Allowed

Kotak Mahindra Bank Limited v. Mr K Srinivasan

DRT23 Jan 2025OA/38/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the bank's original application filed under Section 19(1) of the RDB Act. The court approved the recovery of the principal amount, interest, and costs owed by the respondents for three distinct vehicle and credit line loans, permitting the sale of hypothecated JCB vehicles if payment fails.

What did the court decide?

Allowed the OA; ordered recovery of Rs.34,94,342.70/ along with interest and costs; allowed sale of hypothecated JCB vehicles; directed issuance of Recovery Certificate.

Kotak Mahindra Bank Limited versus Mr K Srinivasan — Banking and Recovery | DRT (2025)

¶1

OA No.38/2022 (E)

¶2

23.01.2025

¶3

¶4

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

¶5

Dated this the 23^rd day of January, 2025

¶6

Present: SMT. S.V. GOWRAMMA Presiding Officer

¶7

ORIGINAL APPLICATION No. 38 of 2022

¶8

M/s. Kotak Mahindra Bank Limited, Rep by its Manager-Legal, No.141, 8^th floor, Zone – 2,

¶9

TVH Agnito Park, Old Mahabalipuram Road, Kandhanchavadi, Chennai-600 096.

¶10

…. Applicant

¶11

-Vs-

¶12

Mr. K. Srinivasan, S/o. Mr. Krishnan No.1/24, Kossvan Palayam Main Road, Kottamedu Post, Thiruvanmiyur, Thiruvallur – 602024.

¶13

Mrs. S.Suguna W/o. Mr.K. Srinivasan No. 1/24, Kossvan Palayam Main Road, Kottamedu Post,Thiruvanmiyur, Thiruvallur – 602 024. …..Defendants

¶14

Counsels on record / appeared:

¶15

Counsel for Applicant Bank : Ms. Ananda Gomathy Murugesan

¶16

Defendants 1 & 2 were set ex-parte on 14.06.2022

¶17

: - F I N A L O R D E R - :

¶18

This original application is filed on 30.08.2021 by the applicant bank under

¶19

OA No.38/2022 (E)

¶20

¶21

23.01.2025

¶22

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 for recovery of a total sum of Rs.34,94,342.70/- (Rupees Thirty Four Lakh Ninety Four Thousand Three Hundred Forty-Two and Seventy Paise only) out of which

¶23

(a) a sum of Rs.18,95,362.88p is due in respect of Vehicle Loan – I (Account No.CE-905541) together with interest therein @ 9.68% per annum with monthly rests and;

¶24

(b) a sum of Rs.10,47,224.24p due under Vehicle Loan – II (Account No.CE801186) together with interest thereon @ 14.26% per annum with monthly rests and;

¶25

(c) a sum of Rs. 5,51,755.58p in respect of Emergency Credit Line Guarantee Scheme Loan (Account No. CE – 949635) together with interest @ 9.25% per annum with monthly rests from the date of application till the date of realization in full, for sale of hypothecated items more fully described in schedule A of OA and for costs of this application.

¶26

Brief Facts of the case:

¶27

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.

¶28

3 The case of the applicant bank is that the Defendants 1 and 2, being husband and wife, approached the applicant bank seeking financial assistance for purchase of construction equipment of JCB, for expansion of his business.

¶29

It is submitted by the applicant bank that the 1^st defendant approached the

¶30

OA No.38/2022 (E)

¶31

¶32

23.01.2025

¶33

applicant bank and sought for sanction of a Construction Equipment Loan –I for purchase of Backhoe Loader JCB 3DX to the tune of Rs. 23,67,199/- which was sanctioned vide Letter of Sanction dated 03.09.2019.The same was considered favourably by applicant bank and the following documents were executed by the defendants on 03.10.2019.

¶34

(a) Demand Promissory note dated 03.10.2019 for Rs. 23,67,199/- with interest @ 9.68% per annum with compounded monthly rests.

¶35

(b) Loan cum guarantee agreement for Rs. 23,67,199/- repayable in 47 equated monthly installments starting from 20.11.2019 and thereby hypothecating Backhoe Loader JCB 3DX more fully described in Schedule “A”.

¶36

The applicant bank further submits that the 1^st defendant approached the applicant bank on 27.10.2020 and sought for sanction of another construction equipment Loan – II, of Rs.10,47,224.24/- to purchase JCB for further expansion of his business. The same was considered favourably by the applicant bank and the defendants had executed the below mentioned documents in favour of the applicant bank.

¶37

(a) Demand promissory note dated 03.11.2020 for Rs. 13,15,335/- with interest @ 14.26% per annum with compounded monthly rests.

¶38

(b) Loan cum agreement for Rs. 13,15,335/- repayable in 35 equated monthly installments from 10.12.2020and thereby hypothecating Backhoe Loader JCB 3DX more fully described in schedule –“A”.

¶39

It is submitted by the applicant bank that the defendants jointly approached the applicant bank during January 2024 and sought for sanction of loan under

¶40

OA No.38/2022 (E)

¶41

23.01.2025

¶42

¶43

Emergency Credit Line Guarantee Scheme (ECLGS). ECLGS is a part of comprehensive package announced by the Ministry of Finance, Government of India, on 13.05.2020 to aid eligible business enterprises/ Micro, Small and medium Enterprises sector in view of the economic distress caused by the COVID-19 pandemic. The same was considered favorably by the applicant and the applicant bank sanctioned The Emergency Credit Line Guarantee Scheme(ECLGS) Loan of Rs. 5.43 Lakhs availed by the defendants, the following documents were executed by the defendants on 11.01.2021.

¶44

(a) Term Loan agreement for 5.43 Lakhs with interest @ 9.25% per annum repayable in 48 equated monthly installments.

¶45

(b) Deed of hypothecation for Rs. 5.4 Lakhs.

¶46

The Applicant Bank submits that the Defendants, after availing the said facilities, failed to repay the loan amount despite several reminders and thus committed default. The loan account was classified as NPA on 08.12.2020. The default in repayment continued and there was no positive response from the defendants. Hence, the applicant bank issued Registered Notice dated 02.07.2021 despite which defendants did not come forward to repay the dues. Hence, this Original Application (OA) has been filed to recover the dues from the defendants.

¶47

After the filing of the OA, summons was sent to the Defendant Nos.1 & 2 through Registered Post with Acknowledgment Due, which was duly served on the defendants. When OA was taken up on 14.06.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants

¶48

OA No.38/2022 (E)

¶49

23.01.2025

¶50

¶51

1 & 2 were placed ex-parte on 14.06.2022.

¶52

Heard the submissions of Applicant Bank and perused the records.

¶53

To prove the case of the Applicant Bank, Sri. P. Thiyagarajan, Manager 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 A1 to A14. 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.

¶54

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:

¶55

: O R D E R:

¶56

12. The OA is allowed with costs,

¶57

(a) The applicant bank is allowed to recover from Defendants No. 1 and 2 jointly, severally a sum of Rs.34,94,342.70/- (Rupees Thirty Four Lakh

¶58

Ninety Four Thousand Three Hundred Forty-Two and Seventy Paise

¶59

only) out of which

¶60

(b) a sum of Rs.18,95,362.88p is due in respect of Vehicle Loan – I (Account No.CE-905541) together with interest therein @ 9.68% per annum with monthly rests and;

¶61

(c) a sum of Rs.10,47,224.24p due under Vehicle Loan – II (Account No.CE- 801186) together with interest thereon @ 14.26% per annum with monthly rests and;

¶62

OA No.38/2022 (E)

¶63

23.01.2025

¶64

¶65

(d) a sum of Rs. 5,51,755.58p in respect of Emergency Credit Line Guarantee Scheme Loan (Account No. CE – 949635) together with interest @ 9.25% per annum with monthly rests from the date of application till the date of realization in full, for sale of hypothecated items more fully described in schedule A of OA and for costs of this application.

¶66

(e) 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 hypothecated movables more fully detailed in the OA;

¶67

(f) Schedule mentioned hypothecated movables in the OA shall be appended to this final order;

¶68

(g) 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 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.

¶69

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

¶70

OA No.38/2022 (E)

¶71

23.01.2025

¶72

¶73

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

¶74

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

¶75

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

¶76

(Dictated to Saranya, transcribed by her, corrected, signed and pronounced by me on this the 23^rd

¶77

day of January, 2025)

¶78

OA No.38/2022 (E)

23.01.2025

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK :

¶83

AW-1: Shri.P. Thiyagarajan, Manager of the applicant bank.

¶84

Exhibits on the part of the Applicant:

¶85

Sl. No.	Description of Documents	Exhibit No.
	AW-1
1.	Proof Affidavit
2.	Customer relation Formofthe1^st defendant	A-1
3.	Customer relation Formofthe2^nd defendant	A-2
4.	Linkages of product form with CRF from submitted by the1^st and2^nd defendants.	A-3
5.	Demand promissorynotefor Rs. 23,67,199/-	A-4
6	Loan cum guarantee agreement along with schedules for Rs23,67,199/-executed by the defendants.	A-5
7	Customer relation formofthe1^st defendant.	A-6
8	Customer relation form of the2^nddefendant	A-7
9	Linkages of product form with CRF from submitted by the1^st and2^nd defendants	A-8
10	Demand promissorynotefor Rs. 13,15,335/-	A-9
11	Loan cum guarantee agreement along with schedules for Rs. 13,15,335/-executed by the defendants.	A-10
12	Credit sanction Advisefor ECLGS of Rs.5.43Lakhs	A-11
13	Deed of hypothecation for Rs.5,43,000/-	A-12
14	RegisteredNoticeissued by the applicationbank.	A-13
15	Statement ofaccounts andBBEcertificate	A-14

¶86

Witness Examined for the Defendants: -Nil-

¶87

List of Documents Exhibited for the Defendants: -Nil –

¶88

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

¶89

OA No.38/2022 (E)

23.01.2025

:Schedule:

(Hypothecated Items)

Hypothecation of Backhoe Loader JCB 3DX Vehicle Registration Number : TN 12S 0021

¶95

Maker’s Name : JCB India Ltd Engine Number : H00129636 Chasis Number : HAR3DXSSV02522590

¶96

Hypothecation of Backhoe Loader JCB 3DX Vehicle Registration Number : TN 20DA 0874 Maker’s Name : JCB India Ltd Engine Number : H00235510 Chasis Number : 839662

¶97

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

Kotak Mahindra Bank Limited v. Mr K Srinivasan

Case brief

What is this about?

What did the court decide?

Kotak Mahindra Bank Limited v. Mr K Srinivasan

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

Uco Bank versus M/s. M.S. Traders Sole Proprietor Mr. M. Karthick

Canara Bank versus C R Malarvannan

Kotak Mahindra Bank Limited versus vel logistics