Allowed

Canara Bank v. Central Traders

DRT13 Oct 2025TA/1100/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the original application filed by Canara Bank for recovery of dues. The court found the defendants liable based on the bank's evidence, including loan agreements and promissory notes, and directed the issuance of a recovery certificate.

What did the court decide?

Direction to recover Rs.83,39,710/- along with further interest at 11.95% per annum and costs; direction to file a memo of costs; direction to prepare and issue a recovery certificate.

Canara Bank versus Central Traders — Insolvency and Bankruptcy | DRT (2025)

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T.A. No. 1100 of 2023

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13.10.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 13^th day of October, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 1100 of 2023

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(Originally filed before DRT- II, Chennai as OA 213/2021 and thereafter transferred to this Tribunal and renumbered as TA No 1100 of 2023)

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Canara Bank,

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Rep. by its Senior Manager, Park Town Branch, No.22, Shydenhams Road,

Chennai – 600 003

….Applicant

-Vs-

1 Central Traders, Rep. by its Partners M. Rajavel and R. Kamaleshwari

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No.64, Acharappan Street,

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George Town,

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Chennai – 600 001

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M. Rajavel, S/o Muthaiah,

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No.36/2, Thaiyappa Mudali Street,

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Broadway, Chennai 600 001

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R. Kamaleswari, W/o M. Rajavel,

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No.36/2, Thaiyappa Mudali Street,

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Broadway, Chennai 600 001 …..Defendants

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Counsels on record / appeared:

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Counsel for Applicant : Sh. Akshai Mani

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Defendants 1 to 3 were set ex-parte on 08.09.2023

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: - FINAL ORDER - :

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This Original Application is filed on 23.04.2021 by the applicant

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bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial

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Institutions Act, 1993) against the defendants for recovery of a total

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T.A. No. 1100 of 2023

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13.10.2025

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sum of Rs.83,39,710/- (Rupees Eighty Three Lakhs Thirty Nine Thousand Seven Hundred and Ten only) due in respect of Term Loan Facility (Account No.0976741000515) repayable together with further interest @ 11.95% per annum with monthly rests from the date of application till the 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.213 of 2021, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.213 of 2021 stood transferred to this Tribunal and renumbered as TA No.1100 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 1^st Defendant is a Partnership firm represented by its Partners i.e., 2^nd and 3^rd defendants herein, who had approached the applicant bank, Chennai seeking financial assistance for construction of a shop at plot allotted by The Chief Executive Officer, Chennai Metropolitan Development Authority (CMDA) vide Allottmenet Letter dated 12.07.2013 under Special Scheme at Koyambedu Wholesale Food Grain market. In connection

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T.A. No. 1100 of 2023

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13.10.2025

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thereto the defendant had submitted the application form for loans under MSME dated 31.08.2013.

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It is submitted by the applicant bank that considering the said request, the applicant bank had sanctioned Term Loan facility of Rs.78,66,000/- under Loan Account No. 0976741000515 vide Sanction Letter dated 06.09.2013, which was duly acknowledged by the defendant. The defendants had agreed to repay the loan together with interest at the rate of 11% p.a. (floating) and shall be repaid in 8 years after a moratorium period of 2 years and the defendants had agreed to adhere to the repayment schedule without any delay or default.

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In order to secure the loan, the 1^st defendant represented by defendants 2 and 3 had executed Demand Promissory Note dated 06.09.2013 and Term Loan Agreement dated 06.09.2013 in favour of applicant bank. The Demand promissory note was revived by the defendant time and again and defendant had executed Acknowledgment of Debt and Security dated 29.04.2016 and 22.04.2019 in favour of applicant bank.

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It is further submitted by the applicant bank that 2^nd and 3^rd defendants stood as Guarantor for the facility availed by the 1^st defendant and executed Guarantee Agreement dated 06.09.2013.

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Applicant Bank submits that subsequent to availing of loan, the defendant was not operating the loan account as per the terms of

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T.A. No. 1100 of 2023

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agreement. Since the defendant had failed to repay the loan account, the applicant bank was constrained to classify the loan account as NonPerforming Asset (NPA) on 01.05.2019 in accordance with RBI guidelines. The applicant bank had issued Legal Notice dated 09.03.2021 demanding the defendant to pay the outstanding dues. The Legal notice sent to 1^st Defendant was duly served, while notice to defendants 2 and 3 returned with an endorsement ‘Left’. Despite receipt of notice, the defendants did not come forward to repay the dues. Hence the present Original Application (OA) has been filed by the applicant bank for recovery of its dues from the defendant.

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After the filing of the OA, summons were sent to Defendants 1 to 3 through Registered Post with Acknowledgment Due, which returned unserved. Applicant bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 08.09.2023 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants 1 to 3 were placed ex-parte on 08.09.2023.

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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, Smt. P. Sundaravalli, Senior Manager representing 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-10 . As the

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T.A. No. 1100 of 2023

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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 Rs.83,39,710/- (Rupees Eighty Three Lakhs Thirty Nine Thousand Seven Hundred and Ten only) due in respect of Term Loan Facility (Account No.0976741000515) repayable together with further interest @ 11.95% per annum with monthly rests from the date of application till the date of realization in full along with costs.

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(b) 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

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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 13^th day of October, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Smt. P. Sundaravalli, Senior 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.	Allotment Letter issued by CMDA in favour of the Defendant herein dated 12.07.2013.	A-1
2.	Application for Credit facility to Micro and Small Enterprises dated 31.08.2013.	A-2
3.	Loan sanction Letter for Term Loan Facility dated 06.09.2013.	A-3
4.	Demand Promissory Note executed by the Defendant dated 06.09.2013.	A-4
5.	Acknowledgement of Debt cum Security executed by the Defendant herein dated 29.04.2016.	A-5
6.	Acknowledgement of Debt cum Security executed by the Defendant herein dated 22.04.2019.	A-6
7.	Term Loan Agreement along with Letter of Undertaking executed by the Defendant herein	A-7

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T.A. No. 1100 of 2023

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13.10.2025

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	dated 06.09.2013.
8.	Guarantee Agreement executed by the 2^ndand 3^rd Defendants herein dated 06.09.2013.	A-8
9.	Legal Notice issued by Counsel along with AD	A-9
	Card and Return Cover dated 09.03.2021.
10.	Statement of Accounts	A-10

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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

Canara Bank v. Central Traders

Case brief

What is this about?

What did the court decide?

Canara Bank v. Central Traders

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

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Case details

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