Allowed

Bank of Baroda v. M/s. Sark Cosmetics Pvt. Ltd.

DRT25 Sept 2025TA/292/2022

Case brief

AI extract

What is this about?

The DRT-II at Chennai allowed an application by Bank of Baroda for issuance of a recovery certificate against M/s. Sark Cosmetics Pvt. Ltd. for a default in overdraft and term loans totaling approximately Rs. 84.57 lakh, considering the claim time-barred and evidence unchallenged.

What did the court decide?

Recovery certificate issued for realization of Rs.84,57,099/- along with interest from various loan accounts from the defendant company.

Bank of Baroda versus M/s. Sark Cosmetics Pvt. Ltd. — Company and Corporate | DRT (2025)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 25^th day of September, 2025

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PRESENT: SHRI SHARANG DHAR UPADHYAY PRESIDING OFFICER

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TA No.292 of 2022

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(Originally filed before DRT-I, Chennai as OA No. 299 of 2020 and thereafter transferred to this Tribunal and renumbered as TA No.292 of 2022)

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Bank of Baroda (Erstwhile Vijaya Bank) 123, Durga Towers, R.L Road, Egmore, Chennai 600008 Represented by its Assistant General Manager …Applicant

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Versus

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M/s. Sark Cosmetics Pvt. Ltd. Represented by its Directors Ms. Rama Devi K and Mrs. K. Soundarya No.406, Basement, T.T.K. Road, Alwarpet, Opp. Ethiraj Kalyana Mandapam,

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Chennai – 600018 ... Defendant

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Counsels on Record / Appeared

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Counsel for Applicant Bank : M/s S. Pandurangan Defendant ex-parte on 16.06.2023

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FINAL ORDER

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This application is filed by the applicant bank under Section 19(1) of

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Recovery of Debts and Bankruptcy Act, 1993 against the defendant seeking issuance of a Recovery Certificate for recovery of an aggregate sum of Rs.84,57,099/- comprising A sum of Rs.21,60,823/- together with

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interest at the rate of 14.20% per annum with monthly rests being the amount due under Overdraft Account No.12730400000072; A sum of Rs.49,43,428/- together with interest at the rate of 8.00% per annum with monthly rests being the amount due under Term Loan Account No.12730600002620 and A sum of Rs.13,52,848/- together with interest at the rate of 7.85% per annum with monthly rests being the amount due under Term Loan Account No.12730600003337 from the date of the application till the date of realisation along with costs of the application.

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The subject matter of the case is the various credit facilities availed by the defendant from the Applicant Bank.

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It is the case of the applicant that during the month of November 2015, the defendant approached the erstwhile Vijaya Bank vide application dated 04.11.2015 for grant overdraft and loan facilities for its business of Beauty Parlour and Spa under CGTMSE Scheme. The applicant considering the said request vide sanction dated 05.02.2016 sanctioned Overdraft facility of Rs.20,00,000/- and Term Loan of Rs.80,00,000/-. The Term Loan was repayable in 60 months commencing from August 2016.

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It is also the case of the applicant that on 06.02.2016, the company authorized the Directors, Ms. Ramadevi Krishnaswamy or M.K. Soundarya to execute the documents. The Directors of the defendant company

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executed on 06.02.2016 executed the loan documents in respect of the overdraft facility of Rs.20,00,000/- and Term Loan of Rs.80,00,000/-.

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It is the further case of the applicant that the defendant executed acknowledgement of liability in respect of Term Loan on 02.08.2017, and 13.07.2020 and Overdraft facility on 31.08.2017 and 29.01.2019.

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It is also the case of the applicant that at the request of the defendant the applicant sanctioned BOB Guaranteed Emergency Credit Line Scheme (due to COVID-19) on 12.11.2020 repayable in 36 monthly installments commencing from November 2021. The defendant by its Board Resolution dated 24.11.2020 authorised the Directors to execute the documents in respect of this loan and the Directors of the company executed loan and security documents in favour of the applicant bank on 24.11.2020.

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It is the further case of the applicant bank that the operation of the overdraft account was not commensurate to the defendant’s business and the limit. The repayment in the Term Loan Account was highly irregular and completely stopped after February 2019. The defendant deliberately routes its business transactions through some other bank / branch and the efforts of the applicant bank to set right the operations and to recover the amount due from the defendant failed and the loan account was classified as NPA on 31.03.2020.

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It is the case of the applicant that as the defendant did not come forward to clear the dues it sent a legal notice on 17.05.2021, which returned unserved with endorsement “No such addressee”. Hence the applicant is filing this OA for recovery of its dues.

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Summons was taken out to the defendant and the same returned unserved and hence was served with notice by way of substituted service by causing paper publication. As there was no representation on behalf of the defendant continuously and on 16.06.2023, the defendant was called absent and placed ex-parte on that day. Applicant Bank filed Proof Affidavit along with 22 documents, which were marked as Ex. A-1 to A-22 on 09.02.2024, however, Ex. A-2 and A-21 were marked subject to proof. The Ld. Counsel for Applicant Bank made his submissions on 04.09.2025 and thereafter the matter stood till this date for passing final orders.

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The following issues arise for consideration in the matter: -

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(a) Whether the applicant had succeeded in proving the liability of the defendant?

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(b) What order as to cost of the proceedings need be passed?

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These issues are considered together.

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Heard the Ld. Counsel for the applicant, perused the OA averments and the record placed before the Tribunal.

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The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-22 along with the proof affidavit. The documents produced in evidence are all found admissible. The proof affidavit of the applicant bank remained unchallenged and unrebutted. Therefore, on careful consideration of proof affidavit along with exhibits filed on behalf of the applicant bank, besides the material placed before the Tribunal, the Tribunal is satisfied that the applicant bank has successfully proved the OA claim against the defendant. Further, the statement of accounts in respect of the loan account produced and certified under the Banker’s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendant. It is clear from the statement of accounts that penal interest is not capitalized.

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In view of the foregoing, it is clearly evident that the application filed by the applicant bank is well within the period of limitation and this Tribunal possesses the territorial and pecuniary jurisdiction to entertain this OA.

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In view of the fact that the loan facility availed by the defendant is a secured overdraft loan and Term Loan facilities for business purposes, this

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Tribunal is of the view that the applicant is entitled for the interest as claimed for and no interference is called for.

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In view of the afore mentioned discussions, the only conclusion this Tribunal can draw is that the applicant had clearly proved the disbursement of the loan, which the applicant is entitled to realize. Hence, OA is disposed off in the following manner: -

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(a) TA No.292 of 2022 stands allowed.

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(b) Applicant is permitted to realize an aggregatesum of Rs.84,57,099/as detailed below from the date of filing of the application till the date of realization in full, from the defendant after deducting all the amounts received / realized by them during the pendency of OA and also by selling the other assets of the defendant: -

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(i) A sum of Rs.21,60,823/- together with interest at the rate of 14.20% per annum with monthly rests being the amount due under Overdraft Account No.12730400000072;

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(ii) A sum of Rs.49,43,428/- together with interest at the rate of 8.00% per annum with monthly rests being the amount due under Term Loan Account No.12730600002620 and

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(iii) A sum of Rs.13,52,848/- together with interest at the rate of 7.85% per annum with monthly rests being the amount due under

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Term Loan Account No.12730600003337.

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(d) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 15 days from the date of receipt of the copy of the order.

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

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Communicate a copy of the order to the parties concerned in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

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Sd/- (SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

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(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 25^th day of September, 2025)

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EXHIBITS MARKED BY APPLICANT BANK

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S.	Date	Description of Documents	Exhibit
No.			Nos.
1	04.11.2015	Loan Application with annexures	A-1

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2	05.02.2016	Loan Sanction letter	A-2
3	06.02.2016	Board resolution of the defendant	A-3
4	06.02.2016	Demand promissory note Rs 20,00,000/-	A-4
5	06.02.2016	Letter of undertaking to pay penal interest etc	A-5
6	06.02.2016	Loan Agreement Rs 20,00,000/-	A-6
7	06.02.2016	Letter of various undertaking Rs 20,00,000/-	A-7
8	06.02.2016	Loan Agreement Rs 80,00,000/-	A-8
9	02.08.2017	Acknowledgement of liability A/c. No. 300509041000095	A-9
10	31.08.2017	Letter of Access for Rs.20,00,000/-	A-10
11	31.08.2017	Acknowledgement of liability A/c. No.300506211000037	A-11
12	29.01.2019	Acknowledgement of liability A/c. No.300506211000037	A-12
13	13.07.2020	Acknowledgement of liability Term Loan	A-13
14	12.11.2020	Sanction Letter under BGECLS Rs. 13,00,000/-	A-14
15	24.11.2020	Board Resolution of defendant	A-15
16	24.11.2020	Demand Promissory Note	A-16
17	24.11.2020	Letter of installment with acceleration clause	A-17
18	24.11.2020	Letter cum hypothecation agreement	A-18
19	24.11.2020	Undertaking from borrower	A-19
20	24.11.2020	Declaration cum undertaking cum authority	A-20
21 22	17.05.2021 ---	Legal notice to defendant Statement of accounts	A-21 A-22

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Sd/-

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(SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

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DESCRIPTION OF PROPERTY

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NIL

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Sd/(SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

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Bank of Baroda v. M/s. Sark Cosmetics Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Bank of Baroda v. M/s. Sark Cosmetics Pvt. Ltd.

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

Case details

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