Allowed

Bank of India v. Krishna Murthy

DRT26 May 2025TA/1219/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the applicant bank's application filed under the RDB Act for recovery of a total sum of Rs.57,06,808/- along with interest from four respondents who defaulted on their loan and credit facility obligations.

What did the court decide?

Recovery of Rs.57,06,808/- with interest; liberty to sell mortgaged property and personal assets for balance dues; issuance of Recovery Certificate.

Bank of India versus Krishna Murthy — Execution and Attachment | DRT (2025)

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T.A. No. 1219 of 2023

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26.05.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 26^th day of May, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 1219 of 2023

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(Originally filed before DRT- II, Chennai as OA 104/2020 and thereafter transferred to this Tribunal and renumbered as TA No 1219 of 2023)

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BANK OF INDIA, Guindy Branch, Rep. by its Chief Manager, # 111, Mount View, Mount Road, Guindy, Chennai -600 032.

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….Applicant

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-Vs-

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Mr. S. Krishna Murthy, S/o. Mr. K. Sankaran,

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No.124/96, Iyya Street,

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Chintadripet, Chennai 600 002.

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Mr. S. Guru Murthy, S/o. Mr. K. Sankaran,

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No.124/96, Iyya Street,

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Chintadripet, Chennai 600 002.

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Mr. K. Sankaran, S/o. Kannan, All Residing at: No.124/96, Iyya Street, Chintadripet, Chennai 600 002.

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Krishnamoorthy Pulp Boards Represented by its Proprietor, No.5, Neduvarampakkam Village Main Road, Nenduvarampakkam, Thiruvallur District,

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Chennai 600 067. …Defendants

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Counsels on record / appeared:

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Counsel for Applicant : Mr. B. Siva Kollapan Defendants 1 to 4 were set ex-parte on 28.03.2022.

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T.A. No. 1219 of 2023

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26.05.2025

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: - FINAL ORDER - :

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This original application is filed on 20.12.2010 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.57,06,808/- (Rupees Fifty Seven Lakhs Six Thousand Eight Hundred and Eight only) as follows:

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(i) A sum of Rs.20,61,150/- due in respect of Star Mortgage Loan (Account No.801162610000119) repayable together with interest @ 10.9% p.a. with monthly rests from the date of filing till the date of realisation in full;

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(ii) A sum of Rs.17,96,083/- due in respect of Term Loan

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Facility (Account No.801170410000188) repayable together with interest @ 11.45% p.a. with monthly rests from the date of filing till the date of realisation in full;

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(iii) A sum of Rs.18,49,575/- due in respect of Cash Credit Facility (Account No.801130110000117) repayable together with interest @ 11.45% p.a. from the date of Application till the date of realization in full,

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for sale of immovable property morefully detailed in schedule to OA and for costs of this OA.

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Originally, this Application was filed before DRT-II, Chennai, assigned OA No.104 of 2020, and thereafter in pursuance to the

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T.A. No. 1219 of 2023

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26.05.2025

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notification from Ministry of Finance, DFS dated 04.10.2022, OA No.104 of 2020 stood transferred to this Tribunal and renumbered as TA No.1219 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 Hon’ble Tribunal.

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It is the case of the Applicant Bank that pursuant to the request of the 1^st and 2^nd Defendant, applicant bank sanctioned the Star Mortgage Loan to the tune of Rs.20,14,000/- to Defendants vide sanction letter dated 22.09.2014, subject to the terms and conditions as envisaged under the Loan Agreement dated 30.09.2014 executed by the 1^st Defendant as borrower and 2^nd Defendant as co-borrower.

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It is further submitted by the Applicant Bank that pursuant to the request of the 4^th Defendant, Cash Credit Facility to the tune of Rs.8,00,000/- and Term Loan to the tune of Rs.20,00,000/- totalling Rs.28,00,000/- was sanctioned to the said Defendants vide sanction letter dated 14.12.2015, subject to the terms and conditions as envisaged under the Loan Agreement dated 14.12.2015 executed by the 4^th Defendant through its proprietor 1^st Defendant.

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The Applicant Bank further stated that pursuant to the request of the 4^th Defendant, the additional Cash Credit Facility to the tune of

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Rs.7,00,000/- totaling the Cash Credit Facility Rs.15,00,000/- was sanctioned to the said Defendants vide sanction letter dated 12.06.2017, subject to the terms and conditions as envisaged under the Loan Agreement dated 23.06.2017 executed by the 4^th Defendant through its proprietor 1^st Defendant.

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It is submitted by the applicant bank that the 3^rd Defendant had executed Deed of Guarantee and Memorandum of Deposit of Title Deeds in favour of the Applicant Bank for the all the loans. The Defendants have guaranteed for the repayment of the due to the aforesaid loan amount.

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The Applicant Bank further states that the Star Mortgage Loan was sanctioned by the bank with rate of interest being 1.50% above base rate presently at 11.70% p.a. as may be rest by the bank on annual basis. The Applicant Bank states that the Cash Credit and Term Loan was sanctioned by the bank with rate of interest being 4.05% over base rate presently at 13.75% p.a. as may be reset by the bank on annual basis. Further the additional Cash Credit was sanctioned by the bank with rate of interest being 2.80% above the yearly Marginal Cost of Funds based Lending Rate (MCLR) at 11.20% p.a. as may be reset by the bank on annual basis.

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It is further submitted by the applicant bank that the loan was secured by equitable mortgage of property being Land and Building admeasuring an extent of 892 Sq.ft situated at Perumbakkam Village, Sholinganallur Taluk, Kancheepuram District more fully described in the

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schedule to the O.A.

In evidence of availing the Loans and as security thereof, the Defendants have executed the following loan documents:

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I. Documents executed for availing Star Mortgage Loan

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a. : Loan Application for Star Mortgage Loan dated 10.09.2014.

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b. : Sanction Letter dated 22.09.2014.

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c. : Term Loan Agreement dated 30.09.2014 executed by 1^st Defendant as borrower and 2^nd Defendant as co-borrower.

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d. : Demand Promissory Note for Rs.20,14,000/- dated 30.09.2014 executed by 1^st Defendant as borrower and 2^nd Defendant as co-borrower.

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e. : Instalment Letter dated 30.09.2014 executed by 1^st Defendant as borrower and 2^nd Defendant as co-borrower.

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f. : Bearer Letter dated 30.09.2014 executed by 1^st Defendant as borrower and 2^nd Defendant as co-borrower. g. : Draft Declaration dated 30.09.2014 executed by 1^st Defendant as borrower and 2^nd Defendant as co-borrower. h. : Letter of Multiple Undertaking dated 30.09.2014 executed by 1^st Defendant as borrower and 2^nd Defendant as co-borrower. i. : Deed of Guarantee dated 30.09.2014 executed by 3^rd Defendant (OD-194).

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j. : Memorandum of Deposit of Title Deeds dated 29.09.2014 registered as Document No.10839 of 2014 at S.R.O. Selaiyur executed by 3^rd Defendant. k. : Acknowledgment of debt dated 22.08.2017 executed by the 1^st and 2^nd defendants (L444C).

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II. Documents executed for availing Cash Credit and Term Loan

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a. : Loan Applicant for Cash Credit and Term Loan dated 26.11.2015.

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b. : Sanction Letter dated 14.12.2015.

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c. : Hypothecation cum Loan Agreement (Plant and Machinery, Stocks and Book Debts) dated 14.12.2015 executed by the 4^th Defendant through its Proprietor 1^st Defendant.

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d. : Demand Promissory Note for Rs.28,00,000/- dated 14.12.2015 executed by 4^th Defendant through its Proprietor 1^st Defendant.

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e. : Instalment Letter dated 14.12.2015 executed by 4^th Defendant through its Proprietor 1^st Defendant. f. : Bearer Letter dated 14.12.2015 executed by 4^th Defendant through its Proprietor 1^st Defendant.

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g. : Draft Declaration dated 14.12.2015 executed by 4^th Defendant through its Proprietor 1^st Defendant. h. : Letter of Multiple Undertaking dated 14.12.2015 executed by 4^th Defendant through its Proprietor 1^st Defendant. i. : Deed of Guarantee dated 14.12.2015 executed by 3^rd Defendant (OD-194). j. : Supplemental Memorandum of Deposit of Title Deeds dated 21.12.2015 registered as Document No.13415 of 2015 at S.R.O Selaiyur executed by 3^rd Defendant.

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k. : Acknowledgment of debt dated 23.06.2017 executed by the 1^st and 2^nd defendants (L444C).

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III. Documents executed for availing additional Cash credit.

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a. : Loan Application for enhanced Cash Credit dated 22.05.2017.

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b. : Sanction Letter dated 12.06.2017.

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c. : Hypothecation cum Loan Agreement (Plant and Machinery, Stocks and Book Debts) dated 23.06.2017 executed by the 4^th Defendant through its Proprietor 1^st Defendant.

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d. : Demand Promissory Note for Rs.15,00,000/- dated 23.06.2017 executed by 4^th Defendant through its Proprietor 1^st Defendant.

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e. : Bearer Letter dated 23.06.2017 executed by 4^th Defendant through its Proprietor 1^st Defendant. f. : Draft Declaration dated 23.06.2017 executed by 4^th Defendant through its Proprietor 1^st Defendant. g. : Letter of Multiple Undertaking dated 23.06.2017 executed by 4^th Defendant through its Proprietor 1^st Defendant. h. : Deed of Guarantee dated 23.06.2017 executed by 3^rd Defendant (OD-194).

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MCLR Agreement dated 23.06.2017 executed by 4^th Defendant through its Proprietor 1^st Defendant.

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i. : Supplemental Memorandum of Deposit of Title Deeds dated 21.06.2017 registered as Document No.6596 of 2017 at S.R.O. Selaiyur executed by 3^rd Defendant.

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The Applicant Bank submitted that the defendants herein have executed the above loan documents thereby acknowledging the said loan amount availed from the Applicant Bank and the Defendants had undertaken to repay the loan amounts in time without committing any default.

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It is further submitted by the Applicant Bank subsequent to availing of loan, despite repeated demands and several reminders

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made, the Defendants failed to repay the balance of the liability owned by them to the Applicant Bank. Consequently, the Star Mortgage Loan account of the 1^st and 2^nd Defendants was classified as Non-Performing Assets on 31.05.2018, Cash Credit and Term Loan Accounts of 4^th Defendant was classified as Non-Performing Assets on 01.08.2018 in terms of the directives of Reserve Bank of India. As defendants did not come forward to repay the dues, this Original Application (OA) has been filed to recover the dues from the Defendants.

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After the filing of the OA, Summons were sent to defendants 1 to 4 through Registered Post with Acknowledgment Due, which returned with remarks as “left”. Applicant bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 28.03.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 to 4 were placed ex-parte on 28.03.2022.

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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. Seera Srihari Rao, Chief Manager and Authorized officer 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-30 . As the Defendants remained ex-parte, the OA claim remains unchallenged. There is no contra evidence available on record to repudiate the claim

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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 1 to 4 jointly and severally, a sum of Rs.57,06,808/- (Rupees Fifty Seven Lakhs Six Thousand Eight Hundred and Eight only) as follows:

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(i) A sum of Rs.20,61,150/- due in respect of Star Mortgage Loan (Account No.801162610000119) repayable together with interest @ 10.9% p.a. with monthly rests from the date of filing till the date of realisation in full;

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(ii) A sum of Rs.17,96,083/- due in respect of Term Loan Facility (Account No.801170410000188) repayable together with interest @ 11.45% p.a. with monthly rests from the date of filing till the date of realisation in full;

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(iii) A sum of Rs.18,49,575/- due in respect of Cash Credit Facility (Account No.801130110000117) repayable together with interest @ 11.45% p.a. from the date of Application till the date of realization in full, along with costs

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of this OA.

(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.

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

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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 Defendant to the applicant bank.

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(f) The applicant bank shall file memo of costs within ten days from the date of this final order.

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(g) 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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26.05.2025

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

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(Dictated to Steno (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 26^th day of May, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sh. Seera Srihari Rao, Chief Manager and Authorized officer of 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 submitted by 1^stand 2^nd Defendants dated 10.09.2014.	A-1
2.	Sanction Letter duly acknowledged by Defendants dated 22.09.2014.	A-2
3.	Term Loan Agreement executed by 1^stand 2^nd Defendant dated 30.09.2014.	A-3
4.	Demand Promissory Note for Rs.20,14,000/- executed by 1^st and 2^nd Defendant dated 30.09.2014.	A-4
5.	Instalment Letter executed by 1^stand 2^nd Defendant (L440) dated 30.09.2014.	A-5
6.	Bearer Letter executed by 1^stand 2^ndDefendant (L435) dated 30.09.2014.	A-6
7.	Draft Declaration executed by 1^stand 2^ndDefendant (L515) dated 30.09.2014.	A-7
8.	Letter of Multiple undertaking executed by 1^stand 2^ndDefendant (L516) dated 30.09.2014.	A-8
9.	Deed of Guarantee executed by 3^rdDefendant (OD- 194) Dated 30.09.2014.	A-9
10.	Acknowledgment of Debt Executed by 1^stand 2^nd Defendants (L444C) dated 22.08.2017.	A-10
11.	Loan Application submitted by 4^thDefendant through its proprietor 1^st Defendant dated 26.11.2015.	A-11

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12.	Sanction Letter duly acknowledged by 4^th Defendant through it proprietor 1^stDefendant dated 14.12.2015.	A-12
13.	Hypothecation cum Loan Agreement (Plant and Machinery, Stocks and Book Debts) executed by the 4^thDefendant through its Proprietor 1^stDefendant dated 14.12.2015.	A-13
14.	Demand Promissory Note for Rs.28,00,000/- executed by 4^thDefendant through its Proprietor 1^st Defendant dated 14.12.2015.	A-14
15.	Instalment Letter executed by 1^stDefendant as borrower and 2^ndDefendant as co-borrower dated 14.12.2015.	A-15
16.	Bearer Letter executed by 4^thDefendant through its Proprietor 1^stDefendant dated 14.12.2015.	A-16
17.	Draft Declaration executed by 4^thDefendant through its Proprietor 1^stDefendant (L515) Dated 14.12.2015.	A-17
18.	Letter of Multiple Undertaking executed by 4^th Defendant through its Proprietor 1^stDefendant (L516) dated 14.12.2015.	A-18
19.	Deed of Guarantee executed by 3^rdDefendant (OD- 194) Dated 14.12.2015.	A-19
20.	Acknowledgement of Debt Executed by 1^stand 2^nd Defendants (L 444C) dated 23.06.2017.	A-20
21.	Loan Application submitted by 4^thDefendant through its proprietor 1^st Defendant dated 22.05.2017.	A-21
22.	Sanction Letter duly acknowledged by 4^th Defendant through its proprietor 1^stDefendant dated 12.06.2017.	A-22
23.	Hypothecation cum Loan Agreement (Plant and Machinery, Stocks and Book Debts) executed by the 4^thDefendant through its Proprietor 1^stDefendant dated 23.06.2017.	A-23
24.	Demand Promissory Note for an amount of Rs.15,00,000/- executed by 4^thDefendant through its Proprietor 1^stDefendant dated 23.06.2017.	A-24
25.	Bearer Letter executed by 4^thDefendant through its Proprietor 1^stDefendant (L435) dated 23.06.2017.	A-25
26.	Draft Declaration executed by 4^thDefendant through its Proprietor 1^stDefendant (L515) dated 23.06.2017.	A-26
27.	Letter of Multiple Undertaking executed by 4^th Defendant through its Proprietor 1^stDefendant (L516) dated 23.06.2017.	A-27

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28.	Deed of Guarantee executed by 3^rdDefendant (OD- 194) dated 23.06.2017.	A-28
29.	MCLR Agreement executed by 4^thDefendant through its Proprietor 1^st Defendant dated 23.06.2017.	A-29
30.	Statement of Accounts dated 29.12.2015 to 21.05.2022.	A-30

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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 OF THE PROPERTY-:

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All that piece and parcel of land and building bearing Plot No.47, Comprised in S.No.429/2O,2J,2K approved by PPD/LO.No.243/90, in 16^th Street, Sowmya Nagar Extension, measuring an extent of 892 Sq.ft, situated at Perumbakkam Village, Sholinganallur Taluk, Kancheepuram District being bounded on the.

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North by : Vacant Land, South by : 16 Feet Road, East by : 16 Feet Road, West by : Plot No.46.

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Admeasuring

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East to West on the Northern Side : 44 Feet, East to West on the Southern Side : 44 Feet, North to South on the Eastern Side : 16 Feet, North to South on the Western Side : 23 Feet,

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Lying within the Registration District of South Chennai and Sub Registrar Office of Selaiyur.

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

Bank of India v. Krishna Murthy

Case brief

What is this about?

What did the court decide?

Bank of India v. Krishna Murthy

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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