Allowed

State Bank of India v. Paulraj

DRT4 Jun 2025TA/347/2023

Case brief

AI extract

What is this about?

Debt Recovery Tribunal allowed an original application filed by State Bank of India for recovery of dues from M/s. PPR Taxi Service. The court upheld the bank's claim for term loan and working capital repayment, granting authority to recover the amount along with interest and future auction of assets.

What did the court decide?

Recovery of Rs.31,37,342/- with interest, costs, and liberty to sell defendant's assets for balance dues.

State Bank of India versus Paulraj — Contract and Commercial Disputes | DRT (2025)

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T.A. No. 347 of 2023

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04.06.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 04^th day of June, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 347 of 2023

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(Originally filed before DRT- II, Chennai as OA 117/2022 and thereafter transferred to this Tribunal and renumbered as TA No 347 of 2023)

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STATE BANK OF INDIA Small and Medium Enterprises Centre, No.157, Anna Salai, 5^th Floor, Chennai 600 002. Rep. by its Manager. ….Applicant

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-Vs-

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M/s. PPR TAXI SERVICE Rep. by its Prop. Paulraj Ponram, Office at No.E-52, Ground Floor, IHFD Nagar, Pallavaram,

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Chennai – 600 043. …Defendant

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Counsels on record / appeared:

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Counsel for Applicant : M/s. Suresh Law Associates

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Defendant was set ex-parte on 23.09.2022

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: - FINAL ORDER - :

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This original application is filed on 01.03.2022 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 defendant for recovery of a total sum of Rs.31,37,342/-

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(Rupees Thirty One Lakhs Thirty Seven Thousand Three Hundred

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and Forty Two only) as follows:

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T.A. No. 347 of 2023

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04.06.2025

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(i) A sum of Rs.26,08,717/- due in respect of Term Loan (Account No.38881959450) together with further interest @ 11.45% p.a. with monthly rests from the date of application till the date of realisation in full;

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(ii) A sum of Rs.5,28,625/- due in respect of WCTL-Guaranteed Emergency Credit Line(GECl) (Account No.39522304156) together with further interest @7.40% p.a. with monthly rests from the date of Application till the date of realization in full and for costs of this OA.

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Originally, this Application was filed before DRT-II, Chennai, assigned OA No.117 of 2022, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.117 of 2022 stood transferred to this Tribunal and renumbered as TA No.347 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 Tribunal.

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It is the case of the applicant bank that the defendant, represented

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by its Proprietor, is carrying on Cab Business. For his business purpose, defendant approached applicant bank and submitted a proposal seeking financial assistance.

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T.A. No. 347 of 2023

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04.06.2025

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It is submitted by applicant bank that at the request of the defendant, the applicant bank had sanctioned Term Loan in a sum of Rs.34,50,000/on 29.10.2019. In order to secure the loan, the defendant had executed

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the following documents on 29.10.2019 in favour of applicant bank:

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(i) Letter of Arrangement,

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(ii) Agreement of Loan cum Hypothecation and

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(iii) Demand Promissory Note.

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It is submitted by applicant bank that as per the Letter of Arrangement dated 29.10.2019, the loan is repayable in 81 instalments of Rs.43,000/- each and final instalment of Rs.10,000/- with moratorium period of 3 months. The defendant had purchased 5 cars for hiring Cab service. The above said vehicles hypothecated in favour of applicant bank. 7. It is further submitted by applicant bank that subsequently at request of the defendant, the applicant bank had sanctioned Working Capital Term Loan Guaranteed Emergency Credit Line in a sum of Rs.5,00,000/- on 23.07.2020.

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The Applicant Bank submitted that in order to secure the aforesaid loan, the defendant had executed the following documents in favour of applicant bank on 23.07.2020:

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(i) Letter of Arrangement

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(ii) Supplemental Agreement of Loan cum Hypothecation

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T.A. No. 347 of 2023

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04.06.2025

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It is submitted by applicant bank that subsequent to availing of loan, the operation of the accounts by the defendant was far from satisfactory. The defendant did not keep up the repayment schedule as per the terms of sanction. Inspite of repeated demands and several reminders, the defendant failed to repay the outstanding dues. Hence the applicant bank had declared the loan account as NPA on 29.08.2021 in terms of RBI guidelines.

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It is further submitted that the applicant bank had issued repossess vehicle notice dated 04.10.2021 and Demand Notices dated 03.11.2021 and 04.12.2021 to the defendant. Even after receipt of notice, the defendant had failed to repay the loan dues. The E-auction Sale notice was published in the two newspapers on 24.11.2021. The 5 hypothecated vehicles were sold by way of e-auction conducted on 01.12.2021. Two Vehicles bearing registration numbers TN 22 DR 3466 and TN 22 DR 3522 were sold to the successful bidder Mr. S. Ashok Kumar and the same was confirmed by applicant bank by way of sale certificate dated 02.12.2021. The auction purchaser had paid a sum of Rs.3,13,200/- and Rs.3,15,000/- the same is credited to the defendant loan account on 02.12.2021.

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Applicant bank further submitted that the other two hypothecated vehicles viz., TN 22 DR 3478 and TN 22 DR 3411 were sold to the successful bidder Mr. R.Muthuselvam. The vehicle bearing registration number TN 22 DR 3420 was sold to the Successful bidder name Mr. J. Srinivasan and the

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T.A. No. 347 of 2023

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04.06.2025

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same was confirmed by the applicant bank way of sale certificate dated 10.12.2021 and 21.12.2021. The above auction purchasers have remitted a sum of Rs.3,18,250/- on 10.12.2021 and Rs.3,16,500 & Rs.3,37,250/respectively, which has been credited to the defendant’s loan account on 21.12.2021. Thus the total E-auction amount recovered in a sum of Rs.16,00,200/- and the same is reflected the statement of account. The present Original Application is filed for recovery of balance amount due from the defendant

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After the filing of the OA, summons were sent to the Defendant through Registered Post with Acknowledgment Due, which returned unserved with postal endorsement as ‘no such person’. Applicant Bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 23.09.2022 even after giving sufficient time, there was no appearance or representation from the defendant. Hence, Defendant was placed ex-parte on 23.09.2022.

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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, Mrs. C. Thamizhkodi, Manager 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-14. As the Defendant remained ex-parte, the OA claim remains unchallenged. There is no contra evidence available on

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T.A. No. 347 of 2023

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record to repudiate the claim of the Applicant Bank.

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With regard to the amount advanced, the interest applied, the conduct

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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 Defendant jointly and severally, total sum of Rs.31,37,342/- (Rupees Thirty

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One Lakhs Thirty Seven Thousand Three Hundred and Forty

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Two only) as follows:

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(i) A sum of Rs.26,08,717/- due in respect of Term Loan

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(Account No.38881959450) together with further interest @ 11.45% p.a. with monthly rests from the date of application till the date of realisation in full;

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(ii) A sum of Rs.5,28,625/- due in respect of WCTLGuaranteed Emergency Credit Line(GECl) (Account No.39522304156) together with further interest @7.40% p.a. with monthly rests from the date of Application till the date of realization in full along with costs of this application.

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(b) The applicant bank is at liberty to sell the personal assets of the

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T.A. No. 347 of 2023

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04.06.2025

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Defendant (both movable and immovable) to recover the balance dues as required under law for which the Defendant to disclose to the Tribunal particulars of other properties or assets owned by the 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 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 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 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/(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

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(Dictated to Steno (Mogesh), transcribed by him, corrected, signed and pronounced by me on this the 04^th day of June, 2025)

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ANNEXURES

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T.A. No. 347 of 2023

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04.06.2025

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Mrs. C. Thamizhkodi, 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.	Letter of Arrangement dated 29.10.2019	A-1
2.	Agreement of Loan cum Hypothecation dated 29.10.2019	A-2
3.	Demand Promissory Note dated 29.10.2019	A-3
4.	Letter of Arrangement dated 23.07.2020	A-4
5.	Supplemental Agreement of Loan cum Hypothecation dated 23.07.2020	A-5
6.	R.C. Book dated 14.11.2019	A-6
7.	Re-possess Vehicle Notice dated 04.10.2021	A-7
8.	Demand Notice dated 03.11.2021	A-8
9.	E-Auction Sale Notice published in the New Indian Express and Dinamani Tamil Edition dated 24.11.2021	A-9
10.	Certificate of Sale issued in favour of S. Ashok Kumar dated 02.12.2021	A-10
11.	Certificate of Sale issued in favour of J.Srinivasan dated 10.12.2021	A-11
12.	Certificate of Sale issued in favour of R.Muthuselvam dated 21.12.2021	A-12
13.	Statement of Accounts and Certificate of Banker’s Book Evidence Act 1891 from 30.10.2019 to 11.02.2022	A-13
14.	Statement of Account and Certificate of Banker’s Book Evidence Act 1891 from 23.07.2020 to 11.02.2022	A-14

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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

State Bank of India v. Paulraj

Case brief

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State Bank of India v. Paulraj

Case brief

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