappan, VKN Industrial Estate, Thuvakudi, Trichy – 620 018.

¶10

Also at:

¶11

VKN Imports & Exports, Prop. Er.KN.Kannappan, S/o V.K.N. Kannappan, No.164, VKN House, 9-A Cross, Thillai Nagar, Trichy – 620 018.

¶12

---Defendant

¶13

Counsel for the Applicant Bank : M/s D. Dhanapal, M.R. Priyanka Jothi

¶14

This Original Application was heard and fixed for passing final order before me in the presence of the above said Advocate for Applicant Bank and

¶15

Page 1 of 9

¶16

OA No. 270/2022

¶17

the Defendant having been set ex-parte and upon hearing the arguments of Counsel for Applicant Bank and upon perusing the material available on the records and having stood over for consideration till this day, this Tribunal delivered the following:

¶18

JUDGEMENT

¶19

1 . This Application has been filed under Sec.19 (1) of the "The Recovery of Debts due to Banks and Financial Institutions Act, 1993" now amended as The Recovery of Debts and Bankruptcy Act, 1993 by the Applicant Bank on 13.01.2022 to recover from the Defendant a total sum of Rs.2,32,34,178.84p i.e., (i) Rs.1,29,73,731.63p together with interest at the rate of 15.75% p.a. compounded with monthly rests in respect of Over Draft facility (ii) Rs.59,35,889.48p together with interest at the rate of 11.05% p.a. compounded with monthly rests in respect of Working capital Term Loan (iii) Rs.36,54,804.89p together with interest at the rate of 11.05% p.a. compounded with monthly rests in respect of Term Loan (iv) Rs.6,69,752.84p together with interest at the rate of 7.80% p.a. compounded with monthly rests in respect of Term Loan from the date of filing of Application till the date of realization with cost and by sale of mortgaged/hypothecated properties, more fully described in Schedules of the application.

¶20

2 . The brief averments of the application filed by the Applicant Bank are as follows:-

¶21

The defendant is the sole proprietor of M/s.VKN IMPORTS & EXPORTS a company carrying on its Import and Export in manufacturer and supplier of Natural Briquettes and Natural Charcoals, Aggarbatti, Dhoops, Cup Samburani, Addicive, Furnace Oil and industrial supplies like Carbon block and fly Ash. The defendant approached the Applicant Bank for the improvement and development of his business activities and financial assistance by way of over draft loan facility of Rs.1,50,00,000/-. The defendant submitted an application of loan with the Applicant Bank seeking credit facilities on 14.12.2017. The Applicant Bank after having considered the other facilities availed by the defendant's sister concern industries considered and sanctioned a sum of Rs.1,50,00,000/- (Rupees One Crore and Fifty lakhs only) as over draft on 16.12.2017 in open cash credit account No.6207179036.

¶22

On 16.12.2017 the defendant executed a Demand Promissory Note in favour of the Applicant Bank for a sum of Rs.1,50,00,000/- (Rupees One Crore and Fifty lakhs only) there by availed the over draft loan and agreed to repay the loan amount to the Applicant Bank together with interest at 10.75% p.a. with monthly rest or any other rate of interest or rest as may be

¶23

Page 2 of 9

¶24

OA No. 270/2022

¶25

directed by the Applicant Bank then and there and also executed a Letter of continuity, Agreement of Hypothecation of movables and hypothecated stocks and book debts and also executed a Agreement of Open Cash Credit (Stocks / Book debts), in favour of the Applicant Bank.

¶26

During the pendency of the over draft loan account, the defendant approached the Applicant Bank for availing MSME General service / Term loan of Rs.32,00,000/-to complete-pending Orders. The defendant submitted an application for MSME loan with the Applicant Bank on 03.11.2018. By taking in to consideration of the business activities of the defendant and his sister concerns the Applicant bank agreed to grant a Term loan facility of Rs.32,00,000/-(Rupees Thirty two lakhs only) and accordingly sanctioned the said loan amount on 03.11.2018.

¶27

The defendant as Proprietor of VKN IMPORTS & EXPORTS executed a Demand Promissory Note in favour of the Applicant Bank for a sum of Rs.32,00,000/-(Rupees Thirty Two Lakhs only) thereby availed the MSME Term loan in order to complete the pending orders. The defendant agreed to repay the said Term Loan of Rs.32,00,000/- together with interest at 11% p.a. with monthly interest or any other rate of interest or rest as maybe directed by the Applicant Bank then and there and also executed a Medium Term loan Agreement, Agreement of Hypothecation of movables and hypothecated stocks and book debts in favour of the Applicant Bank. The defendant agreed to repay the term loan by way of 12 monthly installments of Rs.69,576/- commencing from December 2018.

¶28

The defendant after availing the said loan facilities operated the loan accounts. The defendant failed to repay the term loan installments as agreed by him. The defendant also failed to service the interest on the over draft loan amount. The loan accounts of the defendant remains overdue inspite of the several request from the Applicant Bank to service the interest and to repay the term loan installments.

¶29

On 03.02.2019 the defendant submitted a request letter with the Applicant Bank for a corrective active plan for stressed MSME loan account. The defendant made a request of repayment of Term Loan account No.6691838247 and restructuring of open cash credit account No.6207179036. The defendant requested the Applicant for the repayment of term loan for a period of 60 months and holiday period of 12 months as against the original repayment period of one year. On consideration of the defendant request and as per the RBI Notification No.BP.BC.18/21.04.048/2018-2019 dated 01.01.2019 made a revised restructuring of the loan facilities availed by the defendant viz.-

¶30

Page 3 of 9

¶31

OA No. 270/2022

¶32

a) OCC (regular) limit of Rs.1,00,00,000/- with rate of interest at 10.80% p.a. with monthly interest and the same is repayable in 12 months. The Original OCC loan limit of Rs.150 lakhs was reduced to Rs.100 lakhs.

¶33

b) The shortage in drawing power of OCC limit of Rs.50 lakhs was converted and sanctioned as Working Capital Term Loan repayable along with interest at 9.25% p.a. with monthly interest. The Working capital Term Loan is repayable by way of 60 monthly installments (including 12 months holiday period).

¶34

c) The un-serviced interest portion of OCC of Rs.1,50,000/- and Rs.12,53,000/- 12 month E.M.I of working capital combined and sanctioned as funded interest term loan and the same is repayable by the defendant along with 9.25% interest p.a. monthly rest. The said Funded Interest Term loan is repayable by the defendant by the way of 60 monthly installments (including 12 monthly holiday period)

¶35

d) The Term Loan of Rs.32,00,000/- is rephasement increased by Rs.2,82,290/- and extended upto 60 months. The Term loan is repayable along with interest 11% p.a with monthly rests. The term loan is repayable by way of 60 monthly installment of Rs.80,275/-starting from February 2020. The defendant was provided a copy of the sanction issued by the Applicant bank on 03.02.2019 and acknowledged the same.

¶36

The defendant had executed an Agreement for bifurcation of existing open cash credit facility into Demand Cash Credit of Rs.1,00,00,000/(Rupees One crore only) and Working Capital Term loan to Rs.50,00,000/(Rupees Fifty Lakhs Only) in favour of the Applicant Bank thereby agreed to repay the WCTL of Rs.50,00,000/-, by way of 60 monthly installments with 9.25% interest and agreed to repay the Cash Credit of Rs.1,00,00,000/- with 10.80% interest. On 03.02.2019 the defendant had executed a Demand promissory note in favour of the Applicant bank for the Demand Cash Credit facility of Rs.1,00,00,000/- thereby agreed to repay the said loan amount together with together with 10.80% p.a. with monthly interest in Account No.6207179036 and also executed Letter of continuity.

¶37

On 03.02.2019 the defendant had executed Demand Promissory Note, in favour of the Applicant Bank for a sum, of Rs.50,00,000/-(Rupees Fifty Lakhs only) with respect of Working Capital Term loan (WCTL) thereby agreed to repay the same together with interest at 9.25% p.a. as monthly rest. As per the sanction and acceptance the defendant has agreed to repay the WCTL of Rs.50,00,000/-, by way of 60 monthly installments with interest in Account No.6721028195.

¶38

Page 4 of 9

¶39

OA No. 270/2022

¶40

The defendant executed a Demand Promissory note for a sum of Rs.14,03,000/- (Rupees Fourteen Lakhs and Three Thousand only) in favour of the Applicant Bank on 03.02.2019 thereby agreed to repay the said loan amount together with interest at 9.25% p.a. with monthly Interest for Funded interest term Loan [FITL Account No.6721028071]

¶41

As per the restructuring of all his credit facilities vide sanction ticket dated 03.02.2019 the defendant had executed a, Funded Interest Term loan Agreement with respect of his rephased OCC loan limit of Rs.100.00 lakhs, WCTL limit of Rs.50.00 lakhs, FITL limit of Rs.14.03 lakhs and Term Loan limit of Rs.32.00 lakhs totaling Rs.1,96,03,000/- (Rupees One Crore Ninety Six Lakhs and Three Thousand Only) in favour of the Applicant bank thereby agreed for the terms and conditions laid in the said term loan agreement. The defendant agreed to repay the Term loan along with interest @ 9.25% p.a. with monthly rest.

¶42

After availing the restructured loan facilities defendant was not regular in the matter of repayment. The defendant made several promises, but he failed to keep up his promises. The Applicant Bank sent a Letter of Demand to the defendant on 14.12.2020 to close the loan liability. The letter was acknowledged by him but he failed to close the loan account. Therefore the Applicant Bank issued a Lawyer Notice to the defendant on 20.10.2021. Even after the said notice the defendant did not take any sincere steps to discharge the outstanding amount. Even the defendant has not regularized the said account as on date. The defendant purposely allowed the loan accounts to be classified as Non- performing assets.

¶43

Despite repeated demands and reminders, made by the Applicant Bank, the Defendant has failed and neglected to repay and adjust his liability. Hence, the Applicant Bank has filed the OA for recovery of a total sum of Rs.2,32,34,178.84p i.e., (i) Rs.1,29,73,731.63p together with interest at the rate of 15.75% p.a. compounded with monthly rests in respect of Over Draft facility (ii) Rs.59,35,889.48p together with interest at the rate of 11.05% p.a. compounded with monthly rests in respect of Working capital Term Loan (iii) Rs.36,54,804.89p together with interest at the rate of 11.05% p.a. compounded with monthly rests in respect of Term Loan and (iv) Rs.6,69,752.84p together with interest at the rate of 7.80% p.a. compounded with monthly rests in respect of Term Loan from the date of filing of Application till the date of realization with cost.

¶44

The Applicant Bank has submitted the following documents in support its claim in the OA, which are as follows:

¶45

Page 5 of 9

¶46

OA No. 270/2022

¶47

S. No.	Date	Description of document	Exhibits
1.	14.12.2017	Loan Application	Ex.No.A-01
2.	16.12.2017	Sanction Letter	Ex.No.A-02
3.	16.12.2017	Demand PromissoryNote	Ex.No.A-03
4.	16.12.2017	Letter of Continuity	Ex.No.A-04
5.	16.12.2017	Agreement of Hypothecation Movables	Ex.No.A-05
6.	16.12.2017	Agreement of open cash credit	Ex.No.A-06
7.	03.11.2018	Application for MSME Loan	Ex.No.A-07
8.	03.11.2018	Sanction Letter	Ex.No.A-08
9.	03.11.2018	Demand PromissoryNote	Ex.No.A-09
10.	03.11.2018	Term Loan Agreement	Ex.No.A-10
11.	03.11.2018	Agreement of Hypothecation Movables	Ex.No.A-11
12.	03.02.2019	Request Letter Corrective Active Plan for StressedMSMEaccount	Ex.No.A-12
13.	03.02.2019	Sanction Letter	Ex.No.A-13
14.	03.02.2019	Agreement for bifurcation of existing Cash Credit facility into Demand Cash Credit and WorkingCapital Term Loan	Ex.No.A-14
15.	03.02.2019	Demand PromissoryNote	Ex.No.A-15
16.	03.02.2019	Letter of Continuity	Ex.No.A-16
17.	03.02.2019	Demand PromissoryNote	Ex.No.A-17
18.	03.02.2019	Demand PromissoryNote	Ex.No.A-18
19.	03.02.2019	Agreement for FITL	Ex.No.A-19
20.	14.12.2020	Letter Demand sent by the Applicant Bank to the Defendant	Ex.No.A-20
21.	20.10.2021	Legal Notice	Ex.No.A-21
22.	----	Statement of Account	Ex.No.A-22

¶48

SCHEDULE OF PROPERTY

¶49

(MOVABLE PROPERTY)

¶50

All movable goods and stocks are fully described their in the agreements within the business premises at VKN Industrial Estate, Thuvakudi, Trichy-620 015 and Book Debts of the borrower.

¶51

3 . On the other hand, Notices were issued to Defendant and since from the beginning of the case, there was no representation on behalf of the Defendant. Hence, Defendant was set ex-parte.

¶52

4. Now the main point for consideration before me is as to whether the Applicant has been able to prove his case on his own leg?

¶53

Page 6 of 9

¶54

OA No. 270/2022

¶55

Having gone through the affidavit of the applicant and the documents filed by them and also considering the submission of the counsel for the Applicant, I find that the Applicant Bank, in order to prove its claim, has filed Proof Affidavit executed by one Mr. M. Athiyaman, who is the Chief Manager of the Applicant Bank.

¶56

He has stated in his affidavit that the defendant has availed Over Draft Facility, Working capital Term Loan,and another 2 Term Loans from the Applicant Bank, but he failed to pay the outstanding loan amount, hence he has filed the case. The applicant bank has also filed the documents given by the defendants at the time of sanctioning the loan amount, which have been marked as exhibits No.A-01 to A-22 in support of its claim in the OA.

¶57

The Loan Application has been marked as Ex.No.A-01, Sanction Letter has been marked as Ex.No.A-02, Demand Promissory Note has been marked as Ex.No.A-03, Letter of Continuity has been marked as Ex.No.A-04, Agreement of Hypothecation Movables has been marked as Ex.No.A-05, Agreement of open cash credit has been marked as Ex.No.A-06, Application for MSME Loan has been marked as Ex.No.A-07, Sanction Letter has been marked as Ex.No.A-08, Demand Promissory Note has been marked as Ex.No.A-09, Term Loan Agreement has been marked as Ex.No.A-10.

¶58

The Agreement of Hypothecation Movables has been marked as Ex.No.A-11, Request Letter Corrective Active Plan for Stressed MSME account has been marked as Ex.No.A-12, Sanction Letter has been marked as Ex.No.A-13, Agreement for bifurcation of existing Cash Credit facility into Demand Cash Credit and Working Capital Term Loan has been marked as Ex.No.A-14, Demand Promissory Note has been marked as Ex.No.A-15, Letter of Continuity has been marked as Ex.No.A-16, Demand Promissory Note has been marked as Ex.No.A-17, Demand Promissory Note has been marked as Ex.No.A-18, Agreement for FITL has been marked as Ex.No.A-19, Letter Demand sent by the Applicant Bank to the Defendant has been marked as Ex.No.A-20, Legal Notice has been marked as Ex.No.A-21, Statement of Account has been marked as Ex.No.A-22. So the averments of the applicant as well as the statement of the pleading have been corroborated by the above mentioned documents.

¶59

As the Defendant remained ex-parte, the claim of the Applicant Bank is neither disproved nor dislodged and goes on record as proved. Accordingly a cumulative analysis of both the Proof Affidavit and documents marked by the Applicant Bank would prove the claim of the Applicant Bank in the OA.

¶60

Page 7 of 9

¶61

OA No. 270/2022

¶62

So far the claim of interest is concerned, it is a well settled Law that the Tribunal has got powers to award pendente lite interest in view of the Judgment of the Hon’ble Supreme Court in N.M. Veerapa Vs Canara Bank (reported in AIR 98(1), 1101 & in Central bank of India Vs Ravindra and OS (AIR, 2001(1), 3095).

¶63

Therefore, this Original Application is allowed. The Applicant Bank is entitled for a final order on the following lines:-

¶64

The Applicant Bank is entitled to recover from the Defendant, a total sum of Rs.2,32,34,178.84p i.e., (i) Rs.1,29,73,731.63p together with interest at the rate of 15.75% p.a. with half yearly rests in respect of Over Draft facility (ii) Rs.59,35,889.48p together with interest at the rate of 11.05% p.a. with half yearly rests in respect of Working capital Term Loan (iii) Rs.36,54,804.89p together with interest at the rate of 11.05% p.a. with half yearly rests in respect of Term Loan and (iv) Rs.6,69,752.84p together with interest at the rate of 7.80% p.a. with half yearly rests in respect of Term Loan from the date of filing of Application till the date of realization with cost. Accordingly, it is hereby

¶65

ORDERED

¶66

(a) That the Defendant is directed to pay personally a total sum of Rs.2,32,34,178.84p i.e., (i) Rs.1,29,73,731.63p together with interest at the rate of 15.75% p.a. with half yearly rests in respect of Over Draft facility (ii) Rs.59,35,889.48p together with interest at the rate of 11.05% p.a. with half yearly rests in respect of Working capital Term Loan (iii) Rs.36,54,804.89p together with interest at the rate of 11.05% p.a. with half yearly rests in respect of Term Loan and (iv) Rs.6,69,752.84p together with interest at the rate of 7.80% p.a. with half yearly rests in respect of Term Loan from the date of filing of Application till the date of realization with cost within one month from the date of receipt of this order.

¶67

(b) In case of default of payment by the above mentioned Defendant, the Applicant Bank is at liberty to sell the movable / immovable properties more fully described in Schedule of the original application for appropriation of sale proceeds towards the satisfaction of amount due to the Applicant Bank.

¶68

(c) If the sale proceeds are not sufficient, after defraying the expenses of such sale, for the payment of all such amounts, the defendant is personally liable to pay the amount of such deficiency with interest mentioned above until realization.

¶69

Page 8 of 9

¶70

OA No. 270/2022

¶71

(d) Any amount remitted during the course of this proceedings shall be given due credit, to the loan account of the defendant.

¶72

(e) Recovery Certificate be prepared, as per the directions given above, and issue accordingly. A copy of the order is to be communicated to the parties concerned, immediately.

¶73

(f) It is further ordered that the Applicant Bank shall file cost memo within a period of one month from the date of receipt of this order, so as to prepare the recovery certificate with cost for the Over Draft Facility, Working capital Term Loan, and another 2 Term Loans and the Recovery Officer is also directed to proceed with the matter in accordance with law. In case, cost memo is not filed before said period of one month, Recovery Certificate will be prepared with available records.

¶74

Dictated to T.P, taken down, transcribed, typed by her, corrected and pronounced by me in the Open Court in this the 11^th November, 2025.

¶75

Sd/- (SEEMA SINHA) PRESIDING OFFICER

¶76

Uploaded on 24.11.2025

¶77

Page 9 of 9

Indian Bank v. Vkn Imports and Exports

Case brief

What is this about?

What did the court decide?

Indian Bank v. Vkn Imports and Exports

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

State Bank of India versus M/s Gavrans Infra

International Asset Reconstruction Company Pvt. Ltd. versus Recovery Officer II

Punjab National Bank versus R Karunanithi

Bank of Baroda versus Lakshmi Praba C

Uco Bank versus Abiz Thoothukudi Sea Food

Canara Bank versus S Ashokkumar