Allowed

Indian Bank v. Saraswathe Printing World

DRT4 Jul 2025OA/83/2022

Case brief

AI extract

What is this about?

The DRT allowed the bank's original application for recovery of dues amounting to Rs. 43,92,171.54 including interest and penal charges. Following default by respondents who remained absent, the tribunal permitted recovery via sale of hypothecated assets and issuance of recovery certificate.

What did the court decide?

Permission to recover Rs. 43,92,171.54 including interest and penal charges; option to sell hypothecated assets; issuance of recovery certificate.

Indian Bank versus Saraswathe Printing World — Insolvency and Bankruptcy | DRT (2025)

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O.A. No. 83 of 2022

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04.07.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 04^th day of July, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No. 83 of 2022

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Indian Bank, Mudaliarpet Branch, Puducherry, Represented by its Branch Manager ….Applicant

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-Vs-

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M/s. Saraswathy Printing World, Represented by its Proprietrix, Mrs. Patcheammalle, Having office at No. 238, Lenin Street, Kosapalayam, Puducherry – 605 013. 2. Mrs. A. Patcheammalle, W/o. Adikesava Perumal, Residing at No. 58, D.R. Nagar, First Cross Street, Kosapalayam, Puducherry – 605 013. Also at:No. 9, New Iyannar Koil Street, Kosapalayam, Puducherry – 605 013. ….Defendants Counsels on record / appeared:

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Counsel for Applicant : M/s. P.V. Murlidhar Defendants 1 & 2 were set ex-parte on 06.06.2022

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O.A. No. 83 of 2022

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04.07.2025

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: - FINAL ORDER - :

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This Original Application is filed on 31.01.2022 by the Applicant 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, jointly and severally for recovery of a total sum of Rs.43,92,171.54p (Rupees Forty Three

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Lakhs Ninety Two Thousand One Hundred Seventy One & Fifty

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Four Paise only) as follows:

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(i) A sum of Rs.35,65,905.87p due in respect of Term Loan (Account No. 6614904348) repayable together with further interest @ 14.40% p.a., with compounded monthly rests along with 2% p.a. penal interest from the date of Application till the date of realization in full;

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(ii) A sum of Rs.8,26,265.67p due in respect of Cash Credit Facility (Account No. 6614894907) repayable together with further interest @ 14.40% p.a., with compounded monthly rests along with 2% p.a. penal interest, from the date of Application till the date of realization in full;

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for sale of scheduled mentioned hypotheca and for costs of this Original Application.

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Brief Facts of the case:

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The Applicant submits that the application is filed within the

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period of limitation as prescribed under Section 24 of the Recovery of

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O.A. No. 83 of 2022

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04.07.2025

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Debts and Bankruptcy Act, 1993, and the subject recovery claim falls within the jurisdiction of this Tribunal.

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It is the case of the Applicant Bank that the Defendants approached the Applicant Bank seeking financial assistance for their business purpose for purchase of machinery and submitted an application for a Term Loan for a sum of Rs.24,00,000/- and for a Cash Credit facility for Rs.6,00,000/- on 07.03.2018.

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It is submitted by the applicant bank that considering the said request, applicant bank had sanctioned a Term Loan of Rs.24,00,000/as per the Sanction advice dated 13.03.2018 and Cash Credit facility for Rs.6,00,000/- as per the Sanction advice dated 13.03.2018 to the Defendants.

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The Applicant submits that having availed the Term Loan, the Defendants executed the following documents in favour of applicant bank:

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(i) Demand Promissory Note for a sum of Rs.24,00,000/promising to repay the same with interest at 12% p.a. with monthly rests,

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(ii) Disposal of Proceeds Letter for Rs.24.00 lakhs in favour of the applicant bank,

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(iii) Agreement of hypothecation of Movables for Rs.24.00 lakhs with 84 equated monthly instalments commencing from April,

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O.A. No. 83 of 2022

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04.07.2025

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2018 in favour of the applicant bank.

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(iv) Declaration by the 2^nd Respondent for Rs.24.00 lakhs in favour of the applicant bank,

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(v) Letter of Authority from the 1^st Respondent for Rs.24.00 lakhs in favour of the applicant bank,

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(vi) Letter of disclosure of information by the 1^st Respondent for Rs.24.00 lakhs in favour of the applicant bank.

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The Applicant submits that having availed the Cash Credit Facility, the Defendants executed the following loan documents in favour of applicant bank:

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(i) Demand Promissory Note for a sum of Rs.6,00,000/promising to repay the same with interest at 12.00% p.a. with monthly rests,

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(ii) Letter of Continuity for Rs.6,00,000/- in favour of the applicant bank,

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(iii) Agreement for Open Cash Credit for Rs.6,00,000/- with interest at 12.00% p.a.,

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(iv) Agreement of hypothecation of Movables for Rs.6,00,000/situated at the schedule mentioned property,

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(v) Statement of inventories and Receivables for OCC against Stocks/Book Debts lakhs in favour of the applicant bank,

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(vi) Declaration by the 2^nd Respondent for Rs.6,00,000/- lakhs

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in favour of the applicant bank,

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O.A. No. 83 of 2022

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04.07.2025

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(vii) Letter of disclosure of information by the 1^st Respondent for Rs.6,00,000/- lakhs in favour of the applicant bank.

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It is submitted by the Applicant that subsequent to availing of loan, the Defendants failed to repay the loan facility availed by them and committed default in repayment of the said facility and did not comply with the terms and conditions. The Applicant Bank has been repeatedly sending reminders orally and personally to the Defendants herein. Despite the same they failed and neglected repay the dues as promised by them and loan account has thus been classified as Non Performing Asset (NPA) as on 19.10.2018 in accordance to RBI guidelines.

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It is further submitted by the applicant bank that the Defendants acknowledged their debt on 02.03.2021. The applicant bank issued a Legal Notice dated 29.05.2019 to the defendants. In spite of the legal Notices, the defendants did not make any attempt to discharge the loan. Hence, the present Original Application (OA) has been filed by the applicant bank for recovery of its dues from defendants.

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After the filing of the OA, summons were sent to the Defendants

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1 & 2 through Registered Post with Acknowledgment Due, which was duly served on the defendants 1 & 2. When OA was taken up on 06.06.2022 even after giving sufficient time, there was no appearance

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or representation from the defendants. Hence, Defendants 1 & 2 were

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O.A. No. 83 of 2022

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04.07.2025

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placed ex-parte on 06.06.2022.

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Heard the submissions of Applicant Bank and perused the

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records.

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To prove the case of the Applicant Bank, Sh. R. Rajesh, Branch Manager of the 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. A-1 to A-18 . 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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The OA is allowed with costs,

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(a) The applicant bank is allowed to recover from the defendants for recovery of a total sum of Rs.43,92,171.54p (Rupees Forty Three Lakhs Ninety Two Thousand One Hundred Seventy One & Fifty Four Paise only) as follows:

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(i) A sum of Rs.35,65,905.87p due in respect of Term Loan (Account No. 6614904348) repayable together

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O.A. No. 83 of 2022

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04.07.2025

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with further interest @ 14.40% p.a., with compounded monthly rests along with 2% p.a. penal interest from the date of Application till the date of realization in full;

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(ii) A sum of Rs.8,26,265.67p due in respect of Cash

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Credit Facility (Account No. 6614894907) repayable together with further interest @ 14.40% p.a., with compounded monthly rests along with 2% p.a. penal interest, from the date of Application till the date of realization in full; along with costs of this application.

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(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-A mentioned hypothecated items morefully 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 from the date of receipt of this final order.

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O.A. No. 83 of 2022

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04.07.2025

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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 (Ponmalar), transcribed by her, corrected, signed and pronounced by me

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on this the 04^th day of July, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sh. R.Rajesh, Branch Manager representing Applicant Bank

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Exhibits on the part of the Applicant:

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Sl. No.	Date	Description of Documents	Exhibit No.
1.	07.03.2018	Application form for MSEs Term Loan of Rs. 24,00,000/- and Cash Credit of Rs. 5,00,000/-	A-1
2.	13.03.2018	Credit Sanction Advice for Term Loan of Rs.24,00,000/-	A-2
3.	13.03.2018	Disposal of Proceeds Letter for Rs.24,00,000/-	A-3
4.	13.03.2018	Agreement of Hypothecation of Movables for Rs.24,00,000/-	A-4
5.	13.03.2018	Declaration by the 2^ndrespondent for Rs.24,00,000/-	A-5
6.	13.03.2018	Letter of Authority from the 1^st respondent for Rs.24,00,000/-	A-6
7.	14.03.2018	Letter of disclosure of information by the 1^strespondent for Rs.24,00,000/-	A-7
8.	13.03.2018	Credit Sanction Advice for Cash credit of Rs. 6,00,000/-	A-8
9.	13.03.2018	Demand Promissory Note for Rs. 6,00,000/-	A-9
10.	13.03.2018	Letter of Continuity for Rs. 6,00,000/-	A-10

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O.A. No. 83 of 2022

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04.07.2025

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11.	13.03.2018	Agreement for Open Cash Credi Rs. 6,00,000/-	t for	A-11
12.	13.03.2018	Agreement of hypothecation Movables for Rs. 6,00,000/-	of	A-12
13.	13.03.2018	Statement of inventories receivables for OCC against stoc book debts	and ks /	A-13
14.	13.03.2018	Declaration by the 2^ndResponden Rs. 6,00,000/-	t for	A-14
15.	13.03.2018	Letter of disclosure of informatio the 1^stRespondent for Rs. 6,00,0	n by 00/-	A-15
16.	02.03.2021	Acknowledgement of Debt Security	and	A-16
17.	--	Statement of Account 6614904348 and BBE Certificate	No.	A-17
18.	--	Statement of Account 6614894907 and BBE Certificate	No.	A-18

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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-A

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Description of Hypothecated Items

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Hypothecation of all present and future stocks and receivables situated at No. 238, Lenin Street, Kosapalayam, Puducherry – 605 013.

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Sd/-

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

Indian Bank v. Saraswathe Printing World

Case brief

What is this about?

What did the court decide?

Indian Bank v. Saraswathe Printing World

Case brief

What is this about?

What did the court decide?

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