Allowed

Canara Bank v. M s Jaya Enterprises

DRT17 Jul 2025OA/356/2022

Case brief

AI extract

What is this about?

The DRT allowed the Original Application filed by Canara Bank to recover outstanding dues of Rs.1.15 crores jointly and severally from the proprietorship firm, its proprietor, and the guarantor. The court found the claims unchallenged due to the defendants' ex-parte status and ordered recovery from personal assets if needed.

What did the court decide?

Recovery of total sum of Rs.1,15,73,245.87 with interest and costs; liberty to recover balance by sale of scheduled properties and personal assets of respondents.

Canara Bank versus M s Jaya Enterprises — Contract and Commercial Disputes | DRT (2025)

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O.A. No. 356 of 2022

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17.07.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 17^th day of July, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No. 356 of 2022

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Canara Bank

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Nandanam Branch

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No.96, Chamier’s Road, Nandanam, Chennai – 600 035

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Rep. by its Senior Manager ….Applicant

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-Vs-

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M/s Jaya Enterprises

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Rep. by its Proprietor Mr. C. P. Sudharson, No.5B, Thiruneermalai Road

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Chennai – 600 075

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Mr. C. P. Sudharson,

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Prop. of M/s Jaya Enterprises

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No.22, Suriyamman Koil Street VOC Nagar

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Pammal, Chennai – 600 075

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Mrs. S. Rajeshwari

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W/o Mr. C. P. Sudharson

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No.22, Suriyamman Koil Street VOC Nagar

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Pammal, Chennai – 600 075 ….Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. N. G. Durairajan

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Defendants 1 to 3 were set ex-parte on 30.03.2023

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: - FINAL ORDER - :

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This Original Application is filed on 14.10.2022 by the applicant bank

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under Section 19 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. 356 of 2022

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17.07.2025

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against the defendants 1 to 3, jointly and severally for recovery of a total sum of Rs.1,15,73,245.87p (Rupees One Crore Fifteen Lakhs

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Seventy Three Thousand Two Hundred and Forty Five and Eighty

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Seven Paisa only) as follows:

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(i) A sum of Rs.1,02,18,779.51p due in respect of OD Limit (Account No.2604256000064) repayable together with further interest @ 17.80% p.a. with monthly rests from the date of application till the date of realisation in full;

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(ii) A sum of Rs.2,67,354.66p due in respect of Additional

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Working Capital limit (Account No.2604746000002)

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repayable together with further interest @9.40% p.a., with monthly rests plus @2% p.a. penal interest from the date of application till the date of realisation in full;

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(iii) A sum of Rs.4,64,709.54p due in respect of Covid Working Capital Term Loan (Account No.2604746000004)

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repayable together with further interest @14.25% p.a., with monthly rests plus 2% p.a. penal interest from the date of application till the date of realisation in full;

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(iv) A sum of Rs.6,22,402.16p due in respect of Covid FITL Loan (Account No.2604710000006) repayable together with further interest @9.75% p.a. with monthly rests plus 2% p.a. penal interest from the date of Application till the date of

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realization in full;

for sale of schedule mentioned immovable properties and for costs of this OA.

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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 1^st defendant is a proprietorship firm namely M/s Jaya Enterprises, represented by the 2^nd defendant, who had approached the applicant bank for Overdraft Limit and upon the considering the said request, the applicant bank had sanctioned Over Draft Limit on 28.02.2019 of Rs.75.00 lakhs for its business purposes towards working capital.

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It is submitted by applicant bank that the 1^st defendant had executed the following loan documents towards availing the said OD Limit of Rs.75.00 lakhs:

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a) Request for Overdraft facilities

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b) Pronote for Rs.75.00 lakhs

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c) Take Delivery Letter to DPN

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d) Common Hypothecation Agreement

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e) Cash Credit Agreement

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f) Letter of Undertaking

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The applicant further submits that 3^rd defendant stood as guarantor for the said OD Limit of Rs.75.00 lakhs availed by 1^st defendant and executed the Guarantee Covering Letter and Guarantee Agreement on 28.02.2019 in favour of the applicant.

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It is submitted by the applicant bank that defendants have approached for an additional Working Capital Term Loan of Rs.2.00 lakhs and for restructuring of the Over Draft Limit and the applicant bank had sanctioned the WCTL of Rs.2.00 lakhs on 30.10.2019 towards the part of Debt Restructuring.

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It is submitted that defendants had requested for restructuring the OD Limit and upon the considering the said request the applicant bank had restructured the existing working capital term loan limit and the defendant have executed the following documents on 30.10.2019:

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a) Debt Restructuring Agreement

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b) Letter of undertaking from guarantor for restructuring loan

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c) Debtor creditor Agreement

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The applicant submits that at request of the 1^st defendant, applicant bank had sanctioned additional Term Loan towards COVID in a sum of Rs.4.53 lakhs and the 1^st defendant had availed the same. Applicant

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sanctioned Covid FITL of Rs.5,10,015/- to the 1^st defendant towards the relief granted for Covid relief and the said loan was disbursed to the 1^st defendant.

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The Applicant further submits that defendant had executed the Acknowledgement of Debt and Security on 27.01.2022 towards confirming the liability of OD limit account No.2604256000064, Working Capital Limit Account No.2604746000002, Working Capital Term Loan Account No.260474000004 & Covid FITL account No.2604710000006.

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It is submitted that 3^rd defendant being mortgagor had deposited the title deeds of the secured assets, towards securing the Credit limits availed by the 1^st defendant.

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a) Memorandum of deposit of title deeds executed by 3^rd defendant in favour of Canara Bank, Doc.No.2450/2019 dated 22.02.2019

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b) Sale Deed Doc.No.834/2012, dated 01.02.2012 executed by M/s Marg Limited in favour of Mrs. Rajeshwari

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c) Agreement for Sale and Construction

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d) Sale Deed dated 29.08.2008, Doc.No.7520/2008, in favour of 3^rd defendant.

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It is submitted that interest shall be charged on the outstanding in the account of the 1^st defendant in respect of the OD, restructuring of the OD and additional Working Capital Term Loan, Working Capital Term Loan,

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Covid FITL facility at such rates as may be determined by the bank from time to time in consonance with the interest rates prescribed by the Head Office of the Bank and base rate from time to time and also in terms of the agreements executed from time to time. The interest will be charged on daily balances with such interest being added to the balance outstanding on the last working day of every calendar month and the said interest if unpaid will become part of the amount advanced and bear interest at the same rate. The defendants agreed that the applicant bank is entitled to charge overdue interest as per sanction terms and conditions of sanction.

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The applicant further submits that sanction letter, agreements, documents executed by the defendants authorize the bank to charge at its own discretion enhanced rate of interest for any irregularity or breach of the terms or any change in the credit rating. The defendants have agreed to pay such enhanced rate of interest without any demur.

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It is submitted that subsequent to availing of loan, inspite of repeated demands and several reminders made by the applicant, the defendants have failed and neglected to repay the liability owed by them to the applicant under the aforesaid credit facilities and the accounts has become irregular and was classified as Non-Performing Asset (NPA) on 29.09.2020 as per the directives of RBI. Though several opportunities

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have been provided to the defendants to regularize the loan documents, they have failed and neglected to do so. The defendants have not kept up their commitments. Hence the present Original Application (OA) has been filed by applicant bank for recovery of its amount due from defendants.

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After the filing of the OA, summons were sent to the Defendants 1 to 3 through Registered Post with Acknowledgment Due, which was returned unserved with postal endorsement as “Unclaimed” in respect of D-1 and D-2, while summons to D-3 is duly served. Although defendants 1 to 3 entered appearance through their counsel, did not file written statement despite availing four adjournments. When OA was taken up on 30.03.2023 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 to 3 were placed ex-parte on 30.03.2023.

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Heard the submissions of Applicant Bank and perused the

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record s.

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To prove the case of the Applicant Bank, Sh. Suresh Kumar Senior Manager of 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-21 . As the Defendants remained exparte, 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 jointly and severally, a total sum of Rs.1,15,73,245.87p (Rupees

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One Crore Fifteen Lakhs Seventy Three Thousand Two Hundred and Forty Five and Eighty Seven Paisa only) as follows:

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(i) A sum of Rs.1,02,18,779.51p due in respect of OD

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Limit (Account No.2604256000064) repayable together with further interest @ 17.80% p.a. with monthly rests from the date of application till the date of realisation in full;

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(ii) A sum of Rs.2,67,354.66p due in respect of Additional

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Working Capital limit (Account No.2604746000002)

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repayable together with further interest @9.40% p.a., with monthly rests plus @2% p.a. penal interest from the date of application till the date of realisation in full;

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(iii) A sum of Rs.4,64,709.54p due in respect of Covid Working Capital Term Loan (Account

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O.A. No. 356 of 2022

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No.2604746000004) repayable together with further interest @14.25% p.a., with monthly rests plus 2% p.a. penal interest from the date of application till the date of realisation in full;

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(iv) A sum of Rs.6,22,402.16p due in respect of Covid FITL Loan (Account No.2604710000006) repayable together with further interest @9.75% p.a. with monthly rests plus 2% p.a. penal interest from the date of Application till the date of realization in full along with costs of this application.

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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 immovable properties more fully detailed in the OA schedule.

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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 2^nd and 3^rd Defendants (both movable and immovable) to recover the balance dues as required under law for which the 2^nd and 3^rd Defendants to disclose to the Tribunal particulars of other properties or assets owned by the Defendants 2 and 3.

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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 Defendants 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 (Mogesh), transcribed by him, corrected, signed and pronounced by me on this the 17^th day of July, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sh. Suresh Kumar, Senior Manager of 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.	Request for Overdraft Facilities dated 28.02.	2019	A-1
2.	Take Delivery Letter to DPN dated 28.02.20	19	A-2
3.	Pronote dated 28.02.2019		A-3
4.	Common Hypothecation Agreement 28.02.2019	dated	A-4
5.	Cash Credit Agreement dated 28.02.2019		A-5
6.	Letter of undertaking dated 28.02.2019		A-6
7.	Guarantee covering Letter & Gua Agreement of 3^rddefendant dated 28.02.20	rantee 19	A-7
8.	Application to the Branch for restructuri loan submitted by the 1^stdefendant 28.10.2019	ng the dated	A-8
9.	Sanction Memorandum for Rs.2.00 lakhs dated 30.10.2019	WCTL	A-9
10.	Debt Restructuring Agreement dated 30.10.	2019	A-10
11.	Letter of undertaking from guaranto Restructuring Loan dated 30.10.2019	r for	A-11
12.	Debtor Creditor Agreement dated 30.10.201	9	A-12
13.	Sanction Memorandum of Rs.4,53,000/- 31.03.2020	dated	A-13
14.	Sanction Memorandum of COVID Rs.5,10,015/-dated 01.09.2020	FITL	A-14
15.	Acknowledgement of Debt and Security 27.01.2022	dated	A-15
16.	Memorandum of Deposit of Title Deeds ex by 3^rddefendant in favour of the ap registered as Doc.No.2450/2019 22.02.2019	ecuted plicant, dated	A-16
17.	Construction Agreement entered betwee Marg Limited and 3^rdDefendant dated 05.07	n M/s .2009	A-17
18.	Sale Deed in favour of 3^rddefendant registe Doc.No.834/2012 dated 01.02.2012	red as	A-18
19.	Tripartie Agreement by M/s Easy Communi & Systems Private limited and M/s S.R. Pro & Mrs. S. Rajeshwari dated 25.07.2008	cations moters	A-19
20.	Sale Deed in favour of 3^rddefendant registe Doc.No.7520/2008 dated 29.08.2008	red as	A-20
21.	Statement of Accounts & Banker’s Certificat	e	A-21

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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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Item No.1:

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( Property in the name of 3^rd defendant – Mrs. Rajeshwari covered vide Doc.No.834/2012)

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A residential apartment consisting of Three Bedroom Hall Kitchen

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having super built up area of 1219 sq.ft bearing No.1402 in 13^th floor in Block C including proportionate share in the common area in the building known as Pushpadruma together with 421 sq.ft undivided share together with perpetual and non-exclusive right if way and right to use the common areas along with other allottees in the land admeasuring of an extent of 2 acres and 12 cents comprised in S.No.36/3A, Sub-division S.No.36/3A1, and 1 acre 48 cents in S.No.36/4A and 80 cents in S.No.36/4B totally 4 acres and 40 cents, situated in No.106, Kalavakkam Village, Thiruporur Panchayat, Kancheepuram District.

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Bounded on the North by: S.No.33/1,2,3 & 5

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South by: Panchayat road,

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West by: S.No.37,11 and Old Mahabalipuram Mainroad East by: S.No.36/1, 2A, 2B

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And within the Registration district of Chengalpet and registration SubDistrict of Thiruporur.

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Item No.2:-

( Property in the name of 3^rd defendant, Mrs. Rajeshwari covered vide Doc.No.1428/2016)

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Flat No.S-2 with 1001 sq.ft built up area inclusive of common area in 2^nd

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floor together with 462 sq.ft or 42.92 sq.mt of Undivided share of land in the land being house site, bearing plot No.23 at S.M.S. Nagar at No.4

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Urapakkam Village, Chengalpat Taluk, Kancheepuram District, comprised in S.No.114/3 part, measuring an extent of 2310 sq.ft and bounded on the

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North by: Plot No.24

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South by: Plot No.22 East by: 30 feet Road, West by: Private land,

Measuring

North by: 70 feet

South by: 70 feet

East by: 33 feet

West by: 33 feet

Situated within the Registration District of Chennai South and the Registration Sub-District of Guduvancherry.

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

Canara Bank v. M s Jaya Enterprises

Case brief

What is this about?

What did the court decide?

Canara Bank v. M s Jaya Enterprises

Case brief

What is this about?

What did the court decide?

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