Allowed

Punjab National Bank v. M/S S M Motors

DRT29 May 2025TA/1375/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the applicant bank's original application for recovery of a default amount of Rs. 24.11 lakhs. The court held the defendants jointly and severally liable to repay the principal sum, interest, costs, and future interest pending realization, issuing a recovery certificate.

What did the court decide?

Claim for Rs. 24.11 lakhs along with future interest and costs allowed; recovery certificate directed to be issued.

Punjab National Bank versus M/S S M Motors — Banking and Recovery | DRT (2025)

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T.A. No. 1375 of 2023

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29.05.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 29^th day of May, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 1375 of 2023

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(Originally filed before DRT- II, Chennai as OA 394/2020 and thereafter transferred to this Tribunal and renumbered as TA No 1375 of 2023)

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Punjab National Bank, (Erstwhile Oriental Bank of Commerce) Circle-Sastra-Chennai North, Anna Salai, Chennai -600 002 Represented by its Chief Manager

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….Applicant

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-Vs-

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M/s. S M Motors,

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Represented by its Proprietor,

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Mr. P. Mahesh Kumar S/o Mr. Puntakodi,

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No.100, Redhills Road, Pudur,

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Ambattur, Chennai -600 053.

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Mr. P. Mahesh Kumar S/o Mr. Puntakodi,

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No.21 Kalaivanar Street,

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Oragadam, Ambattur, Chennai -600 053.

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Mrs. M. Sharmila Devi W/o Mr. P. Mahesh Kumar, No.21 Kalaivanar Street,

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Oragadam, Ambattur, Chennai -600 053. ….Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. E. Kumar

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Defendants 1 to 3 were set ex-parte on 18.05.2022

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T.A. No. 1375 of 2023

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29.05.2025

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: - FINAL ORDER - :

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This original application is filed on 21.09.2020 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 3, jointly and severally for recovery of a total sum of Rs.24,11,797.34p (Rupees Twenty Four Lakhs Eleven Thousand Seven Hundred Ninety Seven and Thirty Four Paise Only) as follows:

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(i) A sum of Rs.12,80,156.52p (Rupees Twelve Lakhs Eighty Thousand One Hundred Fifty Six and Fifty two Paise Only) due in respect of Housing Loan (A/c No.14046015001109), together with further interest @ 8.80%, p.a. compounded with monthly rests and with a penal interest @ 2% p.a. from the date of filing the OA till date of realization in full;

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(ii) A sum of Rs.11,31,640.82/- (Rupees Eleven Lakhs Thirty One Thousand Six hundred Forty and Eight Two Paise Only) due in respect of Cash Credit Facility (A/c No.14044015002109) together with further interest @ 10.20% p.a. compounded with monthly rests and with a penal interest @ 2% p.a. from the date of filing the OA, till date of realization in full;

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for sale of immovable property more fully detailed in Schedule to the

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T.A. No. 1375 of 2023

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29.05.2025

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OA and for costs of this application;

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Originally, this Application was filed before DRT-II, Chennai, assigned OA No.394 of 2020, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.394 of 2020 stood transferred to this Tribunal and renumbered as TA No.1375 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 submits the 1^st defendant is M/s. SM Motors Represented by its Proprietor Mr. P. Mahesh Kumar is the Borrower. The 2^nd defendant who is proprietor of 1^st defendant company, is Borrower Cum Mortgagor and the 3^rd defendant, who is wife of 2^nd defendant is Borrower Cum Mortgagor.

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It is submitted by the Applicant Bank that the 2^nd and 3^rd defendants submitted an application with the applicant bank requesting for Housing Loan amount of Rs.16 Lakhs.

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At the request of the 2^nd and 3^rd Defendants the bank had sanctioned the Term Loan (Housing Loan) facility for amount of Rs.16,00,000/(Sixteen Lakhs Only) vide sanction letter dated 23.05.2013. The 2^nd and

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29.05.2025

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3^rd defendants having availed the loan, had executed the following loan documents in favour of applicant bank:

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a) Agreement of Individual Housing Loan (Loan Doc-48) dated 23.05.2015

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b) Common Agreement (Loan Doc-38) dated 23.05.2015.

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The Applicant Bank submitted that the above facility also secured by mortgage of property morefully described in the Schedule which is in the name of 2^nd and 3^rd Defendant, as security for the credit facilities availed by the defendants. The 2^nd and 3^rd defendants has deposited the Original Title Deed pertained to the property more fully described in the Schedule via Sale Deed dated 24.05.2013 execute by Mr. V. Haripraksh, registered as Doc. No.6051/2013, with SRO Ambattur in favour of Mr. P. Maheshkumar & Mrs. M. Sharmila Devi with an intention to create equitable mortgage for the loan availed by him, as under Sec.58 (f) of Transfer of Property Act, 1882 in favour of the Applicant bank.

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It is further submitted that the 2^nd and 3^rd defendants in confirmation of the same executed Memorandum of Deposit of Title Deed dated 30.07.2013, registered as Doc. Nos.8821/2013, with SRO Ambattur in favour of the Applicant Bank for the credit facilities availed by them.

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The Applicant submits that after the good relationship with the bank by the 2^nd and 3^rd defendants, approached the bank through 1^st defendant

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company for credit facility to run the said company.

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At the request of the Defendants vide Application dated 23.06.2015 the bank had sanctioned the cash credit facility for amount of Rs.5,00,000/-

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vide sanction letter dated 23.06.2015. Further, at the request of the Defendants vide Application dated 08.09.2015, the bank has enhance the said credit facility from 5 lakhs to 10 Lakhs vide sanction letter dated 30.09.2015.

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The Applicant Bank submitted that in order to secure the credit facilities, the Defendants had executed the following loan documents in favour of applicant bank:

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i. Agreement of Hypothecation of Assets (Loan Doc-1) dated 23.06.2015 executed by the 1^st defendant.

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ii. Common Agreement (Loan Doc-38) dated 23.06.2015 executed by the 1^st defendant.

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iii. Agreement of Guarantee (Loan Doc-11) dated 23.06.2015 executed by the 3^rd defendant.

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iv. Supplemental Agreement to Secure Credit Loan/Facilities (Loan Doc-13) dated 30.09.2015 executed by the 1^st defendant.

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v. Agreement of Guarantee (Loan Doc-11) dated 30.09.2015 executed by the 3^rd defendant.

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The Applicant further submitted the said credit facility of

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Rs.10,00,000/- also secured by mortgage of property more fully described in the Schedule which is in the name of 2^nd and 3^rd Defendant as security for the credit facilities availed by the defendants.

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It is submitted that for the confirmation of above the 2^nd and 3^rd defendants executed Memorandum of Deposit of Title Deeds dated 25.06.2015 & 25.09.2015 registered as Doc. Nos.8954/2015 and 13582 of 2015 with SRO Ambattur in favour of the Applicant Bank for the Credit facilities availed by them.

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The Applicant Bank submitted that the said credit facility last renewed vide sanction letter dated 19.06.2017.

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It is submitted by applicant bank that subsequent to availing of credit facilities, due to defaulted repayments made by the Defendants, operation of the loan account was highly unsatisfactory. The Applicant submits in spite of repeated requests and demands, the defendants did not care to repay the amounts due to the bank, thereby violating the sanction terms. Consequently, the said account was classified as Non Performing Asset (NPA) on 30.09.2019 in terms of RBI guidelines in the books of account of applicant bank. The Applicant also sent a Demand notice dated 14.10.2019 recalling the loan granted to them and advised them to clear the entire liabilities.

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The Applicant bank submitted that in spite of the above the defendants have not paid the amounts due to the bank. Further they are

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filed the IP bearing No.4 of 2019 before the Principal District Judge at Thiruvallur and the same was in the service of notice stage. The defendants did not at all take any steps to repay the loans and only used the delaying statistics. Hence the present Original Application (OA) is filed for recovery of amounts due from defendants.

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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 with postal endorsement as “left”. Applicant bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 18.05.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 to 3 were placed ex-parte on 18.05.2022.

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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, Mr. S. Srinivasan, Chief Manager 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-16 . 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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T.A. No. 1375 of 2023

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During the pendency of OA, Applicant Bank had reported part satisfaction of OA claim in a sum of Rs.16.90 Lakhs by way of sale of Schedule immovable property under SARFAESI Act on 27.04.2022. Accordingly, part satisfaction of sum of Rs.16.90 Lakhs is duly recorded vide order dated 18.08.2022.

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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, Rs.24,11,797.34p (Rupees Twenty Four

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Lakhs Eleven Thousand Seven Hundred Ninety Seven and

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Thirty Four Paise Only) as follows:

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realization in full;

(b) A sum of Rs.16.90 lakhs realized by way of SARFAESI sale is directed to be given credit to the borrower’s loan account, as on the date of realization.

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(c) 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 2 and 3 (both movable and immovable) to recover the balance dues as required under law for which the Defendants 2 and 3 to disclose to the Tribunal particulars of other properties or assets owned by the Defendants 2 and 3.

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(d) 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

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prepare Recovery Certificate for the amount to be paid by Defendant to the applicant bank.

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

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the date of this final order.

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(f) 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 (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 29^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: Mr. S. Srinivasan, 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.	Loan application submitted by the 2^ndand 3^rd Defendants for Housing Loan dated 15.05.2013.	A-1
2.	Sanctioned of Credit Facility of Term Loan (Housing Loan) for amount of Rs.16,00,000/- dated 23.05.2013.	A-2
3.	Agreement of Individual Housing Loan (Loan Doc- 48) executed by the 2^ndand 3^rdDefendants dated 23.05.2013.	A-3
4.	Common Agreement (Loan Doc-38) executed by the 2^ndand 3^rdDefendants dated 23.05.2013.	A-4

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5.	Loan application submitted by the 1^stand 3^rd Defendants for Cash Credit (Working Capital) amount of Rs.5,00,000/-dated 26.03.2015.	A-5
6.	Sanctioned of Credit Facility of Cash Credit for amount of Rs.5,00,000/-dated 23.06.2015.	A-6
7.	Loan application submitted by the 1^stand 3^rd Defendants for additional Cash Credit (Working Capital ) amount or Rs.5,00,000/- dated 08.09.2015.	A-7
8.	Sanctioned of Credit Facility of Cash Credit for amount of Rs.10,00,000/-dated 30.09.2015.	A-8
9.	Agreement of Hypothecation of Assets (Loan Doc- 1) executed by the 1^stdefendant dated 23.06.2015.	A-9
10.	Common Agreement (Loan Doc-38) executed by the 1^stdefendant dated 23.06.2015.	A-10
11.	Agreement of Guarantee (Loan Doc-11) executed by the 3^rddefendant dated 23.06.2015.	A-11
12.	Supplemental Agreement to Secure Credit Loan/Facilities (Loan Doc-13) executed by the 1^st defendant dated 30.09.2015.	A-12
13.	Agreement of Guarantee (Loan Doc-11) executed by the 3^rddefendant dated 30.09.2015.	A-13
14.	Renewal Sanction Letter dated 19.06.2017.	A-14
15.	Statement of Accounts (Housing Loan) Bearing A/c. No.14046015001109 from 23.05.2013 to 18.09.2020.	A-15
16.	Statement of Accounts (Cash Credit) Bearing A/c. No.14044015002109 from 23.06.2015 to 18.09.2020.	A-16

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

Punjab National Bank v. M/S S M Motors

Case brief

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Punjab National Bank v. M/S S M Motors

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