Allowed

Indian Overseas Bank v. Loyal Housing Development Pvt. Ltd. And Three Others

DRT3 Jun 2025TA/1549/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an SHO filed by Indian Overseas Bank against a property developer, directors, and a land-owner. The court directed recovery of the outstanding term loan amount with interest, accounting for partial satisfaction via SARFAESI sale proceeds.

What did the court decide?

Recovery order for Rs. 9,89,86,795.72p including interest; credit for Rs. 8.11Cr realized under SARFAESI Act; liberty to recover balance from personal assets of guarantors.

Indian Overseas Bank versus Loyal Housing Development Pvt… — Company and Corporate | DRT (2025)

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T.A. No. 1549 of 2023

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03.06.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 03^rd day of June, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 1549 of 2023

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(Originally filed before DRT- II, Chennai as OA 783/2018 and thereafter transferred to this Tribunal and renumbered as TA No 1549 of 2023)

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Indian Overseas Bank, Santhome Branch, 128, Santhome High Road, Mylapore, Chennai -600 004. ….Applicant

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-Vs-

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Loyal Housing Development Pvt Ltd, Represented by Managing Director,

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Umaa Maheswaran,

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Plot No.1402, H-Block, 15^th ,

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Main Road, Anna Nagar,

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Chennai -600 040.

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J. Umaa Maheswaran,

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S/o. Janardhanam, Old No.33, New No.44,

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1^st Cross Street, Kennedy Square,

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Sembium, Perambur, Chennai 600 011.

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J. Saraswathy, W/o. Janardhanam, Old No.33, New No.44,

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1^st Cross Street, Kennedy Square, Sembium, Perambur, Chennai 600 011.

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M/s. Vyas Builders Private Ltd, Represented by its Managing Director, Mr. MukeshGoyal,

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No.18/19, Venkata Maistry Street,

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Chennai -600 001. …Defendants

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T.A. No. 1549 of 2023

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03.06.2025

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Counsels on record / appeared:

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Counsel for Applicant : M/s. Sivashanmugam

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Defendants 1 to 4 were set ex-parte on 26.11.2021

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: - FINAL ORDER - :

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This original application is filed on 11.10.2018 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 4, jointly and severally for recovery of a total sum of Rs.9,89,86,795.72p (Nine Crores Eight Nine Lakhs

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Eighty Six Thousand Seven Hundred and Ninety Five and Seventy

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Two Paise Only) due in respect of Term Loan (Account No.010803271300001) repayable together with an interest @ 14.45% and with monthly rests along with Overdue interest @ 2% p.a. with from the date of filing the OA, till the date of realization in full, for sale of schedule mentioned immovable properties and for costs of this Application.

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Originally, this Application was filed before DRT-II, Chennai, assigned OA No.783 of 2018, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.783 of 2018 stood transferred to this Tribunal and renumbered as TA No.1549 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

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03.06.2025

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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 the 1^st Defendant, Private Limited Company, sought for a Term Loan of Rs. 9 Crores from applicant bank to meet the part finance of the project cost of construction of flats.

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It is submitted by applicant bank that acceding to the request of the 1^st defendant company, the applicant bank sanctioned a sum of Rs. 9crores under Credit Sanction Advice dated 11.01.2013. The term loan is to be repaid in two installments i.e., Rs. 600 lakhs on 30th September 2015 and the balance Rs. 300 lakhs on 31st December 2015 with interest to be serviced to every month separately.

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It is further submitted by applicant bank that in acceptance of terms and conditions of Credit Sanction Advice dated 11.01.2013 and in consideration of receipt of Term Loan, the 1^st defendant executed the following loan documents in favour of applicant bank:

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a) Demand promissory note dated 11.01.2013 for Rs. 9 Crores executed by 1st defendant.

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b) Term loan agreement dated 11.01.2013 executed by 1st defendant.

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c) Agreement dated 11.01.2013 executed by 1st defendant permitting bank to recall the entire loan amount and enforce security.

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Applicant bank submitted that the defendants 2 and 3 are the current Directors of the 1^st Defendant Private Limited Company. Mr. Janardhanan was other Director of the 1^st defendant company. The said Janardhanan is no more now, so he is not impleaded in this OA. The Directors agreed to stand as Guarantors for the above said Term Loan transaction availed by 1^st Defendant Company and executed a joint Letter of Guarantee dated 11.01.2013 in favour of the applicant bank.

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It is the further case of the applicant bank that the 4^th defendant is a Private Limited Company and absolute owner of the land measuring a total extent of 4.12 acres comprised in Survey No. 168/2, 169, 170, 172, 173 and 174, Ward No: ‘F’, Block No. 14 of Korattur Village, Ambattur Taluk, Thiruvallur District. The 4th defendant company had already divided the land having total extent of Acre 4.12 Cents into Phase-I and Phase-II house sites and obtained necessary layout approval in PPD/LO 120.2011 dated 17.11.2011 and LO/WDCO 7/00001/12 dated 01.03.2012, naming the layout area as “Annai Avenue”. The total site area of the Phase-I is 39910 Sq. ft. whereas total site area of the PhaseII is 39811 Sq. ft. The phase I and Phase-II plots contributes totally 79721 Sq. ft. of land as against the total extent of land measuring Acre 4.12 cents.

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It was agreed under Joint Venture Agreement dated 21.03.2010 between the 1^st defendant borrower company and land owner 4^th defendant company that the borrower 1^st defendant company shall

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construct initially flats upon the plots comprised in Phase-I belonging to the 4^th defendant company and thereafter upon the plots comprised in Phase-II and share the constructed flat together with undivided share in right, title and interest of the plots in the ratio of 64%:36%.

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The 1^st Defendant Company had availed the Term Loan from applicant bank for the purpose of construction and development of flats in the plots comprised in Phase-I belonging to the 4^th Defendant company. Pursuant to the Joint venture agreement, the 4^th defendant company appointed and authorized the 1st defendant borrower company as its power of attorney to deal with 64% of its share plots and flats to be constructed thereon under power of attorney dated 24.07.2012 in Doc. No. 636/2012.

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The 1^st Defendant company as lawful power of attorney holder, mortgaged 64% of share of plots found in Phase-I and Phase-II of the layout known as “Annai Avenue”. The plots comprised in Phase-I is described in Item no. 1 of Schedule mentioned property and the plots comprised in Phase-II is described in Item 2 of the schedule mentioned property.

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It is submitted by applicant bank that the 1^st Defendant company (borrower Company) executed a Registered memorandum of deposit of title deeds dated 21.01.2013 in Doc. No. 215 of 2013 in respect of PhaseI plots and executed another Registered Memorandum of deposit of title deeds dated 05.06.2017 in Doc. No. 2703 of 2017 in respect of Phase-II

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plots.

The 4^th Defendant in order to substantiate its agreement with the 1^st Defendant company, entered into a Tripartite Agreement dated 10.01.2013 with applicant bank and the 1^st Defendant company, in and by which it acknowledged the arrangement of the ratio of share between them in respect of the plots contained in Phase-I and Phase-II known as “Annai Avenue”.

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It is submitted that the 1^st defendant borrower subsequently with financial assistance extended by the applicant bank, constructed flats in the plots comprised in the Phase-I of the “Annai Avenue”. However the 1^st defendant company did not construct flats in the plots comprised in Phase-II of the “Annai Avenue”.

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After the construction of the flats in Phase-I, the 1st defendant company sold the flats together with undivided share in the plots to various parties with no objection of the applicant bank. After the sale of the many flats in Phase-I, the unsold flats described in Item No. 3 of the Schedule mentioned property remains with the 1st defendant company.

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It is submitted that the 1^st Defendant company failed to keep up the repayment schedule in accordance with the terms and conditions of the sanction. On account of the default made by 1st defendant, the Term Loan was declared and classified as non-performing assets (NPA) on 30.09.2016 in accordance with RBI guidelines. The 1^st Defendant and its Directors have executed jointly Revival Letters on 16.10.2015 which

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revives the period of limitation for enforcement of the term loan liability under law.

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After the filing of the OA, summons were sent to the Defendants 1 to 4 through Registered Post with Acknowledgment Due, summons to D1 to D3 served. Mr. Gurumoorthy, Advocate field vakalat for D1 to D3. M/s Nathan and Associates, Advocates filed vakalat for D-4. However, despite availing substantial adjournments, defendants did not choose to file written statement. When OA was taken up on 26.11.2021 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants 1 to 4 were placed ex-parte on 26.11.2021.

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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, Mr. M.P. Vinuraj, 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-55 . 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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During the pendency of OA, Applicant Bank had reported part satisfaction of OA claim in a sum of Rs.8,11,00,000/- by way of sale of Schedule mentioned immovable properties under SARFAESI Act on

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29.07.2024. Accordingly, part satisfaction of sum of Rs.8,11,00,000/was duly recorded vide order dated 02.12.2024 and documents marked as Ex A-13 to A-49 were returned to applicant bank on 11.12.2024 under proper acknowledgement.

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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 1 to 4 jointly and severally, a sum of Rs.9,89,86,795.72p (Nine Crores Eight Nine Lakhs Eighty Six Thousand Seven Hundred

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and Ninety Five and Seventy Two Paise Only) due in respect of Term Loan (Account No.010803271300001) repayable together with an interest @ 14.45% and with monthly rests along with Overdue interest @ 2% p.a. with from the date of filing the OA, till the date of realization in full along with costs.

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(b) The sum of Rs. 8,11,00,000/- 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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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 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 the date 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/-

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(S.V. GOWRAMMA)

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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 03^rd day of June, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Mr. M.P. Vinuraj, 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.	Sanction Advice of the applicant bank for the granting term loan of Rs. 9 Crores to the 1st defendant dated 11.01.2013.	A-1
2.	Demand promissory note executed by 1st defendant dated 11.01.2013.	A-2
3.	Term loan agreement executed by 1st defendant dated 11.01.2013.	A-3
4.	Agreement executed by 1st defendant permitting the applicant bank to recall the entire loan amount and to enforce security dated 11.01.2013.	A-4
5.	Housing term loan agreement executed by 1st defendant in favour of the applicant bank dated 11.01.2013.	A-5
6.	Letter of guarantee executed by defendant nos. 2 to 4 dated 11.01.2013.	A-6
7.	Original Joint Venture Agreement, dated 21.03.2010, between the developer M/s. Loyal Housing Development Pvt ltd, and the Owner M/s. Vyas Builders Pvt Ltd dated 21.03.2010.	A-7
8.	Tripartite agreement entered by 5th defendant with applicant bank and the 1st defendant dated 10.01.2013.	A-8
9.	Power of attorney – Doc. No. 636 of 2012, Dated 24.07.2012.	A-9

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10.	Letter of confirmation executed by 1stdefendant for having deposited title deeds documents with an intent to secure the repayment of loan amount to the bank dated 11.01.2013.	A-10
11.	Registered memorandum of deposit of title deeds executed by 5th defendant through its power agent 1st defendant in favour of the applicant bank in Doc. No. 215 of 2013 dated 21.01.2013.	A-11
12.	Registered memorandum of deposit of title deeds executed by 5th defendant through its power agent 1st defendant in favour of the applicant bank in Doc. No. 2703 of 2017 dated 05.06.2017.	A-12
13.	Original sale deed dated 21.03.1944 Registered as Document No. 423 of 1944 executed by Mr. Yegappan & others in favour of Mrs. Rajakanthammal dated 21.03.1944.	A-13
14.	Original sale deed registered as Document No. 456 of 1944 executed by Murugappa Reddiar& others in favour of Mrs. Rajakanthammal dated 26.03.1944.	A-14
15.	Original sale deed registered Document No. 453 of 1944 executed by Mr. Chellappan & others in favour of Mrs. Rajakanthammal dated 27.03.1944.	A-15
16.	Copy of patta no. 378 in the name of Mrs. Rajakanthammal.	A-16
17.	Copy of Extract of the “Settlement Jamabandhi Chitta Register” for the fasli year 1402 in the name of Mrs. Rajakanthammal.	A-17
18.	Copy of Certified extract of patta no. 378 standing in the name of Mr. Karukkukanniappa Reddiar dated 01.09.2005.	A-18
19.	Copy of certified extract of Adangal issued by the village administrative officer, korattur village for fasli year 1402 (Corresponding English calendar year 1993) in the name of Mrs. Rajakanthammal.	A-19
20.	Copy of will registered as Document No. 47 of 1984 executed by K.N. Ranganatha Naidu in favour of Mr. R. Kannan dated 26.11.1984.	A-20
21.	Original death certificate of K.N. Ranganatha Naidu issued by the Ambattur Municipality dated 01.07.2005.	A-21
22.	Original sale deed registered as document no. 1564 of 1995 executed by S. Dhanalakshmi in favour of M/s. Vyas Builders Pvt Ltd dated 21.08.1995.	A-22
23.	Original sale deed registered as document no. 1565 of 1995 executed by C. Mallika in favour of M/s. Vyas Builders Pvt Ltd dated 23.08.1995.	A-23

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24.	Original sale deed registered as document no. 1566 of 1995 executed by R. Venkatesan in favour of M/s. Vyas Builders Pvt Ltd dated 23.08.1995.	A-24
25.	Original sale deed registered as document no. 1567 of 1995 executed by R. Kannan in favour of M/s. Vyas Builders Pvt Ltd dated 24.08.1995.	A-25
26.	Original patta bearing no. 7800 bearing ref. T.K. 8a/254/1415 dated 22.07.2005 issued by the Head Quarters Deputy Tahsildar, Ambattur Taluk in the name of M/s. Vyas Builders Pvt Ltd dated.	A-26
27.	Original Extracts of Chitta and Adangal registers for the Fasli year 1415 (Corresponding English Calendar year 2006), in the name of M/s. Vyas Builders Pvt Ltd.	A-27
28.	Copy of certificate bearing ref no. 18182/2007/A1 issued by the Tahsildar, AmbatturTaluk dated 20.08.2007.	A-28
29.	Original Extract of the Town Survey field register extract issued by the Zonal Deputy Tahsildar, Ambattur Taluk in the Name of the Company (Vyas Builders Pvt Ltd) dated 04.06.2007.	A-29
30.	Copy of Affidavit of Mrs. G. LataGopal dated 23.08.2006.	A-30
31.	Copy of Affidavit of Mr. C. Karupaiya dated 23.08.2006.	A-31
32.	Copy of Affidavit of Mrs. Radha Vijayakumar dated 23.08.2006.	A-32
33.	Original proceedings dated 18.12.2006 bearing Ref. 6123/2005/A1 by the Revenue Division officer, Ponneri.	A-33
34.	Original E.C from 01.01.1905 to 04.02.2009 comprising of a serial of 14 number of Encumbrance certificate covering for the above period.	A-34
35.	Original E.C from 01.01.2009 to 22.11.2010 dated 23.11.2010.	A-35
36.	Copy of Attachment and Cancellation letter from Mapusa Urban Co-op Bank of Goa dated 23.10.2007.	A-36
37.	Copy of Letter dated 08.11.2006 Bearing reference no. CMDA 1C002222/2006 issued by the member secretary, CMDA.	A-37
38.	Original Memorandum of Association and Articles of Association of M/s. Vyas Builders Pvt Ltd dated 18.12.1990.	A-38

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39.	Original Memorandum of Association and Articles of Association of M/s. Loyal Housing Developments Pvt Ltd dated 29.03.2010.	A-39
40.	Attested photo copy of form no. 32 stating the particulars of directors and manager of M/s. Vyas Builders Pvt Ltd dated 27.07.2005.	A-40
41.	Copy of planning permission letter from CMDA to Ambattur Municipality dated 28.09.2010.	A-41
42.	Original Resolution letter from directors of M/s. Vyas Builders Pvt Ltd, dated 05.03.2010 dated 05.03.2010.	A-42
43.	Original resolution of M/s. Vyas Builders Pvt Ltd dated 05.12.2010.	A-43
44.	Registered copy of sale deed – Doc. No. 1567/1996 dated 24.08.1995.	A-44
45.	Registered copy of sale deed – Doc. No. 1564/1996 dated 21.08.1995.	A-45
46.	Registered copy of sale deed – Doc. No. 1565/1996 dated 23.08.1995.	A-46
47.	Registered copy of sale deed – Doc. No. 1566/1996 dated 23.08.1995.	A-47
48.	Search and Status Report – M/s. Vyas Builders Pvt Ltd, by Aashish Kumar & Associates, Company Secretaries dated 16.12.2010.	A-48
49.	General power of authority to the director – M/s. Vyas Builders Pvt Ltd dated 05.03.2010.	A-49
50.	Notary Attested Affidavit of Mr. Mukesh Goyal, Director of M/s. Vyas Builders Pvt Ltd dated 24.12.2010.	A-50
51.	Layout Approval by CMDA dated 17.11.2011.	A-51
52.	Revival letter executed by 1st defendant pvt ltd company dated 16.10.2015.	A-52
53.	Revival letter executed by defendant nos. 2 to 4 dated 16.10.2015.	A-53
54.	Certified Copy of statement of account for term loan facility availed by 1st defendant.	A-54
55.	Power of attorney issued by applicant bank in favour of Mrs. Shobha. S.	A-55

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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/-

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(S.V. GOWRAMMA)

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PRESIDING OFFICER, DRT-III, CHENNAI

Indian Overseas Bank v. Loyal Housing Development Pvt. Ltd. And Three Others

Case brief

What is this about?

What did the court decide?

Indian Overseas Bank v. Loyal Housing Development Pvt. Ltd. And Three Others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

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