Allowed

Bank of India v. M/S All Will Moulds and Dies

DRT2 Apr 2025TA/53/2023

Case brief

AI extract

What is this about?

The Tribunal allowed an application by Bank of India under Section 19 of RDBA for recovery of dues amounting to Rs. 33,40,605/- and interest from the borrowers and guarantor after finding the defendants failed to provide counter-evidence against the bank's claim.

What did the court decide?

Recovery of Rs. 33,40,605/- with interest @ 11.5% p.a. and costs; liberty to sell personal assets of defendants to recover balance dues.

Bank of India versus M/S All Will Moulds and Dies — Banking and Recovery | DRT (2025)

TA No.53 of 2023

02.04.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 02^nd day of April, 2025

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Present: SMT. S.V. GOWRAMMA

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Presiding Officer

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TRANSFERRED APPLICATION No. 53 of 2023

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(Originally filed before DRT- II, Chennai as OA 1006/2019 and thereafter transferred to this Tribunal and renumbered as TA No.53 of 2023)

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Bank of India Guindy Branch Rep. by its Chief Manager #111, Mount View, Mount Road Guindy, Chennai – 600 032

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….Applicant

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-Vs-

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M/s ALL WILL Moulds and Dies

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Represented by its Proprietor

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Plot No.24, Sri Sakthiamman Nagar

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Near New Bus Depot, Kundrathur

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Chennai – 600 069

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Mr. A. Jesudasan, S/o Mr. J. Abraham Residing at No.22/54, Visalakshi Nagar 1^st Street, Ekkattuthangal Chennai – 600 032

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Mr. V.G. Karthikeyan S/o Mr. V. Govindaraju Residing at No.9, 13^th Cross Street, New Colony Chrompet, Chennai – 600 044 …Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. B. Siva Kollapan Counsel for Defendants 1 and 2 : M/s C. Lingam 3^rd Defendant was set ex-parte on 18.04.2022

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: - FINAL ORDER - :

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This Original Application is filed on 16.11.2019 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, jointly and severally for recovery of a total sum of Rs.33,40,605/- (Rupees Thirty Three Lakhs Forty Thousand Six Hundred and Five only) due in respect of Cash Credit Facility (Account No.801130110000130) together with further interest @ 11.5% 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.1006 of 2019, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.1006 of 2019 stood transferred to this Tribunal and renumbered as TA No.53 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 is a Proprietary Concern involved in Manufacturing of Mould and Die for Automobile Components, represented by its Proprietor, 2^nd defendant

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herein. The 1^st defendant represented by 2^nd defendant had approached the Guindy Branch of applicant bank seeking financial assistance for their business purpose.

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It is submitted by applicant bank that after due consideration of the request of the defendants, Cash Credit Facility to the tune of Rs.30 lakhs was sanctioned to defendants vide Sanction Letter dated 07.01.2017, subject to the terms and conditions as envisaged under the Loan Agreement dated 07.01.2017 executed by the 1^st defendant through its Proprietor, 2^nd defendant. The 3^rd defendant had guaranteed for repayment of the loan availed by 1^st defendant and executed a Guarantee Agreement in favour of the applicant bank.

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It is submitted by applicant bank that Cash Credit facility was sanctioned by the bank with rate of interest being 2.8% over base rate, at 12.05% at the time for filing of OA, which may be reset by the bank on annual basis. The loan was secured by equitable mortgage of the property being Land and Building admeasuing an extent of 1215.5 Sq. ft. situated at Kundrathur Village morefully described in schedule to the OA.

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It is further submitted by applicant bank that in evidence of availing the credit facility and as security thereof, the defendants have executed the following loan documents in favour of applicant bank:

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(i) Loan Application dated 10.11.2016;

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(ii) Sanction Letter dated 07.01.2017;

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(iii) Hypothecation cum Loan Agreement (Plant and Machinery, Stocks and Book Debts) dated 07.01.2017 executed by the 1^st defendant through its Proprietor 2^nd defendant;

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(iv) Demand Promissory Note for Rs.30,00,000/dated 07.01.2017 executed by the 1^st Defendant through its Proprietor, 2^nd defendant;

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(v) Bearer Letter dated 07.01.2017 executed by the 1^st Defendant through its Proprietor 2^nd Defendant

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(vi) Draft Declaration dated 07.01.2017 executed by 1^st Defendant through its Proprietor 2^nd Defendant

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(vii) Letter of Multiple Undertaking dated 07.01.2017 executed by 1^st Defendant through its Proprietor 2^nd Defendant

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(viii) MCLR Agreement dated 07.01.2017 executed by 1^st Defendant through its Proprietor 2^nd Defendant and 3^rd Defendant

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(ix) Deed of Guarantee dated 07.01.2017 executed by the 3^rd Defendant.

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It is submitted by the Applicant Bank that the 2^nd defendant being the proprietor of the 1^st Defendant had executed a Deed of Deposit of Title Deeds dated 05.01.2017 registered as Document No.123 of 2017 at SRO, Kundrathur in favour of the applicant bank security the loan facilities availed by the Defendants.

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The applicant bank submitted that the defendants herein have executed the above loan documents thereby acknowledging the loan amount availed from the applicant bank and had also undertaken to repay the loan amounts in time without committing any default.

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It is submitted by applicant bank that subsequent to availing of loan, defendants failed to repay the balance of the liability owed by them to the applicant bank, despite repeated request and demands. Consequently, the loan account was classified as NPA on 31.12.2018 in terms of RBI guidelines. As defendants did not come forward to repay the dues, this Original Application (OA) has been filed to recover the dues from the defendants.

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Brief averments of written statement filed by D-1 and D-2

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2^nd Defendant, the Proprietor of 1^st Defendant filed written statement denying all the allegations contained in the OA, except those that are specifically admitted thereunder.

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It is submitted that 1^st defendant is a company running business of dies for preparing any metal or plastic and the 3^rd defendant herein had approached 2^nd defendant to join in his company. At that time, 3^rd defendant and the erstwhile Manager of the applicant bank namely Mr. Srinivasan approached 2^nd defendant and promised to get loan.

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It is further alleged that even though 2^nd defendant does not have any proper documents, which was also informed to them, 3^rd defendant and erstwhile Manager convinced 2^nd defendant and obtained credit

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facility to the tune of Rs.30 lakhs and Term Loan of Rs.62,24,000/- on 14.11.2016 and 07.01.2017 respectively. Out of the funds sanctioned by the applicant bank, DMC Milling Machine was purchased, which was installed at 3^rd defendant’s address. Loan is also secured by the immovable property of the 2^nd defendant.

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It is contended that for purchasing the said DMC Milling Machine, 3^rd defendant and erstwhile Manager of the applicant bank raised invoice for an excess amount of Rs.12,00,000/- and taken the same and ran the company for a period of one year. When repayment issue was raised by the applicant bank, they have handed over the spoiled DMC Milling Machine.

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It is further contended that on 19.01.2021, a Sale Notice dated 05.01.2021 was issued to 2^nd defendant, wherein it is mentioned that, applicant bank had issued a Demand Notice claiming an outstanding amount of Rs.84,95,286/- due as on 28.01.2019. It is further mentioned in the notice that a notice under Section 13(4) of the SARFAESI Act was issued on 02.05.2019 has been issued including the details of deposit of property morefully detailed in the OA.

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It is submitted by 2^nd defendant that when he approached applicant bank and explained the above mentioned facts, it was informed by applicant bank that if bank should not proceed further, 2^nd defendant should settle the loan account under OTS. Accordingly, 2^nd defendant had given a letter on 20.11.2020 requesting for reduction in

TA No.53 of 2023

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amount to settle the loan amount.

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It is further submitted that, in the meantime, the applicant bank herein moved two OAs 1005 of 2019 and 1006 of 2019 before this tribunal. During the pendency of OA, suddenly, Sale Notice dated 05.01.2021 was issued fixing the sale on 19.01.2021 through public auction. The auction was also conducted and the immovable property was sold in auction at lowest price.

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It is alleged that concealing all the above facts, applicant bank had filed this OA and that the 3^rd defendant along with applicant bank’s erstwhile Manager swindled the entire money obtained through the loan by purchasing machine and other things and now made 1^st and 2^nd defendants liable for the dues. Hence it is prayed that OA may be dismissed against the defendants 1 and 2.

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Although defendants 1 and 2 had relied on 7 documents, list of which is annexed along with Written statement, defendants 1 and 2 did not file any documents along with Written statement.

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After the filing of the OA, summons were sent to the Defendants 1 to 3 through Registered Post with Acknowledgment Due, which was duly served to D1, while summons returned unserved with postal endorsement as ‘left’ in respect of Defendants 2 and 3. D-1 and D-2 entered appearance through the counsel and filed their Written Statement. Applicant bank had caused paper publication of the notice in respect of D-3 and filed proof thereof. When OA was taken up on

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18.04.2022 even after giving sufficient time, there was no appearance or representation from the 3^rd defendant. Hence, 3^rd Defendant was placed ex-parte on 18.04.2022.

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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, Shri. I. Thaveethuvel, Assistant General Manager of 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-10 .

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Despite availing substantial adjournments, as defendants 1 and 2 did not choose to file Counter Proof Affidavit, opportunity to file Counter Proof Affidavit by defendants was closed.

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The defendant, in his Written Statement, while admitting the borrowal and execution of loan and security documents in favour of applicant bank, has denied the claim of applicant bank. It is alleged that the erstwhile Manager of applicant bank colluded with 3^rd defendant and had swindled the money and that the 2^nd defendant has not benefited from the alleged loan sanctioned by the applicant bank. It is further alleged that applicant bank did not consider the OTS proposal of the second defendant and had proceeded with SARFAESI measures and sold the mortgaged property for a lower price.

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However, there is no contra evidence available on record to repudiate the claim of the Applicant Bank, in as much as the allegation

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of defendant regarding OTS proposal given by 2^nd defendant, mortgage property belonging to 2^nd defendant being sold away at lower price and collusion of 3^rd defendant with erstwhile Manager. As the defendant failed to file the counter-proof affidavit with supporting documents contravening the claim of applicant bank, the OA claim remains unchallenged.

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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 Defendant, a total sum of Rs.33,40,605/- (Rupees Thirty Three Lakhs Forty Thousand Six Hundred and Five only) due in respect of Cash Credit Facility (Account

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No.801130110000130) together with further interest @ 11.5% 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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(b) The applicant bank is at liberty to sell the personal assets of the 2^nd and 3^rd Defendants (both movable and immovable) to recover the balance dues as required under law for which the

TA No.53 of 2023

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2^nd and 3^rd Defendant to disclose to the Tribunal particulars of

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other properties or assets owned by the Defendants;

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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 PS, transcribed by her, corrected, signed and pronounced by me on this the 02^nd day of April, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Shri. I. Thaveethuvel, Assistant General Manager of Applicant Bank

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Exhibits on the part of the Applicant:

TA No.53 of 2023

02.04.2025

Sl. No.	Description of Documents	Exhibit No.
1.	Loan Application submitted by the Defendants dated 10.11.2016	A-1
2.	Sanction Letter duly acknowledged by the Defendants dated 07.01.2017	A-2
3.	Hypothecation cum Loan Agreement (Plant and Machinery, Stocks and Book Debts) executed by the 1^stdefendant through its Proprietor, 2^nd defendant dated 07.01.2017	A-3
4.	Demand Promissory Note for Rs.30,00,000/- executed by the 1^stdefendant through its Proprietor, 2^nddefendant dated 07.01.2017	A-4
5.	Bearer Letter executed by the 1^stDefendant through its Proprietor 2^nddefendant (L435) dated 07.01.2017	A-5
6.	Draft Declaration executed by 1^stdefendant through its Proprietor 2^nddefendant dated 07.01.2017	A-6
7.	Letter of Multiple Undertaking executed by 1^st defendant through its Proprietor 2^nddefendant (L516) dated 07.01.2017	A-7
8.	MCLR Agreement executed by the 1^stdefendant through its Proprietor 2^nddefendant and 3^rd defendant dated 07.01.2017	A-8
9.	Deed of Guarantee (OD–194) dated 07.01.2017	A-9
10.	Statement of Accounts from 07.01.2017 to 21.05.2022	A-10

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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

Bank of India v. M/S All Will Moulds and Dies

Case brief

What is this about?

What did the court decide?

Bank of India v. M/S All Will Moulds and Dies

Case brief

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