Allowed

State Bank of India v. M/S J J Chaat and Beverage

DRT14 Mar 2025TA/320/2023

Case brief

AI extract

What is this about?

In a transfer application, the DRT allowed the bank's claim for recovery of ₹21.34 lakhs with interest on cash credit and CCECL loans. The court accepted the bank's evidence as unchallenged since respondents were placed ex parte, and ordered recovery from assets.

What did the court decide?

Recovery of ₹21,34,392.39 along with interest; liberty to sell hypothecated and personal assets; issuance of Recovery Certificate.

State Bank of India versus M/S J J Chaat and Beverage — Banking and Recovery | DRT (2025)

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T.A. No. 320 of 2023

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14.03.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 14^th day of March, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 320 of 2023

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(Originally filed before DRT- II, Chennai as OA 86 of 2022 and thereafter transferred to this Tribunal and renumbered as TA No 320 of 2023)

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STATE BANK OF INDIA (S.A.R.C) Small and Medium Enterprises Centre, No. 157, Anna Salai, 5^th Floor, Chennai 600 002. Represented by its Manager ….Applicant

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-Vs-

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1 M/S J.J. Chaat and Beverage, Represented by its Propreitor Bhagiamurthy,

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No.6/13, Portious Road,

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Ayanavaram, Chennai – 600 023

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Mr. Bhagiamurthy S/O Egamalai, Residing at, No.6/13, portious Road, Ayanavaram, Chennai – 600 023 …..Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. Suresh Law Associates

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Defendants 1 and 2 were set ex-parte on 03.11.2023

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: - FINAL ORDER - :

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This original application is filed on 10.12.2021 by the applicant bank

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T.A. No. 320 of 2023

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14.03.2025

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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 and 2 jointly and severally, for recovery of a total sum of Rs.21,34,392.39p (Rupees Twenty One Lakhs Thirty

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Four Thousand Three Hundred and Ninety Two and Thirty Nine

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Paise Only) as follows:

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(i) A sum of Rs.10,95,160/- due in respect of Cash Credit Facility (Account No.38949210248) together with further interest @ 9.65% 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.9,58,858.39p due in respect of Cash Credit Facility (Account No.38949171636) together with further interest @ 9.65% p.a. with monthly rests from the date of Application till the date of realization in full;

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(iii) A sum of Rs.80,374/- due in respect of CCECL Loan (Account No.39353779085) together with further interest @ 7.40% p.a. with monthly rests from the date of Application till the date of realization in full;

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for sale of schedule mentioned hypothecated assets and for costs of this application.

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Originally, this Application was filed before DRT-II, Chennai, assigned OA No.86 of 2022, and thereafter in pursuance to the notification

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T.A. No. 320 of 2023

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14.03.2025

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from Ministry of Finance, DFS dated 04.10.2022, OA No.86 of 2022 stood transferred to this Tribunal and renumbered as TA No.320 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 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, for the purpose of business, approached the applicant and submitted a proposal seeking for various credit facilities.

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Considering the same, the Applicant sanctioned the following credit

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facilities on 22.11.2019. The 1^st defendant is borrower and the 2^nd

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defendant is the Proprietor of the 1^st defendant.

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Nature of Facility	Limit (in Rs. Crores)
CASH CREDIT	10.00
TERM LOAN	8.90
Total Limits	18.90

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It is submitted by applicant bank that in evidence of availing the

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credit facilities and as security thereof, the defendants have executed the

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following loan documents on 22.11.2019 in favour of applicant bank:

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i) Letter of Arrangement;

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ii) Agreement of Loan cum Hypothecation

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T.A. No. 320 of 2023

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14.03.2025

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It is submitted by the applicant bank that at request of the defendants, the applicant bank had sanctioned CCECL Loan amount of Rs.98,000.00 and renewal of Cash Credit and Term Loan as follows:

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Nature of Facility	Limit (in Rs.Crores)
CASH CREDIT	10.00
TERM LOAN	8.80
CCECL	0.98
Total Limits	19.78

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In evidence of availing the credit facilities and as security thereof,

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the defendants have executed the following loan documents on 27.05.2020 in favour of applicant bank:

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a. Letter of Arrangement

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b. Supplemental Agreement of Loan cum Hypothecation

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c. Link letter

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d. Demand Promissory Note

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The Applicant Bank submitted that the operation of the accounts by the defendants was far from satisfactory. The defendants did no keep up the repayment schedule as per the terms of sanction. Inspite of repeated demands and several reminders made, the defendants failed to repay the balance of the liability owed by them to the Applicant Bank under the aforesaid credit facility. Consequently, the loan amount of the defendants has been classified as Non-Performing Assets on 30.06.2021

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T.A. No. 320 of 2023

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in terms of the directives of Reserve Bank of India. Hence the present OA is filed for recovery of dues from the defendants.

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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 returned unserved with postal endorsement as ‘Left’. Applicant bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 03.11.2023 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendant were placed ex-parte on 03.11.2023.

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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, Smt. C. Tamizhkodi, Manager, SARC-SMECCC 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 :

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, Rs.21,34,392.39p (Rupees Twenty One Lakhs Thirty Four Thousand Three Hundred and Ninety Two and Thirty Nine Paise Only) as follows:

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(iii) A sum of Rs.80,374/- due in respect of CCECL Loan (Account No.39353779085) together with further interest @ 7.40% p.a. with monthly rests from the date of Application till the date of realization in full;

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(b) In the event of failure of the Defendants to pay the aforesaid amount, the bank is at liberty to recover the amount by sale

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T.A. No. 320 of 2023

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of the hypothecated assets morefully detailed in the OA schedule.

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(d) If the sale proceeds of the hypothecated assets are not sufficient to satisfy the dues as ordered above, 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 Defendant;

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(e) The applicant bank shall file the latest memo of calculation of OA amount together with interest, costs etc., to be paid by the Defendant 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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(f) The applicant bank shall file memo of costs within ten days from the date of this final order.

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T.A. No. 320 of 2023

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14.03.2025

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(g) 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/(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 14^th day of March, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Smt. C. Tamizhkodi, Manager, SARC-SMECCC 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.	Letter of Arrangement dated 22.11.2019	A-1
2.	Agreement of Loan cum Hypothecation dated 22.11.2019	A-2
3.	Letter of Arrangement dated 27.05.2020	A-3
4.	Supplemental Agreement of Loan cum Hypothecation dated 27.05.2020	A-4
5.	Link Letter dated 27.05.2020	A-5
6.	Demand Promissory Note dated 27.05.2020	A-6
7.	Statement of Account and Certificate of Banker’s Book Evidence Act 1891 - 28.11.2019 to 15.11.2021	A-7
8.	Statement of Account and Certificate of Banker’s Book Evidence Act 1891 - 28.11.2019 to 15.11.2021	A-8
9	Statement of Account and Certificate of Banker’s Book Evidence Act 1891 - 28.05.2020 to 15.11.2021	A-9

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T.A. No. 320 of 2023

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SCHEDULE OF PROPERTY

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Hypothecation of Stocks and Receivables and Plant and machineries situated at, No.6/13, portious Road, Ayanavaram, Chennai – 600 023.

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

State Bank of India v. M/S J J Chaat and Beverage

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/S J J Chaat and Beverage

Case brief

What is this about?

What did the court decide?

What the court decided

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