Allowed

State Bank of India v. M/S Koghima Garments

DRT6 Jun 2025TA/1197/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application filed by State Bank of India seeking recovery of overdue loans including interest and costs from the borrowers jointly and severally, permitting sale of mortgaged property.

What did the court decide?

Recovery of total sum of Rs. 54,53,660.59 plus interest and costs; liberty to recover balance by sale of mortgaged and personal assets.

State Bank of India versus M/S Koghima Garments — Specific Performance | DRT (2025)

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T.A. No. 1197 of 2023

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06.06.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 06^th day of June, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 1197 of 2023

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(Originally filed before DRT- II, Chennai as OA 153/2020 and thereafter transferred to this Tribunal and renumbered as TA No 1197 of 2023)

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State Bank of India ARM Branch Chennai

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No.44, 1^st Floor, Eldams Road, Teynampet, Chennai – 600 018

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IFSC Code: SBIN0070674 Rep. by its Chief Manager ….Applicant

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-Vs-

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M/s Koghima Garments, Rep. by its Proprietor Mr. R.K. Rajkumar,

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No.14, Kennedy Square, 3^rd Street, Thiru vi ka Nagar, Chennai – 600 011

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Mr. R.K. Rajkumar S/o Mr. Karunanidhi Proprietor M/s. Koghima Garments, No.14, Kennedy Square, 3^rd Street, Thiru vi ka Nagar, Chennai – 600 011

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Mr. Karunanidhi S/o Mr. Rajagopal No.14, Kennedy Square, 3^rd Street, Thiru vi ka Nagar, Chennai – 600 011

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Mrs. K. Varalakshmi W/o Mr. Karunanidhi No.14, Kennedy Square, 3^rd Street, Thiru vi ka Nagar,

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Chennai – 600 011 ….Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. KNC & KCYR Associates

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Defendants 1 to 4 were set ex-parte on 10.03.2022

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T.A. No. 1197 of 2023

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06.06.2025

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: - FINAL ORDER - :

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This original application is filed on 25.01.2020 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 to 4, jointly and severally for recovery of a total sum of Rs.54,53,660.59p (Rupees Fifty Four Lakhs Fifty Three Thousand Six Hundred Sixty and Fifty Nine Paisa only) as follows:

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(i) A sum of Rs. 36,81,896.02p due in respect of Term Loan (Account No.62334570673) repayable together with further interest @ 12.55% p.a. 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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(j) (ii) A sum of Rs.17,71,764.57p due in respect of Cash Credit Facility (Account No.62334532093) together with further interest @ 12.55% p.a., 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 schedule mentioned immovable property and for costs of this OA.

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Originally, this Application was filed before DRT-II, Chennai, assigned OA No.153 of 2020, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.153 of 2020 stood

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T.A. No. 1197 of 2023

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06.06.2025

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transferred to this Tribunal and renumbered as TA No.1197 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 defendants approached the applicant bank on 24.10.2013 seeking financial assistance for running their garment business and submitted the application for the same and were willing to execute necessary loan documents.

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It is submitted that applicant bank, after applying their mind and analysing various aspects as per the banking norms and upon getting clearance on the title of the property to be mortgaged in the form of legal opinion had decided to sanction the loan to the defendants. At the request of defendants, applicant bank had sanctioned two loans viz., Term Loan of Rs.12 lakhs and Cash Credit facility of Rs.3 lakhs vide letter of Arrangement dated 28.02.2014 and the same were duly acknowledged by the 1^st , 3^rd & 4^th defendants.

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The applicant submits that defendants while availing the said facilities

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executed the following loan documents in favour of the applicant bank:

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a) Agreement of loan cum Hypothecation dated 28.02.2014 executed by 1^st defendant

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b) Guarantee Agreement dated 28.02.2014 executed by 3^rd & 4^th defendant

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c) Consolidated documents (D/L) – HO 1132 dated 28.02.2014 executed by 1^st , 3^rd & 4^th defendants

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d) Confirming the Deposit of title deeds dated 01.03.2014 execute by 2^nd , 3^rd , 4^th defendants.

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It is submitted that again the defendants approached the applicant bank for enhancement of the loan facilities and based on the request of the defendants, the applicant bank enhanced the loan facilities vide their Letter of Arrangement dated 08.07.2015 viz., Term Loan – Rs.12 lakhs and CC (Hyp) Loan – Rs.24 lakhs. The defendants had agreed to repay the working capital on demand within the period of 12 months from the date of sanction and the same was in force subject to review of every 3 months. The applicant submits that defendants agreed to repay the Term Loan in 60 months, each instalment of Rs.29199/- per month.

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It is submitted that for the enhanced loan facilities, the defendants executed the following documents:

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a) Guarantee agreement (SME 3) dated 08.07.2015 executed by the 2 to 4^th defendants.

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b) Supplemental Agreement of Loan cum Hypothecation (SME 4) dated 08.07.2015 executed by 1^st and 2^nd defendants

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c) Memorandum for Recording Extension of mortgage by Deposit of

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title deeds covering enhanced limits and or creation of equitable mortgage (SME 7) dated 08.07.2015 executed by the 2 to 4^th defendants.

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d) Letter of confirmation for extension of mortgage by deposit of title deeds covering enhanced limits (SME 8) dated 08.07.2015 executed by the 2 to 4^th defendants.

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The Applicant further submits that 2^nd defendant also deposited the title deeds of the schedule mentioned property as security viz., Settlement Deed dated 07.06.2012 executed by Mrs. K. Varalakshmi to and in favour of Mr. R.K. Rajkumar registered as Doc.No.1695 of 2012 with SRO Sembium as security for the loan availed by the defendant under Section 58(f) of Transfer of Property Act, 1892 in favour of the applicant bank.

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It is submitted that the 2^nd defendant in confirmation of the same have executed the Memorandum of Deposit of title deeds confirming the immovable property standing in his name given as security for the credit facility availed by the defendants and registered the same as MODTD dated 09.07.2015 registered as Doc.No.2366 of 2015 with SRO Sembium in favour of the applicant bank.

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The applicant bank submitted that subsequent to availing of loan, the defendants did not keep up their undertaking and maintained the loan accounts. The accounts become sticky the applicant bank sent several reminder to the defendants and also request to defendants close the

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account in OTS but there was no response from the defendants. Since the defendants failed and neglected to clear the loan, the loan accounts were classified as NPA on 30.04.2016 in accordance with RBI guidelines. The applicant bank recalled entire due amount vide demand notice dated 05.05.2016, recalling the amount as on 30.04.2016 in a sum of Rs.36,28,000/- but there was no response from the defendants. Hence the present Original Application (OA) has been filed for recovery of amounts due from defendants.

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After the filing of the OA, summons were sent to the Defendants 1 to 4 through Registered Post with Acknowledgment Due, which returned unserved with postal endorsement as ‘left’ in respect of D-1 and returned unserved with postal endorsement as ‘No such Person’ in respect of D-2 to D-4. Applicant Bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 10.03.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 to 4 were placed ex-parte on 10.03.2022.

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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. T S V Ramana, Chief 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

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to be marked as Ex A-1 to A-14 . 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 jointly and severally, a total sum of Rs.54,53,660.59p (Rupees

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Fifty Four Lakhs Fifty Three Thousand Six Hundred Sixty and Fifty Nine Paisa only) as follows:

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(i) A sum of Rs. 36,81,896.02p due in respect of Term Loan (Account No.62334570673) repayable together with further interest @ 12.55% p.a. 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.17,71,764.57p due in respect of Cash Credit Facility (Account No.62334532093) together

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with further interest @ 12.55% p.a., with monthly rests

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along with penal interest @ 2% p.a. from the date of filing till the date of realisation 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 immovable property more fully detailed in the OA schedule.

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(d) If the sale proceeds of the mortgaged property is not sufficient to satisfy the dues as ordered above, the applicant bank is at liberty to sell the personal assets of the Defendants 2 to 4 (both movable and immovable) to recover the balance dues as required under law for which the Defendants 2 to 4 to disclose to the Tribunal particulars of other properties or assets owned by the Defendants 2 to 4.

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(e) 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

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T.A. No. 1197 of 2023

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to the applicant bank.

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(f) The applicant bank shall file memo of costs within ten days from

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the date of receipt of this final order.

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(g) 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 06^th 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: Sh. T S V Ramana, 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.	Letter of Arrangement for sanctioning 2 loans, Term Loan-12 lakh and Cash Credit-3 lakhs 28.02.2014	A-1
2.	Agreement of Loan cum Hypothecation executed by 1^stdefendant 28.02.2014	A-2
3.	Guarantee Agreement executed by 3^rdand 4^th Defendants 28.02.2014	A-3
4.	Consolidated Documents (D/L) – HO 1132 executed by 1^st, 3^rd& 4^thDefendants 28.02.2014	A-4

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06.06.2025

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5.	Confirming the Deposit of Title Deeds executed by 2^nd, 3^rd& 4^thdefendants 01.03.2014	A-5
6.	Letter of Arrangement, enhancing the Credit facility of Term Loan – Rs.12 lakhs and CC (Hyp) Loan – Rs.24 lakhs 08.07.2016	A-6
7.	Guarantee Agreement (SME 3) executed by the 2 to 4 defendants 08.07.2015	A-7
8.	Supplemental Agreement of Loan cum Hypothecation (SME 4) executed by 1^stand 2^nd Defendants 08.07.2015	A-8
9.	Memorandum for Recording Extension of Mortgage by deposit of title deeds covering enhanced limits and or creation of equitable mortgage (SME 7) executed by the 2 to 4^thdefendants. 08.07.2015	A-9
10.	Letter of Confirmation for extension of mortgage by Deposit of Title Deeds covering enhanced limits (SME 8) executed by the 2 to 4^thdefendants 08.07.2015	A-10
11.	Settlement Deed executed by Mrs. K. V. Varalakshmi (4^thDefendant) to and in favour of Mr. R. K. Rajkumar (2^ndDefendant) registered as Doc.No.1695 of 2012 with SRO Sembium along with English translation 07.06.2015	A-11
12.	MODTD registered as Doc.No.2366 of 2015 with SRO Sembium in favour of the applicant bank 09.07.2015	A-12
13.	Statement of Account for CC A/c No.62334532093 covering the period from 28.02.2014 to 24.01.2020	A-13
14.	Statement of Account for TL A/c. No.62334570673 covering the period from 28.02.2014 to 24.01.2020	A-14

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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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All that piece and parcel of the land measuring an extent of 1.723% UDS (273 Sq.ft) out of 15850 Sq.ft. comprised in TS No.29/1 Part, 29/2 Part, Block 11 of Sembium village, together with the flat constructed

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thereon with a super built area of 470 sq.ft., bearing Flat No.8 B, First Floor, Block No.C, Vasanth Apartment, Door No.10, Madurai Sami Madam Street, Sembium, Perambur, Chennai – 600 011, situated at Perambur Purasaiwakkam Taluk, Chennai North District and bounded on the

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North by: TS No.33 part South by: Property of Ramanachari and Vagayaras East by: TS No.33 Part West by: TS No.291 part

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Situated within the Registration District of Chennai North and Sub Registration District of Sembium

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

State Bank of India v. M/S Koghima Garments

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/S Koghima Garments

Case brief

What is this about?

What did the court decide?

What the court decided

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