Allowed

City Union Bank Limited v. Avejoo Enterprises

DRT13 May 2025OA/313/2022

Case brief

AI extract

What is this about?

This judgment allowed an original application filed by a bank for recovery of dues under the RDB Act. The Tribunal, in the absence of the respondents, directed recovery of Rs. 37,32,289/- along with interest and costs, crediting a prior SARFAESI realization amount.

What did the court decide?

Recovery of Rs. 37,32,289/- with interest, costs, and penalties legalised; liberty granted to auction assets for balance dues.

City Union Bank Limited versus Avejoo Enterprises — Contract and Commercial Disputes | DRT (2025)

¶1

O.A. No. 313 of 2022

¶2

13.05.2025

¶3

¶4

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

¶5

Dated this the 13^th day of May, 2025

¶6

Present: SMT. S.V. GOWRAMMA

¶7

Presiding Officer

¶8

ORIGINAL APPLICATION No. 313 of 2022

¶9

City Union Bank Ltd., Branch Office at Chrompet, No.57, Rajendra Prasad Road, Hasthinapuram, Chrompet, Chennai – 600 044, Kancheepuram Dist.

¶10

Rep. by its Branch Manager ….Applicant

¶11

-Vs-

¶12

M/s. Avejoo Enterprises,

¶13

Rep. by its Proprietrix Mrs. Hema Rafee,

¶14

No.625/33, MKN Road, Mini Market, Guindy,

¶15

Chennai – 600 032

¶16

Mrs. Hema Rafee

¶17

W/o. Mohamed Rafee,

¶18

No.211, III Main Road, Thirumalai Nagar, Chrompet,

¶19

Chennai – 600 032

¶20

Mr. Mohammed Rafee

¶21

S/o. Musthafa,

¶22

No.211, III Main Road Thirumalai Nagar, Chrompet,

¶23

Chennai – 600 032

¶24

…..Defendants

¶25

Counsels on record / appeared:

¶26

Counsel for Applicant : Mr. Hasmukh S Surana Defendants were set ex-parte on 01.02.2023

¶27

: - FINAL ORDER - :

¶28

This original application is filed on 13.07.2022 by the applicant bank

¶29

under Section 19 of Recovery of Debts and Bankruptcy Act, 1993 (formerly

¶30

O.A. No. 313 of 2022

¶31

¶32

13.05.2025

¶33

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.37,32,289/- (Rupees Thirty Seven Lakhs Thirty Two Thousand

¶34

Two Hundred & Eighty Nine Only) as follows:

¶35

(i) A sum of Rs.34,93,841/- due in respect of OD Loan A/c No.512120020008114 together with further interest thereon @ 13.75% p.a., with monthly rests and a penal interest @ 2% p.a., from the date of application till the date of realization in full and for costs of this application.

¶36

(ii) A sum of Rs.2,38,448/- due in respect of FITL Adhoc Loan A/c No.501912090017087 together with further interest thereon @ 13.75% p.a., with monthly rests and a penal interest @ 2% p.a., from the date of application till the date of realization in full and for costs of this application.

¶37

Brief Facts of the case:

¶38

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.

¶39

The Applicant Bank submits that they had extended financial assistance as requested by the 1^st Defendant (a Proprietorship Firm),

¶40

O.A. No. 313 of 2022

¶41

¶42

13.05.2025

¶43

represented by its Proprietrix Mrs. Hema Rafee i.e., the 2^nd Defendant herein for which the 3^rd Defendant stood as co-obligant, to meet-out their business requirement and for working capital. Further, the 2^nd Defendant

¶44

had created Equitable Mortgage over the OA schedule property. Accordingly, the Applicant Bank under Loan A/c No. 512120020008114 sanctioned a sum of Rs.30,00,000/- to the Defendants.

¶45

The Applicant Bank submits that to evidence the aforesaid credit facility the following documents were executed / agreed / signed / submitted by the Defendants in favour of the Applicant Bank: -

¶46

a. Sanction Ticket dated 10.02.2020

¶47

b. Sanction Letter dated 10.02.2020

¶48

c. On Demand Promissory Note dated 14.02.2020 executed by the Defendants No.1 to 3;

¶49

d. Overdraft Rules for Running Account facilities dated 14.02.2020 agreed and signed by Defendants No.1 to 3;

¶50

e. Letter of continuity dated 14.02.2020 agreed and signed by Defendants No.1 to 3;

¶51

f. Letter (F.No.226) dated 14.02.2020 agreed and signed by Defendants No.1 to 3;

¶52

g. Registered Memorandum of Deposit of Title Deed dated 29.03.2016 executed by the 2^nd Defendant in favour of the Applicant Bank;

¶53

h. Registered Memorandum of Extension of Equitable Mortgage dated 08.05.2017 executed by the 2^nd Defendant in favour of the Applicant Bank;

¶54

i. Registered Memorandum of Extension of Equitable Mortgage dated

¶55

O.A. No. 313 of 2022

¶56

13.05.2025

¶57

¶58

13.02.2020 executed by the 2^nd Defendant in favour of the Applicant Bank;

¶59

The Applicant Bank upon subsequent request made by the 1^st Defendant (a Proprietorship Firm), represented by its Proprietrix; Mrs. Hema Rafee i.e., the 2^nd Defendant herein for which the 3^rd Defendant stood as Co-obligant, the Applicant Bank had further extended the financial assistance. The Applicant Bank under FITL – ADHOC Loan A/c No.501912090017087, sanctioned a sum of Rs.2,03,000/- to the defendants.

¶60

The Applicant Bank submits that to evidence the aforesaid credit facility the following documents were executed / agreed / signed / submitted by the Defendants in favour of the Applicant Bank: -

¶61

a. Consent Letter dated 31.08.2020 to avail FITL on account of deferment of interest payment in existing OLCC/OSOD limit availed & undertaking to repay in instalments;

¶62

b. Sanction Ticket dated 04.09.2020

¶63

The Applicant Bank submits that apart from executing the aforesaid documents, like Demand Promissory note and other loan documents, the 2^nd Defendant had executed a registered Memorandum of Deposit of Title Deeds on 29.03.2016, which had been duly extended on 08.05.2017 and 13.02.2020. Accordingly, the 2^nd Defendant had given the OA schedule mentioned property as security for property repayment of the credit

¶64

O.A. No. 313 of 2022

¶65

13.05.2025

¶66

¶67

facilities availed by them. Thus, the 2^nd Defendant had created equitable mortgage in respect of the OA schedule mentioned property, in favour of the Applicant Bank for the loans availed by them.

¶68

It is submitted by Applicant Bank that after availing the said facility, the defendants deliberately failed to repay the loan amount availed in spite of repeated demands and reminders by Applicant Bank. As defendants miserably failed to make repayments in the aforesaid loan account, the applicant bank classified the aforesaid loan account as NPA (Non-Performing Assets) on 30.04.2021, as per the guidelines issued by the RBI but they had failed to do so. Hence, this Original Application (OA) has been filed to recover the dues from the defendant.

¶69

After the filing of the OA, Summons were sent to Defendants 1 to 3 through Registered Post with Acknowledgement due, which was returned unserved with postal endorsement as ‘Left’. Applicant Bank had caused Paper Publication of Notice and filed proof thereof. When OA was taken up on 01.02.2023 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants were placed exparte on 01.02.2023.

¶70

Heard the submissions of Applicant Bank and perused the records.

¶71

O.A. No. 313 of 2022

¶72

13.05.2025

¶73

¶74

To prove the case of the Applicant Bank, Ms. V.S. Krishnapriya, Branch Manager of the Applicant Bank, has filed her 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-14 . 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.

¶75

During the pendency of OA, applicant bank had reported part satisfaction of OA claim in a sum of Rs.16,11,000/- by way of sale of Schedule immovable property under SARFAESI Act on 06.06.2023. Accordingly, part satisfaction of sum of Rs.16,11,000/- is duly recorded vide proceedings dated 31.01.2024 and documents marked as Ex A-9 to A-12 were returned to applicant bank on 12.02.2204 under proper acknowledgment.

¶76

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 a final order on the following terms:

¶77

: O R D E R:

¶78

The OA is allowed with costs,

¶79

(a) The applicant bank is allowed to recover from the Defendants 1

¶80

to 3, jointly and severally, a total sum of Rs.37,32,289/-

¶81

O.A. No. 313 of 2022

¶82

13.05.2025

¶83

¶84

(Rupees Thirty Seven Lakhs Thirty Two Thousand Two

¶85

Hundred & Eighty Nine Only) as follows:

¶86

(i) A sum of Rs.34,93,841/- due in respect of OD Loan A/c No.512120020008114 together with further interest thereon @ 13.75% p.a., with monthly rests and a penal interest @ 2% p.a., from the date of application till the date of realization in full along with costs of this application.

¶87

(ii) A sum of Rs.2,38,448/- due in respect of FITL Adhoc Loan A/c No.501912090017087 together with further interest thereon @ 13.75% p.a., with monthly rests and a penal interest @ 2% p.a., from the date of application till the date of realization in full along with costs of this application.

¶88

(b) The sum of Rs.16,11,000/- realized by way of SARFAESI sale is directed to be given credit to the borrower’s loan account as on the date of realization.

¶89

(c) The applicant bank is at liberty to sell the personal assets / hypothecated assets of the defendants 2 and 3 (both movable and immovable) to recover the balance dues as required under law;

¶90

(d) The applicant bank shall file the latest memo of calculation of

¶91

O.A. No. 313 of 2022

¶92

¶93

13.05.2025

¶94

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.

¶95

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

¶96

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

¶97

A copy of this order be communicated to the parties concerned.

¶98

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

¶99

(Dictated to Steno (Sudhakar), transcribed by him, corrected, signed and pronounced by me on this the 13^th day of May, 2025)

¶100

ANNEXURES

¶101

WITNESSES EXAMINED FOR THE APPLICANT BANK :

¶102

AW-1: Ms. V.S. Krishnapriya, Branch Manager of the Applicant Bank

¶103

O.A. No. 313 of 2022

¶104

¶105

13.05.2025

¶106

Exhibits on the part of the Applicant:

¶107

Sl. No.	Description of Documents	Exhibit No.
1.	Sanction Ticket dated 10.02.2020	A-1
2.	Sanction Letter dated 10.02.2020	A-2
3.	On Demand Promissory Note executed by the Defendants No. 1 to 3 dated 14.02.2020	A-3
4.	Overdraft Rules for Running Account facilities agreed and signed by Defendants No.1 to 3 dated 14.02.2020	A-4
5.	Letter of continuity agreed and signed by Defendants No.1 to 3 dated 14.02.2020	A-5
6.	Letter (F.No.226) agreed and signed by Defendants No.1 to 3 dated 14.02.2020	A-6
7.	Consent letter to avail FITL on account of deferment of interest payment in existing OLCC/OSOD limit availed & undertaking to repay in instalments dated 31.08.2020	A-7
8.	Sanction Ticket dated 04.09.2020	A-8
9.	Registered Memorandum of Deposit of Title Deed executed by the 2^ndDefendant in favour of the Applicant Bank dated 29.03.2016	A-9
10.	Registered Memorandum of Extension of Equitable Mortgage executed by the 2^nd Defendant in favour of the Applicant Bank dated 08.05.2017	A-10
11.	Registered Memorandum of Extension of Equitable Mortgage executed by the 2^nd Defendant in favour of the Applicant Bank dated 13.02.2020	A-11
12.	Sale Deed executed by K. Kumudavalli W/o. P. Kasi in favour of the 2^ndDefendant namely Hema Rafee and Registered as Doc No.7978 of 2015 in the Office of the SRO, Padappai dated 09.10.2015	A-12
13.	Demand Notice under Section 13(2) of the SARFAESI Act, 2002 issued by the Applicant Bank to the Defendants dated 17.09.2021	A-13
14.	Statement of Accounts along with Memorandum of Interest calculation and BBE Certificates.	A-14

¶108

O.A. No. 313 of 2022

¶109

¶110

13.05.2025

¶111

Witness Examined for the Defendants: -Nil-

¶112

List of Documents Exhibited for the Defendants: -Nil –

¶113

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

City Union Bank Limited v. Avejoo Enterprises

Case brief

What is this about?

What did the court decide?

City Union Bank Limited v. Avejoo Enterprises

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

Mrs Sridevi T versus Union Bank of India

State Bank of India versus Sivasankari

Bank of Maharashtra versus Suyambulingam

Nandhi Dall Mills versus Idbi Bank

Mr K Sivakumar S o R Kaliaperumal versus State Bank of India

Nabisha Leathers versus Cfm Asset Reconstruction Company Ltd.