Allowed

Uco Bank v. M/S Muthu Engineering Agencies

DRT21 Apr 2025TA/153/2023

Case brief

AI extract

What is this about?

Appeal/Transfer Application filed under Section 19 of the RBI Act for recovery of dues from loan defaulters. The bank proved its claim ex-parte due to respondents' absence. The Tribunal allowed the application and directed recovery of principal, interest, and costs.

What did the court decide?

Recovery of Rs. 31,90,367.77 with interest @ 9.80% p.a. and penal interest @ 2% p.a. from the date of application till full realization plus costs.

Uco Bank versus M/S Muthu Engineering Agencies — Specific Performance | DRT (2025)

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T.A. No. 153 of 2023

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21.04.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 21^st day of April, 2025

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Present: SMT. S.V. GOWRAMMA

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Presiding Officer

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TRANSFERRED APPLICATION No. 153 of 2023

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(Originally filed before DRT- II, Chennai as OA 735/2019 and thereafter transferred to this Tribunal and renumbered as TA No 153 of 2023)

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UCO Bank, Mid Corporate T.Nagar Branch Rep. by its Chief Manager No.26, Ground Floor, South Dhandapani Street, T.Nagar Chennai – 600 017 ….Applicant

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-Vs-

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M/s Muthu Engineering Agencies GST RN 33BBZPS1863A

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Rep. by its Sole Proprietor

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Mr. S. Selvanathan No.18 3^rd Reddy Street Ekkattuthangal, Chennai 600 032.

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Mr. S. Selvanathan

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S/o Shunmugam

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S.V.M. Illam, B-1 Ground Floor

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No.3 Eswaran Koil, 3^rd Cross Street Madipakkam, Chennai 600 091 …Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s R. Selvakumar

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Defendants 1 to 2 were set ex-parte on 05.08.2021

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: - FINAL ORDER - :

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This original application is filed on 19.07.2019 by the applicant bank

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under Section 19 of Recovery of Debts and Bankruptcy Act, 1993

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T.A. No. 153 of 2023

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21.04.2025

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(formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendants 1 and 2, jointly and severally for recovery of a total sum of Rs.31,90,367.77p (Rupees Thirty One Lakhs Ninety Thousand Three Hundred and Sixty Seven and Seventy Seven Paise Only) due in respect of Cash Credit Loan (Account No.01760510000359) together with further interest @ 9.80% p.a., with monthly rests along with penal interest @ 2% p.a. from the date of Application till the date of realization in full and for costs of this OA.

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Originally, this Application was filed before DRT-II, Chennai, assigned OA No.735 of 2019, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.735 of 2019 stood transferred to this Tribunal and renumbered as TA No.153/2023.

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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 sole proprietor concern represented by its proprietor 2^nd defendant, who had approached the applicant bank to avail a Cash Credit limit for manufacture of sugar & forging components business.

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T.A. No. 153 of 2023

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21.04.2025

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It is submitted that considering the said request, the applicant bank sanctioned the cash credit facility of Rs.22.50 lakhs initially and the defendants availed the facility under A/c No. 01760510000359 after executing the necessary documents. Subsequently, by a letter dated 25.09.2018 enclosing the necessary application, 1^st defendant requested the applicant to enhance the limit of the cash credit facility.

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Applicant submits that after evaluating the credentials of the defendants, the limit of cash credit facility was enhanced to the tune of Rs.27 lakhs with certain terms and conditions, which was accepted by the 1^st defendant.

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It is submitted by applicant bank that the 1^st defendant executed the necessary documents on 25.10.2018 and availed the cash credit facility under A/c No.01760510000359. The credit limits were covered under CGTMC guarantee Scheme.

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It is further submitted by the applicant bank that 1^st defendant defaulted in repayment of the dues of the applicant and the account was declared as Non-Performing Asset on 31.05.2019 as per RBI guidelines. The applicant issued a legal notice dated 19.06.2019 and the defendants were

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requested to close the above loan account, despite which defendants did not come forward to repay the dues. Hence, this Original Application (OA) has been filed to recover the dues from the defendants.

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T.A. No. 153 of 2023

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21.04.2025

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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 was served. When OA was taken up on 05.08.2021, even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants1 and 2 were placed ex-parte on 05.08.2021.

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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. Uma Shivakumar, Chief 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-9 . 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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12. The OA is allowed with costs,

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(a) The applicant bank is allowed to recover from the Defendants 1 and 2, jointly and severally for recovery of a total sum of Rs.31,90,367.77p (Rupees Thirty One Lakhs Ninety Thousand Three Hundred and Sixty Seven and Seventy Seven Paise

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T.A. No. 153 of 2023

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21.04.2025

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Only) due in respect of Cash Credit Loan (Account No.01760510000359) together with further interest @ 9.80% p.a., with monthly rests along with penal interest @ 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) 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 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 Defendants to the applicant bank.

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

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(e) Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of the final order.

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T.A. No. 153 of 2023

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21.04.2025

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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 Mogesh, transcribed by him, corrected, signed and pronounced by me on this the 21^st 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. Uma Shivakumar, Chief 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.	Loan Application by1^stdefendant 25.09.2018	A-1
2.	Accepted Sanction Letter of Applicant 25.09.2018	A-2
3.	Demand Promissory Note by 1^st defendant 25.09.2018	A-3
4.	Letter of waiver by1^stdefendant 25.09.2018	A-4
5.	Letter of continuitybydefendants 25.09.2018	A-5
6.	Hypothecation of Goods executed by defendant 25.09.2018	A-6
7.	Hypothecation of Book Debts executed by 1^st defendant 25.09.2018	A-7
8.	Lawyer’s Notice issued byApplicant 19.06.2019	A-8
9	Statement of Account 15.07.2019	A-9

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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 - NIL

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

Uco Bank v. M/S Muthu Engineering Agencies

Case brief

What is this about?

What did the court decide?

Uco Bank v. M/S Muthu Engineering Agencies

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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