Allowed

City Union Bank Limited v. Dr S Saravanan

DRT30 Oct 2025OA/434/2022

Case brief

AI extract

What is this about?

The DRT allowed the bank's application for a Recovery Certificate, finding the loan liability proved. The court rejected penal interest but permitted recovery of the principal plus 10% simple interest pending realization.

What did the court decide?

Recovery Certificate directed for Rs.27,20,704/- plus 10% simple interest from filing date; penal interest rejected.

City Union Bank Limited versus Dr S Saravanan — Contract and Commercial Disputes | DRT (2025)

¶1

BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

¶2

Dated this 30^th day of October, 2025

¶3

PRESENT: SHRI SHARANG DHAR UPADHYAY PRESIDING OFFICER

¶4

OA No.434 of 2022

¶5

City Union Bank Ltd., Kumbakonam Town Branch 35/14, Kamatchi, Josier Street, Swaminatha Nagar Valayapettai Agraharam Kumbakonam – 612 001 Represented by its Branch Manager …Applicant

¶6

Versus

¶7

Dr. S. Saravanan Son of Mr. Sundararajulu No.45/31, Dabir West Street Kumbakonam – 612 001

¶8

Mrs. Vanitha Wife of Dr. S. Saravanan No.45/31, Dabir West Street Kumbakonam – 612 001 ... Defendants

¶9

Counsels on Record / Appeared

¶10

Counsel for Applicant Bank : M/s S. Anuradha Balaji Defendants ex-parte on 24.08.2023

¶11

FINAL ORDER

¶12

This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 against the defendants seeking issuance of a Recovery Certificate for recovery of an aggregate

¶13

¶14

sum of Rs.27,20,704/- comprising a sum of Rs.6,66,255/- together with interest at the rate of 12.5% per annum with monthly rests plus 2% penal interest being the amount due under Loan Account No.501812080036821; a sum of Rs.9,54,478/- together with interest at the rate of 12.5% per annum with monthly interest plus 2% penal interest being the amount due under Loan Account No.501812080050561 and a sum of Rs.10,99,971/together with interest at the rate of Rs.12.5% per annum with monthly rests plus 2% penal interest being the amount due under Loan Account No.501812080072094 from the date of the application till the date of realisation along with costs of the application and for schedule mentioned properties.

¶15

The subject matter of the case is the Term Loans availed by the defendants from the Applicant Bank.

¶16

It is the case of the applicant that the defendants approached the applicant for grant of loan for the purpose of business against the hypothecation of machinery owned by the 1^st defendant more fully described in the schedule to the OA. Considering the said request the applicant sanctioned a General Loan – Non Scheme Loan in the nature of Term Loan of Rs.10,00,000/- to the defendants on 08.03.2018. It is stated that the 1^st defendant as the borrower and the 2^nd defendant as co-obligant executed

¶17

¶18

necessary loan documents including Demand Promissory Note on 12.03.2018.

¶19

It is also the case of the applicant that at the request of the defendants the applicant bank sanctioned further credit facilities of Rs.10,00,000/- each on 27.03.2019 and 30.06.2020 respectively. It is stated that the defendants executed necessary loan and security documents in favour of the applicant on 27.03.2019 and 01.07.2020 respectively.

¶20

It is the further case of the applicant that the defendants also executed letter of revival and confirmation of balance on 03.02.2021 and 29.01.2022 in respect of the loan accounts sanctioned on 08.03.2018 and 27.03.2019 respectively.

¶21

It is the case of the applicant that having availed the loan the defendants defaulted in repayment and failed to regularize the loan account despite repeated request and hence the loan account was classified as NPA on 25.08.2021. As no payment was forthcoming the applicant issued a legal notice dated 27.07.2022. Despite the receipt of the said notice the defendants did not come forward to clear the dues. Hence the applicant is filing this OA for recovery of its dues.

¶22

Summons was taken out to the defendants returned unserved and hence were served summons by way of substituted service by causing paper

¶23

¶24

publication. As there was no representation on behalf of the defendants continuously and on 24.08.2023, the defendants were called absent and placed ex-parte on that day. Applicant Bank filed Proof Affidavit along with 28 documents, which were marked as Ex. A-1 to A-28 on 04.04.2024. The Ld. Counsel for Applicant Bank made his submissions on 25.09.2025 and thereafter the matter stood till this date for passing final orders.

¶25

The following issues arise for consideration in the matter: -

¶26

(a) Whether the applicant had succeeded in proving the liability of the defendants?

¶27

(b) What order as to cost of the proceedings need be passed?

¶28

These issues are considered together.

¶29

Heard the Ld. Counsel for the applicant, perused the OA averments and the record placed before the Tribunal.

¶30

The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-28 along with the proof affidavit. The documents produced in evidence are all found admissible. The proof affidavit of the applicant bank remained unchallenged and unrebutted. Therefore, on careful consideration of proof affidavit along with exhibits filed on behalf of the applicant bank, besides the material placed before the Tribunal, the

¶31

¶32

Tribunal is satisfied that the applicant bank has successfully proved the OA claim against the defendants. Further, the statement of accounts in respect of the loan account produced and certified under the Banker’s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendants. It is clear from the statement of accounts that penal interest is not capitalized.

¶33

In view of the foregoing, it is clearly evident that the application filed by the applicant bank is well within the period of limitation and this Tribunal possesses the territorial and pecuniary jurisdiction to entertain this OA.

¶34

In view of the fact that the loan facility availed by the defendant is a Term Loan and the applicant has claimed interest at contractual rate till the date of filing of the OA, this Tribunal is of the view that the pendente lite interest can be awarded at reduced rates and prayer for award of penal interest is rejected.

¶35

In view of the afore mentioned discussions, the only conclusion this Tribunal can draw is that the applicant had clearly proved the disbursement of the loan, which the applicant is entitled to realize. Hence, OA is disposed off in the following manner: -

¶36

(a) OA No.434 of 2022 stands allowed.

¶37

¶38

(b) Applicant is permitted to realize a sum of Rs.27,20,704/- together with interest at the date of 10% (Simple) from the date of filing of the application till the date of realization in full, from the defendants jointly and severally after deducting all the amounts received / realized by them during the pendency of OA and also by selling the schedule mentioned hypotheca and other assets of the defendants.

¶39

(c) If the sale proceeds are not found sufficient to cover the amount due and payable to the Applicant Bank the defendants are personally liable for all such amounts due as ordered above.

¶40

(d) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 15 days from the date of receipt of the copy of the order.

¶41

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

¶42

Communicate a copy of the order to the parties concerned in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

¶43

Sd/(SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

¶44

(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 30^th day of October, 2025)

¶45

¶46

EXHIBITS MARKED BY APPLICANT BANK

¶47

S. No.	Date	Description of Documents	Exhibit Nos.
1.	08.03.2018	Sanction ticket issued by the applicant bank	A-1
2.	08.03.2018	Sanction letter issued by the applicant bank	A-2
3.	12.03.2018	Demand Promissory Note executed by the defendants.	A-3
4.	12.03.2018	Application cum undertaking for loan executed by the defendants.	A-4
5.	12.03.2018	Consent letter for EMI Loans executed by the defendants.	A-5
6.	12.03.2018	Hypothecation agreement for machinery executed by 1^stdefendant	A-6
7.	03.02.2021	Letter of revival of secured advances executed by the defendants	A-7
8.	03.02.2021	Confirmation of balance executed by the defendants.	A-8
9.	27.03.2019	Sanction ticket issued by the applicant bank	A-9
10.	27.03.2019	Sanction letter issued by the applicant bank	A-10
11.	27.03.2019	Demand Promissory Note executed by the defendants	A-11
12.	27.03.2019	Application cum undertaking for loan executed by the defendants	A-12
13.	27.03.2019	Consent letter for EMI Loans executed by defendants.	A-13
14.	27.03.2019	Hypothecation Agreement for machinery executed by the 1^stdefendant	A-14

¶48

¶49

15.	29.01.2022	Letter of revival of secured advances executed by the defendants	A-15
16.	29.01.2022	Confirmation of balance executed by the defendants	A-16
17.	30.06.2020	Sanction ticket issued by the applicant bank	A-17
18.	30.06.2020	Sanction letter issued by the applicant bank	A-18
19.	01.07.2020	Demand Promissory Note executed by the defendants	A-19
20.	01.07.2020	Application cum undertaking for loan executed by the defendants	A-20
21.	01.07.2020	Consent letter for EMI Loan executed by the defendants	A-21
22.	01.07.2020	Hypothecation agreement for machinery executed by the 1^stdefendant	A-22
23.	01.07.2020	End use certificate executed by the defendant	A-23
24.	27.07.2022	Legal notice issued by the applicant	A-24
25.	30.07.2022	Proof of delivery of legal notice – 02 Acknowledgement cards	A-25
26.		Statement of Accounts – A/c No.501812080036821	A-26
27.		Statement of Accounts – A/c No.501812080036821	A-27
28.		Statement of Accounts – A/c No.501812080036821	A-28

¶50

Sd/-

¶51

(SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

¶52

¶53

DESCRIPTION OF PROPERTY

¶54

Video Processor with build in Halogen Light Source.

¶55

Video Bronchoscope.

¶56

Leakage Tester

¶57

Biopsy Forceps – Reusable

¶58

Bronchoscope Trolley

¶59

Monitor 19”

¶60

Image Capture Software

¶61

LTF-160 – Semi Rigid Thoracoscope

¶62

LTF-160 – High Frequency Ventilator

¶63

Sd/-

¶64

(SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

¶65

BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

¶66

Dated this 30^th day of October, 2025

¶67

PRESENT: SHRI SHARANG DHAR UPADHYAY PRESIDING OFFICER

¶68

OA No.434 of 2022

¶69

City Union Bank Ltd., Kumbakonam Town Branch 35/14, Kamatchi, Josier Street, Swaminatha Nagar Valayapettai Agraharam Kumbakonam – 612 001 Represented by its Branch Manager

…Applicant

Versus

Dr. S. Saravanan Son of Mr. Sundararajulu No.45/31, Dabir West Street Kumbakonam – 612 001

¶74

Mrs. Vanitha Wife of Dr. S. Saravanan No.45/31, Dabir West Street Kumbakonam – 612 001 ... Defendants

¶75

Counsels on Record / Appeared

¶76

Counsel for Applicant Bank : M/s S. Anuradha Balaji Defendants ex-parte on 24.08.2023

¶77

FINAL ORDER

¶78

This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 against the defendants seeking issuance of a Recovery Certificate for recovery of an aggregate sum of Rs.27,20,704/- comprising a sum of Rs.6,66,255/- together with interest at the rate of 12.5% per annum with monthly rests plus 2% penal interest being the amount due under Loan Account No.501812080036821; a sum of Rs.9,54,478/- together with interest at the rate of 12.5% per annum with monthly interest plus 2% penal interest being the amount due under Loan Account No.501812080050561 and a sum of Rs.10,99,971/together with interest at the rate of Rs.12.5% per annum with monthly rests plus 2% penal interest being the amount due under Loan Account No.501812080072094 from the date of the application till the date of

¶79

¶80

realisation along with costs of the application and for schedule mentioned properties.

¶81

The subject matter of the case is the Term Loans availed by the defendants from the Applicant Bank.

¶82

It is the case of the applicant that the defendants approached the applicant for grant of loan for the purpose of business against the hypothecation of machinery owned by the 1^st defendant more fully described in the schedule to the OA. Considering the said request the applicant sanctioned a General Loan – Non Scheme Loan in the nature of Term Loan of Rs.10,00,000/- to the defendants on 08.03.2018. It is stated that the 1^st defendant as the borrower and the 2^nd defendant as co-obligant executed necessary loan documents including Demand Promissory Note on 12.03.2018.

¶83

It is also the case of the applicant that at the request of the defendants the applicant bank sanctioned further credit facilities of Rs.10,00,000/- each on 27.03.2019 and 30.06.2020 respectively. It is stated that the defendants executed necessary loan and security documents in favour of the applicant on 27.03.2019 and 01.07.2020 respectively.

¶84

It is the further case of the applicant that the defendants also executed

¶85

letter of revival and confirmation of balance on 03.02.2021 and 29.01.2022

¶86

¶87

in respect of the loan accounts sanctioned on 08.03.2018 and 27.03.2019 respectively.

¶88

It is the case of the applicant that having availed the loan the defendants defaulted in repayment and failed to regularize the loan account despite repeated request and hence the loan account was classified as NPA on 25.08.2021. As no payment was forthcoming the applicant issued a legal notice dated 27.07.2022. Despite the receipt of the said notice the defendants did not come forward to clear the dues. Hence the applicant is filing this OA for recovery of its dues.

¶89

Summons was taken out to the defendants returned unserved and hence were served summons by way of substituted service by causing paper publication. As there was no representation on behalf of the defendants continuously and on 24.08.2023, the defendants were called absent and placed ex-parte on that day. Applicant Bank filed Proof Affidavit along with 28 documents, which were marked as Ex. A-1 to A-28 on 04.04.2024. The Ld. Counsel for Applicant Bank made his submissions on 25.09.2025 and thereafter the matter stood till this date for passing final orders.

¶90

The following issues arise for consideration in the matter: -

¶91

(a) Whether the applicant had succeeded in proving the liability of the defendants?

¶92

¶93

(b) What order as to cost of the proceedings need be passed?

¶94

These issues are considered together.

¶95

Heard the Ld. Counsel for the applicant, perused the OA averments and the record placed before the Tribunal.

¶96

The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-28 along with the proof affidavit. The documents produced in evidence are all found admissible. The proof affidavit of the applicant bank remained unchallenged and unrebutted. Therefore, on careful consideration of proof affidavit along with exhibits filed on behalf of the applicant bank, besides the material placed before the Tribunal, the Tribunal is satisfied that the applicant bank has successfully proved the OA claim against the defendants. Further, the statement of accounts in respect of the loan account produced and certified under the Banker’s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendants. It is clear from the statement of accounts that penal interest is not capitalized.

¶97

In view of the foregoing, it is clearly evident that the application filed by the applicant bank is well within the period of limitation and this Tribunal possesses the territorial and pecuniary jurisdiction to entertain this OA.

¶98

¶99

In view of the fact that the loan facility availed by the defendant is a Term Loan and the applicant has claimed interest at contractual rate till the date of filing of the OA, this Tribunal is of the view that the pendente lite interest can be awarded at reduced rates and prayer for award of penal interest is rejected.

¶100

In view of the afore mentioned discussions, the only conclusion this Tribunal can draw is that the applicant had clearly proved the disbursement of the loan, which the applicant is entitled to realize. Hence, OA is disposed off in the following manner: -

¶101

(a) OA No.434 of 2022 stands allowed.

¶102

(b) Applicant is permitted to realize a sum of Rs.27,20,704/- together with interest at the date of 10% (Simple) from the date of filing of the application till the date of realization in full, from the defendants jointly and severally after deducting all the amounts received / realized by them during the pendency of OA and also by selling the schedule mentioned hypotheca and other assets of the defendants.

¶103

(c) If the sale proceeds are not found sufficient to cover the amount due and payable to the Applicant Bank the defendants are personally liable for all such amounts due as ordered above.

¶104

¶105

(d) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 15 days from the date of receipt of the copy of the order.

¶106

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

¶107

Communicate a copy of the order to the parties concerned in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

¶108

Sd/(SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

¶109

(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 30^th day of October, 2025)

¶110

EXHIBITS MARKED BY APPLICANT BANK

¶111

S. No.	Date	Description of Documents	Exhibit Nos.
1.	08.03.2018	Sanction ticket issued by the applicant bank	A-1
2.	08.03.2018	Sanction letter issued by the applicant bank	A-2
3.	12.03.2018	Demand Promissory Note executed by the defendants.	A-3
4.	12.03.2018	Application cum undertaking for loan executed by the defendants.	A-4
5.	12.03.2018	Consent letter for EMI Loans executed by the defendants.	A-5
6.	12.03.2018	Hypothecation agreement for machinery	A-6

¶112

¶113

		executed by 1^stdefendant
7.	03.02.2021	Letter of revival of secured advances executed by the defendants	A-7
8.	03.02.2021	Confirmation of balance executed by the defendants.	A-8
9.	27.03.2019	Sanction ticket issued by the applicant bank	A-9
10.	27.03.2019	Sanction letter issued by the applicant bank	A-10
11.	27.03.2019	Demand Promissory Note executed by the defendants	A-11
12.	27.03.2019	Application cum undertaking for loan executed by the defendants	A-12
13.	27.03.2019	Consent letter for EMI Loans executed by defendants.	A-13
14.	27.03.2019	Hypothecation Agreement for machinery executed by the 1^stdefendant	A-14
15.	29.01.2022	Letter of revival of secured advances executed by the defendants	A-15
16.	29.01.2022	Confirmation of balance executed by the defendants	A-16
17.	30.06.2020	Sanction ticket issued by the applicant bank	A-17
18.	30.06.2020	Sanction letter issued by the applicant bank	A-18
19.	01.07.2020	Demand Promissory Note executed by the defendants	A-19
20.	01.07.2020	Application cum undertaking for loan executed by the defendants	A-20
21.	01.07.2020	Consent letter for EMI Loan executed by the defendants	A-21
22.	01.07.2020	Hypothecation agreement for machinery	A-22

¶114

¶115

		executed by the 1^stdefendant
23.	01.07.2020	End use certificate executed by the defendant	A-23
24.	27.07.2022	Legal notice issued by the applicant	A-24
25.	30.07.2022	Proof of delivery of legal notice – 02 Acknowledgement cards	A-25
26.		Statement of Accounts – A/c No.501812080036821	A-26
27.		Statement of Accounts – A/c No.501812080050561**	A-27
28.		Statement of Accounts – A/c No.501812080072094**	A-28

¶116

Sd/- (SHARANG DHAR UPADHYAY) PRESIDING OFFICER

¶117

DRT-II, CHENNAI

¶118

**Amended as per the order of this Tribunal dated 10.02.2026

¶119

DESCRIPTION OF PROPERTY

¶120

Video Processor with build in Halogen Light Source.

¶121

Video Bronchoscope.

¶122

Leakage Tester

¶123

Biopsy Forceps – Reusable

¶124

Bronchoscope Trolley

¶125

Monitor 19”

¶126

Image Capture Software

¶127

LTF-160 – Semi Rigid Thoracoscope

¶128

LTF-160 – High Frequency Ventilator

¶129

¶130

Sd/(SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

¶131

City Union Bank Limited v. Dr S Saravanan

Case brief

What is this about?

What did the court decide?

City Union Bank Limited v. Dr S Saravanan

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

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