Allowed

Bank of Baroda v. Rathinavel Kanthasamy

DRT9 Dec 2025OA/301/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed a final order granting the bank's claim for recovery of dues from three guarantee loans and attached risk, directing payment of principal and interest and sale of properties if necessary.

What did the court decide?

Recovery of Rs.66,26,691.50 plus interest; liberty to sell schedule properties or personal assets for balance dues.

Bank of Baroda versus Rathinavel Kanthasamy — Specific Performance | DRT (2025)

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O.A. No. 301 of 2022

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09.12.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 09^th day of December, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No. 301 of 2022

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Bank of Baroda Dharmapuri Branch No.61G Santosh Complex Pennagaram Road, Dharmapuri – 36702 Rep. by its Branch Manager

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….Applicant

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-Vs-

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Mr. K. Rathinavel, S/o. Kanthasamy No.2/58, Periyaveetu Street Pallapatti, Nathahalli Dharmapuri – 636 803

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Mrs. Priya Selvam, W/o. Selvam Prop. Of M/s. Pranith Trading No.2/173, Pallapatti, Nathahalli Dharmapuri – 636 803

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Mr. R. Selvam, S/o. Rajendran No.2-137, Pallapatti, Nathahalli Dharmapuri – 636 803

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Mr. S. Satheesh, S/o. Sekar No.1/244, Siddan Kottai

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Kuppur Post, Dharmapuri – 636 704 …..Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. S. Pandurangan Defendants 1 to 4 were set ex-parte on 04.01.2023

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O.A. No. 301 of 2022

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09.12.2025

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: - FINAL ORDER - :

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This Original Application is filed on 16.06.2022 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 jointly and severally for recovery of a total sum of Rs.66,26,691.50p (Rupees Sixty Six Lakhs Twenty Six Thousand Six Hundred and Ninety One and Fifty Paisa Only) as follows:

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(i) To direct the 1^st and 3^rd Defendants to pay jointly and severally a sum of Rs.27,37,774/- due in respect of Term Loan facility (A/c No.05480600030288), repayable together with further interest @ 7.35%, p.a. with monthly rests from the date of filing the OA, till date of realization in full;

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(ii) To direct the 1^st and 3^rd Defendants to pay jointly and severally a sum of Rs.13,33,398.50p due in respect of Cash Credit Facility A/c No.05480400000169), repayable together with further interest @ 7.40%, p.a. with monthly rests from the date of filing the OA till date of realization in full;

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(iii) To direct the 2^nd , 3^rd and 4^th Defendants to pay jointly and severally sum of Rs.25,55,519/- due in respect of Term Loan Facility (A/c No.05480600030287), repayable together with further interest @ 7.35%, p.a. with monthly rests from the date of filing the OA till date of realization in full;

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O.A. No. 301 of 2022

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09.12.2025

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for sale of immovable properties morefully detailed in Schedule A and B to the 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 Tribunal.

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I. Term Loan of Rs.23.75 Lakhs and Cash Credit Limit of

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Rs.12.50 Lakhs availed by Mr. Rathinavel Kanthasamy

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It is the case of the applicant bank that the 1^st defendant had approached the applicant bank and submitted Loan Application dated 30.07.2020 seeking Term Loan and Cash Credit facilities from the applicant bank.

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At the request of the 1^st defendant, the applicant bank had sanctioned the Term Loan limit of Rs.23,75,000/- and Cash Credit limit of Rs.12,50,000/- vide Sanction Letter dated 31.07.2020. 3^rd Defendant is the guarantor to the Term Loan and Cash Credit limit sanctioned to the 1^st Defendant. It is submitted that the above limits are repayable with interest @ BRLLR + Strategic Premium + 1.25% i.e., 8.75% p.a. with Monthly Rests.

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It is submitted by the applicant bank that the above loans are to be secured by the hypothecation of the Hollow Bricks machinery to be purchased out of bank’s finance and Book Debts etc and by the equitable mortgage over the immovable properties belonging to the 3^rd

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09.12.2025

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Defendant, morefully described in schedule “A” and “B” properties hereunder as security for due repayment of the credit limits availed by the 1^st Defendant.

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The applicant submits that the 1^st defendant availed the above limits and the defendants have executed the following loan and security documents in order to evidence and secure the due payment of the above limits:

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a) D.P. Note for Rs.23.75 Lakh dated 31.07.2020.

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b) Composite Hypothecation Agreement dated 31.07.2020.

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c) General Form of Guarantee by D3 dated 31.07.2020.

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d) Letter of authority to make payments directly to the dealer dated 31.07.2020.

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e) D.P. Note for Rs.12.50 Lakh dated 31.07.2020.

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f) Letter of continuing security dated 31.07.2020.

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g) Composite Hypothecation Agreement dated 31.07.2020.

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h) Declaration cum undertaking cum authority dated 31.07.2020 i) General Form of Guarantee by D3 dated 31.07.2020.

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It is further submitted that the 1^st defendant, though availed the loan, failed to install the machineries for which the 1^st defendant had availed finance from the applicant bank and also failed to operate the account in terms of sanction. Therefore the applicant issued several reminders and Recall Notice dated 22.07.2021 to the defendants. Despite the above the defendant have failed and neglected to recognize/repay the dues.

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II. Term Loan of Rs.23.75 Lakh availed by Mrs. Priya Selvam

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Prop. Of M/s. Pranith Trading

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It is the further case of the applicant bank that the 2^nd defendant is carrying on business under the name and style “Pranith Trading” as a Proprietary concern and the 2^nd defendant had submitted a Loan Application dated 30.07.2020 seeking Term Loan of Rs. 23,75,000/-. At the request of the 2^nd defendant, the applicant bank had sanctioned the Term Loan limit of Rs.23,75,000/- to the 2^nd defendant vide Sanction Letter dated 31.07.2020. The Applicant also submits that the 3^rd and 4^th Defendants are the guarantors to the Term Loan sanctioned to the 2^nd Defendant. It is submitted that the above limits are repayable with interest @ BRLLR + Strategic Premium + 1.25% i.e., 8.75% p.a. with Monthly Rests.

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The above loan is secured by the hypothecation of the machinery to be purchased out of bank’s finance, stocks in trade and Book Debts etc; and by the equitable mortgage over the immovable properties belonging to the 3^rd Defendant, morefully described in schedule "A" and "B" to the OA as a security for the due repayment of the credit limit availed by the 2^nd Defendant.

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The applicant submits that the 2^nd defendant availed the above limit and executed the following security documents in order to evidence secure the due payment of the above limits:

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a) D.P. Note for Rs.23.75 Lakhs dated 31.07.2020.

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b) Letter of instalments dated 31.07.2020.

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c) Composite Hypothecation Agreement dated 31.07.2020.

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d) Declaration cum undertaking cum authority dated 31.07.2020

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e) General Form of Guarantee by D2 & D3 dated 31.07.2020.

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It is further submitted by the applicant bank that the above accounts are also collaterally secured by the equitable mortgage of the schedule properties. The 3^rd defendant had deposited the title deeds including the Sale Deed dated 27.01.2014 bearing Doc. No.162/2014 and the Sale Deed dated 23.09.2015 bearing Doc. No.4224/2015 with the applicant bank at Dharmapuri with the intention to create a mortgage over the schedule properties as a security. The 3^rd defendant had also executed a Registered Memorandum of Deposit of Title Deeds dated 30.07.2020 bearing Doc. 1810/2020 at JSRO-II, Dharmapuri.

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The applicant bank submits that the 1^st & 2^nd defendants, though availed the loans, failed to install the machineries for which the 1^st defendant had availed finance from the applicant bank and also failed to operate the account in terms of sanction. Therefore the applicant issued several reminders and Recall Notice dated 22.07.2021 to the defendants. Despite the above the defendants have failed neglected to regularize/repay the dues.

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It is submitted that the operation of the above accounts were not satisfactory despite several reminders and Recall notices. The 1^st and

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2^nd defendants failed to operate the above accounts as per the terms of sanction and also failed to install machineries and also failed to submit stock statements. The defendants made false promises for regularizing the account but failed to repay the dues. As the account were irregular, the applicant has declared the above accounts as Non-Performing Asset (NPA) as on 29.05.2021 in accordance with RBI guidelines. This however does not relieve the Defendants from their liability to pay interest by the defendants to the applicant.

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The interest rates are subject to enhancement from time to time as may be decided by the Applicant in conformity with stipulations of the Reserve Bank of India. The loan interest is levied as per Reserve Bank of India guidelines under Section 21-A of Banking Regulation Act, 1949 and instructions issued by the Head Office of the Applicant Bank from time to time which were notified to the defendants besides displaying the circulars regarding the change of interest in the Notice board of the Applicant's Branch. The defendants have undertaken to pay additional interest @ 2% p.a. in case of any irregularity in operating/conducting the accounts in terms of sanction. The Applicant declares that compound interest has been charged at such rates, and capitalized at monthly rests, as are permitted, and do not run counter to the directives of the Reserve Bank of India, and no penal interest has been compounded in the accounts. The Applicant further submits that the Defendants are not entitled for any relief under Debts Reliefs

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Act. The 3^rd and 4^th defendants being the guarantors, they are jointly and severally liable to repay the dues along with the 1^st and 2^nd defendants under the contract. Hence, the present Original Application (OA) has been filed by the applicant bank for recovery of its dues from the defendants.

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After the filing of the OA, summons were duly served to all the defendants. Applicant bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 04.01.2023 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants 1 to 4 were placed ex-parte on 04.01.2023.

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Heard the submissions of Applicant Bank and perused the

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records.

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To prove the case of the Applicant Bank, Sh. Dharmalingam, Chief Manager representing the Applicant 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 A-1 to A-26 . 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 advanced, 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

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09.12.2025

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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 the Defendants jointly and severally, a sum of Rs.66,26,691.50/(Rupees Sixty Six Lakh Twenty Six Thousand Six Hundred and Ninety One and Fifty Paisa Only) as follows:

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(i) To direct the 1^st and 3^rd Defendants to pay jointly and severally a sum of Rs.27,37,774/- due in respect of Term Loan facility (A/c No.05480600030288), together with further interest @ 7.35%, p.a. with monthly rests from the date of filing the OA, till date of realization in full;

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(ii) To direct the 1^st and 3^rd Defendants to pay jointly and severally a sum of Rs.13,33,398.50/- due in respect of Cash Credit Facility (A/c No.05480400000169), together with further interest @ 7.40%, p.a. with monthly rests from the date of filing the OA till date of realization in full;

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(iii) To direct the 2^nd , 3^rd and 4^th Defendants to pay jointly and severally sum of Rs.25,55,519/- due in respect of Term Loan Facility (A/c No.05480600030287), together with further interest @ 7.35%, p.a. with monthly rests from the date of filing the OA, till date of realization in full along with costs.

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O.A. No. 301 of 2022

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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 A and B mentioned immovable properties.

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(d) If the sale proceeds of the immovable properties are not sufficient to satisfy the dues as ordered above, the applicant bank is at liberty to sell the personal assets of the Defendants (both movable and immovable) to recover the balance dues as required under law for which the Defendants to disclose to the Tribunal particulars of other properties or assets owned by the Defendants.

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(e) 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 Defendant 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 Defendant to the applicant bank.

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

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(g) 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 Steno (Deepika), transcribed by her, corrected, signed and pronounced by me on this the 09^th day of December, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sh. Dharmalingam, Chief Manager representing the Applicant 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 dated 30.07.2020.	A-1
2.	Sanction Letter for Rs.23.75 Lakh and Rs.12.50 Lakh dated 31.07.2020.	A-2
3.	D.P. Note for Rs.23,75,000/-dated 31.07.2020.	A-3
4.	Composite Hypothecation Agreement dated 31.07.2020.	A-4
5.	Letter of authority to make payments directly to the dealer dated 31.07.2020.	A-5
6.	General form of guarantee by Mr. R. Selvam dated 31.07.2020.	A-6
7.	D.P. Note for Rs.12,50,000/-dated 31.07.2020.	A-7
8.	Letter of continuing security dated 31.07.2020.	A-8
9.	Composite Hypothecation Agreement dated 31.07.2020.	A-9
10.	Declaration Cum Undertaking Cum Authority dated 31.07.2020.	A-10
11.	General form of guarantee by Mr. R. Selvam dated 31.07.2020.	A-11
12.	Letter issued by the applicant bank along with D.D. of Rs.25 Lakhs to M/s. Rajendran Traders for purchase of machines by Mr. Rathinavel Kanthasamy as per quotation given M/s. Rajendran Traders dated 03.08.2020.	A-12

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13.	Recall notice dated 22.07.2021.	A-13
14.	Loan Application dated 30.07.2020.	A-14
15.	Sanction Letter dated 31.07.2020.	A-15
16.	D.P. Note for Rs.23.75 Lakh dated 31.07.2020.	A-16
17.	Letter of instalments dated 31.07.2020.	A-17
18.	Composite Hypothecation Agreement dated 31.07.2020.	A-18
19.	Declaration cum undertaking cum authority dated 31.07.2020.	A-19
20.	General form of guarantee by Mr. Selvam and Mr. Satheesh dated 31.07.2020.	A-20
21.	Sale Deed Doc. No.162/2014 dated 27.01.2014.	A-21
22.	Sale Deed Doc. No.4224/2015 dated 23.09.2015.	A-22
23.	Regd. Memorandum of Deposit of title deeds Mr. R. Selvam bearing Doc. No.1810/2020 dated 30.07.2020.	A-23
24.	Letter issued by the applicant bank along with D.D. of Rs.25 Lakh to M/s. Rajendran Traders for purchase of machines by Mrs. Priya Selvam as per quotation given by M/s. Rajendran Traders dated 03.08.2020.	A-24
25.	Reminder dated 22.07.2021.	A-25
26.	Statement of account	A-26

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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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SCHEDULE “A” MORTGAGED PROPERTY

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All that piece and parcel of vacant land situated at Thadangam Village, Survey No.647/1C, Dry ext. Hec. 0.14.50, Assessment 0.80 Bounded on the:

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North of : Vendor Sampath Land South of : Vendor Sampath Land East of : Panchayat drainage West of : 15 feet wide Road Admeasuring

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East to West on Northern side : 56 ¾ Feet East to West on Southern side : 64 ¼ Feet South to North on Eastern side : 29 Feet

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South to North on Western side : 29 Feet

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And totally measuring 1754 ½ sq.ft. or 163 sq. mtr and more fully described in the Sale Deed bearing Doc. No. 4224/2015 dated 23.09.2015 at Dharmapuri Joint No.1 Sub Registration District Dharmapuri Registration District.

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SCHEDULE “B” MORTGAGED PROPERTY

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All that piece and parcel of vacant land situated at Amani Reddy Halli Village, Survey No.471/1, Dry ext. Hec. 1.29.5, Assessment 6.40 in this New S.No.471/1D Dry Ext. Hec. 0.15.70, Asst. Rs.0.78 as per New Patta No.843

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Bounded on the North of : Narasimma Reddy, Obbili vagaiyara Land South of : 20 ft. Road East of : Land Belongs to Arul Murugan West of : Thaiyal Nagar Vacant Land

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Measuring

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East to West on both sides : 25 feet

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South to North on both sides : 49 feet

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And totally measuring 1225 sq.ft. or 113.81 sq. mtr and more fully described in the Sale Deed bearing Doc. No. 162/2014 dated 27.01.2014 at Dharmapuri Joint No.1 Sub Registration District Dharmapuri Registration District.

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

Bank of Baroda v. Rathinavel Kanthasamy

Case brief

What is this about?

What did the court decide?

Bank of Baroda v. Rathinavel Kanthasamy

Case brief

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