Allowed

Punjab National Bank v. M/S Mahek Udyog

DRT19 Dec 2025TA/656/2023

Case brief

AI extract

What is this about?

The Tribunal allowed an original application filed by Punjab National Bank for recovery of loans and advances due to it. The application was filed under Section 19 of the RDDB Act. The tribunal confirmed the debt amount, awarded interest, and directed the issuance of a recovery certificate after costs were considered.

What did the court decide?

Allowed the OA; permitted recovery of Rs. 2,10,08,973.87p with interest @ varied rates monthly rest and costs; directed filing of cost memo and issue of Recovery Certificate.

Punjab National Bank versus M/S Mahek Udyog — Contract and Commercial Disputes | DRT (2025)

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T.A. No. 656 of 2023

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19.12.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 19^th day of December, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 656 of 2023

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(Originally filed before DRT- II, Chennai as OA 235/2022 and thereafter transferred to this Tribunal and renumbered as TA No 656 of 2023)

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Punjab National Bank

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Circle Sastra Centre, Chennai North, 769, Ground Floor, Spencer Plaza, Anna Salai, Chennai – 600 002. Rep. by its Authorized Officer. ….Applicant

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-Vs-

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M/S. Mahek Udyog, Rep. by its Proprietor Mr.Krishna Kumar Jhunjhunwala, C-703, Shivalaya Building, Ethiraj Salai, Egmore, Chennai 600 105.

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Mr.Krishnakumar Jhunjhunwala S/o. Mr.SK.Jhunjhunwala, Old No.7/8, New No.11, Dhanammal Street Off Mayor Chitti Babu Street, Chetpet, Chennai 600 031. ….Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. Renuka Shankar

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Defendants 1 and 2 were set ex-parte on 17.10.2023

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: - FINAL ORDER - :

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This Original Application is filed on 29.01.2022 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,

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against the defendants 1 and 2, jointly and severally for recovery

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T.A. No. 656 of 2023

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19.12.2025

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of a total sum of Rs.2,10,08,973.87p (Rupees Two Crores Ten

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Lakhs Eight Thousand Nine Hundred Seventy Three and Eight

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Seven Paisa only) due in respect of

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i. Cash Credit (Account No.10654015003697) for

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Rs.62,20,605.91p together with further interest @ 11.95% p.a., with monthly rests.

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ii. Term Loan – I (Account No.10657021000068) for Rs.55,46,780.05p together with further interest @11.60% p.a., with monthly rests.

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iii. Term Loan – II (Account No.10657021000075) for Rs.33,06,941.18p together with further interest @11.60% p.a., with monthly rests.

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iv. Term Loan – III (Account No.10657025004295) for Rs.59,34,646.73p together with further interest @11.65% p.a., with monthly rests.

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from the date of Application till the date of realization in full, for sale of schedule mentioned immovable property and for costs of this OA. 2. Originally, this Application was filed before DRT-II, Chennai, assigned OA No.235 of 2022, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.235 of 2022 stood transferred to this Tribunal and renumbered as TA No.656 of 2023.

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Brief Facts of the case:

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T.A. No. 656 of 2023

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19.12.2025

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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 1^st Defendant represented by the 2^nd Defendant, had approached the Applicant for Cash Credit Facility for their business needs. After perusal of relevant documents, the applicant had sanctioned Cash Credit (Hyp) (Fresh) Limit of Rs.50,00,000/- at the rate of 11.20% p.a. with monthly rests for the purpose of working capital to the Defendants Vide Sanction dated 10.12.2015. The margin being 25%. The Primary Security being hypothecation of Stocks of Raw material, works in progress, finished goods, spares and stores and receivables.

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It is further submitted that the said facility is covered under CGTMSE Guarantee Scheme. On accepting the terms and conditions of the said sanction, 1^st Defendant represented by the 2^nd Defendant, had executed Agreement of Hypothecation of Assets dated 10.12.2015, thereby the Stocks of raw materials, Work in Progress, Finished Goods, Spares and Stores and Receivables are Hypothecated with the Applicant for the said loan facility availed from Applicant.

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The applicant submits that the 1^st Defendant represented by the 2^nd Defendant, had executed Common Agreement dated 10.12.2015 in favour of Applicant. Further the 1^st Defendant represented by the 2^nd Defendant, has executed an Undertaking dated 10.12.2015 in favour of

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T.A. No. 656 of 2023

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the Applicant thereby stating that there are no arrears of tax including interest, leviable under various provisions are outstanding against him. Further in and by a Declaration dated 10.12.2015, the 1^st Defendant represented by the 2^nd Defendant, had declared that their account has not been categorised as non-performing asset by any other branch of the applicant and that they have not defaulted in payment to any other bank.

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It is further submitted that the 1^st Defendant represented by the 2^nd Defendant, had availed Cash Credit Limit of Rs.50,00,000/- in Loan Account No.10654015003697 for its business needs. The 1^st Defendant represented by the 2^nd Defendant, had requested the Applicant for Adhoc Limit of Rs.5,00,000/- Vide its Letter dated 26.04.2016. Thereafter the 1^st Defendant represented by the 2^nd Defendant, had availed Adhoc limit of Rs.5,00,000/- from the Applicant and executed Demand Promissory Note dated 02.05.2016 for a sum of Rs.55,00,000/-, Supplemental Agreement to Secure Credit/ Loan Facilities dated 02.05.2016, in favour of applicant.

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The applicant submits that thereafter the 1^st Defendant represented by the 2^nd Defendant, had requested the Applicant for Renewal cum Enhancement of Cash Credit Limit from Rs.50,00,000/- to Rs.100,00,000/- and also Term Loan Facility of Rs.60,00,000/- for business needs. Subsequently, the Applicant had Sanctioned Cash Credit (Hyp) – Renewal cum Enhancement Under CGTMSE, enhanced from Rs.50,00,000/- to Rs.1,00,00,000/- and Term Loan – Fresh under

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T.A. No. 656 of 2023

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CGTMSE of Rs.60,00,000/- to the Defendant Vide Sanction dated 09.06.2017, subject to terms and conditions therein.

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It is further submitted that the Security being Hypothecation of Stocks of Raw material, Stocks in Progress, Finished Goods, Stores and Spares and Entire Receivables of the Firm. Further the said loan facilities were covered under CGTMSE. Agreeing to the terms and conditions of the said sanction, the 1^st Defendant represented by the 2^nd Defendant, had executed Supplemental Agreement to Secure Credit/Loan Facilities dated 14.06.2017, Sole Proprietorship Letter dated 14.06.2017, Common Agreement dated 14.06.2017 and Agreement of Term Loan dated 14.06.2017 in favour of the Applicant.

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Further the 1^st Defendant represented by the 2^nd Defendant, had executed an Undertaking dated 14.06.2017 in favour of the Applicant thereby stating that there are no arrears of tax including interest, leviable under various provisions are outstanding against him. Further in and by a declaration dated 14.06.2017, the 1^st Defendant represented by the 2^nd Defendant, had declared that their account has not been categorised as non-performing asset by any other branch of the Applicant and that they have not defaulted in payment to any other bank.

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Thereafter the 1^st Defendant represented by the 2^nd Defendant, had availed Cash Credit Limit of Rs.100,00,000/- in Loan Account No.10654015003697 and Term Loan Facility of Rs.60,00,000/- in Loan Account No.10657025004295 from the Applicant for its business needs.

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T.A. No. 656 of 2023

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19.12.2025

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It is submitted that subsequently the 1^st Defendant represented by the 2^nd Defendant, had requested the Applicant for Renewal cum Reduction of Cash Credit Facility from Rs.100,00,000/- to Rs.50,00,000/, Sanction of WCTL for Rs.50,00,000/- under MSME Restructure Scheme and Review/ Restructure of Term Loan of Rs.57,48,000/-. Subsequently the Applicant vide Sanction dated 27.02.2019, had sanctioned (1) Renewal cum Reduction of Cash Credit Facility from Rs.100,00,000/- to Rs.50,00,000/- (2) WCTL – Fresh Loan amount of Rs.50,00,000/towards Restructure (3) Term Loan – Restructure of Rs.55,82,908.52/towards Restructure and FITL – Fresh Loan amount of Rs.30,00,000/- to service the interest for Term Loan and WCTL during the moratorium period as per the terms and conditions therein to the 1^st Defendant.

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Since it is submitted that the Primary Security for Cash Credit Facility is Hypothecation of Stocks and Book Debts with margin 25%. All the above said loan facilities are covered under CGTMSE. The Primary Security for Term Loan of Rs.55,82,908.52/- is Hypothecation of Machinery. Agreeing to the terms and conditions of the above sanction, the 1^st Defendant represented by the 2^nd Defendant, had executed Agreement of Hypothecation of Assets dated 27.02.2019, Sole Proprietorship Letter dated 27.02.2019, Agreement for Working Capital Term Loan dated 27.02.2019, Common Agreement dated 27.02.2019, Agreement of Term Loan dated 27.02.2019 and Agreement for Funded Interest Term Loan dated 27.02.2019, in favour of Applicant for the above said loan facilities availed by the 1^st Defendant from the Applicant

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T.A. No. 656 of 2023

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for its business needs.

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The applicant further submits that the 1^st Defendant represented by the 2^nd defendant, had fully utilised (1) Cash Credit Limit of Rs.50,00,000/- in Loan Account No.10654015003697, (2) WCTL – Fresh Term Loan-I of Rs.50,00,000/- in Loan Account No.10657021000068, (3) FITL – Fresh Term Loan – II of Rs.30,00,000/- in Loan Account No.10657021000075 and (4) Term Loan – III of Rs.55,82,908.52/- in Loan Account No.10657025004295. Applicant submits that on the request of the Defendant, the Applicant had subsequently renewed Cash Credit (Hyp) of Rs.50,00,000/- Term Loan – Restructured (Review) of Rs.55,86,080/-, WCTL – Restructured (Review) of Rs.50,00,000/- and FITL – Restructured (Review) of Rs.30,00,000/- vide Sanction dated 15.09.2020, subject to compliance of terms and conditions therein.

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The Applicant submits that after availing and utilizing the above said loan facilities to its fullest benefit, the 1^st Defendant represented by the 2^nd Defendant, had failed to repay the loan dues as agreed upon and committed wilful default to regularise their above said Loan Accounts. Hence the Defendant’s above said (1) Cash Credit Loan Account No.10654015003697, (2) Term Loan–I Loan Account No.10657021000068, (3) Term Loan-II Loan Account No. 10657021000075 and (4) Term Loan-III Loan Account No.10657025004295 became Non-Performing Asset (NPA) on 30.04.2021 in accordance with RBI guidelines.

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T.A. No. 656 of 2023

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It is submitted that in the meantime, the 1^st Defendant represented by the 2^nd Defendant, had confirmed their outstanding dues to the Applicant vide Balance and Security Confirmation Letter dated 14.06.2017 and 26.02.2019 respectively. However, the Defendants did not come forward to regularise and settle their outstanding dues to the Applicant. Subsequently since the Defendant did not come forward to repay the outstanding dues to the Applicant, the Applicant was constrained to issue Recall Notice dated 11.06.2021 to the Defendants to repay their outstanding dues to the Applicant. Further the Applicant had issued Notice u/s. 13(2) of SARFAESI Act, 2002 dated 01.07.2021 to the Defendants, to repay their outstanding dues to the Applicant. But till date, the Defendants did not respond and repay their outstanding dues to the applicant. Hence, 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

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1 and 2 through Registered Post with Acknowledgment Due, covers of D1 returned as “left” and D2 returned as “no such person” respectively. Applicant Bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 17.10.2023 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 and 2 were placed ex-parte on 17.10.2023.

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T.A. No. 656 of 2023

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Heard the submissions of Applicant Bank and perused the

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record s.

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To prove the case of the Applicant Bank, Sh. M. Velayutham, 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-37 . 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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20. The OA is allowed with costs,

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(a) The applicant bank is allowed to recover from the Defendants jointly and severally a total sum of sum of Rs.2,10,08,973.87p

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(Rupees Two Crores Ten Lakhs Eight Thousand Nine

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Hundred Seventy Three and Eight Seven Paisa only) due in respect of

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(i) Cash Credit (Account No.10654015003697) for Rs.62,20,605.91p together with further interest @ 11.95% p.a., with monthly rests.

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(ii) Term Loan – I (Account No.10657021000068) for

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T.A. No. 656 of 2023

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19.12.2025

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Rs.55,46,780.05p together with further interest @11.60%

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p.a., with monthly rests.

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(iii) Term Loan – II (Account No.10657021000075) for Rs.33,06,941.18p together with further interest @11.60% p.a., with monthly rests.

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(iv) Term Loan – III (Account No.10657025004295) for Rs.59,34,646.73p together with further interest @11.65% p.a., with monthly rests.

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

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T.A. No. 656 of 2023

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

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Sd/-

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

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(Dictated to Steno (Arti), transcribed by her, corrected, signed and pronounced by me on this the 19^th day of December, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sh. M. Velayutham, 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.	Sanction Letter dated 10.12.2015		A-1
2.	Agreement of Hypothecation of Assets 10.12.2015	dated	A-2
3.	Common Agreement dated 10.12.2015		A-3
4.	Affidavit by the 2^ndDefendant dated 10.12	.2015	A-4
5.	Undertaking Letter by the Defendant 10.12.2015	dated	A-5
6.	Undertaking by the Defendant dated 10.1	2.2015	A-6
7.	Branch Certificate of Compliance 06.01.2016	dated	A-7
8.	Request letter by the Defendant 26.04.2016	dated	A-8
9.	Demand Promissory Note for Rs.55,0 dated 02.05.2016	0,000/-	A-9
10.	Supplemental Agreement to Secure Credi facilities dated 02.05.2016	t/ Loan	A-10
11.	Affidavit by the 2^ndDefendant dated 22.11	.2016	A-11
12.	Sanction letter dated 09.06.2017		A-12
13.	Branch Certificate of Compliance 19.06.2017	dated	A-13
14.	Supplemental Agreement to Secure Cred Facilities dated 14.06.2017	it/Loan	A-14

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T.A. No. 656 of 2023

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15.	Sole Proprietorship Letter dated 14.06.2017	A-15
16.	Common Agreement dated 14.06.2017	A-16
17.	Agreement of Term Loan dated 14.06.2017	A-17
18.	Undertaking by the Defendant dated 14.06.2017	A-18
19.	Undertaking Letter by the Defendant dated 14.06.2017	A-19
20.	Sanction Letter dated 27.02.2019	A-20
21.	Agreement of Hypothecation of Assets dated 27.02.2019	A-21
22.	Sole Proprietorship Letter dated 27.02.2019	A-22
23.	Agreement for Working Capital Term Loan dated 27.02.2019	A-23
24.	Common Agreement dated 27.02.2019	A-24
25.	Agreement of Term Loan dated 27.02.2019	A-25
26.	Agreement for Funded Interest Term Loan dated 27.02.2019	A-26
27.	Branch Certificate of Compliance dated 30.03.2019	A-27
28.	Renewal Sanction Letter dated 15.09.2020	A-28
29.	Balance and Security Confirmation dated 14.06.2017	A-29
30.	Balance and Security Confirmation dated 26.02.2019	A-30
31.	Letter to Borrower(s), Recall Notice along with acknowledgment card dated 11.06.2021	A-31
32.	Notice U/S.13(2) of SARFAESI Act, 2002 along with acknowledgement card dated 01.07.2021	A-32
33.	Statement of Account in respect of Cash Credit Limit Loan Account No.10654015003697	A-33
34.	Statement of Account in respect of Term Loan-I Loan Account No.10657021000068	A-34
35.	Statement of Account in respect of Term Loan-II in Loan Account No.10657021000075	A-35
36.	Statement of Account in respect of Term Loan-III in Loan Account No.10657025004295	A-36

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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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NIL

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

Punjab National Bank v. M/S Mahek Udyog

Case brief

What is this about?

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Punjab National Bank v. M/S Mahek Udyog

Case brief

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