Allowed

Indian Overseas Bank v. M/S Sai Cabs

DRT29 Jul 2025TA/1034/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the applicant bank's original application for recovery of dues of Rs. 43,68,870 plus interest against the respondent proprietor of Sai Cabs. The tribunal found the claim unchallenged as the respondent appeared ex-parte and directed the issuance of a recovery certificate.

What did the court decide?

Recovery of Rs. 43,68,870 with interest at 12.75% p.a. compounded monthly from filing date until realization plus costs; issuance of recovery certificate.

Indian Overseas Bank versus M/S Sai Cabs — Intellectual Property | DRT (2025)

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T.A. No. 1034 of 2023

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29.07.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 29^th day of July, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 1034 of 2023

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(Originally filed before DRT- II, Chennai as OA 843/2019 and thereafter transferred to this Tribunal and renumbered as TA No 1034 of 2023)

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Indian Overseas Bank, Triplicane Branch, No: 203, Triplicane High Road, Triplicane, Chennai – 600 005, Rep. by its Chief Manager

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….Applicant

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-Vs-

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M/s. Sai Cabs, Represented by its Proprietor: Mr. Ramesh, S/o. Mr. Krishnamoorthi, No: 15/8, 2^nd Floor, Balaji Street, Kodambakkam, Chennai – 600 024.

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…..Defendant

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Counsels on record / appeared:

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Counsel for Applicant : M/s. A. Sermaraj

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Defendant was set ex-parte on 08.10.2021

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: - FINAL ORDER - :

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This Original Application is filed on 13.09.2019 by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendant for recovery of a total sum of Rs.43,68,870/- (Rupees Forty Three Lakh Sixty Eight Thousand Eight Hundred Seventy only) due in respect of Cash Credit Facility (A/c No.009802000007272) together with further interest @12.75% p.a. compounded with monthly rests, from the date of application till the

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T.A. No. 1034 of 2023

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29.07.2025

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date of realization in full and for costs of this application.

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Originally, this Application was filed before DRT-II, Chennai, assigned OA No.843 of 2019, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.843 of 2019 stood transferred to this Tribunal and renumbered as TA No.1034 of 2023.

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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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It is the case of the applicant bank that the defendant had approached the applicant and requested to provide financial assistance for his business purposes and submitted the application on 11.02.2012. Considering the request of the defendant, the applicant bank sanctioned the credit facility under Cash Credit Limit for a sum of Rs.4.00 Lakhs in favour of the defendant.

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It is submitted by the applicant bank that the defendant, having accepted the aforesaid credit sanction and the terms and condition enumerated therein on 11.02.2012, executed following loan documents in favor of the applicant viz:-

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a. Demand Promissory Note for a sum of Rs.4.00 Lakhs.

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b. Letter of continuity the Demand promissory Note for a sum of

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T.A. No. 1034 of 2023

29.07.2025

Rs.4.00 Lakhs.

c. Deed of Hypothecation (for securing machineries/ vehicles/

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goods/book-debts) for Rs.4.00 Lakhs defendant.

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The applicant submits that the defendant fully enjoyed the aforesaid Credit Limit sanctioned by the applicant. Subsequently, the defendant requested the applicant to enhance the existing cash credit limit for his business requirements. Considering the request of the defendant, the applicant on 12.01.2013 enhanced the existing Cash Credit Limit from Rs.4.00 Lakhs to Rs.12.50 Lakhs.

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It is submitted that having accepted the credit sanction, the defendants on 12-01-2013 executed following loan documents in favour of the applicant for the enhanced the credit limit viz:-

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a. Demand Promissory Note for a sum of Rs.8.50 Lakhs.

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b. Letter of continuity to the Promissory Note for Rs.12.50 Lakhs.

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c. Deed of Hypothecation of stocks lying in the business premises of the defendant for Rs.12.50 Lakhs.

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d. Deed of Hypothecation of book-debts for Rs.12.50 Lakhs.

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The Applicant submits that the defendant fully enjoyed the aforesaid Credit Limit sanctioned by the applicant. Subsequently, the defendant requested the applicant to enhance the existing cash credit limit for its business necessities. Considering the request of the defendant, the applicant on 13-08-2013 enhanced the existing Cash Credit Limit from Rs.12.50 Lakhs to Rs.35.00 Lakhs.

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T.A. No. 1034 of 2023

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29.07.2025

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It is further submitted by applicant bank that having accepted the credit sanction, the defendants on 14.08.2013 executed following loan documents in favour of the applicant for the enhanced the credit limit viz:-

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a. Demand Promissory Note for a sum of Rs.22.50 Lakhs together with interest at the Base Rate +2.25% per annum compounded with monthly rest.

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b. Letter of continuity to the Promissory Note for Rs.35 Lakhs.

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c. Deed of Hypothecation (for securing machineries/ vehicles/goods/book-debts) for Rs.35.00 Lakhs.

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The applicant submits that the defendant fully enjoyed the credit facilities sanctioned by the applicant. The defendant on 10.01.2015 and on 23.06.2017 executed Revival Letters by which he has revived the loan documents dated 11.02.2012, 12.01.2013 & 14.08.2013 executed by him for Cash Credit limit.

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The applicant submits that the defendant acknowledged his liability on 04.04.2015 and on 20.03.2018 by executing debit confirmation letters in favour of the applicant. The defendant also renewed the existing Cash Credit Limit of Rs.35.00 Lakhs vide the credit sanction advice issued by the applicant.

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It is further submitted that subsequent to availing of loan, the defendant was highly irregular in operating his Cash Credit limit. Therefore, the liabilities of the defendant in his credit account was going

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on increasing without proper remittance. Despite repeated demands and personal calls made by the applicant's officials the defendant did not pay any amount to regularize his credit accounts. Therefore, the defendant's loan account was classified as Non Performing Asset (NPA) on 31.10.2018 as per the RBI guidelines. Thereafter, the applicant bank through its Authorised Officer had issued Demand Notice under Section 13(2) of the SARFAESI Act and called upon the defendants to pay the outstanding due amount. Having received the demand notice, the defendants did not settle their liability. 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 was sent to sole defendant through Registered Post with Acknowledgment Due, which was duly served. Applicant bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 08.10.2021 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendant were placed ex-parte on 08.10.2021.

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Heard the submissions of Applicant Bank and perused the records.

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To prove the case of the Applicant Bank, Mr. Prabin Kumar Bhoi, Chief Manager representing 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-20 . As the defendant remained ex-parte, the OA claim remains unchallenged. There is no

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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 Defendant, a sum of Rs.43,68,870/- (Rupees Forty Three Lakh Sixty Eight Thousand Eight Hundred Seventy only) due in respect of Cash Credit Facility (A/c No.009802000007272) together with further interest @12.75% p.a. compounded with monthly rests, from the date of filing the OA till date of realization in full along with costs.

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

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OA amount together with interest, costs etc., to be paid by the defendants duly considering the amounts, if any, paid by the defendants 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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from the date of receipt of this final order.

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(d) 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 (Deepika), transcribed by her, corrected, signed and pronounced by me on this the 29^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: Mrs. Prabin Kumar Bhoi, Chief Manager representing 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.	Loan sanction letter from the applicant dated 11.02.2012.	A-1
2.	Demand Promissory Note for Rs.4 lakhs executed by the defendant dated 11.02.2012.	A-2
3.	Letter of continuity to DPN for Rs.4 Lakhs executed by the defendant dated 11.02.2012.	A-3
4.	Deed of Hypothecation of book-debts for Rs.4 Lakhs executed by the defendant dated 11.02.2012.	A-4
5.	Deed of Hypothecation for securing machineries/vehicle/good/book-debts for Rs.4.00 Lakhs executed by the defendant dated 11.02.2012.	A-5
6.	Loan sanction letter from the applicant dated 12.01.2013.	A-6
7.	Demand Promissory Note for Rs.8.50 Lakhs	A-7

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	executed by the defendant dated 12.01.2013.
8.	Letter of continuity to DPN for Rs.12.50 Lakhs executed by the defendant dated 12.01.2013.	A-8
9.	Deed of Hypothecation of stocks for Rs. 12.50 Lakhs executed by the defendant dated 12.01.2013.	A-9
10.	Deed of Hypothecation of book-debts for Rs.12.50 Lakhs executed by the defendant dated 12.01.2013.	A-10
11.	Loan sanction letter from the applicant dated 13.08.2013.	A-11
12.	Demand Promissory Note for Rs.22.50 Lakhs executed by the defendant dated 14.08.2013.	A-12
13.	Letter of continuity to DPN for Rs.35 Lakhs executed by the defendant dated 14.08.2013.	A-13
14.	Deed of Hypothecation for securing machineries/vehicle/good/book-debts for Rs.35.007 Lakhs executed by the defendant dated 14.08.2013.	A-14
15.	Revival Letter executed by the defendant dated 10.01.2015.	A-15
16.	Acknowledgment of debt executed by the defendant dated 04.04.2015.	A-16
17.	Acknowledgement of debt executed by the defendant dated 20.03.2018.	A-17
18.	Credit sanction letter from the applicant with acknowledgement from the defendant dated 20.03.2018.	A-18
19.	Demand notice issued by the applicant to the defendant dated 08.03.2019.	A-19
20.	Statement of account for the Cash Credit Limit dated 07.09.2019.	A-20

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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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NIL

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

Indian Overseas Bank v. M/S Sai Cabs

Case brief

What is this about?

What did the court decide?

Indian Overseas Bank v. M/S Sai Cabs

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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Case details

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