Allowed

Canara Bank v. Micro Cutting Dies

DRT8 Aug 2025OA/329/2022

Case brief

AI extract

What is this about?

This DRT allowed Canara Bank's original application for recovery of Rs.26,79,175.93 due from Micro Cutting Dies and proprietor N.S. Palani for a term loan. The respondent defendants were placed ex-parte as they failed to appear. The Tribunal confirmed the bank's entitlement to recover dues along with interest and costs.

What did the court decide?

Recovery of Rs.26,79,175.93 principal with further interest @ 10.45%, penal interest @ 2% and costs.

Canara Bank versus Micro Cutting Dies — Banking and Recovery | DRT (2025)

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O.A. No. 329 of 2022

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08.08.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 08^th day of August, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No. 329 of 2022

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Canara Bank, SME Ambattur Branch, No.3, M.T.H.Road, Padi, Chennai -600 050 Represented by Chief Manager. ….Applicant

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-Vs-

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M/s. Micro Cutting Dies, Proprietor Mr. N.S. Palani, No.59, Padavattamman Industrial Estate, Sidco, Chennai -600 098.

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Mr. N.S. Palani, Son of Mr. P. Subramani, No.19-A, Angela Apartment, F-8, “D” Block, SVT Nagar, Thirumullaivoyal, Chennai -600 062. …..Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. S. Sundaramoorthy Jeyaseelan

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Defendants were set ex-parte on 03.02.2023

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: - FINAL ORDER - :

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This Original Application is filed on 11.10.2021 by the Applicant

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Bank under Section 19 (1) of Recovery of Debts and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act,

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O.A. No. 329 of 2022

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08.08.2025

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against the Defendants jointly and severally for recovery of a total sum of Rs.26,79,175.93p (Rupees Twenty Six Lakhs Seventy Nine Thousand One Hundred and Seventy Five and Nine Three Paise

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Only) due in respect of Term Loan (Account No.2412766000163) together with further interest @ 10.45% p.a. with monthly rests and penal interest @ 2% p.a. from the date of filing the OA till 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 Tribunal.

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It is the case of the Applicant Bank that the defendants had approached the applicant bank for financial assistance. The 1^st Defendant is a small enterprise established in the year 2016 and engaged in manufacturing of dies and to purchase 2 numbers of CNC lathes and accessories.

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It is submitted by the applicant bank that at the request of the defendants, the applicant sanctioned a Term Loan of Rs.22,00,000/- on 04.08.2016. In order to secure the loan, the defendants had executed following loan documents in favour of applicant bank:-

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a) Request for Term Loan dated 04.08.2014

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O.A. No. 329 of 2022

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08.08.2025

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b) Sanction letter dated 04.08.2016

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c) Letter evidencing execution of documents dated 04.08.2016

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d) Pronote dated 04.08.2016

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e) Agreement cum Deed of Hypothecation dated 04.08.2016

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f) Letter of undertaking re: Loan dated 04.08.2016

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g) Deed of Hypothecation re: Machinery dated 04.08.2016

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At the request of the defendants, the applicant renewed the above referred Term Loan and the defendants executed the following documents:-

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a) Acknowledgement of debt and security dated 18.05.2019.

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b) Proceedings of one time Restructuring Committee dated 27.05.2019.

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The defendants approached the applicant for renewal and restructuring of limits availed as per OTR scheme. Hence at the request of the defendants, the committee for Stressed Micro, Small and Medium Enterprises as conducted and the proceedings were initiated and the applicant renewed and restructured the above referred facility and the defendants executed the following loan documents:

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a) Draft letter undertaking from Guarantor for Restructuring of loan dated 29.06.2019.

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b) Debt/Creditor Agreement dated 29.06.2019

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c) Debt Restructuring Agreement dated 29.06.2019.

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O.A. No. 329 of 2022

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08.08.2025

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It is submitted by the applicant bank that after availing the credit facilities, the defendants committed default in repayment of the loan inspite of repeated demands. In view of the continuous default committed by the defendants, the loan account was classified as Non-Performing Asset (NPA) on 19.06.2021 in accordance with the guidelines. Applicant bank issued notice through its Advocate dated 15.07.2021, despite which defendants did not come forward to repay the dues. Hence the present Original Application (OA) has been filed by the applicant bank for recovery of its dues from defendants.

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After the filing of the OA, Summons were sent to defendants through Registered Post with Acknowledgment Due, which returned unserved with postal endorsement as 'no such company' in respect of D-1, while summon to D-2 is duly served. Applicant bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 03.02.2023 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants 1 and 2 were placed ex-parte on 03.02.2023.

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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. C. Siva, Divisional Manager representing the Applicant Bank, has filed his Affidavit by way of

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O.A. No. 329 of 2022

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08.08.2025

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evidence and same was considered as evidence of AW-1 and list of documents came to be marked as Ex A-1 to A-17 . 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 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 a total sum of Rs.26,79,175.93p (Rupees Twenty Six Lakhs Seventy Nine Thousand One Hundred and Seventy Five and

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Nine Three Paise Only) due in respect of Term Loan (Account No.2412766000163) repayable together with further interest @ 10.45% p.a. with monthly rests and penal interest @ 2% p.a. from the date of filing the OA till date of realization in full along with costs.

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(b) The applicant bank is at liberty to sell the personal assets of the 2^nd Defendant (both movable and immovable) to recover the balance dues as required under law for which the 2^nd Defendant to disclose to the Tribunal particulars of other properties or assets

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O.A. No. 329 of 2022

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08.08.2025

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owned by the 2^nd Defendant.

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(c) 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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(d) The applicant bank shall file memo of costs within ten days

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from the date of receipt of this final order.

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(e) Recovery Certificate shall be drawn up and issued to the

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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 (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 08^th day of August, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sh. C. Siva, Divisional Manager representing the Applicant Bank.

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O.A. No. 329 of 2022

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08.08.2025

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Exhibits on the part of the Applicant:

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Sl. No.	Description of Documents	Exhibit No.
1.	Request for Term Loan dated 04.08.2016.	A-1
2.	Certificate of loan papers obtained dated 04.08.2016.	A-2
3.	Letter evidencing execution of documents dated 04.08.2016.	A-3
4.	Pronote dated 04.08.2016.	A-4
5.	Agreement cum Deed of Hypothecation dated 04.08.2016.	A-5
6.	Letter of undertaking re: loans dated 04.08.2016.	A-6
7.	Deed of Hypothecation Re: Machinery dated 04.08.2016.	A-7
8.	Acknowledgement of Debt and security dated 18.05.2019.	A-8
9.	Proceeding of one time restructuring committee dated 27.05.2019.	A-9
10.	Letter of evidencing execution of documents dated 29.06.2019.	A-10
11.	Draft letter undertaking from Guarantor for Restructuring of loan dated 29.06.2019.	A-11
12.	Debtor/Creditor Agreement dated 29.06.2019.	A-12
13.	Debt Restructuring Agreement dated 29.06.2019.	A-13
14.	Advocate Notice dated 15.07.2021.	A-14
15.	Acknowledgement card dated 17.07.2021.	A-15
16. 17.	Returned cover dated 22.07.2021. Statement of Accounts.	A-16 A-17

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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

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- NIL -

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

Canara Bank v. Micro Cutting Dies

Case brief

What is this about?

What did the court decide?

Canara Bank v. Micro Cutting Dies

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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