Allowed

Tamilnad Mercantile Bank Limited v. M/S Chandrika Builders

DRT7 Nov 2025TA/394/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an original application filed by Tamilnadu Mercantile Bank Ltd for recovery of a total sum of Rs.1,34,23,367.70 plus interest from jointly and severally liable defendants against multiple outstanding loans, overdrafts, and credit card facilities, following ex-parte expositions.

What did the court decide?

Recovery of Rs.1,34,23,367.70 along with further interest at varying rates until full realization from the respondents, sale of immovable properties.

Tamilnad Mercantile Bank Limited versus M/S Chandrika Builders — Company and Corporate | DRT (2025)

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T.A. No. 394 of 2023

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07.11.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 07^th day of November, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 394 of 2023

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(Originally filed before DRT- II, Chennai as OA 114/2020 and thereafter transferred to this Tribunal and renumbered as TA No 394 of 2023)

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Tamilnadu Mercantile Bank Ltd, Thiruvanmiyur Branch 3, Thiruvalluvar Salai, Thiruvanmiyur, Chennai – 600041 Rep. by its Branch Manager

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….Applicant

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-Vs-

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M/s. Chandrika Builders,

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Rep. by its Proprietor V. Ayyasamy,

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No.2, Flat No. 3d, Mangalgraha Apartments, 3^rd floor, Panchayat 3^rd Link Road,

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Perungudi, Chennai - 600096

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Mr. V. Ayyasamy, S/o. Veerabadhran

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No.2, Flat No. 3d, Mangalgraha Apartments, 3^rd floor, Panchayat 3^rd Link Road,

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Perungudi, Chennai - 600096

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M/s. Sai Bairavi Builders, Rep. by its proprietor Mrs. A. Srividya, 17, Sainath Buildings, Ground Floor, Maruthi Nagar, Seevaram, Perungudi,

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Chennai – 600096

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Mrs. A. Srividya,

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W/o. Mr. V. Ayyasamy,

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No.2, Flat No. 3d, Mangalgraha Apartments, 3^rd floor, Panchayat 3^rd Link Road,

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Perungudi, Chennai – 600096 …..Defendants

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T.A. No. 394 of 2023

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07.11.2025

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Counsels on record / appeared:

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Counsel for Applicant : Sh. S. Sethuraman

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Defendants 1 to 4 were set ex-parte on 03.06.2022

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: - FINAL ORDER - :

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This Original Application is filed on 27.01.2020 by the applicant bank under Section 19 (1) of Recovery of Debts and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendants jointly and severally for recovery of a total sum of Rs.1,34,23,367.70p (Rupees One Crore

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Thirty Four Lakhs Twenty Three Thousand Three Hundred and Sixty Seven and Seventy Paisa Only) as follows:

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(i) Direct the defendants 1,2 and 4 jointly and severally to pay a sum of Rs.75,34,240.26p due in respect of Over Draft Loan facility (A/c No.158700050900284), repayable together with further interest @ 13.05%, p.a. compounded with monthly rests from the date of filing the OA, till date of realization in full;

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(ii) Direct the defendants 1,2 and 4 jointly and severally to pay a sum of Rs.1,42,200.60p due in respect of Term Loan Facility (A/c No.158700460100113), together with further interest @ 13.55%, p.a. compounded with monthly rests from the date of filing the OA till date of realization in full;

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(iii) Direct the defendants 2 and 4 jointly and severally to pay a sum of Rs.5,17,472/- due in respect of Term Loan Facility (A/c

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T.A. No. 394 of 2023

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07.11.2025

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No.158700850100156), together with further interest @

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12.45%, p.a. compounded with monthly rests from the date of filing the OA till date of realization in full;

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(iv) Direct the defendants 2,3 and 4 jointly and severally to pay a sum of Rs.50,03,176.20p due in respect of Over Draft Loan Facility (A/c No.158700050900295), together with further interest @ 13.05%, p.a. compounded with monthly rests from the date of filing the OA till date of realization in full;

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(v) Direct the 4^th defendant to pay a sum of Rs.98,391.65p due in respect of Credit Card Facility (A/c

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No.158100300550027), together with further interest @ 24%, p.a. compounded with monthly rests from the date of filing the OA till date of realization in full;

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(vi) Direct the 2^nd defendant to pay a sum of Rs.1,27,887.03p due in respect of Credit Card Facility (A/c No.158100050308847), together with further interest @ 24%, p.a. compounded with monthly rests from the date of filing the OA till date of realization in full;

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and for sale of immovable properties morefully detailed in Schedule to the OA, and for costs of this application.

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Originally, this Application was filed before DRT-II, Chennai, assigned OA No.114 of 2020, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.114

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T.A. No. 394 of 2023

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07.11.2025

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of 2020 stood transferred to this Tribunal and renumbered as TA No.394 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 first defendant had approached the applicant bank seeking financial assistance for their business purpose. After careful consideration of the proposal submitted by the 1^st defendant, the applicant bank sanctioned Overdraft facility upto a limit of Rs.60 Lakhs. The said facility was secured by mortgage of immovable property and the guarantee of the 4^th Defendant. The said facility was revived from time to time and the latest being in the year 2017.

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The applicant Bank submits that the 1^st and 4^th defendants had executed the following documents to secure the Overdraft facility availed by the 1^st defendant:

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a) Demand Promissory Note dated 02.06.2016 executed by the 1^st Defendant for Rs.60 Lakhs agreeing to pay or order of the Applicant Bank said the sum of Rs.60 Lakhs together with interest at the rate of 11.30% p.a.

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b) Take delivery letter dated 02.06.2016 executed by the 1^st Defendant Whereby the said defendant tendered the promissory

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note with a request to hold the same as part and parcel of security documents till the liability is fully liquidated.

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c) Letter dated 02.06.2016 waiving the presentment of the promissory note.

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d) Deed of Hypothecation dated 02.06.2016 of tangible moveable assets such as products, stock in trade and goods of the 1^st defendant.

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e) Letter of hypothecation of book debts dated 02.06.2016.

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f) Power of Attorney dated 02.06.2016.

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g) Consent letter dated 21.06.2017 from the 4^th defendant to stand as guarantor and also offer to create mortgage in respect of the property belonging to her more fully described in the schedule.

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h) Deed of guarantee by the 4^th defendant dated 02.06.2016.

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i) Consent letter dated 21.06.2017 by the 2^nd defendant offering to stand as co-obligant.

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j) The 1^st Defendant executed a Revival Letter upon reviving the said limit by sanction letter dated 21.06.2017 declaring the documents executed by him on would remain in full force.

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k) The 4^th defendant also executed a mortgage extension letter dated 21.06.2017 extending the mortgage dated 13.11.2014.

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It is submitted by the applicant bank that the first defendant again approached the applicant bank for a Term Loan of Rs.1,74,000/-. After careful consideration of the proposal submitted by the defendants,

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the applicant bank sanctioned a Term Loan of Rs.1.74 Lakhs vide Sanction Letter dated 21.06.2017 on the security of Hypothecation of one new make 10/7 concrete mixture machine and the guarantee the 4^th defendant.

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The Applicant Bank submits that the defendants had executed the following documents to secure the Term Loan availed by the 1^st defendant:

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a) Demand Promissory Note dated 21.06.2017 executed by the 1^st Defendant for Rs.1.74 Lakhs agreeing to pay or order of the Applicant Bank said sum of Rs.1.74 Lakhs together with interest at the rate of 11.80% p.a.

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b) Take Delivery Letter dated 21.06.2017, tendering the said promissory note with a request to hold the same as part and parcel of the security documents till the liability is fully liquidated.

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c) Letter dated 21.06.2017 waiving the presentment of the promissory note.

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d) Deed of Hypothecation dated 21.06.2017 of the machinery.

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e) Articles of Agreement dated 21.06.2017 undertaking to repay the loan with interest on 21.06.2019 by 24 monthly instalments.

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f) Consent letter dined 21.06.2017 from the 1^st defendant to hypothecate one new make 10/7 concrete mixer machine CI.

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g) Guarantee Letter dated 21.06.2017 executed by the 3^rd defendant.

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h) Guarantee covering Letter dated 21.06.2017 executed by the 3^rd defendant.

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The Applicant Bank submits that the 2^nd defendant approached the applicant bank for a Term Loan of Rs.12,00,000/- for purchase of Mahindra XUV 500 W4, 2017 model Vehicle. After careful consideration of the proposal submitted by the 2^nd defendant, the applicant bank sanctioned a Term Loan of Rs.12 Lakhs vide sanction letter dated 21.04.2017. The said loan was secured by hypothecation of the vehicle and the guarantee of the 4^th defendant The defendants agreed to the terms and conditions contained in the sanction letter.

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It is submitted that the 2^nd and 4^th defendants had executed the following documents to secure the Term Loan availed by the 2^nd defendant:

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a) Demand Promissory Note dated 21.04.2017 executed by the 2^nd

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Defendant for Rs. 12 Lakhs agreeing to pay or order of the Applicant Bank said sum of Rs. 12 Lakhs together with interest at the rate of 10.75 p.a.

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b) Take Delivery Letter dated 21.04.2017, note with a request to hold the same as part and parcel of the security documents till the liability is fully liquidated.

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c) Letter dated 21.04.2017 waiving the presentment of the promissory note.

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d) Hire Purchase Agreement dated 21.04.2017 executed by the 2^nd and 3^rd defendants in respect of the vehicle Mahindra XUV 500

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W42017 model.

e) Deed of Hypothecation dated 21.04.2017 of the said vehicle.

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f) Guarantee Letter dated 21.04.2017 executed by the 4^th defendant

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g) Guarantee covering Letter dated 21.04.2017 executed by the 4^th defendant.

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The applicant submits that the hypothecated vehicle was sold for sum of Rs. 7,21,000/- and adjusted towards the loan.

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It is further submitted by the Applicant Bank that at the request of the 3^rd defendant the applicant sanctioned a overdraft limit of Rs.40 Lakhs on the personal guarantee of the 2^nd defendant and on the security of the immovable property in the name of the 4^th defendant. The 2^nd and 3^rd defendants had executed the following documents to secure the overdraft facility Limit availed of by the 3^rd defendant:

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a) The Demand Promissory Note dated 07.11.2017 executed by the 3^rd Defendant for Rs.40 Lakhs agreeing to pay or order of the Applicant Bank said sum of Rs.40 Lakhs together with interest at the rate of 11.30%р.а.

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b) Take delivery letter dated 07.11.2017 executed by the 3^rd Defendant whereby the said defendant tendered the promissory note with a request to hold the same as part and parcel of security documents till the liability is fully liquidated.

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c) Letter dated 07.11.2017 waiving the presentment of the

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promissory note.

d) Deed of Hypothecation dated 07.11.2017 of tangible moveable assets such as products, stock in trade and goods of the 4^th defendant.

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e) Letter of hypothecation of book debts dated 07.11.2017.

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f) Power of Attorney dated 19.10.2017.

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g) Consent letter dated 07.11.2017 from the 3^rd defendant to offer to stand as guarantor and also offer to create mortgage in respect of the property more fully described in the schedule item ii.

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h) Memorandum of deposit of title deeds dated 30.06.2015.

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i) Mortgage extension letter dated 07.11.2017.

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j) Letter of guarantee dated 07.11.2017 from the 2^nd defendant.

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k) Guarantee covering Letter dated 07.11.2017 from the 2^nd defendant.

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The 4^th Defendant created an equitable mortgage in favour of the Applicant bank mortgaging the property more fully described schedule to the OA in favour of applicant bank vide Doc No.3941/2016 dated 02.06.2016 and Doc No.5955/2016 dated 11.08.2016.

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The 4^th defendant also executed a mortgage extension letter dated 07.11.2017 extending the mortgage dated 30.06.2015.

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The applicant states that the 4^th defendant availed of credit card facility on 05.09.2017 from the applicant in a sum of Rs.1 Lakh [RQ30S4412] and the 4^th defendant submitted the Application Form to

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the applicant, declaring that the 4^th defendant are bound by the credit card terms and conditions as may be in force from time to time and also executed a letter dated 05.09.2017 for auto debit of credit card dues. As on 26.01.2020 a sum of Rs.98,391.65/- is outstanding in the credit card facility.

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The applicant states that the 2^nd defendant availed of credit card facility on 05.09.2017 from the applicant in a sum of Rs.1 Lakh [RQ31S4412]. The 2^nd defendant submitted the Application Form to the applicant, declaring that the 2^nd defendant is bound by the credit card

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terms and conditions as may be in force from time to time and also executed a letter dated 05.09.2017 for auto debit of credit card dues. As on 26.01.2020 a sum of Rs.1,27,887.03/- is outstanding in the credit card facility.

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It is submitted by the applicant bank that subsequent to availing of loan, the defendants failed to pay the dues/operate the loan accounts satisfactorily as per the terms of sanction and security documents. As the default continued despite several demands of the applicant, the above loans have been classified as Non-Performing Asset (NPA) on 31.10.2018 in accordance with RBI guidelines. Despite repeated requests to regularize the loan accounts, the defendants have not come forward to rectify the irregularity or repay and close the accounts.

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The Applicant Bank submits that it took necessary action under SARFAESI Act and issued a notice of demand to the Defendants

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demanding payment of Rs.1,07,20,124.50/- due under the said loan accounts for enforcement of mortgage/hypothecation of securities in default of their compliance with the notice within the stipulated period. As defendants did not come forward to repay the dues, the present Original Application (OA) has been filed by the applicant bank for recovery of its dues from the defendants.

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After the filing of the OA, summons were sent to the defendants 1 to 4 through Registered Post with Acknowledgment Due, summons to D1, D2 & D4 returned with the remarks “Left”, while summons to the D3 returned with the remark “No such person”. Applicant bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 03.06.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants 1 to 4 were placed ex-parte on 03.06.2022.

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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, Sh. C. Saravanan, Chief Manager representing the Applicant Bank, has filed his Affidavit by way of evidence and same was considered as evidence of AW-1 and

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list of documents came to be marked as Ex A-1 to A-43 . 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 :

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The OA is allowed with costs,

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(a) The applicant bank is allowed to recover from the Defendants a sum of Rs.1,34,23,367.70p (Rupees One Crore Thirty Four Lakhs Twenty Three Thousand Three Hundred and Sixty Seven and Seventy Paisa Only) as follows:

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(iii) Direct the defendants 2 and 4 jointly and severally to

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pay a sum of Rs.5,17,472/- due in respect of Term Loan Facility (A/c No.158700850100156), together with further interest @ 12.45%, p.a. compounded with monthly rests from the date of filing the OA till date of realization in full;

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(v) Direct the 4^th defendant to pay a sum of Rs.98,391.65p due in respect of Credit Card Facility (A/c No.158100300550027), together with further interest @ 24%, p.a. compounded with monthly rests from the date of filing the OA till date of realization in full;

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

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aforesaid amount, the bank is at liberty to recover the amount by sale of the schedule mentioned immovable properties more fully detailed in the OA.

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

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(f) 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 (Deepika), transcribed by her, corrected, signed and pronounced by me on this the 07^th day of November, 2025)

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ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sh. C. Saravanan, Chief 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.	Credit sanction Intimation (Over draft Facility) dated 21.06.2017.	A-1
2.	On Demand Promissory Note dated 02.06.2016.	A-2
3.	Take Delivery Letter dated 02.06.2016.	A-3
4.	Letter of waiving the presentment dated 02.06.2016.	A-4
5.	Deed of Hypothecation of products, stock in trade and goods dated 02.06.2016.	A-5
6.	Letter of hypothecation of book debts dated 02.06.2016.	A-6
7.	Power of Attorney dated 02.06.2016.	A-7
8.	Consent Letter dated 21.06.2017.	A-8
9.	Mortgage Extension Letter dated 21.06.2017.	A-9
10.	Consent Letter dated 21.06.2017.	A-10
11.	Guarantee Agreement dated 02.06.2016.	A-11
12.	Letter of Revival dated 21.06.2017.	A-12
13.	Sanction Intimation Letter dated 21.06.2017.	A-13
14.	Demand Promissory Note dated 21.06.2017.	A-14
15.	Promissory Note Delivery Letter dated 21.06.2017.	A-15
16.	Letter waiving the presentment dated 21.06.2017.	A-16
17.	Deed of hypothecation new make concrete mixer dated 21.06.2017.	A-17
18.	Articles of Agreement dated 21.06.2017.	A-18
19.	Consent Letter dated 21.06.2017.	A-19
20.	Letter of Guarantee dated 21.06.2017.	A-20
21.	Guarantee covering Letter dated 21.06.2017.	A-21
22.	Sanction Letter dated 21.04.2017.	A-22
23.	Demand Promissory Note dated 21.04.2017.	A-23
24.	Take Delivery Letter dated 21.04.2017.	A-24
25.	Letter waiving the presentment dated 21.04.2017.	A-25
26.	Hire Purchase Agreement dated 21.04.2017.	A-26
27.	Deed of Hypothecation dated 21.04.2017.	A-27

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28.	Guarantee Covering Letter dated 21.04.2017.	A-28
29.	Letter of Guarantee dated 21.04.2017.	A-29
30.	Sanction intimation Letter dated 07.11.2017.	A-30
31.	Demand Promissory Note dated 07.11.2017.	A-31
32.	Promissory Note Delivery Letter dated 07.11.2017.	A-32
33.	Letter waiving the presentment dated 07.11.2017.	A-33
34.	Agreement for demand cash credit on the Hypothecation new make concrete mixer dated 07.11.2017.	A-34
35.	Hypothecation of book debts dated 07.11.2017.	A-35
36.	Power of Attorney	A-36
37.	Consent Letter dated 07.11.2017.	A-37
38.	Mortgage extension letter	A-38
39.	Letter of Guarantee dated 21.04.2017.	A-39
40.	Credit card Application form dated 05.09.2017.	A-40
41.	Credit card Application form dated 05.09.2017.	A-41
42.	Notice under section 13(2) of SARFAESI Act dated 19.12.2018.	A-42
43.	Statement of accounts	A-43

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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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SCHEDULE

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ITEM-I

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Flat bearing No.S-1 in the building Sai Krishna in Second floor (Land measured about 893 Sq.ft UDS out of 3696 sq.ft and measuring 1972 Sq.ft. of built up area including common area) in plot No.8, in old survey No.138/3 bearing Patta No.3190, New survey No.138/3A4, at Sri Venkateswara Nagar, Perungudi Village, Sholinganallur Taluk, Kancheepuram Dist, Chennai – 600 096. Bounded on the: North by : Land in Survey No.159 South by : 25 feet road East by : Plot No.7 West by : Plot No.9 Admeasuring on the:

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North to South on the Eastern side : 89 feet North to South on the Western side : 87 feet East to West on the Northern side : 43 feet East to West on the Southern side : 41 feet ITEM-II

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Flat bearing No.S-3 in the building Sai Krishna in Second floor (Land measured about 507 Sq.ft UDS out of 3696 sq.ft and measuring 998 Sq.ft. of built up area including common area) in plot No.8, in old survey No.138/3, New survey No.138/3A4, at Sri Venkateswara Nagar, Perungudi Village, Sholinganallur Taluk, Kancheepuram Dist, Chennai – 600 096.

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

Tamilnad Mercantile Bank Limited v. M/S Chandrika Builders

Case brief

What is this about?

What did the court decide?

Tamilnad Mercantile Bank Limited v. M/S Chandrika Builders

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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