Allowed

Uco Bank v. M/s. M.S. Traders Sole Proprietor Mr. M. Karthick

DRT23 Jan 2025OA/30/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the original application filed by UCO Bank for recovery of an outstanding term loan against the defendants who failed to respond after summons were left unserved in their absence.

What did the court decide?

Recovery of Rs. 26,48,441 with interest at 9.35% p.a. and costs from the defendants jointly and severally.

Uco Bank versus M/s. M.S. Traders Sole Proprietor Mr. M… — Banking and Recovery | DRT (2025)

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OA No.30/2022 (E)

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23.01.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 23^rd day of January, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No. 30 of 2022

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*Uco Bank, ICF Colony Branch, Rep by its Senior Branch Manager, Konnur High Road, Chennai – 600 038.

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…. Applicant

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-Vs-

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M/s M.S. Traders,

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Sole proprietor, Mr. K. Karthick, No.70/77 Muthamman Koil Street Ayanavaram, Chennai 600 023.

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Mr. M .Karthick S/o. Madasamy C 1/65 Valluvar Salai, SAMS Avenue, Arumbakkam, Chennai 600 106.

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Counsels on record / appeared:

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Counsel for Applicant Bank : M/s. R. Selva Kumar

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Defendants 1& 2 were set ex-parte on 24.05.2022

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: - F I N A L O R D E R - :

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This original application is filed on 17.11.2021 by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendants for

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OA No.30/2022 (E)

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23.01.2025

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recovery of a total sum of Rs.26,48,441/- (Rupees Twenty Six Lakhs forty thousand

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four hundred and forty only) due in respect of Term Loan (Account No05680510000427) availed by them together with further interest @ 9.35% per annum with monthly rests from the date of application till the date of realization in full 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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The case of the applicant bank is that the 1^st Defendant a Sole proprietorship concern, represented by it proprietor 2^nd defendant , approached the applicant bank and submitted an application on 31.10.2019 seeking financial assistance to improve their business.

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It is submitted that upon request of defendants, the applicant bank had sanctioned a cash credit Facility under UCO Vyapar Samirridhi Scheme for Rs.25,00,000/- vide Sanction Letter dated 28.11.2019 repayable on demand with terms and conditions, agreed upon by the defendants.

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It is submitted by the applicant bank that on availing the said credit facility of Cash credit facility, the defendants 1 & 2 have executed the following loan documents on 28.11.2019.

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A) Demand Promissory Note for Rs. 25,00,000/- executed by the 1^st Defendant represented by the 2^nd Defendant.

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OA No.30/2022 (E)

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23.01.2025

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B) Composite hypothecation agreement duly signed and executed by the 1^st Defendant represented by the 2^nd defendant.

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C) Overdraft/Cash Credit Facility Agreement duly signed and executed by the

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1^st Defendant represented by the 2^nd Defendant.

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It is submitted by the applicant bank that the defendant No.1 executed Deed of hypothecation of Good to secure a demand cash credit agreement, hypothecating all stocks in trade present and future, situated at No.70/77, Muthamman Koil Street, Ayanavaram, Chennai to the applicant, more fully detailed in schedule to OA, the credit limits were covered under CGTMS guarantee scheme.

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The Applicant Bank contends 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 was classified as a Non-Performing Asset (NPA) on 09.07.2021 for Loan Account No. 05680510000427 (Cash credit Facility). Despite the default and persistent non-compliance, the Defendants failed to respond positively. In light of this, the Applicant Bank, through its Authorized Officer, issued a Legal Notice dated 15.09.2021; 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 & 2 through Registered Post with Acknowledgment Due, which was returned unserved with postal endorsement as ‘left’ and Unclaimed in respect of D1 and D2 respectively.

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OA No.30/2022 (E)

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23.01.2025

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Applicant bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 24.05.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants 1 & 2 were placed ex-parte on 24.05.2022.

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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. Mithun Shankar, Chief Manager of UCO 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 A1 to A10. 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 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 No.1 & 2 jointly, severally a sum of Rs.26,48,441/- (Rupees Twenty Six Lakhs forty thousand four hundred and forty only) due in respect of Term Loan facility (Account No- 05680510000427) availed by them together with further interest @ 9.35% per annum with monthly rests from the date of application till the date of realization in full and for costs of this application.

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OA No.30/2022 (E)

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23.01.2025

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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 morefully detailed in the OA;

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(d) The applicant bank shall file the latest memo of calculation of OA 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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(e) The applicant bank shall file memo of costs within ten days from the date of this final order.

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(f) Recovery Certificate shall be drawn up and issued to the Recovery 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/(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 23^rd day of January, 2025)

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OA No.30/2022 (E)

23.01.2025

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sri.R. Mithun Shankar, Chief Manager, ICF Colony Branch

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Exhibits on the part of the Applicant:

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Sl. No.	Description of Documents	Exhibit No.
	AW-1
1.	Proofaffidavit ofapplicant
2.	Photo copy ofGeneral Powerof Attorney.
3.	Loan Applicationby defendant1	A-1
4.	Accepted sanction Letterofapplicant	A-2
5.	DemandPromissoryNote by defendant1	A-3
6	Letterof waiver	A-4
7	Letter of continuity	A-5
8	Deed of hypothecation of goods to secure a demand cashcredit	A-6
9	Composite deed of hypothecation	A-7
10	Lawyer’sNoticeissued by applicant	A-8
11	Acknowledgement Card	A-9
12	Statement ofaccount	A-10

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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.30/2022 (E)

23.01.2025

:Schedule:

All stocks in trade present and future, situated at No. 70/77, Muthamman Koil Street, Ayanavaram, Chennai.

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

Uco Bank v. M/s. M.S. Traders Sole Proprietor Mr. M. Karthick

Case brief

What is this about?

What did the court decide?

Uco Bank v. M/s. M.S. Traders Sole Proprietor Mr. M. Karthick

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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