Allowed

Indian Overseas Bank v. Jupiter Business Excellence

DRT23 Jun 2025OA/79/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the applicant bank's original application for recovery of dues. The respondents were set ex-parte due to lack of appearance. The Tribunal concluded the bank is entitled to recovery from respondents jointly and severally for a total of Rs. 24,98,438/- along with interest.

What did the court decide?

Recovery of Rs. 24,98,438/- along with interest and penal charges; liberty to sell hypothecated property if amount not paid.

Indian Overseas Bank versus Jupiter Business… — Contract and Commercial Disputes | DRT (2025)

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O.A. No. 79 of 2022

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23.06.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 23^rd day of June, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No. 79 of 2022

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Indian Overseas Bank, Madipakkam Branch, Represented by its Senior Manager, No.4, Pillaiyar Koil Street, Velacherry Main Road,

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Chennai – 600 091. ….Applicant

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-Vs-

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M/s Jupiter Business Excellence,

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Rep. by its Proprietor Mr. N. R. Devaraj, No.39B, Periyar Nagar,

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6^th Street, Madipakkam,

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Chennai – 600 091.

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Mr. N.R. Devaraj, S/o Mr. Rajagopalan, Proprietor M/s. Jupiter Business Excellence,

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Plot No.3, G2, Akil Flats,

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Govindasamy Nagar 11^th Street, Madipakkam,

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Chennai – 600 091. .…Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. V. Rajeswari

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Defendants 1 and 2 were set ex-parte on 14.06.2022

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: - FINAL ORDER - :

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This original application is filed on 31.01.2022 by the applicant bank

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under Section 19 of Recovery of Debts and Bankruptcy Act, 1993

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O.A. No. 79 of 2022

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23.06.2025

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(formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendants 1 and 2, jointly, severally and personally for recovery of a total sum of Rs.24,98,438/- (Rupees Twenty Four Lakhs Ninety Eight Thousand Four Hundred and Thirty Eight Only) as follows:

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(i) A sum of Rs.12,57,811/- due in respect of Cash Credit Facility (Account No.228102000000196) together with further interest @ 10.85% p.a. compounded with monthly rests along with penal interest @2% p.a. from the date of filing till the date of realisation in full;

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(ii) A sum of Rs.12,40,557/- and due in respect of Term loan (Account No.228103710000004) together with further interest @ 9.05% p.a., compounded with monthly rests along with penal interest @2% p.a. from the date of filing till the date of realisation in full;

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for sale of scheduled mentioned Hypothecated property 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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O.A. No. 79 of 2022

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23.06.2025

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It is the case of the applicant bank that the 1^st defendant is a Proprietorship firm, represented by the 2^nd defendant, who had approached the applicant bank and sought for sanction of Cash Credit.

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It is submitted that the same was considered by the applicant bank during ordinary course of business and Cash credit of Rs.5.00 lakhs was granted to 1^st defendant by the applicant bank vide credit sanction advice dated 02.01.2016.

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The Applicant further submits that for the cash credit of Rs.5.00 lakhs availed by the defendant and executed the following documents:

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a) Demand promissory note take delivery letter

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b) Letter of hypothecation along with consent cum authorization letter of Rs.5.00 lakhs hypothecating stocks purchased out of Cash Credit limits more fully described in Schedule – A.

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c) Hypothecation of Book Debts along with consent cum authorization letter for Rs.5.00 lakhs.

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It is further submitted by applicant bank that the 1^st defendant proprietorship firm, represented by 2^nd defendant had again approached the applicant bank and sought for enhancement of Cash Credit. The same was considered by the applicant bank during ordinary course of business and the Cash Credit facility was enhanced from Rs.5.00 lakhs to Rs.10.00 lakhs vide Credit Sanction Advice dated 24.08.2018. For the enhanced

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Cash credit facility, 1^st defendant executed the following documents:

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a) Demand promissory note dated 24.08.2018 for Rs.5.00 lakhs with interest at the rate of Base rate 8.65% plus 1.65% aggregating to 10.25% p.a., with compounded monthly rests

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b) Letter of hypothecation along with consent cum authorization letter for Rs.10.00 lakhs hypothecating stocks purchased out of Cash Credit limits.

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c) Hypothecation of Book Debts along with consent cum authorization letter for Rs.10.00 lakhs.

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It is submitted that the above cash credit was renewed at the existing limit of Rs.10.00 lakhs as per the request of the defendants at the existing limit vide credit sanction advice dated 28.11.2019, for the renewal of Cash Credit facility 1^st defendant executed following documents on 28.01.2019:

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a) Demand promissory note dated 28.11.2019 for Rs.10.00 lakhs with interest at the rate of Base rate i.e., 8.00% plus 1.80% aggregating to 9.80% p.a., with compounded monthly rests.

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b) Letter of Hypothecation for Rs.10.00 lakhs hypothecating stocks purchased out of Cash Credit limits

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c) Hypothecation of Book Debts for Rs.10.00 lakhs

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d) Consent for change of interest from base rate to RLLR

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The applicant further submits that 1^st defendant thereafter approached the applicant bank and sought for sanction of Term loan for the purchase of computers and its accessories and furniture. The same was considered by the applicant during ordinary course of business and the following credit facility was granted to 1^st defendant by the applicant bank vide credit sanction advice dated 17.10.2017 for a Term Loan of Rs.12.70 lakhs.

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The Applicant submits that for the Term Loan of Rs.12.70 lakhs was availed by the 1^st defendant, the following documents were executed by the 1^st defendant on 17.10.2017:

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a) Demand promissory note dated 17.10.2017 for Rs.12.70 lakhs with interest at the rate of Base rate i.e., 8.40% plus 1.60% p.a., aggregating to 10.00% p.a., with compounded monthly rests.

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b) Letter agreeing to pay in 60 EMIs of Rs.26,984/- w.e.f. 17.05.2018

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c) Term Loan agreement for Rs.12.70 lakhs further hypothecating assets of the firm more fully described in Schedule – A

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d) Letter of undertaking.

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The Applicant further states that defendants executed a Revival Letter on 31.10.2018 for the purpose of limitation and the validity of the documents executed for the Cash Credit and Term Loan availed on 02.01.2016 and 17.10.2017 respectively. The defendants also executed

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Letter of Confirmation of balance on 08.11.2019 for the purpose of acknowledgement of debts for Cash Credit as on 28.11.2019.

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Since it is submitted that after availing the above facilities, the defendants did not repay the amounts to the applicant bank in spite of repeated demands and incessant requests. The defendants did not keep their payment schedule. The operation of the accounts by the defendants was far from satisfactory and the account was classified as NPA on 31.12.2019 in accordance with RBI guidelines. The applicant issued a Legal Notice dated 07.09.2020, inspite of which, the defendants did not make any attempt to discharge the loan. Hence the present Original Application (OA) has been filed for recovery of the amounts due from defendants.

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After the filing of the OA, summons were sent to the Defendants 1 and 2 through Registered Post with Acknowledgment Due, which returned unserved with postal endorsement as ‘left’. Applicant Bank had caused paper publication of the notice and filed proof thereof. 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 1 and 2 were placed ex-parte on 14.06.2022.

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Heard the submissions of Applicant Bank and perused the

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records .

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O.A. No. 79 of 2022

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To prove the case of the Applicant Bank, Ms. P N Angayarkanni, Senior Manager of the Applicant Bank, has filed her 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-22 . 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.

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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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15. The OA is allowed with costs,

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(a) The applicant bank is allowed to recover from the Defendants jointly, severally and personally for recovery of a total sum of

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Rs.24,98,438/- (Rupees Twenty Four Lakhs Ninety Eight

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Thousand Four Hundred and Thirty Eight Only) as follows:

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(i) A sum of Rs.12,57,881/- due in respect of Cash Credit Facility (Account No.228102000000196) together with further interest @ 10.85% p.a. compounded with monthly rests along with penal interest @2% p.a. from the date of filing till the date of

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realisation in full;

(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 property more fully detailed in the OA schedule.

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(d) 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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(e) The applicant bank shall file memo of costs within ten days

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from the date of receipt of this final order.

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(f) Recovery Certificate shall be drawn up and issued to the

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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 23^rd day of June, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Ms. P N Angayarkanni, 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.	Credit Sanction Advice for Cash Credit of R lakhs 02.01.2016	s.5.00	A-1
2.	Demand Promissory Note for Rs.5.00 02.01.2016	lakhs	A-2
3.	Demand Promissory Note take delivery 02.01.2016	note	A-3
4.	Letter of Hypothecation for Rs.5.00 02.01.2016	lakhs	A-4
5.	Hypothecation of Book Debts for Rs.5.00 02.01.2016	lakhs	A-5
6.	Credit sanction advice for Cash Credit Rs. lakhs 24.08.2016	10.00	A-6
7.	Demand Promissory Note for Rs.10.00 24.08.2018	lakhs	A-7
8.	Letter of Hypothecation for Rs.15.00	lakhs	A-8

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O.A. No. 79 of 2022

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	02.01.2016
9.	Hypothecation of Book Debts for Rs.10.00 lakhs 24.08.2016	A-9
10.	Credit Sanction Advice for Cash Credit of Rs.10.00 lakhs 28.11.2019	A-10
11.	Demand Promissory Note for Rs.10.00 lakhs 28.11.2019	A-11
12.	Letter of Hypothecation for Rs.10.00 lakhs 28.11.2019	A-12
13.	Hypothecation of Book Debts for Rs.10.00 lakhs 28.11.2019	A-13
14.	Consent for change of interest from base rate to RLLR 17.10.2017	A-14
15.	Credit Sanction Advice for Term Loan of Rs.12.70 lakhs 17.10.2017	A-15
16.	Demand Promissory Note for Rs.12.70 lakhs 17.10.2017	A-16
17.	Letter agreeing to pay in 60 EMIs of Rs.26,894/- 17.10.2017	A-17
18.	Term Loan Agreement for Rs.12.70 lakhs 17.10.2017	A-18
19.	Revival letter executed by the defendants 31.10.2018	A-19
20.	Confirmation letter of Balance and security 28.11.2019	A-20
21.	Legal Notice issued by the applicant bank 07.09.2020	A-21
22.	Statement of accounts and BBE Certificate	A-22

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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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Hypothecation of assets at No.39B, Periyar Nagar, 6^th Street, Madipakkam, Chennai – 600 091.

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

Indian Overseas Bank v. Jupiter Business Excellence

Case brief

What is this about?

What did the court decide?

Indian Overseas Bank v. Jupiter Business Excellence

Case brief

What is this about?

What did the court decide?

What the court decided

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