Allowed

Karnataka Bank Limited v. M/S Shree Balaji Enterprises

DRT3 Jun 2025TA/306/2023

Case brief

AI extract

What is this about?

A Debt Recovery Tribunal allowed a Transfer Application filed by Karnataka Bank Ltd. for recovery of dues from borrowers after declaring the application ex-parte due to non-appearance.

What did the court decide?

Applicant allowed to recover Rs.1,10,94,370.74p plus future interest at 10.95% p.a.; liberty to sell defendants' assets; recovery certificate to be drawn.

Karnataka Bank Limited versus M/S Shree Balaji Enterprises — Banking and Recovery | DRT (2025)

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T.A. No. 306 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. 306 of 2023

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(Originally filed before DRT- II, Chennai as OA 382/2021 and thereafter transferred to this Tribunal and renumbered as TA No 306 of 2023)

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Karnataka Bank Ltd.,

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Chennai – Triplicane Branch No.19, B.V. Naicken Street, Triplicane, Chennai – 600 005 Rep. by its Branch Manager

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….Applicant

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-Vs-

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M/s. Shree Balaji Enterprises, Rep. by its Proprietor N. Sridhar, No.4, Anderson Street,

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1^st Floor, Parrys, Chennai – 600 001

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Mr. N. Sridhar, S/o. N. Nagarajan No.15, Sherfuddin Street, Choolaimedu, Chennai – 600 094

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Mr. N. Nagarajan, S/o. Nagamani No.11, Muthusamy Nagar, S.N. Chavedy, Kundur, Cuddalore – 607 001

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Mr. A. Ayyappan, S/o. E. Arulalan, No.56/16, Kutty Gramani Street, 1^st Floor, R.A. Puram, Chennai – 600 028 …..Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. R. Thirumalai

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Defendants were set ex-parte on 21.06.2022

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T.A. No. 306 of 2023

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03.06.2025

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: - FINAL ORDER - :

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This original application is filed on 05.05.2021 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 for recovery of a total sum of Rs.1,10,94,370.74p

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(Rupees One Crore Ten Lakhs Ninety Four Thousand Three Hundred and Seventy and Seventy Four Paise Only) as follows:

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(i) A sum of Rs.1,01,95,779.23p due in respect of OD Loan (A/c No.4887000100115501) repayable together with further interest thereon @ 10.95% p.a., with monthly rests from the date of application till the date of realization in full

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(ii) A sum of Rs.8,98,591.51p due in respect of Term Loan A/c

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(No.4887001800083201) repayable together with further interest thereon @ 10.95% p.a., with monthly rests from the date of application till the 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. 382 of 2021, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.382 of 2021 stood transferred to this Tribunal and renumbered as TA No.306 of 2023.

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T.A. No. 306 of 2023

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03.06.2025

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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 Tribunal.

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It is the case of the Applicant Bank that the 1^st Defendant being the proprietary concern represented by the 2^nd Defendant had approached the Applicant for financial assistance for working capital needs of his business of papers trading to offset printing industry.

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It is submitted by applicant bank that after due consideration, the 1^st defendant was granted Over draft facility of Rs.40,00,000/- under OD Account No. 4887000100115501 on 08.07.2010. The said OD limit had been renewed with enhancement from time to time, and renewed finally on 05.07.2017 with the enhanced limit of Rs.70,00,000/- together with a fresh limit of Term Loan of Rs.14,00,000/under Account No. 4887001800083201 on the terms and conditions stipulated in applicant’s sanction order Ref. No.AGMS/R500/12948/2017-18 dated 01.07.2017. The 1^st Defendant, in all transactions with the applicant, has been represented by its proprietor, the 2^nd defendant. The defendants 3 & 4 are the coobligants / guarantors in respect of repayment of such facilities.

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It is submitted by applicant bank that the mode of repayment of OD

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facility of Rs.70,00,000/- will be on demand together with interest @ 10.75% p.a., compounded monthly. The mode of repayment of Term Loan of Rs.14,00,000/- will be in 59 equated monthly installments of Rs.23,500/and one final installment of Rs.13,500/- together with interest thereon @ 10.75% p.a., compounded monthly.

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It is further submitted that accepting the terms and conditions, the first defendant had enjoyed the above facility. In consideration therefor and towards security the due repayment thereof, the defendants have executed the following loan documents:

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Sl. No.	Description of Documents
	For OD Facility
1.	Demand Promissory Note with take delivery letter executed by Defendants dated 05.07.2017
2.	Request for Overdraft facility executed by Defendants dated 05.07.2017
3.	Hypothecation Agreement executed by Defendants 1 & 2 dated 05.07.2017
4.	Letter of declaration executed by Defendants 1 & 2 dated 05.07.2017
5.	Letter of declaration executed by Defendant 3 dated 05.07.2017
6.	Letter of declaration executed by Defendant 4 dated 05.07.2017
7.	Consent Letter executed by Defendants 1 & 2 dated 05.07.2017
8.	Consent Letter executed by Defendant 3 dated 05.07.2017
9.	Consent Letter executed by Defendant 4 dated 05.07.2017
10.	General Power of Attorney for book debts executed by Defendants 1 & 2 dated 05.07.2017

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T.A. No. 306 of 2023

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	For Term Loan Facility
11.	Term Loan Agreement executed by Defendants 1 to 4 dated 05.07.2017
12.	Letter of declaration executed by Defendants 1 & 2 dated 05.07.2017
13.	Letter of declaration executed by Defendant 3 dated 05.07.2017
14.	Letter of declaration executed by Defendant 4 dated 05.07.2017
15.	Consent Letter executed by Defendants 1 & 2 dated 05.07.2017
16.	Consent Letter executed by Defendant 3 dated 05.07.2017
17.	Consent Letter executed by Defendant 4 dated 05.07.2017
18.	General Power of Attorney for book debts executed by Defendants 1 & 2 dated 05.07.2017

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The Applicant Bank submits that the 3^rd Defendant had effected equitable mortgage of his house property situated at Door No.11, Muthusamy Nagar, S.N. Chavedy Kundur, Cuddalore, Tamil Nadu – 607 001, under Memorandum of Deposit of Title Deeds viz., i) dated 19.07.2010 registered as document No.2965/2010, ii) dated 11.08.2015, registered as document No.2998/2015, and under letter of continuity dated 05.07.2017 securing the repayment of the above facilities.

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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

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T.A. No. 306 of 2023

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Assets) on 29.10.2017, as per the guidelines issued by the RBI. The Applicant Bank through its Authorised Officer issued Demand Notice dated 19.03.2018 under Section 13(2) of the SARFAESI Act and subsequently issued Possession Notice under Section 13(4) of the SARFAESI Act on 30.11.2018. However, the Defendants have not bothered to repay the outstanding amount.

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It is submitted by applicant bank that even after the receipt of notices under SARFAESI Act, the defendants failed to set right both the accounts. Hence, the Applicant has followed the next step of auction under SARFAESI Act, conducted public auction on 14.10.2019 and sold the mortgaged property for a sum of Rs.30,10,000/-. Out of the auction sale proceeds received, sum of Rs.10,00,000/- has been adjusted to the Term Loan Account and the balance sum of Rs.20,10,000/- has been adjusted to the Over Draft Account on 06.01.2020. To recover the balance outstanding in both the accounts, the applicant’s caused Recall notice dated 07.07.2020 to the Defendants, which notice has been returned against the defendants 1 to 3 with the endorsement as “Left” and served on the 4^th Defendant. The Applicant Bank registered and issued Sale Certificate dated 05.02.2020 to the successful bidder/auction purchaser. After adjusting the auction sale proceeds of the secured assets, there is a due of Rs.1,01,95,779.23 under Overdraft account and a sum of Rs.8,98,591.51 under the Term Loan Account. Hence, this Original Application (OA) has been filed to recover the

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T.A. No. 306 of 2023

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dues from the defendants.

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After the filing of the OA, Summons were sent to Defendants 1 to 4 through Registered Post with Acknowledgement due, which was returned unserved with postal endorsement ‘No such company’ from D1, while summons sent to D2 to D4 returned unserved with the remarks ‘Left’. Applicant Bank had caused Paper Publication of Notice and filed proof thereof. When OA was taken up on 21.06.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants were placed ex-parte on 21.06.2022.

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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, Mr. R. Vijay Anand, Branch Manager of 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-27 . 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 :

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.1,10,94,370.74p (Rupees One Crore Ten Lakhs Ninety Four Thousand Three Hundred and Seventy and

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Seventy Four Paise Only) as follows:

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(i) A sum of Rs.1,01,95,779.23p due in respect of OD Loan (A/c No.4887000100115501) repayable together with further interest thereon @ 10.95% p.a., with monthly rests from the date of application till the date of realization in full

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(ii) A sum of Rs.8,98,591.51p due in respect of Term Loan A/c (No.4887001800083201) repayable together with further interest thereon @ 10.95% p.a., with monthly rests from the date of application till the date of realization in full along with for costs of this application.

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(b) In the event of failure of the defendants to pay the aforesaid

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amount, the applicant bank is at liberty to sell the personal assets / hypothecated assets of the defendants 2 to 4 (both movable and immovable) to recover the outstanding dues as required under law, for which the Defendants 2 to 4 to disclose to the Tribunal particulars of other properties or assets owned by the Defendants 2 to 4.

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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 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

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the date of this final order.

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(e) 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 PS, transcribed by her, 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. R. Vijay Anand, Branch Manager of the Applicant Bank.

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Exhibits on the part of the Applicant:

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T.A. No. 306 of 2023

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Sl. No.	Description of Documents	Exhibit No.
1.	Sanction Order (OD & TL) executed by Applicant dated 01.07.2017	A-1
	Security Documents executed for OD Limit
2.	Demand Promissory Note with take delivery letter executed by Defendants dated 05.07.2017	A-2
3.	Request for Overdraft facility executed by Defendants dated 05.07.2017	A-3
4.	Hypothecation Agreement executed by Defendants 1 & 2 dated 05.07.2017	A-4
5.	Letter of declaration executed by Defendants 1 & 2 dated 05.07.2017	A-5
6.	Letter of declaration executed by Defendant 3 dated 05.07.2017	A-6
7.	Letter of declaration executed by Defendant 4 dated 05.07.2017	A-7
8.	Consent Letter executed by Defendants 1 & 2 dated 05.07.2017	A-8
9.	Consent Letter executed by Defendant 3 dated 05.07.2017	A-9
10.	Consent Letter executed by Defendant 4 dated 05.07.2017	A-10
11.	General Power of Attorney for book debts executed by Defendants 1 & 2 dated 05.07.2017	A-11
	Security Documents executed for Term Loan
12.	Term Loan Agreement executed by Defendants 1 to 4 dated 05.07.2017	A-12
13.	Letter of declaration executed by Defendants 1 & 2 dated 05.07.2017	A-13
14.	Letter of declaration executed by Defendant 3 dated 05.07.2017	A-14
15.	Letter of declaration executed by Defendant 4 dated 05.07.2017	A-15
16.	Consent Letter executed by Defendants 1 & 2 dated 05.07.2017	A-16
17.	Consent Letter executed by Defendant 3 dated 05.07.2017	A-17
18.	Consent Letter executed by Defendant 4 dated 05.07.2017	A-18
19.	General Power of Attorney for book debts executed by Defendants 1 & 2 dated 05.07.2017	A-19

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	Common Documents to both the facilities
20.	Recall Notice dated 07.07.2020	A-20
21.	Returned RPAD Cover addressed to 1^stDefendant	A-21
22.	Returned RPAD Cover addressed to 2^nd Defendant	A-22
23.	Returned RPAD Cover addressed to 3^rd Defendant	A-23
24.	Acknowledgement Card received from 4^th Defendant	A-24
25.	Account statement with certificates (OD)	A-25
26.	Account statement with certificates (TL)	A-26
27.	Sale Certificate dated 05.02.2020	A-27

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

Karnataka Bank Limited v. M/S Shree Balaji Enterprises

Case brief

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Karnataka Bank Limited v. M/S Shree Balaji Enterprises

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