Allowed

Bank of Baroda v. M/S. Sri Sai Food

DRT13 May 2025TA/383/2023

Case brief

AI extract

What is this about?

The DRT allowed the Applicant Bank's original application filed under Section 19 of the Recovery of Debts and Bankruptcy Act against three respondents. The court permitted recovery of the principal sum along with interest at 13.25% p.a., costs, and authorized the sale of hypothecated assets with personal assets as a back-up for the balance dues.

What did the court decide?

Recovery of Rs.1,32,20,171.12 plus 13.25% interest, costs, and liberty to sell hypothecated and personal assets

Bank of Baroda versus M/S. Sri Sai Food — Banking and Recovery | DRT (2025)

¶1

T.A. No. 383 of 2023

¶2

13.05.2025

¶3

¶4

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

¶5

Dated this the 13^th day of May, 2025

¶6

Present: SMT. S.V. GOWRAMMA Presiding Officer

¶7

TRANSFERRED APPLICATION No. 383 of 2023

¶8

(Originally filed before DRT- II, Chennai as OA 526/2020 and thereafter transferred to this Tribunal and renumbered as TA No 383 of 2023)

¶9

BANK OF BARODA, T.NAGAR BRANCH, ISFSC No. BARBOTHEAGA No.74, Sir Theagararaya Road, T.Nagar, Chennai -600 017. Rep. by its Chief Manager. ….Applicant

¶10

-Vs-

¶11

M/s. SRI SAI FOODS,

¶12

Rep. by its Prop. Mr. P. SATHISH KUMAR,

¶13

TIN No.33271370650

¶14

No.96/74, G.N CHETTY ROAD,

¶15

T.Nagar, Chennai -600 017.

¶16

Mr. P. SATISH KUMAR,

¶17

S/o P. Parameswaran,

¶18

DOB.18.09.1972,

¶19

PAN No. BELPS3715Q

¶20

D-154, R.V.Nagar,

¶21

Anna Nagar East, Chennai -600 102.

¶22

Mrs. R. SHYAMALA DEVI

¶23

W/o. Mr. P. Sathish Kumar, DOB.11.12.1979,

¶24

PAN No. CWBPS7393R D-154, R.V.Nagar,

¶25

Anna Nagar East, Chennai -600 102. …Defendants

¶26

T.A. No. 383 of 2023

¶27

¶28

13.05.2025

¶29

Counsels on record / appeared:

¶30

Counsel for Applicant : M/s. S. Pandurangan

¶31

Defendants 1 to 3 were set ex-parte on 28.06.2022.

¶32

: - FINAL ORDER - :

¶33

This original application is filed on 18.11.2020 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 1 to 3, jointly and severally for recovery of a total sum of Rs.1,32,20,171.12p (Rupees One Crore Thirty Two Lakhs

¶34

Twenty Thousand One Hundred Seventy One and Twelve paise Only) due in respect of Cash Credit Facility (Account No.301706211000056) repayable together with an interest @ 13.25% p.a. with monthly rests from the date of Application till the date of realization in full, for sale of scheduled mentioned property and for costs of this OA.

¶35

Originally, this Application was filed before DRT-II, Chennai, assigned OA No.526 of 2020, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.526 of 2020 stood transferred to this Tribunal and renumbered as TA No.383 of 2023.

¶36

T.A. No. 383 of 2023

¶37

¶38

13.05.2025

¶39

Brief Facts of the case:

¶40

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.

¶41

It is the case of the Applicant Bank that the 1^st defendant had availed credit facilities from the erstwhile Vijaya Bank, T.Nagar Branch, Chennai, 600 017 and the Defendants have executed Security Documents and created Securities in favour of the erstwhile Vijaya Bank, T.Nagar Branch, which is now merged with the Bank of Baroda, the applicant herein pursuant to the Notification No.02 Part II, Section 3, Sub-Section (i) and Oder No.G.S.R.2 (E) dated 02.01.2019 of the Government of India.

¶42

It is submitted by the applicant bank that the 1^st defendant is a Proprietary concern represented by 2^nd defendant as its Proprietor, carrying on business of running Nilgiris 1905 franchisee shops at No.50, Dr. C.P. Ramasamy Road, Alwarpet, Chennai -600 018 and also at No.G.N. Chetty Road, T.Nagar, Chennai -600 018. The Applicant also submits that the 3^rd Defendant is the guarantor to the loan sanctioned to the 1^st Defendant.

¶43

It is further submitted by the applicant bank that the above loan is also secured by the hypothecation of the stocks in trade, consumer goods, furniture’s and Book Debts etc; more fully described in Schedule “A”

¶44

T.A. No. 383 of 2023

¶45

13.05.2025

¶46

¶47

hereunder belonging to the 1^st defendant and by the equitable mortgage over the immovable property belonging to the 2^nd Defendant, more fully described in schedule “B” hereunder as a security for the due repayment of the credit limits availed by the 1^st Defendant.

¶48

The Applicant Bank submits that the 1^st defendant represented by the 2^nd Defendant as its Proprietor submitted loan application dated 12.05.2017 to the applicant bank.

¶49

It is submitted that considering the request of the Defendants, the applicant vide its letter dated 12.05.2017 had sanctioned the Cash Credit limit of Rs.80 Lakhs by way of working Capital subject to the terms and conditions mentioned in the above sanction letter which was duly acknowledged by the defendants. The above Cash credit facility shall carry interest @ MCLR Plus 4.60% p.a. with monthly rests. It is also stipulated that the defendants are liable to pay additional interest @ 2% in case of failure to conduct/operate the account in terms of sanction.

¶50

The 1^st defendant availed the above limit after the Defendants executed the following Security Documents in order to evidence and secure the due payment of the above limits.

¶51

a. Loan Agreement cum hypothecation Deed dated 12.05.2017.

¶52

b. Agreement for Demand Cash Credit dated 12.05.2017.

¶53

c. Letter of Guarantee by D3 dated 12.05.2017.

¶54

T.A. No. 383 of 2023

¶55

13.05.2025

¶56

¶57

It is further submitted that at the request of the 1^st defendant, vide its letter dated 17.08.2017, the applicant has sanctioned the Adhoc limit of Rs.8,00,000/- to the 1^st Defendant to tide over its temporary financial difficulties. It is also submitted that at the request of the 1^st defendant, the applicant has allowed overdrafts to the 1^st defendant to tide over its temporary financial difficulties on several occasions including on 04.10.2017, 31.10.2017, 15.11.2017, 20.11.2017, 05.12.2017, 20.12.2017, 18.01.2018 & on 22.05.2018. The 1^st defendant has executed acknowledgement of liability dated 04.04.2020 confirming the availment of the limits from applicant bank and its consequent liability to the applicant bank.

¶58

It is submitted that the 2^nd defendant has created a mortgage by way of deposit of title deeds including the Sale Agreement dated 18.03.2006 and the Sale Deed bearing Doc.No.1712/2006 dated 03.05.2006 over the Schedule “B” mentioned property as a security with the applicant bank at T.Nagar, Chennai-600 017 with intention to create a mortgage thereon. It is submitted that the 2^nd defendant has also executed a Registered Memorandum of deposit of title deeds dated 12.05.2017 confirming the deposit of title deeds as a security relating to Schedule “B” property in favour of the applicant bank.

¶59

It is further submitted that the operation of the above account was not satisfactory despite several reminders including the reminder dated

¶60

T.A. No. 383 of 2023

¶61

13.05.2025

¶62

¶63

19.03.2018, 10.04.2018, 14.05.2018 and Recall notices dated 06.06.2018 & 13.06.2018. The 1^st defendant failed to operate the above account as per the terms of sanction and failed to submit stock statements.

¶64

The defendants made false promises for regularizing the account but failed to repay the dues. Several Cheques sent for collection were returned and several attempts made to meet the defendants could not succeed. The 1^st defendant has closed the shops at Alwarpet and T.Nagar and disposed off the stocks in trade, and other hypothecated Goods without the knowledge/permission of the applicant bank and without crediting the Sale proceeds of the hypotheca into the loan account of the 1^st defendant.

¶65

As the defendants did not make any repayments and the account was irregular, the applicant has declared the account as NPA as on 27.10.2018 in terms of the guidelines of RBI and the applicant through it’s Authorized Officer had issued a Demand Notice dated 05.11.2018 under Section 13(2) of the SARFAESI Act to the defendants and the same has been received by the defendants followed by the Possession Notie dated 04.02.2019 under Section 13(4) of the SARFAESI Act. However, despite receipt of notices, defendants have failed to pay the outstanding dues. Hence the present Original Application (OA) has been filed for recovery of dues from the defendants.

¶66

After the filing of the OA, summons were sent to Defendants 1 to 3 through Registered Post with Acknowledgment Due, which returned with

¶67

T.A. No. 383 of 2023

¶68

13.05.2025

¶69

¶70

remarks as “left”. Applicant bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 28.06.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants1 to 3 were placed ex-parte on 28.06.2022.

¶71

Heard the submissions of Applicant Bank and perused the records.

¶72

To prove the case of the Applicant Bank, Mr. R. Krishnan, Chief 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-23 . 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.

¶73

During the pendency of OA, Applicant Bank had reported part satisfaction of OA claim in a sum of Rs.53,60,000/- by way of sale of OA Schedule immovable property under SARFAESI Act on 18.05.2021.

¶74

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:

¶75

: O R D E R :

¶76

The OA is allowed with costs,

¶77

(a) The applicant bank is allowed to recover from the Defendants 1

¶78

T.A. No. 383 of 2023

¶79

¶80

13.05.2025

¶81

to 4 jointly and severally, a sum of Rs.1,32,20,171.12p (Rupees One Crore Thirty Two Lakhs Twenty Thousand One Hundred Seventy One and Twelve paise Only) due in respect of Cash Credit Facility (Account No.301706211000056) repayable together with an interest @ 13.25% p.a. with monthly rests from the date of Application till the date of realization in full, along with costs of this application;

¶82

(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 of the schedule A mentioned hypothecated assets.

¶83

¶84

(d) The sum of Rs. Rs.53,60,000/- realized by way of SARFAESI sale is directed to be given credit to the borrower’s loan account as on the date of realization.

¶85

(e) 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 Defendants 2 and 3 (both movable and immovable) to recover the balance dues as required under law for which the Defendants 2 and 3 to disclose to the Tribunal particulars of other properties or assets owned by the Defendants 2 and 3.

¶86

T.A. No. 383 of 2023

¶87

¶88

13.05.2025

¶89

(f) 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 Defendant to the applicant bank.

¶90

(g) The applicant bank shall file memo of costs within ten days from the date of this final order.

¶91

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

¶92

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

¶93

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

¶94

(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this the 13^th day of May, 2025)

¶95

T.A. No. 383 of 2023

13.05.2025

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK :

¶100

AW-1: Mr. R. Krishnan, Chief Manager of the Applicant Bank

¶101

Exhibits on the part of the Applicant:

¶102

Sl. No.	Description of Documents	Exhibit No.
1.	Loan Application dated 12.05.2017.	A-1
2.	Sanction Letter dated 12.05.2017.	A-2
3.	Loan Agreement cum Hypothecation Deed dated 12.05.2017.	A-3
4.	Agreement for Demand Cash Credit against Hypothecation of Stocks and Book Debts dated 12.05.2017.	A-4
5.	Letter of Guarantee by the 3^rddefendant dated 12.05.2017.	A-5
6.	Letter from the 1^stdefendant seeking temporary overdraft limit of Rs.8 Lakhs dated 17.08.2017.	A-6
7.	Letter from the 1^stdefendant seeking temporary overdraft of Rs.8 Lakhs dated 31.10.2017.	A-7
8.	Letter from the 1^stdefendant seeking temporary overdraft of Rs.8 Lakhs dated 15.11.2017.
9.	Letter from the 1^stdefendant seeking temporary overdraft of Rs.8 Lakhs dated 13.02.2018.	A-9
10.	Letter from the 1^stdefendant seeking temporary overdraft of Rs.3 Lakhs dated 22.05.2018.	A-10
11.	Acknowledgement of Liability by 1^stdefendant dated 04.04.2020.	A-11
12.	Sale Agreement in favour of 2^nddefendant dated 18.03.2006.	A-12
13.	Sale Deed bearing Doc.No.1712/2006 in favour of 2^nd defendant dated 03.05.2006.	A-13
14.	Regd. Memorandum of Deposit of title deeds dated 12.05.2017.	A-14
15.	Applicant’s letter requesting 1^stdefendant for submission of renewal papers dated 05.03.2018.	A-15
16.	Reminder dated 19.03.2018.	A-16
17.	Reminder dated 10.04.2018.	A-17
18.	Reminder dated 14.05.2018.	A-18
19.	Recall Letter dated 06.06.2018.	A-19

¶103

T.A. No. 383 of 2023

¶104

13.05.2025

¶105

¶106

20.	Reminder dated 13.06.2018.	A-20
21.	Demand Notice dated 05.11.2018.	A-21
22.	Possession Notice dated 04.02.2019.	A-22
23.	Statement of account.	A-23

¶107

Witness Examined for the Defendants: -Nil-

¶108

List of Documents Exhibited for the Defendants: -Nil –

¶109

:-“A” SCHEDULE OF THE HYPOTHECATED PROPERTY -:

¶110

Stocks in Trade, provisions, Foreign Made Consumer Goods items, Furniture’s, Books Debts, receivables kept at No.96/74, G.N. Chetty Road, T.Nagar, Chennai -600 017 and at No.50, Dr. C.P. Ramasamy Road, Alwarpet, Chennai -600 018.

¶111

Sd/-

¶112

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

Bank of Baroda v. M/S. Sri Sai Food

Case brief

What is this about?

What did the court decide?

Bank of Baroda v. M/S. Sri Sai Food

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

Similar cases

Mrs Sridevi T versus Union Bank of India

State Bank of India versus Sivasankari

Bank of Maharashtra versus Suyambulingam

City Union Bank Limited versus Avejoo Enterprises

Nandhi Dall Mills versus Idbi Bank

Mr K Sivakumar S o R Kaliaperumal versus State Bank of India