Allowed

Bank of India v. M/S Ganapathi Enterprises

DRT1 Aug 2025TA/1643/2023

Case brief

AI extract

What is this about?

In an ex-parte application under the RDB Act, the Debt Recovery Tribunal allowed a bank's claim for recovery of dues comprising Cash Credit and two Term Loans sanctioned to a proprietorship firm and its proprietor, along with attached interest, costs, and permission to sell the proprietor's personal assets.

What did the court decide?

Permission to recover Rs.40,59,541/- (plus interest and costs) jointly from respondents and liberty to sell the personal assets of the second defendant for further recovery.

Bank of India versus M/S Ganapathi Enterprises — Specific Performance | DRT (2025)

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T.A. No. 1643 of 2023

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01.08.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 01^st day of August, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 1643 of 2023

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(Originally filed before DRT- II, Chennai as OA 813/2019 and thereafter transferred to this Tribunal and renumbered as TA No 1643 of 2023)

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Bank of India

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Theagaroya Nagar Branch No.38, Theagaroya Road T.Nagar, Chennai 600 017 Rep. by its Constituted Attorney

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….Applicant

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-Vs-

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M/s. Ganapathi Enterprises

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Old No 4. New No 7, Surappa Street, Triplicane

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Chennai 600 005

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Rep. by its Proprietrix

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Mrs.R.Malathi

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Mrs.R.Malathi W/o Mr.S.Ramesh Old No 4. New No 7, Surappa Street, Triplicane, Chennai 600 005.

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Proprietrix M/s Ganapathi Enterprises …..Defendants

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Counsels on record / appeared:

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Counsel for Applicant : Mr. M. P. Venkateswaran

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Defendants 1 and 2 were set ex-parte on 08.10.2021

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: - FINAL ORDER - :

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This Original Application is filed on 07.08.2019 by the applicant

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bank under Section 19 (1) 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

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T.A. No. 1643 of 2023

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01.08.2025

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recovery of a total sum of Rs.40,59,541/- (Rupees Forty Lakh Fifty

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Nine Thousand Five Hundred Forty One Only) as follows:

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(i) A sum of Rs.10,86,177/- due in respect of Cash Credit facility (A/c No.800430110000073), repayable together with further interest @ 10%, p.a., compounded with monthly rests from the date of filing the OA, till date of realization in full;

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(ii) A sum of Rs.2,91,678/- due in respect of Term Loan Facility (A/c No.800470410000037), repayable together with further interest @ 10%, p.a., compounded with monthly rests from the date of filing the OA till date of realization in full;

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(iii) A sum of Rs.26,81,686/- due in respect of Term Loan Facility (A/c No.800470410000060), together with further interest @ 10%, p.a., compounded with monthly rests from the date of filing the OA till 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.813 of 2019, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.813 of 2019 stood transferred to this Tribunal and renumbered as TA No.1643 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

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T.A. No. 1643 of 2023

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01.08.2025

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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 defendants approached the Applicant during the month of February, 2015 for sanction of Cash Credit and Term Loan facilities for their printing, binding and lamination business and submitted a loan application form dated 07.02.2015.

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It is submitted by applicant bank that after due consideration of the request of the defendants and the representations made by them, the Applicant sanctioned a cash credit facility of Rs 2,00,000/- and a term loan facility of Rs.10,00,000/- to the defendants by their sanction letter dated 05.03.2015 bearing no TNG/ADV/GCA. The defendants counter signed the sanction letter agreeing to the terms and conditions of sanction.

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To secure the due repayment of the afore said Cash Credit facility the defendants executed the following loan documents in favour of the Applicant:

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a) Demand promissory dated 08.04.2015 for Rs.2,00,000/promising to repay the cash credit facility with interest at the rate of 2.40% above base rate then 12.60% per annum compounded with monthly rests for value received.

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b) Bearer letter dated 8.04.2015

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c) Composite loan document dated 8.04.2015

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d) Hypothecation cum loan agreement (Plant and machinery,

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stocks and Book debts) dated 8.04.2015 hypothecating stocks of paper, printing, binding and lamination materials in favour of the Applicant.

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To secure the due repayment of the afore said Term Loan facility of Rs 10,00,000/-, the defendants executed the following loan documents in favour of the Applicant:

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a) Demand promissory dated 08.04.2015 for Rs 10,00,000/promising to repay the term loan facility with interest at the rate of 2.40% above base rate then 12.60% per annum compounded with monthly rests for value received.

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b) Bearer letter dated 08.04.2015.

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c) Instalment letter dated 08.04.2015 undertaking to repay the term loan in 60 instalments of Rs 22,549/- per month commencing from May 2015.

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d) Composite loan document dated 08.04.2015.

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e) Hypothecation cum loan agreement (Plant and machinery, stocks and Book debts) dated 08.04.2015 hypothecating Sumitomo miller offset printing machine stocks of paper, printing machine with motor, compressor, and other accessories in favour of the Applicant.

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The defendants fully utilized the Cash Credit and Term Loan facilities sanctioned by the Applicant and started doing business.

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It is submitted by the Applicant Bank that the defendants approached the Applicant again in the month of April 2016 for sanction

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of additional cash credit facility for their business and submitted a loan Application form dated 21.04.2016.

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After due consideration of the request of the defendants and the representations made by them, the Applicant sanctioned additional Cash Credit facility of Rs 8,00,000/- increasing the total Cash Credit limit to Rs 10,00,000/- to the defendants by their sanction letter dated 04.05.2016 bearing no TNG/ADV/PRV/20 – The defendants counter signed the sanction letter agreeing to the terms and conditions of sanction.

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It is submitted by the applicant bank that to secure the due repayment of the afore said additional Cash Credit facility of Rs. 8,00,000/-, the defendants executed the following loan documents in favour of the Applicant:

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a) Demand promissory dated 05.05.2016 for Rs.8,00,000/promising to repay the cash credit facility with interest at the rate of 1.35% above the yearly BOI MCLR then 10.75% per annum compounded with monthly rests for value received.

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b) Bearer letter dated 05.05.2016.

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c) Composite loan document dated 05.05.2016.

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d) Hypothecation cum loan agreement (Plant and machinery, stocks and Book debts) dated 05.05.2016.

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e) Supplemental deed of hypothecation cum loan agreement dated 05.05.2016.

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f) MCLR Agreement for existing loan dated 05.05.2016.

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The defendants fully utilized the additional Cash Credit facility also and continued their business.

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The Applicant further submits that defendants again approached the Applicant in the month of June, 2017 for sanction of another Term Loan facility for their printing, binding and lamination business and submitted a loan application form dated 01.06.2017.

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After due consideration of the request of the defendants and the representations made by them, the Applicant sanctioned another Term Loan facility of Rs 31,00,000/- to the defendants by their sanction letter dated 26.12.2017 bearing no TNG/ADV/PRV. The defendants counter signed the sanction letter agreeing to the terms and conditions of sanction.

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To secure the due repayment of the aforesaid Term Loan facility, the defendants executed the following loan documents in favour of the Applicant:

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a) Demand promissory dated 27.12.2017 for Rs 31,00,000/promising to repay the term loan facility with interest at the rate of 1.30% above yearly MCLR then 9.6% per annum with monthly rests for value received.

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b) Bearer letter dated 27.12.2017.

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c) Instalment letter dated 27.12.2017 undertaking to repay the term loan in 60 Instalments of Rs 65,258/- per month commencing from March 2018.

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d) Composite loan amount dated 27.12.2017.

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e) Hypothecation cum loan agreement(Plant and machinery, stocks and Book debts) dated 27.12.2017 hypothecating the Microband 6 clamp perfect binding machine, Shoel 66 – 2 Bukkel Knife folding machine etc in favour of the Applicant

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f) Hypothecation cum loan agreement dated 27.12.2017.

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g) MCLR Agreement for new loans dated 27.12.2017.

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In respect of the Cash Credit facility loan account, the defendants executed Acknowledgment of Debt and Securities on 27.12.2017. In respect of the Term Loan facility of Rs 10,00,000/- the defendants executed Acknowledgment of Debt and Securities on 27.12.2017.

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It is submitted by the applicant bank that the defendants fully utilized all the three facilities sanctioned by the Applicant. However the defendants did not maintain the account properly. The defendants are chronic defaulters in repayment of the facilities sanctioned by the Applicant. Despite several demands made and opportunities granted by the Applicant, the defendants failed and neglected to repay the credit facilities. Hence the accounts of the defendants were classified as NonPerforming Asset (NPA) by the Applicant on 31.05.2019 as per guidelines issued by Reserve Bank of India. As defendants did not come forward to repay the dues, the present Original Application (OA) has been filed by applicant bank for recovery of its dues from defendants.

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After the filing of the OA, Summons were sent to D1 and D2

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through Registered Post with Acknowledgment Due, which returned with postal endorsement as ‘Left’. Applicant bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 08.10.2021 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants 1 and 2 were placed ex-parte on 08.10.2021.

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Heard the submissions of Applicant Bank and perused the

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records.

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To prove the case of the Applicant Bank, Sh. M. Jayaraj, Constituted Attorney 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-33 . 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 Defendants, jointly and severally, a total sum of Rs.40,59,541/-

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T.A. No. 1643 of 2023

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(Rupees Forty Lakh Fifty Nine Thousand Five Hundred

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Forty One Only) as follows:

(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 defendants and/or amount realized by sale of assets etc., during

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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 receipt 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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A copy of this order be communicated to the parties concerned.

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Sd/-

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

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(Dictated to Steno (Deepika), transcribed by him, corrected, signed and pronounced by me on this the 01^st day of August, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sh. M. Jayaraj, Constituted Attorney 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 Form dated 07.02.2015.	A-1
2.	Sanction letter dated 05.03.2015.	A-2
3.	Demand Promissory Note dated 08.04.2015.	A-3
4.	Bearer Letter dated 08.04.2015.	A-4
5.	Composite Loan Document dated 08.04.2015.	A-5
6.	Hypothecation cum loan agreement dated 08.04.2015.	A-6
7.	Demand Promissory Note dated 08.04.2015.	A-7
8.	Bearer Letter dated 08.04.2015.	A-8
9.	Instalment letter dated 08.04.2015.	A-9
10.	Composite loan document dated 08.04.2015.	A-10
11.	Hypothecation cum loan agreement dated 08.04.2015.	A-11
12.	Loan Application form dated 21.04.2016.	A-12
13.	Sanction letter dated 04.05.2016.	A-13
14.	Demand promissory note dated 05.05.2016.	A-14
15.	Bearer letter dated 05.05.2016.	A-15
16.	Composite loan document dated 05.05.2016.	A-16
17.	Hypothecation cum loan agreement dated 05.05.2016.	A-17
18.	Hypothecation cum loan agreement dated 05.05.2016.	A-18
19.	MCLR Agreement dated 05.05.2016.	A-19
20.	Loan application form dated 01.06.2017.	A-20
21.	Sanction letter dated 26.12.2017.	A-21
22.	Demand promissory note dated 27.12.2017.	A-22
23.	Bearer letter dated 27.12.2017.	A-23
24.	Instalment letter dated 27.12.2017.	A-24
25.	Composite loan document dated 27.12.2017.	A-25
26.	Hypothecation cum loan agreement dated 27.12.2017.	A-26
27.	Hypothecation cum loan agreement dated 27.12.2017.	A-27
28.	MCLR Agreement dated 27.12.2017.	A-28
29.	Acknowledgement of debt and securities dated 27.12.2017.	A-29
30.	Acknowledgement of debt and securities dated 27.12.2017.	A-30
31.	Statement of account in respect of cash credit account	A-31
32.	Statement of account in respect of term loan	A-32
33.	Statement of account in respect of term loan	A-33

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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

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-NIL-

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

Bank of India v. M/S Ganapathi Enterprises

Case brief

What is this about?

What did the court decide?

Bank of India v. M/S Ganapathi Enterprises

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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