Allowed

Canara Bank v. M/S kumaran Oil Mills

DRT28 Aug 2025TA/1295/2023

Case brief

AI extract

What is this about?

DRT allowed the bank's application for recovery of loans. The court, finding the respondents absent and the claim unchallenged, ordered the recovery of the principal amount, accrued interest, and costs, and authorized the sale of the second respondent's assets.

What did the court decide?

Recovery of Rs.38,40,318.27 plus future interest and costs; liberty to sell second respondent's assets; issuance of recovery certificate.

Canara Bank versus M/S kumaran Oil Mills — Contract and Commercial Disputes | DRT (2025)

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T.A. No. 1295 of 2023

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28.08.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 28^th day of August, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 1295 of 2023

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(Originally filed before DRT- II, Chennai as OA 398/2021 and thereafter transferred to this Tribunal and renumbered as TA No 1295 of 2023)

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Canara Bank, Kasturba Nagar Branch, No.4, 1^st Main Road, Kasturba Nagar, Adyar, Chennai -600 020 Represented by its Branch Manager ….Applicant

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-Vs-

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M/s. Kumaran Oil Mills,

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Represented by its Proprietor,

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Mr. T. Vijayakumar,

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S/o. Mr. Thangaraj,

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No.26/10, Kayarambedu Main Road,

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Vigilance Nagar, Kadambur,

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Chennai -603 202.

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Mr. T. Vijayakumar,

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S/o. Mr. Thangaraj,

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No.5/3, South Boag Road,

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T.Nagar, Chennai-600 017. …..Defendants

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Counsels on record / appeared:

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Counsel for Applicant : Sh. N.G. Durairajan

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Defendants 1 and 2 were set ex-parte on 06.07.2022

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: - FINAL ORDER - :

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This original application is filed on 22.09.2021 by the applicant

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bank under Section 19 (1) of Recovery of Debts and Bankruptcy Act,

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1993 (formerly Recovery of Debts Due to Banks and Financial

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T.A. No. 1295 of 2023

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28.08.2025

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Institutions Act, 1993) against the defendants jointly and severally for recovery of a totally aggregating a sum of Rs.38,40,318.27p (Rupees Thirty Eight Lakhs Forty Thousand Three Hundred Eighteen and Twenty Seven Paise Only):

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(i) A sum of Rs.27,55,142.65p (Rupees Twenty Seven Lakhs Fifty Five Thousand One Hundred Forty Two and Sixty Five Paise Only) due in respect of OCC/ODBD (A/c No.0942256010463), repayable together with further interest @ 15.07% p.a., with monthly rests plus 2% penal interest from the date of filing the OA, till date of realization in full;

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(ii) A sum of Rs.10,85,175.62p (Rupees Ten Lakhs Eight Five Thousand One Hundred Seventy Five and Sixty Two Paise Only) due in respect of Term Loan (A/c No.0942768000134), repayable together with further interest @ 10.35% p.a., with monthly rests plus 2% penal interest from the date of filing the OA till 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.398 of 2021, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.398 of 2021 stood transferred to this Tribunal and renumbered as TA No.1295 of 2023.

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T.A. No. 1295 of 2023

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28.08.2025

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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 defendants approached the applicant bank seeking financial assistance for their business purpose.

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It is submitted by the applicant bank that upon considering the request of the defendants, applicant bank had sanctioned OCC/ODBD Limit of Rs.20.00 Lakhs for the purpose of Working Capital Limit and Term Loan of Rs.10.00 Lakhs towards reimbursement of cost of the Plant and Machinery, vide Sanction Letter dated 12.12.2018 covered under CGTMSE (Credit Guarantee Funds Trust for Micro and Small Enterprises is a trust established by the Government of India, under the Ministry of Micro, Small and Medium Enterprises (MSME) and Small Industries Development Bank of India (SIDBI)) with rate of interest @ 10.85% per annum, floating of monthly rest, rest of yearly (1 year) MCLR+2.15% (Spread) for Cash Credit Limit and Rate of Interest @11.70% Per annum in respect of Term Loan Account with repayment tenure of 60 monthly installment.

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It is further submitted that the Defendants towards availing the Cash Credit Limit and Term Loan had executed the following loan documents on 12.12.2018:

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a) For Cash Credit Limit

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i. Letter of Proprietorship.

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ii. Request for Over Draft Facilities.

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iii. Pronote of Rs.20.00 Lakhs.

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iv. Cash Credit Agreement of 1^st Defendant.

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v. Agreement for advance against book debts as prime security declaration cum undertaking cum authority by 2^nd defendant.

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b) For Term Loan

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i. Pronote of Rs.10.00 Lakhs.

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ii. Agreement cum Deed of Hypothecation.

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Applicant bank submits that interest shall be charged on the

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outstanding in the account of the 1^st defendant in respect of the OCC/ODBD and TL Facility at such rates as may be determined by the Bank from time to time in consonance with the interest rates prescribed by the Head Office of the bank from time to time and also in terms of the agreements executed from time to time.

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The sanction letter/agreements/documents executed by the defendants authorize the bank to charge at its own discretion enhanced rate of interest for any irregularity or breach of the terms or any change in the credit rating. The Defendants have agreed to pay such enhanced rate of interest without any demur.

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It is submitted by the applicant bank that in spite of repeated demands and several reminders made by the applicant, the 1^st and 2^nd

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T.A. No. 1295 of 2023

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Defendants have failed and neglected to repay the liability owned by them to the applicant under the aforesaid credit facility and the account has become irregular and classified as Non-performing Asset (NPA) on 01.11.2020 as per the directives of Reserve Bank of India. Though

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several opportunities have been provided to the defendants to regularize the loan documents, they have failed and neglected to do so. The defendants have not kept up their commitments/promises. The Defendants are very much aware of the classification of the loan accounts as Non-performing assets in view of the irregularities/defaults committed in the loan account. The applicant had issued Legal Notice cum Advance Recall Notice to defendant on 19.04.2021, despite which 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 defendants.

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After the filing of the OA, summons to the defendants 1 and 2 through Registered Post with Acknowledgment Due, summons to D1 was duly served, while summons to D2 returned with endorsement “No such person”. Applicant bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 06.07.2022

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even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants 1 and 2 were placed ex-parte on 06.07.2022.

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Heard the submissions of Applicant Bank and perused the

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records.

To prove the case of the Applicant Bank, Sh. K.S. Sathish, Manager Kasturba Nagar Branch 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-12 . 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 a sum of totally aggregating a sum of Rs.38,40,318.27p (Rupees Thirty Eight Lakhs Forty Thousand Three Hundred Eighteen and Twenty Seven Paise Only):

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(i) A sum of Rs.27,55,142.65p (Rupees Twenty Seven Lakhs Fifty Five Thousand One Hundred Forty Two and Sixty Five Paise Only) due in respect of OCC/ODBD (A/c No.0942256010463), repayable

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T.A. No. 1295 of 2023

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together with further interest @ 15.07% p.a., with monthly rests plus 2% penal interest from the date of filing the OA, till date of realization in full;

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(ii) A sum of Rs.10,85,175.62p (Rupees Ten Lakhs

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Eight Five Thousand One Hundred Seventy Five and Sixty Two Paise Only) due in respect of Term Loan (A/c No.0942768000134), repayable together with further interest @ 10.35% p.a., with monthly rests plus 2% penal interest from the date of filing the OA till date of realization in full and for costs of this application along with costs.

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(b) The applicant bank is at liberty to sell the personal assets of the 2^nd Defendant (both movable and immovable) to recover the balance dues as required under law for which the 2^nd Defendant to disclose to the Tribunal particulars of other properties or assets owned by the 2^nd Defendant.

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(c) 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 the Registry to prepare Recovery Certificate for the amount to 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 receipt 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 Steno (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 28^th day of August, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sh. K.S. Sathish, Manager, Kasturba Nagar Branch 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.	Sanction Letter dated 12.12.2018.	A-1
2.	Letter of Proprietorship dated 12.12.2018.	A-2
3.	Request for Overdraft Facilities dated 12.12.2018.	A-3
4.	Pronote of Rs.20.00 Lakhs dated 12.12.2018.	A-4
5.	Cash Credit Agreement of 1^stDefendant dated 12.12.2018.	A-5
6.	Agreement for advance against book debts as prime security dated 12.12.2018.	A-6
7.	Pronote of Rs.10.00 Lakhs dated 12.12.2018.	A-7
8.	Agreement cum Deed of Hypothecation dated 12.12.2018.	A-8
9.	Legal Notice cum Advance Recall Notice dated 19.04.2021.	A-9

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10.	Acknowledgement of Debt and Security for	A-10
	Overdraft Limit of Rs.20.00 Lakhs dated 19.07.2021.
11.	Acknowledgement of Debt and security for Term Loan of Rs.10.00 Lakhs dated 19.07.2021.	A-11
12.	Statement of Accounts & Banker’s Certificate.	A-12

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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 PROPERTY -:

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NIL

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

Canara Bank v. M/S kumaran Oil Mills

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/S kumaran Oil Mills

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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Case details

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