Allowed

Bank of Baroda v. M/S Golden Textiles and Readymades

DRT11 Mar 2025TA/1342/2023

Case brief

AI extract

What is this about?

The DNRT allowed a debt recovery application filed by Bank of Baroda against a textile proprietorship. The court validated the claim of over 1 crore rupees based on unchallenged affidavits and documents, permitting recovery from hypothecated and personal assets.

What did the court decide?

Recovery of Rs.1,09,95,128.48 including interest and penal interest; liberty to recover by sale of hypothecated and personal assets; issuance of Recovery Certificate.

Bank of Baroda versus M/S Golden Textiles and… — Contract and Commercial Disputes | DRT (2025)

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T.A. No. 1342 of 2023

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11.03.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 11^th day of March, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 1342 of 2023

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(Originally filed before DRT- II, Chennai as OA 225/2020 and thereafter transferred to this Tribunal and renumbered as TA No 1342 of 2023)

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Bank of Baroda (Erstwhile Dena Bank) Sembudoss Street Branch 80/81, Broadway, Chennai – 600 108 Represented by its Senior Branch Manager

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….Applicant

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-Vs-

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1 M/s Golden Textiles & Readymades

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Represented by its Proprietor Mr.Mohideen Seeni, New No. 30,Old No.61/1, Murugappa Mudali Street, Purasawalkam, Chennai-600007.

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Mr. M. Mohideen Seeni S/o Mohamed Mustafa, No.7, North Arasamaran Street, Aminjikarai, Chennai-600029. …..Defendants

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Counsels on record / appeared:

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Counsel for Applicant : W.S. Jayaprakash

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Defendants 1 and 2 were set ex-parte on 12.09.2022

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: - FINAL ORDER - :

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This original application is filed on 18.02.2020 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

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jointly and severally for recovery of a total sum of Rs.1,09,95,128.48p (Rupees One

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T.A. No. 1342 of 2023

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11.03.2025

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Crore Nine Lakhs Ninety Five Thousand One Hundred and Twenty Eight and Forty Eight Paise Only) as follows:

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(i) A sum of Rs.91,32,350.49p due in respect of Cash Credit Hypothecation Facility (Account No.068313023855) together with further interest @ 10.40% p.a., with monthly rests along with simple penal interest at the rate of 2% p.a. from the date of Application till the date of realization in full;

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(ii) A sum of Rs.18,62,777.99p due in respect of Term Loan Facility (Account No.068354023867) together with further interest @ 10.90% p.a., with monthly rests along with simple penal interest at the rate of 2% p.a. 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.225 of 2020, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.225 of 2020 stood transferred to this Tribunal and renumbered as TA No.1342/2023.

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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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The case of the applicant bank is that the 1^st Defendant, is a proprietorship concern, represented by its Sole Proprietor, the 2^nd Defendant herein, doing business of manufacture/sale of Readymade Garments and Fabrics. The 1^st Defendant,

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T.A. No. 1342 of 2023

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11.03.2025

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represented by the 2^nd Defendant, applied to the Dena Bank (since merged with Bank of Baroda vide Gazette Notification dated 02.01.2019) for a Cash Credit Hypothecation Limit for working capital and Term Loam for a purchase of Fixed Assets in the form of new furniture and machineries.

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It is submitted by applicant bank that upon consideration of request of defendants, the Applicant Bank sanctioned Cash Credit Hypothecation facility of Rs.80,00,000/- against security of stock and Book Debts on 15.12.2017 with interest at the rate of 10.15% p.a. with monthly rests repayable in 12 months subject to annual review for their working capital requirement and a Term Loan for Rs.15,00,000/against security of Machineries and furniture, with interest at the rate of 10.15% p.a. with monthly rests, repayable in 60 EMIs of Rs.32400/- each.

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It is further submitted by applicant bank that the defendants agreed to the terms and conditions of the sanction and signified their acceptance by signing the sanction letter bearing ref. No. DB/SEMUD/ADV/2017 dated 15.12.2017 with respect to Cash Credit Hypothecation Limit of Rs.80,00,000/- and Term Loan for Rs.15,00,000/- and availed the Cash Credit Hypothecation facility for Rs.80,00,000/- and the Term Loan for Rs.15,00,000/- on 15.02.2017 vide account bearing No.068313023855 and A/c bearing No.068354023867 respectively by executing the following documents:

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a) D. p Note for (Individual/Prorietor) dated for Rs.95,00,000/- executed by the 1^st Defendant represented by the 2^nd Defendant.

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b) Letter of Continuity executed by the 2^nd Defendant

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T.A. No. 1342 of 2023

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11.03.2025

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c) Agreement of Hypothecation (Goods, Book Debts and other movables) to Secure Multiple Facilities dated 15.12.2017 executed by 1^st Defendant represented by 2^nd Defendant.

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d) Power of Attorney from Borrower (Book Debts) executed by 1^st Defendant represented by 2^nd Defendant.

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e) General Letter of Lien and Security for borrowing arrangements from the Borrowers executed by 1^st Defendant represented by 2^nd Defendant.

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f) Letter of Consent from Borrowers dated 12.04.2017 executed by 1^st Defendant represented by 2^nd Defendant.

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g) Declaration in respect of pending Court Cases of Banks & Financial Institutions dated 12.04.2017 executed by 1^st Defendant represented by 2^nd Defendant.

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The Defendants failed to operate the Cash Credit Hypothecation Limit satisfactorily and also defaulted in repayment of the installments resulting in the Account becoming sticky and non-performing and was classified as NPA on 17.10.2018. Inspite of various demands/remainders to regularize the liability accounts, defendants failed to respond to the personal requests to regularize the account. The applicant bank issued notice dated 02.01.2019 calling upon the Defendants to visit the branch and regularize the accounts, which was returned by the Defendant with postal endorsement as ‘Unclaimed’. Hence, this Original Application (OA) has been filed to recover the dues from the defendants.

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T.A. No. 1342 of 2023

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11.03.2025

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After the filing of the OA, summons were sent to the Defendants 1 and 2 through Registered Post with Acknowledgment Due, which returned unserved with postal endorsement as ‘insufficient address’ in respect of D-1 and ‘no such person’ in respect of D-2. Applicant bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 12.09.2022 even after giving sufficient time, there was no appearance or representation from the defendant. Hence, Defendant were placed ex-parte on 12.09.2022.

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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, Ms. Sushma Panigrahi, Senior Branch Manager of 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-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 Defendant Rs.1,09,95,128.48p (Rupees One Crore Nine Lakhs Ninety Five Thousand One Hundred and Twenty Eight and Forty Eight Paise Only) as follows:

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T.A. No. 1342 of 2023

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11.03.2025

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(i) A sum of Rs.91,32,350.49p due in respect of Cash Credit Hypothecation Facility (Account No.068313023855) together with further interest @ 10.40% p.a., with monthly rests along with simple penal interest at the rate of 2% p.a. from the date of Application till the date of realization in full;

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(ii) A sum of Rs.18,62,777.99p due in respect of Term Loan Facility (Account No.068354023867) together with further interest @ 10.90% p.a., with monthly rests along with simple penal interest at the rate of 2% p.a. from the date of Application till the date of realization in full and for costs of this application;

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(b) In the event of failure of the Defendant to pay the aforesaid amount, the bank is at liberty to recover the amount by sale of the hypothecated assets morefully detailed in the OA schedule.

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(d) If the sale proceeds of the hypothecated assets are not sufficient to satisfy the dues as ordered above, 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 Defendant;

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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 Defendant duly

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T.A. No. 1342 of 2023

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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

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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 PS, transcribed by her, corrected, signed and pronounced by me on this the 11^th day of March, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Ms. Sushma Panigrahi, Senior Branch Manager 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.	Application For Credit Facilities executed by 1^st Defendantrep.by2^ndDefendant.	A-1
2.	Sanction letter bearing ref.no. DB/SEMBUD/ ADV/2017 dated15.12.2017	A-2

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T.A. No. 1342 of 2023

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3.	Demand Promissory Note dated 15.12.2017 executed 1^st Defendantrep.by2^ndDefendant and2^ndDefendant	A-3
4.	Letter continuity executed by 1^stDefendant rep.by 2^nd Defendant.	A-4
5.	Agreement of Hypothecation Agreement (Goods Book- Debts and other movable assets) dated 15.12.2017 executed by1^stDefendantrep.by2^ndDefendant.	A-5
6.	Power of Attorney from Borrowers (Book Debts) executed by 1^stDefendant rep.by 2^ndDefendant 15.12.17	A-6
7.	General Letter of Lien and Set Off for Borrowing arrangements from Borrowers executed by 1^st Defendant15.12.17 rep.by2^ndDefendant.	A-7
8.	Letter of Consent from Borrowers Executed by 1^st Defendantrep.by2^ndDefendant. 15.12.17	A-8
9	Declaration in respect of pending Court Cases of Banks &financial Institutions. 15.12.17	A-9
10	The copy of Notice dated 02.01.2019 sent to Defendants, 02.01.19	A-10
11	Returned Postal cover	A-11
12	Statements of Accounts duly certified under Bankers Book Evidence Act, 1891 in respect of the Cash Credit under Account No. 068313023846 with affidavit confirmingnon-capitalisationofpenal interest	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-A

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The whole of the stocks both present and future, all stocks of raw materials like cloth material, fabrics, work in-process, semi finished goods and finished goods such as readymade garments ; all tangible movable sewing machines, furniture, fixtures and fittings, and office equipment whether installed or not, kept at New 30/Old 61/1,Murugappa Mudali Street, Purasawalkam, Chennai-600 007.

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

Bank of Baroda v. M/S Golden Textiles and Readymades

Case brief

What is this about?

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Bank of Baroda v. M/S Golden Textiles and Readymades

Case brief

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