Allowed

Uco Bank v. S R Dress and Mobiles

DRT13 Oct 2025OA/646/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal, Madurai, adjudicated an Original Application filed by UCO Bank to recover outstanding dues from two borrowers. The defendants, representing a proprietary concern and themselves, failed to appear. The Tribunal found the bank's evidence of loan facility, utilization, and default uncontradicted, allowing the application for recovery of principal and interest with a direct

What did the court decide?

Recovery of Rs.39,15,221.75 with interest directed; liberty to sell properties on default; issuance of Recovery Certificate.

Uco Bank versus S R Dress and Mobiles — Contract and Commercial Disputes | DRT (2025)

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OA No. 646/2022

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 13^TH DAY OF OCTOBER, 2025 PRESENT: SEEMA SINHA,

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[PR. DISTRICT & SESSIONS JUDGE – Retd] PRESIDING OFFICER

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OA No.646/2022

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Between

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UCO Bank, Tuticorin Branch, No.148A, Elim Towers, 1^st Floor, Devarpuram Road, Tuticorin – 628 003. Rep. By its Senior Manager. ---Applicant Bank

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And

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S.R. Dress & Mobiles,

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Prop. K. Syeed Rasith, No.246, South New Street, Thoothukudi – 628 002.

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Mr. K. Syed Rasith,

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S/o Khaja Mohaideen,

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No.220, South new Street,

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Melur – Tuticorin,

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Tuticorin – 628 002. ---Defendants

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Counsel for the Applicant Bank : M/s T. Govindasamy

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This Original Application was heard and fixed for passing final order before me in the presence of the above said Advocate for Applicant Bank and the Defendants having been set ex-parte and upon hearing the arguments of Counsel for Applicant Bank and upon perusing the material available on the records and having stood over for consideration till this day, this Tribunal delivered the following:

Page 1 of 10

OA No. 646/2022

JUDGEMENT

1 . This Application has been filed under Sec.19 (1) of the "The Recovery of Debts due to Banks and Financial Institutions Act, 1993" now amended as The Recovery of Debts and Bankruptcy Act, 1993 by the Applicant Bank on 22.08.2022 to recover from the Defendants a total sum of Rs.39,15,221.75p i.e., (i) Rs.10,25,575.27p together with interest at the rate of 7.45% p.a. with monthly rests in respect of CC limit (ii) Rs.27,78,804.72p together with interest at the rate of 8.45% p.a. with monthly rests in respect of Term Loan (iii) Rs.8,789.75p together with interest at the rate of 8.05% p.a. with monthly rests in respect of Working Capital Term Loan (iv) Rs.1,02,052.01p together with interest at the rate of 8.05% p.a. with monthly rests in respect of Funded Interest Term Loan from the date of filing of Application till the date of realization with cost and by sale of mortgaged/hypothecated properties, more fully described in Schedules of the application.

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2 . The brief averments of the application filed by the Applicant Bank are as follows:-

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D-1 is the Proprietary concern and D-2 is the sole Proprietor of D-1. Both D-1 & D-2 are the Borrowers. Both D-1 & D-2 had approached the Applicant Bank by submitting the Application for Credit facilities dated 20.10.2020 under UCO Vyapar Samridhi Scheme duly executed by D-1 & D- 2 enclosing there with PAN Card bearing No.EWTPR1729C and Aadhaar Card bearing No.444341739769 both held in the name of D-2 and an unregistered Rental Agreement dated 21.09.2020 entered into between D-2 and K.Khaja Mohideen and Mrs. Wahidha Rehman before the Applicant Bank with the request for sanctioning of Term Loan of Rs.24,00,000/- for the purpose of purchase of Mobiles and Dresses and CC Limit of Rs.10,00,000/- for the purpose of Working Capital Requirement for the development of the business activities of D-1. The Applicant Bank, after scrutiny of the aforesaid loan application and other documents furnished by the borrowers, had sanctioned the Term Loan of Rs.24,00,000/- and the CC Limit of Rs.10,00,000/- to D-1 & D-2 and accordingly issued the sanction letter dated 22.10.2020 to them who had acknowledged the receipt of the same by agreeing to all the terms and conditions as stipulated there in the aforesaid sanction letter. In consideration of the aforesaid sanctioned Term Loan of Rs.24,00,000/- and the CC Limit of Rs.10,00,000/- availed by D-1 & D-2, as the borrowers, they had executed the following listed security loan documents in favour of the Applicant Bank on 22.10.2020.

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LIST OF SECURITY LOAN DOCUMENTS EXECUTED BY D-1 & D-2

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Page 2 of 10

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OA No. 646/2022

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Demand Promissory Note for Rs. 10,00,000/- duly executed by D-1 & D-2 in favour of the Applicant Bank dated 22.10.2020.

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Undertaking Letter for Rs. 10,00,000/- duly executed by D-1 & D-2 in favour of the Applicant Bank dated 22.10.2020.

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Take Delivery Letter to Demand Promissory Note for Rs. 10,00,000/-duly executed by D-1 & D-2 in favour of the Applicant Bank dated 22.10.2020.

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Composite Deed of Hypothecation for Rs.34,00,000/- duly executed by D- 1 & D-2 in favour of the Applicant Bank dated 22.10.2020.

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Demand Promissory Note for Rs.24,00,000/- duly executed by D-1 & D-2 in favour of the Applicant Bank dated 22.10.2020.

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Undertaking Letter for Rs.24,00,000/- duly executed by D-1 & D-2 in favour of the Applicant Bank dated 22.10.2020.

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Take Delivery Letter to Demand Promissory Note for Rs.24,00,000/-duly executed by D-1 & D-2 in favour of the Applicant Bank dated 22.10.2020.

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Agreement Relating to Term Loan for Rs.24,00,000/- duly executed by D- 1 & D-2 in favour of the Applicant Bank dated 22.10.2020.

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Both D-1 & D-2 had approached the Applicant Bank and submitted a letter dated 15.06.2021 before the Applicant Bank with the request for restructuring the repayment of loan dues in respect of the aforesaid Two Loan Accounts availed by them from the Applicant Bank. The Applicant Bank had favorably considered the request of D-1 & D-2 and accordingly disbursed Rs.8,378/- as Working Capital Term Loan and credited the same into the Loan Account bearing A/c.No.08860610079539 on 29.06.2021. Likewise the Applicant Bank had also disbursed Rs.96,961/- as the Funded Interest Term Loan and credited the same into the Loan Account bearing A/c.No.08860610079546 in a phased manner starting from 29.06.2021 (Rs.23,514/-), 22.07.2021 (Rs. 10,000/0), 06.08.2021 (Rs.6,290/-), 06.09.2021 (Rs.6,279/-), 04.10.2021 (Rs.6,071/-), 02.11.2021(Rs.6,747/-), 02.12.2021 (Rs.7,505/-), 05.01.2022(Rs.7,790/-), 09.02.2022(Rs.7,782/-), 01.03.2022(Rs.7,023/-), 07.04.2022(Rs.7,960/-) to avoid such loan accounts slip into NPA category. On 20.04.2022, both D-1 & D-2 had submitted the Application for credit facilities under UCO Vyapar Samridhi Scheme duly executed by D-1 & D-2 before the Applicant Bank with the request for sanction/renewal of the CC Limit of Rs. 10,00,000/-. The Applicant Bank after scrutiny of the aforesaid loan Application had sanctioned Rs.10,00,000/- as the CC Limit to D-1 & D-2 on 20.04.2022 and

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Page 3 of 10

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OA No. 646/2022

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accordingly issued the sanction letter to them who had acknowledged the receipt of the same by agreeing to all the terms and conditions as stipulated there in the aforesaid sanction letter. On 20.04.2022 itself, both D-1 & D-2 had executed the Acknowledgement of Debt/Securities in favour of the Applicant Bank in respect of the CC Limit Account bearing A/c.No.08860510000670.

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Both D-1 & D-2 had fully utilized the aforesaid sanctioned loans availed from the Applicant Bank. The aforesaid sanctioned Term Loan of Rs.24,00,000/- is repayable by 108 EMI of Rs.31,808/- each commencing from November 2020 and interest at the rate of 8.45% per annum with monthly rests has to be serviced as and when applied. The aforesaid sanctioned CC Limit Rs.10,00,000/- is repayable on demand together with interest at the rate of 7.45% per annum with monthly rests and all the transaction have to be routed through the aforesaid account. The aforesaid sanctioned Working Capital Term Loan of Rs.8,738/- and Funded Interest Term Loan Rs.96,961/- availed by D-1 & D-2 is repayable by 24.12.2021, 24.06.2022 together with interest at the rate of 7.50% per annum However, both the Defendants had thoroughly failed to comply with the agreed terms and conditions of sanction stipulation in repayment of loan dues to the Applicant Bank.

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Therefore the Applicant Bank had issued the Recall Notice dated 30.04.2022 to the Defendants by the recalling the entire loan dues held in the aforesaid Loan Accounts and accordingly advised them to settle the loan dues within 15 days from the date of receipt of such Recall Notice by them. However, despite the receipt of such notice by them on 03.05.2022 there was no response from the Defendants side to show their Bonafide intention in settling the loan dues to the Applicant Bank. Therefore the Applicant Bank had classified the loan account of the Defendants as NPA Account with effect from 19.04.2022.

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Despite repeated demands and reminders, made by the Applicant Bank, the Defendants have failed and neglected to repay and adjust their liability. Hence, the Applicant Bank has filed the OA for recovery of a total sum of Rs.39,15,221.75p i.e., (i) Rs.10,25,575.27p together with interest at the rate of 7.45% p.a. with monthly rests in respect of CC limit (ii) Rs.27,78,804.72p together with interest at the rate of 8.45% p.a. with monthly rests in respect of Term Loan (iii) Rs.8,789.75p together with interest at the rate of 8.05% p.a. with monthly rests in respect of Working Capital Term Loan (iv) Rs.1,02,052.01p together with interest at the rate of 8.05% p.a. with monthly rests in respect of Funded Interest Term Loan from the date of filing of Application till the date of realization with cost.

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Page 4 of 10

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OA No. 646/2022

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The Applicant Bank has submitted the following documents in support its claim in the OA, which are as follows:

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S. No.	Date	Description of document	Exhibits
1.	20.10.2020	Application for Credit facilities under UCO Vyapar Samridhi Scheme duly executed by D-1 & D-2 and submitted before the Applicant Bank enclosing there with PAN Card bearing No. EWTPR1729C and Aadhaar Card bearing No.444341739769 both dated held in the name of D-2 and an unregistered Rental Agreement 21.09.2020 entered into between D-2 and K.Khaja Mohideen and Mrs. Wahidha Rehman	Ex.No.A-01
2.	22.10.2020	Sanction Letter for the Sanction of Term Loan of Rs.24,00,000/- and CC Limit of Rs.10,00,000/-issued to D-1 & D-2 and duly acknowledged by them for the receipt of the same	Ex.No.A-02
3.	22.10.2020	DPN for Rs. 10,00,000/-duly executed by D- 1 & D-2 in favour of the Applicant Bank	Ex.No.A-03
4.	22.10.2020	Undertaking Letter for Rs. 10,00,000/- duly executed by D-1 & D-2 in favour of the ApplicantBank	Ex.No.A-04
5.	22.10.2020	Take Delivery Letter to Demand Promissory Note for Rs. 10,00,000/- duly executed by D- 1 & D-2in favour of the Applicant Bank	Ex.No.A-05
6.	22.10.2020	Composite Deed of Hypothecation for Rs. 34,00,000/-duly executed by D-1 & D-2 in favour of the Applicant Bank	Ex.No.A-06
7.	22.10.2020	DPN for Rs.24,00,000/-duly executed by D-1 & D-2in favour of the Applicant Bank	Ex.No.A-07
8.	22.10.2020	Undertaking Rs.24,00,000/-Letter for duly executed by D-1 & D-2 in favour of the ApplicantBank	Ex.No.A-08
9.	22.10.2020	Take Delivery Letter to Demand Promissory Note for Rs.24,00,000/- duly executed by D- 1&D-2in favouroftheApplicantBank	Ex.No.A-09
10.	22.10.2020	Agreement Relating to Term Loan Rs.24,00,000/-for duly executed by D-1 & D- 2in favour of the Applicant Bank	Ex.No.A-10
11.	15.06.2021	Letter submitted by D-1 & D-2 before the Applicant Bank with the request for Restructuring CC Limit and Term Loan Accounts	Ex.No.A-11
12.	24.06.2021	Restructure offered bythe Applicant Bank	Ex.No.A-12

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Page 5 of 10

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OA No. 646/2022

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		and accepted by D-1 & D-2 by submission of letterbefore theApplicantBank
13.	20.04.2022	Application for Credit facilities under UCO Vyapar Samridhi Scheme duly executed by D-1 & D-2 and submitted before the Applicant Bank	Ex.No.A-13
14.	20.04.2022	Sanction Letter for the Sanction of Rs. 10,00,000/-as CC-Limit issued to D-1 and acknowledged by them for duly the receipt of the same	Ex.No.A-14
15.	20.04.2022	Acknowledgement Debt/Securities of duly executed by D-1 & D-2 in favour of the Applicant Bank in respect of CC-Limit Account of Rs. 10,00,000/- (A/No.08860510000670)	Ex.No.A-15
16.	30.04.2022	Recall Notice sent by the Applicant Bank to D-1 & D-2	Ex.No.A-16
17.	03.05.2022	Postal Acknowledgement duly executed by D- 1 & D-2 for the receipt of the aforesaid Recall Notice	Ex.No.A-17
18.	10.08.2022	Undertaking Letter to file English Translation for Tamil version documents whenever required	Ex.No.A-18
19.	10.08.2022	Certificate U/s.2 (A)(a), 2(A)(b), 2(A)(c) and Certificate for Notional Interest of the Bankers Book Evidence Act,1891	Ex.No.A-19
20.	10.08.2022	Statement of Accounts	Ex.No.A-20

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SCHEDULE-A

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DESCRIPTION OF MOVABLE PROPERTIES

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All movables more fully described therein the Hypothecation Agreement, Stock in Trade and Trade Debtors, other movable items Hypothecated in favour of the Applicant Bank purchase out of bank finance the details described hereunder as may be notified by the Defendants or the Applicant Bank from time to time.

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Gents Shirts, T-Shirts, Mobiles, Mobile Covers and other Gents Wears, etc.

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3 . On the other hand, Notices were issued to Defendants and since from the beginning of the case, there was no representation on behalf of the Defendants. Hence, Defendants were set ex-parte.

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4. Now the main point for consideration before me is as to whether the Applicant has been able to prove his case on his own leg?

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Page 6 of 10

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OA No. 646/2022

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Having gone through the affidavit of the applicant and the documents filed by them and also considering the submission of the counsel for the Applicant, I find that the Applicant Bank, in order to prove its claim, has filed Proof Affidavit executed by one Mr. P.V. Suresh Goud, who is the Branch Manager of the Applicant Bank.

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He has stated in his affidavit that the defendants has availed Term Loan, CC Limit, Working Capital Term Loan, Funded Interest Term Loan from the Applicant Bank, but they failed to pay the outstanding loan amount, hence he has filed the case. The applicant bank has also filed the documents given by the defendants at the time of sanctioning the loan amount, which have been marked as exhibits No.A-01 to A-20 in support of its claim in the OA.

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The Application for Credit facilities under UCO Vyapar Samridhi Scheme duly executed by D-1 & D-2 and submitted before the Applicant Bank enclosing there with PAN Card bearing No. EWTPR1729C and Aadhaar Card bearing No.444341739769 both dated held in the name of D-2 and an unregistered Rental Agreement 21.09.2020 entered into between D-2 and K.Khaja Mohideen and Mrs. Wahidha Rehman has been marked as Ex.No.A01, Sanction Letter for the Sanction of Term Loan of Rs.24,00,000/- and CC Limit of Rs.10,00,000/-issued to D-1 & D-2 and duly acknowledged by them for the receipt of the same has been marked as Ex.No.A-02, DPN for Rs. 10,00,000/-duly executed by D-1 & D-2 in favour of the Applicant Bank has been marked as Ex.No.A-03, Undertaking Letter for Rs. 10,00,000/- duly executed by D-1 & D-2 in favour of the Applicant Bank has been marked as Ex.No.A-04, Take Delivery Letter to Demand Promissory Note for Rs. 10,00,000/- duly executed by D-1 & D-2 in favour of the Applicant Bank has been marked as Ex.No.A-05, Composite Deed of Hypothecation for Rs. 34,00,000/-duly executed by D-1 & D-2 in favour of the Applicant Bank has been marked as Ex.No.A-06, DPN for Rs.24,00,000/-duly executed by D-1 & D-2 in favour of the Applicant Bank has been marked as Ex.No.A-07, Undertaking Rs.24,00,000/-Letter for duly executed by D-1 & D-2 in favour of the Applicant Bank has been marked as Ex.No.A-08, Take Delivery Letter to Demand Promissory Note for Rs.24,00,000/- duly executed by D-1 & D-2 in favour of the Applicant Bank has been marked as Ex.No.A-09, Agreement Relating to Term Loan Rs.24,00,000/-for duly executed by D-1 & D-2 in favour of the Applicant Bank has been marked as Ex.No.A-10.

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The Letter submitted by D-1 & D-2 before the Applicant Bank with the request for Restructuring CC Limit and Term Loan Accounts has been marked as Ex.No.A-11, Restructure offered by the Applicant Bank and accepted by D-1 & D-2 by submission of letter before the Applicant Bank has been marked as Ex.No.A-12, Application for Credit facilities under UCO

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Page 7 of 10

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OA No. 646/2022

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Vyapar Samridhi Scheme duly executed by D-1 & D-2 and submitted before the Applicant Bank has been marked as Ex.No.A-13, Sanction Letter for the Sanction of Rs. 10,00,000/-as CC-Limit issued to D-1 and acknowledged by them for duly the receipt of the same has been marked as Ex.No.A-14, Acknowledgement Debt/Securities of duly executed by D-1 & D-2 in favour of the Applicant Bank in respect of CC-Limit Account of Rs. 10,00,000/(A/No.08860510000670) has been marked as Ex.No.A-15, Recall Notice sent by the Applicant Bank to D-1 & D-2 has been marked as Ex.No.A-16, Postal Acknowledgement duly executed by D-1 & D-2 for the receipt of the aforesaid Recall Notice has been marked as Ex.No.A-17, Undertaking Letter to file English Translation for Tamil version documents whenever required has been marked as Ex.No.A-18, Certificate U/s.2 (A)(a), 2(A)(b), 2(A)(c) and Certificate for Notional Interest of the Bankers Book Evidence Act, 1891 has been marked as Ex.No.A-19, Statement of Accounts has been marked as Ex.No.A-20. So the averments of the applicant as well as the statement of the pleading have been corroborated by the above mentioned documents.

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As the Defendants remained ex-parte, the claim of the Applicant Bank is neither disproved nor dislodged and goes on record as proved. Accordingly a cumulative analysis of both the Proof Affidavit and documents marked by the Applicant Bank would prove the claim of the Applicant Bank in the OA.

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So far the claim of interest is concerned, it is a well settled Law that the Tribunal has got powers to award pendente lite interest in view of the Judgment of the Hon’ble Supreme Court in N.M. Veerapa Vs Canara Bank (reported in AIR 98(1), 1101 & in Central bank of India Vs Ravindra and OS (AIR, 2001(1), 3095).

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Therefore, this Original Application is allowed. The Applicant Bank is entitled for a final order on the following lines:-

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The Applicant Bank is entitled to recover from the Defendants, a total sum of Rs.39,15,221.75p i.e., (i) Rs.10,25,575.27p together with interest at the rate of 7.45% p.a. with half yearly rests in respect of CC limit (ii) Rs.27,78,804.72p together with interest at the rate of 8.45% p.a. with half yearly rests in respect of Term Loan (iii) Rs.8,789.75p together with interest at the rate of 8.05% p.a. with half yearly rests in respect of Working Capital Term Loan (iv) Rs.1,02,052.01p together with interest at the rate of 8.05% p.a. with half yearly rests in respect of Funded Interest Term Loan from the date of filing of Application till the date of realization with cost. Accordingly, it is hereby

Page 8 of 10

OA No. 646/2022

ORDERED

(a) That the Defendants are directed to pay jointly/severally a total sum of Rs.39,15,221.75p i.e., (i) Rs.10,25,575.27p together with interest at the rate of 7.45% p.a. with half yearly rests in respect of CC limit (ii) Rs.27,78,804.72p together with interest at the rate of 8.45% p.a. with half yearly rests in respect of Term Loan (iii) Rs.8,789.75p together with interest at the rate of 8.05% p.a. with half yearly rests in respect of Working Capital Term Loan (iv) Rs.1,02,052.01p together with interest at the rate of 8.05% p.a. with half yearly rests in respect of Funded Interest Term Loan from the date of filing of Application till the date of realization with cost within one month from the date of receipt of this order.

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(b) In case of default of payment by the above mentioned Defendants, the Applicant Bank is at liberty to sell the movable / immovable properties more fully described in Schedule of the original application for appropriation of sale proceeds towards the satisfaction of amount due to the Applicant Bank.

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(c) If the sale proceeds are not sufficient, after defraying the expenses of such sale, for the payment of all such amounts, the defendants are jointly/severally liable to pay the amount of such deficiency with interest mentioned above until realization.

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(d) Any amount remitted during the course of this proceedings shall be given due credit, to the loan account of the defendants.

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(e) Recovery Certificate be prepared, as per the directions given above, and issue accordingly. A copy of the order is to be communicated to the parties concerned, immediately.

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(f) It is further ordered that the Applicant Bank shall file cost memo within a period of one month from the date of receipt of this order, so as to prepare the recovery certificate with cost for the Term Loan, CC Limit,

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Page 9 of 10

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OA No. 646/2022

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Working Capital Term Loan, Funded Interest Term Loan and the Recovery Officer is also directed to proceed with the matter in accordance with law. In case, cost memo is not filed before said period of one month, Recovery Certificate will be prepared with available records.

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Dictated to T.P, taken down, transcribed, typed by her, corrected and pronounced by me in the Open Court in this the 13^th October, 2025.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 01.11.2025

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Page 10 of 10

Uco Bank v. S R Dress and Mobiles

Case brief

What is this about?

What did the court decide?

Uco Bank v. S R Dress and Mobiles

Case brief

What is this about?

What did the court decide?

What the court decided

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