Allowed

Karur Vysya Bank v. Senguttavan

DRT2 Jun 2025TA/1044/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application filed by Karur Vysya Bank for recovery of dues amounting to Rs.2,09,82,209.75 along with further interest. The court ordered recovery jointly and severally from the defendants via sale of the specified immovable properties pledged as security.

What did the court decide?

Recovery of Rs.2,09,82,209.75 plus further interest @ 16.85% p.a. jointly and severally from respondents, with liberty to recover from sale of schedule property.

Karur Vysya Bank versus Senguttavan — Contract and Commercial Disputes | DRT (2025)

TA No.1044/2023

02.06.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 02^nd day of June, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 1044 of 2023

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(Originally filed before DRT- II, Chennai as OA 937/2019 and thereafter transferred to this Tribunal and renumbered as TA No. 1044 of 2023)

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Karur Vysya Bank Ltd Chennai Main Branch No.46, Armenian Street Chennai-600 001 Represented by its Chief Manager

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…. Applicant

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-Vs-

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Mr. P Senguttavan Son of Sri D. Pandiyan New No.6, North Street Villupuram- 605 602

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Mr. D. Pandiyan S/o Deivasigamani Street New No.6, North Street Villupuram- 605 602 ….Defendants

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Counsels on record / appeared:

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Counsel for Applicant Bank : M/s R. Umasuthan

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Defendants were set ex-parte on 21.03.2022

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: - FINAL ORDER - :

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This original application is filed on 03.10.2019 by the applicant bank

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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 defendants for recovery of a total sum of

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02.06.2025

Rs.2,09,82,209.75p (Rupees Two Crores Nine Lakhs Eighty-Two

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Thousand Two Hundred Nine and Seventy-Five Paise only) due in respect of Agricultural Term Loan Facility (Loan Account No. 1153713000000056) together with further interest @ 16.85% per annum compounded with monthly rests from the date of application till the date of realization in full, for sale of schedule mentioned immovable property and for costs of this application.

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Originally the application was filed before DRT-II, Chennai, assigned OA No.937/2019, and thereafter in pursuance to the notification from Ministry of Finance, DFS, dated 04.10.2022, OA No. 937/2019 stood transferred to this Tribunal and renumbered as TA No.1044/2023.

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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 1^st defendant, an agriculturist engaged in the cultivation and sale of sugarcane, paddy, pulses, and other allied products, approached the bank in November 2012 with a request for sanction of Agricultural Loan for purchase of sugarcane harvester, sugarcane infielder and a tractor.

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It is submitted by applicant bank that towards collateral security for the repayment of the said loan along with interest accrued thereon, the 1^st defendant and 2^nd defendant offered to create equitable mortgage over schedule properties in favour of the applicant. The 2^nd defendant offered to execute deed of personal guarantee in favour of the applicant for guaranteeing the repayment of aforementioned financial facilities along with interest accrued thereon by the 1^st defendant.

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The applicant bank submits that for the purpose of availing Agricultural term loan the 1^st defendant identified the supplier of his choice and requested the applicant bank to purchase the same and deliver it to him on hire purchase basis.

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The applicant bank submitted that 1^st defendant obtained quotation from M/s. Sriram Tractors for the purchase of 3 Nos of ‘New Holland 3630TX Plus Tractor’. The 1^st defendant also obtained quotation from ‘M/s New Holland Flat (India) Pvt. Ltd’ for the purchase of 1 No Sugarcane Harvester Case IH-4000 Plus Series.

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It is further submitted that 1^st defendant after obtaining quotation from the said supplier, requested the applicant bank to purchase the same and deliver it to him on hire purchase basis. The 1^st defendant represented to the applicant bank in the event of applicant bank sanctioning the loan facility for the purchase of the aforementioned machineries/agricultural

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equipment’s, he would repay the same without any delay/default in accordance with the repayment schedule as prescribed by the applicant bank.

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It is further submitted by the applicant bank that it relied upon the representations and assurances made by the 1st defendant, the personal guarantee of the 2^nd defendant, and the offer to create an equitable mortgage over the schedule property by both the 1^st and 2^nd defendants. Based on the above, the applicant bank sanctioned a Term Loan Facility of Rs.1,20,00,000/- in favour of the 1^st and 2^nd defendants, vide sanction letter dated 31.12.2012.

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The applicant bank submits that as per the terms of sanction the aforesaid term loan facility the term loan was due and liable to be repaid together with interest calculated at the rate of 12.75% per annum compounded with monthly rests in 20 quarterly installments commencing from 30.06.2013, with the holiday period of 3 months.

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It is submitted that the sanction letter was accepted by the defendants in its entirety both in form and content. The term loan facility was directly paid by them to the supplier of the machinery/vehicle for and on behalf of the 1^st defendant as per the specific mandate of the 1^st defendant. The 1^st defendant took delivery of the machinery/vehicle directly from its supplier. 12. It is submitted that at the time of availing the credit facilities the 1^st

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02.06.2025

defendant has executed the following loan documents on 31.12.2012 in favour of applicant bank:

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a) Hypothecation agreement

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b) Hypothecation agreement relating to the hypothecation of motor vehicle

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c) Machinery loan agreement

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d) Letter of undertaking to pay installment monies

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e) Letter of undertaking to create hypothecation in favour of the applicant.

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The applicant bank submits that, as collateral security for the repayment of the aforesaid term loan facility along with interest, the 1^st and 2^nd defendants created an equitable mortgage over the schedule-mentioned property by registering Memorandum of Deposit of Title Deeds (MOD) dated 31.12.2012 as Document No. 4 of 2013 before the office of the Joint SubRegistrar-I, Villupuram, thereby confirming the mortgage created by them in favour of the applicant. Further the 2^nd defendant executed deed of personal guarantee dated 31.12.2012 in favour of the applicant and thus rendered herself jointly and severally liable to pay the said sum to the applicant.

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The applicant bank submits that the 1^st defendant was regular in repayment for the initial period of one year. However, the applicant states that thereafter, the 1^st defendant began making irregular, on-account

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remittances at their own discretion, without adhering to the repayment schedule stipulated by the applicant. Subsequently, vide their demand notice dated 19.03.2015 called upon the defendants herein to remit the over due amount and to upgrade the loan amount. However, despite the receipt of the said notice the defendants failed and neglected to comply with the demand of the applicant bank. Consequently, the loan account of the defendants was classified as a Non-Performing Asset (NPA) on 01.04.2015.

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The applicant bank submits that, vide its letter dated 16.04.2015, it recalled the loan facility and called upon the defendants, jointly and severally, to discharge the outstanding liability. However, the defendants failed and neglected to discharge their admitted liability to the applicant.

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The applicant bank submits that, due to the defendants' default in repaying the instalments, it initiated steps to seize the hypothecated vehicles. At that juncture, the 1^st defendant, vide his letter dated 14.06.2016, requested the applicant not to seize the vehicles, stating that such action would adversely affect his business commitments. Relying on the assurances given by the defendants, the applicant permitted them to regularize the loan account without proceeding with repossession. However, despite repeated promises by the 1^st defendant to regularize the account, he has continuously deferred the discharge of his admitted liability. Therefore, the Applicant Bank has filed this Original Application (OA)

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seeking recovery of the outstanding dues from the Defendants.

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After the filing of the OA, summons were sent to the defendants through Registered Post with Acknowledgment Due. Summons to D-1 returned unserved. Although 2^nd Defendant entered appearance through this counsel, did not choose to file written statement despite availing substantial number of adjournments. Applicant Bank had caused paper publication of the notice for the defendants and filed proof thereof. When OA was taken up on 21.03.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants 1 and 2 were placed ex-parte on 21.03.2022.

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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, Shri. P S Sundaravarathan, Chief Manager, 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 A1 to A15 . As the defendant 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 due to the applicant bank, 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

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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 Defendants jointly and severally a sum Rs.2,09,82,209.75p (Rupees Two Crores Nine Lakhs Eighty-Two Thousand Two Hundred Nine and Seventy-Five Paise only) due in respect of Agricultural Term Loan Facility (Loan Account No. 1153713000000056) together with further interest @ 16.85% per annum compounded with monthly rests 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 mentioned property in the OA.

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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 defendants and/or amount realized by sale of assets etc., during the intervening period after the filing of the OA, enabling

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the Registry to prepare Recovery Certificate for the amount to

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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 this final order.

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(f) Recovery Certificate shall be drawn up and issued to the 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 Prasobh Sankar, transcribed by him, corrected, signed and pronounced by me on this the 02^nd 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: Shri. P. S. Sundaravarathan, 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 Application form by the 1^stdefendant to the applicant	A-1
2	Hypothecation agreement in favour of the applicant Sanction letter dated	A-2
3	Hypothecation agreement relating to the hypothecation of Motor Vehicle in favour of the applicant dated	A-3

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4	Machinery Loan Agreement in favour of the applicant dated	A-4
5	Letter by the 1^stdefendant to the supplier dated	A-5
6	Personal Guarantee of the 2^nddefendant	A-6
7	Memorandum of Deposit of Tile Deeds registered as Doc.No.4 of 2013 before the office of the JSRO-I, Villupuram by the 1^stand 2^nddefendants in favour of the applicant dated 17.08.2011	A-7
8	Settlement Deed, registered as Doc.No.869 of 2008, before the office of the JSRO-I, Villupuram in favour of the 1^stdefendant dated	A-8
9	Sale Deed registered as Doc.No.1 of 2008, before the office of the JSRO-I, Villupuram in favour of the 2^nddefendant dated	A-9
10	Office copy of letter by the applicant bank dated 17.08.2011	A-10
11	Office copy of the demand letter by the applicant dated	A-11
12	Office copy of demand notice issued by the applicant bank along with AD cards dated 07.02.2014	A-12
13	Office copy of letter issued by the applicant bank dated	A-13
14	Office copy of the 13(2)-notice issued by the applicant dated 20.12.2015	A-14
15	Certificate along with statement of accounts dated 31.12.2015	A-15

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Witness Examined for the Defendant: -Nil-

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List of Documents Exhibited for the Defendant: -Nil -

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SCHEDULE

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Item 1

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(Immovable property belong to Mr. P Senguttavan, the 1^st defendant herein) Villupuram Registration District, Villupuram Joint No.1, Sub-Registration District of Villupuram in North Street, site measuring East West at North 22 feet, a south 20 feet, North South measurements 83 ½ feet in total 1753

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02.06.2025

½ Sq Ft =162.95 Sq.Ft meters with boundaries North of Street, East of Paulraj’s house and site, South of Senthil’s Property, West of Common Lane, within these boundaries the Madras terraced house measuring 1700 Sq.Ft with all accessories, Doors and Windows, Door No.6, Ward No.20, Assessment No.12057.

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In the above street, site measuring East West 5 Feet, North South 60 Feet Total 1300Sq.Ft and in continuation of the same on the North East West 6 ½ Feet, North South 28 ½ feet, in total 152 ¾ Sq.Ft =14.19 Sq.ft meters in the above site Right of easement of take vehicles, to the common use of the to use as way and also to take drainage channel.

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The property is situated in Villupuram Grama Natham Survey No.362/B, 34, A1, A1, A1, A1, A1 in 8.106 cents within the Villupuram Municipal Limits.

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And situated within the Registration District of Villupuram and SubRegistration District of Villupuram No.I

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Item 2

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(Immovable property belonging to Mr. D Pandiyan, the 2^nd defendant herein)

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Agricultural land Nanja at S.No.134/1, measuring 1.75 Acres (Near Janagaraj Garden), Kaspa Villupuram and situate at Villupuram No.I, Sub Registration District and Villupuram Registration District.

TA No.1044/2023

02.06.2025

Sd/-

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

Karur Vysya Bank v. Senguttavan

Case brief

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Karur Vysya Bank v. Senguttavan

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