Allowed

Union Bank of India v. Jeevanandham Enterprises

DRT10 Dec 2025OA/334/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the bank's Original Application to recover outstanding dues of approximately Rs. 22.24 lakhs from the defaulting borrowers. The application claimed recovery of Cash Credit, Working Capital Term Facility, and Term Loan with interest. The respondents being absent ex-parte, the Tribunal accepted the bank's evidence and granted final orders.

What did the court decide?

Final Order allowed the applicant to recover Rs. 22,24,077/- with interest at stipulated rates and directed the issuance of a Recovery Certificate.

Union Bank of India versus Jeevanandham Enterprises — Contract and Commercial Disputes | DRT (2025)

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O.A. No. 334 of 2022

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10.12.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 10^th day of December, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No. 334 of 2022

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Union Bank of India, Rep. by its Authorized Signatory Thiruvallur Branch

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Plot No.3573, Thiruvallur Kakkalur Bye pass Road, Thiruvallur 602 001 ….Applicant

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-Vs-

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M/s Jeevanandham Enterprises,

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Rep. by its Proprietor, Mr. A. Jeevanandham

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No.12-A, ESI Anna Nagar

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Car Shed Complex

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Avadi, Chennai – 600 109

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Mr. A. Jeevanandham S/o Mr. Anumantha Rao

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No.12-A, ESI Anna Nagar

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Car Shed Complex

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Avadi, Chennai – 600 109 …..Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. S. Parthasarathy

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Defendants 1 and 2 were set ex-parte on 03.02.2023

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: - FINAL ORDER - :

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This Original Application is filed on 21.04.2022 by the applicant

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bank under Section 19 (1) of Recovery of Debts and Bankruptcy Act,

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1993 (formerly Recovery of Debts Due to Banks and Financial

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Institutions Act, 1993) against the defendants for recovery of a total

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sum of Rs.22,24,077/- (Rupees Twenty Two Lakh Twenty Four

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O.A. No. 334 of 2022

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10.12.2025

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Thousand and Seventy Seven Only) as follows:

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(i) A sum of Rs.10,63,739/- due in respect of Cash Credit facility (A/c No.635405140000135), repayable together with further interest @ 9.65%, p.a. with monthly rests from the date of filing the OA, till date of realization in full;

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(ii) A sum of Rs.8,43,278/- due in respect of Working Capital Term Facility (A/c No.635406170000124), repayable together with further interest @ 10.15%, p.a. with monthly rests from the date of filing the OA till date of realization in full;

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(iii) A sum of Rs.3,17,060/- due in respect of Working Capital Term Loan Facility (A/c No.635406990000094), repayable together with further interest @ 7.50%, p.a. with monthly rests 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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Cash Credit Mudra Loan of Rs.15 Lakh in Loan A/c

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No.635405140000135

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It is the case of the Applicant Bank that the 1^st Defendant

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O.A. No. 334 of 2022

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10.12.2025

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represented by its Proprietrix, the 2^nd Defendant had approached the Applicant Bank for sanction of Cash Credit for the purpose of running a Tailoring and preparing of Readymade Garments in the name and style of M/s Jeevanandham Enterprises under Credit Guarantee Fund Trust for Micro Small Enterprises (CGTMSE).

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It is submitted that the Applicant Bank had considered the defendants' request and sanctioned the Cash Credit under Union Progress on 19.09.2019 for Rs.15 Lakhs in Loan Account No. 635405140000135 with repayment terms at the rate of interest at 9.65% per annum. The Defendants have executed the loan documents in favour of the Applicant as follows:

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a) Demand Promissory Note dated 19.09.2019 for Rs.15 Lakhs.

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b) Letter of Continuity pursuant to the Demand Promissory Note for Rs.15 Lakhs.

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c) Hypothecation (Goods & Debts) Agreement dated 19.09.2019 for Rs.15 Lakhs.

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d) An undertaking dated 19.09.2019 agreeing to transfer any sum or sums standing to the credit of any one or more of such accounts in or towards satisfaction of any of her liability to the Applicant.

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e) Interest agreement dated 19.09.2019 in favour of the Applicant.

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The applicant bank submits that no collateral security was obtained from the Defendants, since the sanction was made under

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10.12.2025

CGTMSE Scheme.

It is further submitted that subsequent to availing of loan, if the defendants defaulted in payment of installments of the loan which has fallen due as per the repayment terms, or any other amounts as directed by the Applicant Bank, and such default continues for a period of three months, compound interest shall be charged on a quarterly basis on the outstanding liability. Further, in the event of such default by the Defendants, in making payment of any amounts which have fallen due as stipulated in the Loan Agreement, the Defendants shall be liable to pay additional interest at 2% per annum over and above the interest rate stipulated hereinabove on such defaulted amounts, from the date of such default till regularizing or clearing the account in full as the case may be.

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The applicant submits that the Defendants have failed to respond to the reminders, personal contacts and repeated demands made by the Applicant Bank.

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The Defendants are jointly and severally liable to pay a sum of Rs.10,63,739.35 which is rounded off to Rs.10,63,739/- with the present rate of interest at 9.65% per annum towards Cash Credit Facility Account in Loan Account No. 635405140000135 as on 28.02.2022.

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Cash Credit Mudra Facility for Rs.10 Lakhs in Loan A/c

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No.635406170000124

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O.A. No. 334 of 2022

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10.12.2025

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It is the further case of the applicant bank that the Defendants have once again approached the Applicant for sanction of Cash Credit to meet their working capital requirements. Considering the said request, the Applicant had sanctioned a sum of Rs. 10 Lakhs to the Defendants vide their Sanction Letter dated 23.10.2019 with repayment terms payable with interest at the rate of 10.15% per annum. In order to secure the loan, the defendants have executed the following loan documents on 23.10.2019 in favour of applicant bank:

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a) Demand Promissory Note for Rs.10 Lakhs in favour of the Applicant promising to pay on demand to the Applicant together with interest such sum from this date at interest rate of 10.15% per annum with quarterly rests for value received.

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b) Letter of Continuity pursuant to the Demand Promissory Note for Rs.10 Lakhs.

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c) Hypothecation (Goods) Agreement.

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d) An Undertaking for Rs.10 Lakhs.

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e) Interest agreement dated 23.10.2020.

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It is submitted that, in case, the Defendants defaults in payment of any installment of the loan which has fallen due as per the repayment terms, or any other amounts as directed by the Applicant Bank, and such default continues for a period of three months, compound interest shall be charged on a quarterly basis on the outstanding liability. Further, in the event of such default by the

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O.A. No. 334 of 2022

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10.12.2025

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Defendants, in making payment of any amounts which have fallen due as stipulated in the Loan Agreement, the Defendants shall be liable to pay additional interest at 2% per annum over and above the interest rate stipulated hereinabove on such defaulted amounts, from the date of such default till regularizing or clearing the account in full as the case may be.

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The Defendants have failed to respond to the reminders, personal contacts and repeated demands made by the Applicant Bank. The Defendants are jointly and severally liable to pay a sum of Rs.8,43,278.37 which is rounded off to Rs.8,43,278/- with the present rate of interest at 10.15% per annum towards Cash Credit Facility Account in Loan Account No. 635406170000124 as on 28.02.2022.

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Term Loan Facility for Rs.3 Lakh in Loan A/c No.635406990000094

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It is submitted by the applicant bank that the Defendants have further approached the Applicant for sanction of Working Capital Term Loan to meet the liquidity crunch and cash flow mismatch on account of outbreak of COVID-19. Considering the said request, the Applicant had sanctioned a sum of Rs.3 Lakhs to the Defendants vide their sanction Letter dated 19.09.2019 with repayment terms of 48 monthly installments with the moratorium period of 12 months. In order to secure the loan, the defendants have executed the following loan documents on 08.06.2020 in favour of the applicant bank:

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a) Demand Promissory Note for Rs.3 Lakhs in favour of the Applicant promising to pay on demand to the Applicant together with interest on such sum from this date at interest rate of 7.50% per annum with quarterly rests for value received.

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b) Letter of Continuity pursuant to the Demand Promissory Note for Rs.3 Lakhs.

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c) An undertaking for Rs.3 Lakhs addressed to the Applicant.

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d) General Term Loan Agreement for Rs.3 Lakhs.

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e) Interest agreement.

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f) An undertaking dated 08.06.2020 agreeing to transfer any sum or sums standing to the credit of any one or more of such accounts in or towards satisfaction of any of her liability to the Applicant.

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The applicant submits that, in case, the Defendants defaults in payment of installment of the loan which has fallen due as per the repayment terms, or any other amounts as directed by the Applicant Bank, and such default continues for a period of three months, compound interest shall be charged on a quarterly basis on the outstanding liability. Further, in the event of such default by the Defendants, in making payment of any amounts which have fallen due as stipulated in the Loan Agreement, the Defendants shall be liable to pay additional interest at 2% per annum over and above the interest rate stipulated hereinabove on such defaulted amounts, from the date

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O.A. No. 334 of 2022

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of such default till regularizing or clearing the account in full as the case may be.

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It is further submitted by the applicant bank that the Defendants have failed to respond to the reminders, personal contacts and repeated demands made by the Applicant Bank. The Defendants are jointly and severally liable to pay a sum of Rs.3,17,060.67 which is rounded off to Rs.3,17,060/- with the present rate of interest at 7.5% per annum towards Term Loan Facility Account in Loan Account No. 635406990000094 as on 28.02.2022.

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The Applicant submits that subsequent to availing of the aforesaid credit facilities, the Defendants have defaulted in repayment of the same as per the agreed terms. The Applicant had sent Legal Notice to the defendants 07.04.2022 calling upon them to repay the outstanding under aforesaid credit facilities and the same was duly served. In spite of the above notice, the Defendants have not taken any steps to pay or regularize the aforesaid personal loan facility. The Defendant have Closed the business after default in repayment and no stocks are available in the business premises. Therefore, the Applicant has no other option except to file this suit for recovery of a sum of Rs.22,24,077/- as on 28.02.2022 with applicable rate of interest as detailed above from the date of filing this Original Application and till the date of realization in full.

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O.A. No. 334 of 2022

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After the filing of the OA, summons were sent to Defendants 1 and 2 through Registered Post with Acknowledgment Due, which were duly served. When OA was taken up on 03.02.2023 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, the 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, Mr. K. Venkata Ratnam, Authorized Officer 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-24 .

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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 Rs.22,24,077/- (Rupees Twenty Two Lakh

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O.A. No. 334 of 2022

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Twenty Four Thousand and Seventy Seven Only) as follows:

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(iii) A sum of Rs.3,17,060/- due in respect of Working Capital Term Loan Facility (A/c

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No.635406990000094), repayable together with further interest @ 7.50%, 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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(b) 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

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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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from the date of receipt of this final order.

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(d) 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 (Deepika), transcribed by her, corrected, signed and pronounced by me on this the 10^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. K. Venkata Ratnam, Authorized Officer 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 19.09.2019.	A-1
2.	Letter of Sanction for Rs.15 Lakhs dated 19.09.2019.	A-2
3.	Demand Promissory Note for Rs.15 Lakh dated 19.09.2019.	A-3
4.	Letter of Continuity in favour of the Bank for Rs.15 Lakh	A-4
5.	Hypothecation (Goods & Debts) Agreement dated 19.09.2019.	A-5
6.	An undertaking given by the Defendants dated 19.09.2019.	A-6
7.	Interest Agreement dated 19.09.2019.	A-7
8.	Letter of Sanction for Rs.10 Lakh dated	A-8

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O.A. No. 334 of 2022

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	23.10.2019.
9.	Demand Promissory Note for Rs.10 Lakh dated 23.10.2019.	A-9
10.	Letter of Continuity in favour of the Bank for Rs.10 Lakh	A-10
11.	Hypothecation (Goods) Agreement dated 23.10.2019.	A-11
12.	Interest Agreement dated 23.10.2019.	A-12
13.	Undertaking from the 2^ndDefendant dated 23.10.2019.	A-13
14.	Letter of Sanction for Rs.3 Lakh dated 08.06.2020.	A-14
15.	Demand Promissory for Rs.3 Lakh dated 08.06.2020.	A-15
16.	Letter of Continuity in favour of the Bank for Rs.3 Lakh	A-16
17.	Undertaking letter for disbursement of loan for Rs.3 Lakh dated 08.06.2020.	A-17
18.	General Term Loan Agreement dated 08.06.2020.	A-18
19.	Interest Agreement dated 08.06.2020.	A-19
20.	Undertaking from the 2^ndDefendant dated 08.06.2020.	A-20
21.	Legal Notice issued to the Defendants dated 16.04.2022.	A-21
22.	Statement of Accounts for Loan A/c No.635406170000124 along with Certificate under Bankers Book Evidence Act	A-22
23.	Statement of Accounts for Loan A/c No.635405140000135 along with Certificate under Bankers Book Evidence Act	A-23
24.	Statement of Accounts for Loan A/c No.635406990000094 along with Certificate under Bankers Book Evidence Act	A-24

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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

Union Bank of India v. Jeevanandham Enterprises

Case brief

What is this about?

What did the court decide?

Union Bank of India v. Jeevanandham Enterprises

Case brief

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What did the court decide?

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