Allowed

Indian Overseas Bank v. M/s. Aakash Constructions

DRT27 Jun 2025OA/68/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the bank's application for recovery of a debt of Rs. 49.50 lakhs plus interest. The respondent defendants were present in absentia (ex-parte) and failed to appear or oppose the claim despite notices. The court accepted the bank's evidence and granted an order for recovery.

What did the court decide?

Recovery of Rs. 49,50,750.23 plus 10.35% p.a. interest and costs; liberty to sell hypothecated properties on default.

Indian Overseas Bank versus M/s. Aakash… — Contract and Commercial Disputes | DRT (2025)

¶1

O.A. No. 68 of 2023

¶2

27.06.2025

¶3

¶4

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

¶5

Dated this the 27^th day of June, 2025

¶6

Present: SMT. S.V. GOWRAMMA Presiding Officer

¶7

ORIGINAL APPLICATION No. 68 of 2022

¶8

Indian Overseas Bank Valasaravakkam Branch, Represented by its Manager, No.1, East Kamakodi Nagar, Off. Arcot Road, Valasaravakkam, Chennai – 600 087.

¶9

….Applicant

¶10

-Vs-

¶11

M/s. Aakash Constructions,

¶12

Rep. by its Proprietor Mr. R. Udhayakumar,

¶13

11/34, Gangaiamman Koil Sreet,

¶14

Kamarajapuram, Velachery,

¶15

Chennai – 600 042.

¶16

And Also at:

¶17

No.3, Gandhi Nagar Main Raod, Virugampakkam, Chennai – 600 092.

¶18

Mr. R. Udhayakumar,

¶19

S/o. Mr. Ramalingam,

¶20

11/34, Gangaiamman Koil Sreet, Kamarajapuram, Velachery,

¶21

Chennai – 600 042.

¶22

And also at:-

¶23

No. 25, Kalivanar Nagar,

¶24

Ambattur, Tiruvallur, Chennai – 600 058. …. Defendants

¶25

Counsels on record / appeared:

¶26

Counsel for Applicant : M/s. Annal P Defendants 1 & 2 were set ex-parte on 03.08.2022

¶27

: - FINAL ORDER - :

¶28

This Original Application is filed on 15.09.2021 by the Applicant

¶29

O.A. No. 68 of 2023

¶30

¶31

27.06.2025

¶32

Bank under Section 19 of Recovery of Debts and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendants 1 & 2 for recovery of a total sum of Rs.49,50,750.23p (Rupees Forty Nine Lakhs Fifty Thousand Seven Hundred and Fifty and Twenty Three Paise only) due in respect of Cash Credit Facility (Account No. 173833000000066) together with further interest @ 10.35% p.a., with monthly rests from the date of Application till the date of realization in full, for sale of scheduled mentioned hypothecated property and for costs of this Original Application.

¶33

Brief Facts of the case:

¶34

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.

¶35

It is the case of the Applicant Bank that 1^st defendant is a Proprietorship Concern, represented by its Proprietor Mr. R. Udhyakumar, the 2^nd defendant herein, approached and requested the Applicant for financial assistance for their business purpose.

¶36

It is submitted by applicant bank that considering the said request, the Applicant Bank sanctioned to the 1^st defendant herein CASH CREDIT (H) of Rs.40,00,000/- (Rupees Forty Lakhs Only) against Stocks and Book Debts, vide its Credit Sanction Advice dated

¶37

O.A. No. 68 of 2023

¶38

¶39

27.06.2025

¶40

04.09.2019, the terms and conditions of which are accepted and acknowledged by the Defendants.

¶41

The Applicant submits that in evidence of availing the aforesaid Cash Credit Facility, the 1^st defendant executed the following Loan Documents:

¶42

(a) Revised Demand Promissory Note (Linked to MCLR) dated 04.09.2019 for Rs.40,00,000/- (Rupees Forty Lakhs Only) together with floating Interest thereon at the rate of 10.35% per annum from the date with monthly rests or such rates as may be re-set and rests as may be revised by the Bank on its own or as per the instructions of the Reserve Bank of India from time to time;

¶43

(b) Letter of Continuity and confirmation of DPN dated 04.09.2019 for Rs.40,00,000/-;

¶44

(c) Letter of Hypothecation (In case of open advances only) dated 04.09.2019 for Rs.40,00,000/-, thereby hypothecated all present and future receivables in the premises of the 1^st defendant;

¶45

(d) Letter of Hypothecation (For securing Machineries/Vehicles/ Goods/Book Debts) dated 04.09.2019 for Rs.40,00,000/-, thereby hypothecated all present and future receivables in the premises of the 1^st defendant herein and

¶46

(e) Hypothecation of Book Debts dated 04.09.2019 for Rs.40,00,000/-, thereby hypothecated the Book Debts of

¶47

O.A. No. 68 of 2023

¶48

27.06.2025

¶49

¶50

the 1^st defendant, as security for the due repayment to the Applicant at any time on demand at Chennai.

¶51

It is submitted by the Applicant Bank that the 1^st Defendant has agreed to pay the interest for the above said Loan availed by him at the rate of 10.35% per annum compounded on monthly rests basis. The said interest rate is linked to the MCLR (Marginal Cost of funds based Lending Rate) of the Bank and the same is subject to revision by Bank usual practice and RBI Norms from time to time.

¶52

It is further submitted by the applicant bank that the Credit Facility availed by the 1^st defendant is secured by the Hypothecation of all present and future receivables in the premises of the 1^st defendant herein and also the Book Debts of the 1^st defendant.

¶53

It is submitted by the Applicant Bank that subsequent to availing of loan, the 1^st defendant committed default in repayment. Despite repeated requested and reminders, as defendants failed to regularize the Loan account, it was declared as a Non Performing Asset (NPA) on 29.02.2020 as per RBI guidelines. The Applicant issued a Notice dated 18.03.2020 to the defendants herein, calling upon him to regularize his over dues and informing him that the Bank may proceed against him legally, if it did not hear from him on or before 30.04.2020, despite which, the Defendants have not turned up to settle the Loan Dues to the Applicant herein. Hence the present Original Application (OA) has

¶54

O.A. No. 68 of 2023

¶55

27.06.2025

¶56

¶57

been filed for recovery of amounts due from defendants.

¶58

After the filing of the OA, summons were sent to the defendants 1 & 2 through Registered Post with Acknowledgment Due, which returned unserved with postal endorsement as “left” & “no such person”. Applicant had caused Paper publication of notice and filed proof thereof. When OA was taken up on 03.08.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants 1 & 2 were placed ex-parte on 03.08.2022.

¶59

Heard the submissions of Applicant Bank and perused the records.

¶60

During the pendency of OA, applicant bank had filed IA No.1196/22 praying to appoint an Advocate Commissioner to inspect and compare documents/records pertaining to the Loan account of defendants, pending on the file of Central Bureau of Investigation, Anti Corruption Branch, 3rd Floor, Shastri Bhawan, 26, Haddows Road, Chennai – 600 006, which was allowed vide order dated 02.10.2022 and Sh. Akshai Mani, Advocate was appointed as Advocate Commissioner. After execution of the commands of the warrant, Advocate Commissioner filed his report before this Tribunal on 15.12.2022.

¶61

To prove the case of the Applicant Bank, Sh. Alubelli Bhaskara Rao, Manager of the Applicant’s Bank, has filed his Affidavit by way of

¶62

O.A. No. 68 of 2023

¶63

27.06.2025

¶64

¶65

evidence and same was considered as evidence of AW-1 and list of documents came to be marked as Ex. A-1 to A-8 . Advocate Commissioner report dated 15.12.2022 is taken on record and marked as Ex C-1 . 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.

¶66

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:

¶67

: O R D E R :

¶68

The OA is allowed with costs,

¶69

(a) The applicant bank is allowed to recover from the Defendants a total sum of Rs.49,50,750.23p (Rupees Forty Nine Lakhs Fifty Thousand Seven Hundred and Fifty & Paise Twenty Three only) due in respect of Cash Credit Facility (Account No. 173833000000066) repayable together with further interest @ 10.35% p.a. with monthly rests from the date of Application till the date of realization in full along with costs of this application.

¶70

(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 hypothecated properties more

¶71

O.A. No. 68 of 2023

¶72

27.06.2025

¶73

¶74

fully detailed in the OA schedule.

¶75

¶76

(d) The applicant bank shall file the latest memo of calculation of

¶77

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.

¶78

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

¶79

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

¶80

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

¶81

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

¶82

(Dictated to Steno (Ponmalar), transcribed by her, corrected, signed and pronounced by me on this the 27^th day of June, 2025)

¶83

ANNEXURES

¶84

WITNESSES EXAMINED FOR THE APPLICANT BANK :

¶85

AW-1: Sh.Alubelli Bhaskara Rao, Manager representing the Applicant Bank

¶86

O.A. No. 68 of 2023

¶87

¶88

27.06.2025

¶89

Exhibits on the part of the Applicant:

¶90

Sl. No.	Date	Description of Documents	Exhibits No.
1.	04.09.2019	Credit Sanction Advice for Rs.40,00,000/-	A-1
2.	04.09.2019	Revised Demand Promissory Note for Rs. 40,00,000/-	A-2
3.	04.09.2019	Letter of Continuity and Confirmation of DPN for Rs. 40,00,000/-	A-3
4.	04.09.2019	Letter of Hypothecation (In case of open advance only) for Rs. 40,00,000/-	A-4
5.	04.09.2019	Letter of Hypothecation (For securing Machineries/Vehicles/Goods/Book-Debts) for Rs. 40,00,000/-	A-5
6.	04.09.2019	Hypothecation of Book Debts for Rs.40,00,000/-	A-6
7.	18.03.2020	Notice issued by the Applicant Bank to the 1^stdefendant	A-7
8.	23.08.2021	Statement of Accounts for A/c. No. 173833000000060 and its Certificates	A-8

¶91

Report of the Advocate Commissioner dated 15.12.2023 - Ex C-1

¶92

Witness Examined for the Defendants: -Nil-

¶93

List of Documents Exhibited for the Defendants: -Nil –

¶94

SCHEDULE

¶95

(Properties Hypothecated)

¶96

All present and future receivables in the premises of 1^st defendant at No.11/34, Gangaiammal Koil Street, Kamarajapuram, Velachery, Chennai- 600 042 and the Book Debts of the 1^st defendant.

¶97

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

Indian Overseas Bank v. M/s. Aakash Constructions

Case brief

What is this about?

What did the court decide?

Indian Overseas Bank v. M/s. Aakash Constructions

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

State Bank of India versus Solomon Jachin Finney G

Bank of Baroda versus vadim infrastructure private limited

M s Saibaba Ploymer Technologies Pvt. Limited Authoried signatory N G Naveen Kumar versus Uco Bank

Bank of India versus Ms Leo Vending Concepts

Bank of Baroda versus S Bhaskar

Bank of Baroda versus Vayal Agri Trading Company