Allowed

Indian Overseas Bank v. Mb Studios LLP

DRT29 Apr 2025TA/1437/2023

Case brief

AI extract

What is this about?

In a transferred application under Section 19 of the RDB Act, the Debt Recovery Tribunal allowed the bank's claim for recovery of dues of Rs. 46,33,046.34 plus interest against a Limited Liability Partnership and its partners who failed to repay a cash credit facility, as defendants were absent ex-parte.

What did the court decide?

Bank allowed to recover Rs. 46,33,046.34 with 10.55% p.a. interest and costs; liberty to sell hypothecated assets on default; Recovery Certificate to be issued.

Indian Overseas Bank versus Mb Studios LLP — Insolvency and Bankruptcy | DRT (2025)

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T.A. No. 1437 of 2023

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29.04.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 29^th day of April, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 1437 of 2023

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(Originally filed before DRT- II, Chennai as OA 222/2021 and thereafter transferred to this Tribunal and renumbered as TA No 1437 of 2023)

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Indian Overseas Bank Sriram Nagar Branch No.135, T.T.K. Road Alwarpet, Chennai – 600 018 Rep. by its Senior Manager

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….Applicant

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-Vs-

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1 M/s. M B Studios LLP

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Rep. by its Partners,

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Registered Address:

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No.29, Chitranjan Road,

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Alwarpet, Chennai – 600 018

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Mr. Dheeraj B Bansal,

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S/o. Mr. Shri Krishan Murari, Villa 2-A, Oakritge Enclave, Thirumalai Nagar Annexe, 3^rd Main Road, Perungudi, Chennai – 600 096

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Mr. Tushar Kant Bansal

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S/o. Mr. Dheeraj B Bansal, Villa 2-A, Oakritge Enclave, Thirumalai Nagar Annexe, 3^rd Main Road, Perungudi, Chennai – 600 096

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Mrs. Ammu Bansal, D/o. Mr. Prakash Chander Sapra, No.29, Chitranjan Road, Alwarpet, Chennai – 600 018

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T.A. No. 1437 of 2023

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29.04.2025

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Mr. Sushil Kumar Srinivasan, S/o. Mr. Srinivasan, No.29, Chitranjan Road, Alwarpet, Chennai – 600 018

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Mr. S. Suren Kumar, S/o. Mr. Srinivasan, No.29, Chitranjan Road, Alwarpet, Chennai – 600 018

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Mr. Sanjay Kumar, S/o. Mr. Srinivasan, No.29, Chitranjan Road,

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Alwarpet, Chennai – 600 018

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…..Defendants

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Counsels on record / appeared:

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Counsel for Applicant : Mr. P. Annal

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Defendants were set ex-parte on 05.01.2022

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: - FINAL ORDER - :

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This original application is filed on 05.12.2020 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 jointly and severally for recovery of a total sum of

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Rs.46,33,046.34p (Rupees Forty Six Lakhs Thirty Three Thousand

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and Forty Six and Thirty Four Paise Only) due in respect of Cash Credit Facility (A/c No.047933000000005) together with further interest @ 10.55%, p.a. with monthly rests from the date of Application till the date of realization, for sale of Schedule mentioned Hypothecated Asset morefully detailed in Schedule to the OA and for costs of this application.

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T.A. No. 1437 of 2023

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29.04.2025

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Originally, this Application was filed before DRT-II, Chennai, assigned OA No.222 of 2021, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No. 222 of 2021 stood transferred to this Tribunal and renumbered as TA No.1437/2023.

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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 the 1^st Defendant is a Limited Liability Partnership, registered under the Companies Act, 2008 and it is represented by its Partners and is having its Registered Address at No.29, Chitharanjan Road, Alwarpet, Chennai – 600 018 and Office at No.33, 1^st Cross Street, TTK Road, Alwarpet, Chennai – 600 018. The Defendants 2 to 7 are the Partners of the 1^st Defendant.

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It is submitted that the 1^st Defendant approached the Applicant Bank and requested and applied for Credit Facility, vide an Application Form for MSEs dated 22.07.2016, based upon which the Applicant Bank sanctioned to the 1^st Defendant herein a Cash Credit of Rs.25,00,000/- vide its Credit Sanction Advice dated 27.07.2016, the terms and conditions of which are accepted and acknowledged by the 1^st Defendant herein.

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The Applicant submits that in evidence of availing the aforesaid Cash Credit Facility, the 1^st Defendant executed the following Loan Documents:

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i. Demand Promissory Note dated 27.07.2016 for Rs.25,00,000/-.

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ii. Letter of Continuity and Confirmation of DPN dated 27.07.2016 for Rs.25,00,000/-.

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iii. Letter of Hypothecation dated 27.07.2016 for Rs.25,00,000/-, thereby hypothecated the Stocks of the 1^st Defendant, stored in the premises in Chennai and the Book Debts of the 1^st Defendant.

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The Applicant submits that at the request of the 1^st Defendant, the Applicant Bank has increased the aforesaid Cash Credit from Rs.25,00,000/to Rs.40,00,000/- vide its Credit Sanction Advice dated 08.09.2017, the terms and conditions of which are accepted and acknowledged by the Defendants.

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The Applicant submits that in evidence of availing the said increased Cash Credit, the 1^st Defendant executed the following loan documents:

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a. Demand Promissory Note dated 08.09.2017 for Rs.15,00,000/-

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b. Letter of Continuity and confirmation of DPN dated 08.09.2017 for Rs.40,00,000/-

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c. Supplemental Deed of Hypothecation / Pledge (Enhanced limit with same security) dated 08.09.2017 for Rs.40,00,000/- and

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T.A. No. 1437 of 2023

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29.04.2025

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d. Letter of Hypothecation dated 08.09.2017 for Rs.40,00,000/-, thereby hypothecated the stocks of the 1^st defendant, stored in the premises in Chennai and the Book Debts of the 1^st Defendant.

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The Applicant submits that at the request of the 1^st Defendant, the Applicant Bank has renewed the aforesaid Cash Credit of Rs.40,00,000/against stock & Book Debts of 90 days old, at its existing limit amount prevailed then, vide its credit sanction advice dated 28.09.2018.

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The Applicant humbly submit that the Defendants herein have also executed two Revival Letters, both dated 15.07.2019, for the above said Cash Credit Facility availed from the Applicant Bank.

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The Applicant submits that the above said Cash Credit Facility availed by the 1^st Defendant are secured by the hypothecation of the Stocks of the 1^st Defendant, stored in the premises in Chennai and the Book Debts of the 1^st Defendant, morefully described in the Schedule given hereunder.

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It is submitted by Applicant Bank that after availing the said facility, the defendants deliberately failed to repay the loan amount availed in spite of repeated demands and reminders by Applicant Bank. As defendants miserably failed to make repayments in the aforesaid loan account, the applicant bank classified the aforesaid loan account as NPA (Non-Performing Assets) on 29.02.2020, as per the guidelines issued by the RBI but they

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T.A. No. 1437 of 2023

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had failed to do so. The Applicant issued a Recall Notice dated 02.03.2020 to the Defendants herein, calling back its advances wef 01.03.2020, the said notice was personally received and duly acknowledged by the Defendant on 02.03.2020. Hence, 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 7 through Registered Post with Acknowledgement due, which was returned unserved. Applicant Bank had caused Paper Publication of Notice and filed proof thereof. When OA was taken up on 05.01.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants 1 to 7 were placed ex-parte on 05.01.2022.

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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, Mrs. Monika Sarkar, Senior 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-15 . 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

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T.A. No. 1437 of 2023

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29.04.2025

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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 total sum of Rs.46,33,046.34p (Rupees Forty Six Lakhs Thirty Three Thousand & Forty Six & Paise Thirty Four Only) due in respect of Cash Credit Facility (A/c

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No.047933000000005) together with further interest @ 10.55%, p.a. with monthly rests from the date of Application till the date of realization 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 hypotheca morefully detailed in the OA.

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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 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

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T.A. No. 1437 of 2023

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29.04.2025

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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 (Sudhakar), transcribed by him, corrected, signed and pronounced by me on this the 29^th day of April, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Mrs. Monika Sarkar, Senior Manager of the Applicant Bank.

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T.A. No. 1437 of 2023

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Exhibits on the part of the Applicant:

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Sl. No.	Description of Documents	Exhibit No.
1.	Application Form for MSEs given by the Defendants dated 22.07.2016	A-1
2.	Credit Sanction Advice for Cash Credit of Rs.25,00,000/-dated 27.07.2016	A-2
3.	Demand Promissory Note for Rs.25,00,000/- dated 27.07.2016	A-3
4.	Letter of Continuity and Confirmation of DPN for Rs.25,00,000/-dated 27.07.2016	A-4
5.	Letter of Hypothecation (In case of Open Advances only) for Rs.25,00,000/-dated 27.07.2016	A-5
6.	Credit Sanction Advice for the enhancement of Cash Credit from Rs.25,00,000/- to Rs.40,00,000/-dated 08.09.2017	A-6
7.	Demand Promissory Note for Rs.15,00,000/- dated 08.09.2017	A-7
8.	Letter of Continuity and Confirmation of DPN for Rs.40,00,000/-dated 08.09.2017	A-8
9.	Supplemental Deed of Hypothecation / Pledge for Rs.40,00,000/-dated 08.09.2017	A-9
10.	Letter of Hypothecation (For Security Machines / Vehicles / Goods / Book – Debts) for Rs.40,00,000/-dated 08.09.2017	A-10
11.	Credit Sanction Advice for Rs.40,00,000/- dated 28.09.2018	A-11
12.	Revival Letter executed by the 2^ndDefendant dated 15.07.2019	A-12
13.	Revival Letter executed by the 3^rdDefendant dated 15.07.2019	A-13
14.	Recall Notice to the Defendants dated 02.03.2020	A-14
15.	Statement of Accounts for A/c No. 047933000000005 and its Certificates dated 30.11.2020	A-15

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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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T.A. No. 1437 of 2023

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SCHEDULE

Properties Hypothecated

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Hypothecation of the stocks of the 1^st Defendant, stored in the premises

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at No.29, Chitharanjan Road, Alwarpet, Chennai – 600 018 and Office at No.33, 1^st Cross Street, TTK Road, Alwarpet, Chennai – 600 018 and the Book Debts of the 1^st Defendant.

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

Indian Overseas Bank v. Mb Studios LLP

Case brief

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Indian Overseas Bank v. Mb Studios LLP

Case brief

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