Allowed

State Bank of India v. M/S No 1 City Mobile Coffee Suppliers

DRT28 Mar 2025TA/724/2023

Case brief

AI extract

What is this about?

This is a transferred application under Section 19 of the RDB Act filed by a bank for recovery of dues totaling over Rs. 40 lakh against defaulting borrowers for home loans, insurance, credit card, and term loans. The Tribunal allowed the application ex-parte due to the absence of the respondents. The respondents were set ex-parte for default, and the bank was allowed to recover the claimed amount

What did the court decide?

Recovery of Rs. 40,86,880.84 (principal, interest, penal) plus sale of mortgaged and personal assets of the respondents for realization.

State Bank of India versus M/S No 1 City Mobile… — Contract and Commercial Disputes | DRT (2025)

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T.A. No. 724 of 2023

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28.03.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 28^th day of March, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 724 of 2023

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(Originally filed before DRT- II, Chennai as OA 802/2019 and thereafter transferred to this Tribunal and renumbered as TA No 724 of 2023)

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State Bank of India ARM BRANCH CHENNAI No.44, 1^st Floor, Eldams Road, Teynampet, Chennai – 600 018 IFSC Code: SBIN0070674 Rep. by it’s Chief Manager ….Applicant

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-Vs-

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Ms.No.1 City Mobile Coffee Suppliers,

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Rep. by its Proprietor Mr. A.P.Murugan S/o Mr. Subramani 792, 59^th St. 10^th Sector, K.K. Nagar, Amman Koil, Chennai – 600 078

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Also at

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No.8, 62^nd street, 10^th Sector Shanthinikethan Colony, Near Amman Koil, K.K.Nagar, Chennai – 600 078

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Mr.A.P. Murugan S/o Mr.Subramani Proprietor of Ms.No.1 City Mobile Coffee Suppliers 13/842, 60^th street, 10^th sector, K.K. Nagar, Chennai – 600 078

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Also at THAI FLAT, Plot No. 20, Shanmugasundaram Street Devaraj Nagar, Saligramam, Chennai 600 093

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Also at

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792, 59^th Street, 10^th sectors, K.K. Nagar, Amman Koil, Chennai – 600 078

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T.A. No. 724 of 2023

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28.03.2025

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Mr.A.P. Murugan S/o Mr.Subramani

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Mrs. Nagarani W/o Mr.A.P. Murugan

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3 and 4 both residing at 13/842, 60^th street, 10^th sector K.K.Nagar, Chennai – 600 078

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3 and 4 also at

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THAI FLAT Plot No.20, Shanmugasundaram Street Devaraj Nagar, Saligramam, Chennai 600 093 3 and 4 both are also available at 792, 59^th Street, 10^th Sector, K.K.Nagar, Amman Koil, Chennai – 600 078. …Defendants

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Counsels on record / appeared:

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Counsel for Applicant : Mr. E. Kumar

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Defendants 1 to 4 were set ex-parte on 26.11.2021

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: - FINAL ORDER - :

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This Original Application is filed on 30.08.2019 by the applicant bank

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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 4, jointly and severally for recovery of a total sum of Rs.40,86,880.84p (Rupees Forty Lakhs Eighty Six

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Thousand Eight Hundred Eighty and Eighty Four paise Only) as follows:

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(i) A sum of Rs.31,59,320.77p due in respect of Home Loan

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(Account No.34981944144) with an interest @ 8.75%

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p.a. compounded with monthly rests along with penal

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T.A. No. 724 of 2023

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interest @ 2% p.a. from the date of filing till the date of realisation in full;

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(ii) A sum of Rs.82,987.52p due in respect of Home Loan House Insurance Loan (Account No.34981962991) with an interest @ 8.75% p.a. compounded with monthly rests along with penal interest @ 2% p.a. from the date of filing till the date of realisation in full;

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(iii) A sum of Rs.4,64,737.13p due in respect of CC (Hip) Loan (Account No.35553937216) with an interest @ 12.55% p.a. compounded with monthly rests along with penal interest @ 2% p.a. from the date of filing till the date of realisation in full;

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(iv) A sum of Rs.3,79,844.42p due in respect of Term Loan (Account No.35553803963) with an interest @ 12.25% p.a. compounded with monthly rests along with penal interest @ 2% p.a. from the date of filing till the date of realisation in full;

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for sale of schedule mentioned immovable property and for costs of this OA.

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Originally, this Application was filed before DRT-II, Chennai, assigned OA No.802 of 2019, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.802 of

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T.A. No. 724 of 2023

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28.03.2025

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2019 stood transferred to this Tribunal and renumbered as TA No.724 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 Proprietorship concern namely M/s No.1 City Mobile Coffee Suppliers, represented by its Proprietor Mr. A.P. Murugan, 2^nd defendant herein. It is submitted that 3^rd & 4^th Defendants have approached the Applicant Bank for Housing Loan and Home Insurance for the purchased House and submitted the applications for the same 3^rd and 4^th Defendants are agreed and willing to execute necessary loan documents.

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It is submitted by the Applicant Bank that after applying their mind and analysing various aspects as per the banking norms and upon getting clearance on the title of the property to be mortgaged in the form of legal opinion had decided to sanction the loan to the Defendants. It is submitted by the Applicant, at the request of the 3^rd and 4^th Defendants, had sanctioned an Home Loan for Rs.30,00,000/- (Rupees Thirty Lakhs Only) and Insurance for Home Rs.1,03,630/- (Rupees One Lakhs Three

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T.A. No. 724 of 2023

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Thousand Six Hundred Thirty)

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It is submitted that the Defendants while availing of the said loan executed the following loan documents in favour of the Applicant Bank (For Facility of Home Loan):

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(i) Sanction Letter of Home Loan of Rs.30,00,000/- executed by the applicant bank in favour of 3^rd and 4^th defendants dated 06.06.2015;

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(ii) Application for Additional Loan for Life Insurance Premium executed by 3^rd Defendant to Applicant Bank dated 08.06.2015;

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(iii) Memorandum of Loan Agreement for Home Loan Granted to 3^rd and 4^th Defendants executed by 3^rd and 4^th Defendants in favour of Applicant Bank dated 08.06.2015

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(iv) Affidavit of undertaking executed by the 3^rd and 4^th Defendants in favour of Applicant bank dated 08.06.2015

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(v) Agreement to Mortgage the property executed by 3^rd and 4^th Defendants in favour of the Applicant bank dated 08.06.2015

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(vi) Deed of Undertaking executed by the 3^rd and 4^th Defendants in favour of Applicant Bank dated 08.06.2015

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(vii) Operations Letter executed by the 3^rd and 4^th Defendants to change the Loan Account from MRC Nagar RACPC branch to Walajah Road Branch dated 08.06.2015

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It is further submitted by the Applicant Bank that to secure the loan, 3^rd and 4^th Defendants also executed the MODTD dated 20.07.2015 registered as Doc.No.5079 of 2015 with SRO Virugambakkam in favour of applicant bank. The 3^rd and 4^th defendant had also deposited the title deeds of the schedule mentioned property as security via sale deed dated 11.06.2015 executed by Mrs.Vanitha Madhavan to and in favour of Mr.A.P. Murugan and Mrs.Nagarani registered as Doc.No.4026 of 2015 with SRO Virugambakkam.

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The Applicant submitted that the 2^nd Defendant again approached as proprietor of 1^st defendant company for availing facilities of Term Loan & CC (Hip) for sum of amount of Rs.11,20,000/- (Rupees Eleven Lakhs Twenty Thousands Only) and the 3^rd and 4^th defendant also stood as Guarantor for the facilities availed by the 1^st and 2^nd defendants. Further the 3^rd and 4^th defendants are also agreed to extend the equitable mortgage of immovable property for the said facilities which already created in favour of the bank as security for the home loan.

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The applicant bank had sanctioned a sum of Rs.11,20,000/-(Rupees Eleven Lakhs Twenty Thousands Only) as mortgage Term Loan (5.20 lakhs) & CC (6 Lakh) vide letter of Arrangement dated 05.02.2016 to the 1^st and 2^nd defendants against the mortgage of 3^rd and 4^th defendant’s property and as well as with their guarantees.

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In order to secure the loan, the defendants executed the following

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documents in favour of the Applicant Bank (for facilities of term loan and CC):

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(i) Sanction letter for the loan of Rs.11.20 lakhs duly acknowledged by all the defendants dated 01.02.2016

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(ii) Letter of Arrangement executed between all the Defendants and applicant bank dated 05.02.2016

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(iii) Agreement of Loan-Cum-Hypothecation executed by 1^st defendant in favour of Applicant bank dated 05.02.2016

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(iv) Guarantee Agreement executed by 3^rd and 4^th defendants in favor of Applicant bank dated 05.02.2016

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(v) Memorandum Confirming the Extension of the Existing Equitable Mortgage executed by 3^rd and 4^th Defendants in favor of Applicant Bank dated 09.02.2016

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It is further submitted by applicant bank that the 3^rd and 4^th defendants confirmed the availment of said facilities in the MODTD extension of Mortgage of properties executed by them on 10.02.2016 and the same was registered as Doc.No.771 of 2016 with SRO Virguambakkam. Hence the property was taken as common security for all the loans availed by the defendants.

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The Applicant submits that the Defendants though the defendants have availed the said loans, they had not kept up their

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promise/undertaking and did not properly maintain the loan accounts. The Applicant submits that since the defendants failed and neglected to clear the loans, hence the loan account was classified as NPA on 09.11.2018. As the loan accounts became sticky, the Applicant bank recalled the entire loan amount vide demand notice dated 09.11.2018, but there was no response from the defendants. Hence the present Original Application (OA) has been filed to recover the amount due from the defendants.

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After the filing of the OA, Summons were sent to D1 to D4 returned with remarks as “left” and “No such Person”. Applicant bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 26.11.2021even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants1 to 4 were placed ex-parte on 26.11.2021.

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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. S. Suresh, Chief Manager and Authorized officer 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-19 . As the Defendants remained ex-parte, the OA claim remains unchallenged. There is no contra evidence available on record to repudiate the claim of

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the Applicant Bank.

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 1 to 4 jointly and severally, Rs.40,86,880.84p (Rupees Forty Lakhs Eighty Six Thousand Eight Hundred Eighty and Eighty Four paise Only) as follows:

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(i) A sum of Rs.31,59,320.77p due in respect of Home Loan (Account No.34981944144) with an interest @ 8.75% p.a. compounded with monthly rests along with penal interest @ 2% p.a. from the date of filing till the date of realisation in full;

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(ii) A sum of Rs.82,987.52p due in respect of Home Loan House Insurance Loan (Account No.34981962991) with an interest @ 8.75% p.a. compounded with monthly rests along with penal interest @ 2% p.a. from the date of filing till the date of realisation in full;

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(iii) A sum of Rs.4,64,737.13p due in respect of CC (Hip)

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T.A. No. 724 of 2023

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Loan (Account No.35553937216) with an interest @ 12.55% p.a. compounded with monthly rests along with penal interest @ 2% p.a. from the date of filing till the date of realisation in full;

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(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 mentioned immovable properties.

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(d) 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 3 and 4 (both movable and immovable) to recover the balance dues as required under law for which the Defendants to disclose to the Tribunal particulars of other properties or assets owned by the Defendants 3 and 4;

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(e) The applicant bank shall file the latest memo of calculation of OA amount together with interest, costs etc., to be paid by the

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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.

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(f) The applicant bank shall file memo of costs within ten days

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from the date of this final order.

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(g) 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 28^th day of March, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sh. S. Suresh, Chief Manager and Authorized officer of 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.
	FOR FACILITY OF HOUSING LOAN AND INSURANCE
1.	Sanction letter of Home Loan of Rs.30,00,000 executed by the applicant bank in favour of 3^rdand 4^thdefendants 06.06.2015	A-1
2.	Application for additional loan for life insurance premium executed by 3^rddefendant to applicant bank 08.06.2015	A-2
3.	Memorandum of Loan agreement for Home Loan granted to 3^rdand 4^thdefendants executed by 3^rd and 4^thdefendants in favour of the applicant bank 08.06.2015	A-3
4.	Affidavit of undertaking executed by the 3^rdand 4^th defendants in favour of Applicant bank 08.06.2015	A-4
5.	Agreement to mortgage the property executed by 3^rdand 4^thdefendants in favour of the Applicant bank 08.06.2015	A-5
6.	Deed of Undertaking executed by the 3^rdand 4^th defendants in favour of the Applicant bank 08.06.2019	A-6
7.	Operations Letter executed by the 3^rdand 4^th defendants to change the Loan Account from MRC Nagar RACPC branch to walajah road branch 08.06.2015	A-7
	FOR FACILITIES OF CC AND TERM LOAN	A-8
8.	Sanction letter for the loan of Rs.11.20 lakhs duly acknowledged by all the defendants. 01.02.2016
9	Letter of Arrangement executed between all the defendants and applicant bank 05.02.2016	A-9
10	Agreement of Loan-Cum-Hypothecation executed by 1^stdefendant in favour of Applicant bank 05.02.2016	A-10
11	Guarantee Agreement executed by 3^rdand 4^th Defendants in favour of Applicant bank 05.02.2016	A-11
12	Memorandum Confirming the Extension of the Existing Equitable Mortgage executed by 3^rdand 4^th defendants in favour of Applicant Bank. 09.02.2016	A-12
13	Memorandum Relating of deposit of title deeds executed by 3^rdand 4^thdefendants in favour of applicant bank registered as Doc.No.5079 of 2015	A-13

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	with SRO Virugambakkam 20.07.	2015
14	Memorandum relating to Depo executed by 3^rdand 4^thdefend applilcant bank registered as Do with SRO Virugambakkam 10.02.	sit of title deeds ants in favour of c.No.771 of 2016 2016	A-14
15	Sale deed executed by Mrs.Van and in favour of Mr.A.P. Murugan registered as Doc.No.4026 of Virugambakkam 11.06.2015	itha Madhavan to and Mrs.Nagarani 2015 with SRO	A-15
16	Statement of Accounts No.34981944144 from 08.06.201	for Account 5 till 29.08.2019	A-16
17	Statement of Accounts No.34981962991 from 09.09.201	for Account 5 till 29.08.2019	A-17
18	Statement of Accounts No.35553937216 from 05.02.201	for Account 6 till 29.08.2019	A-18
19	Statement of Accounts No.35553803963 from 15.02.201	for Account 6 till 29.08.2019	A-19

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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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(Immovable Properties)

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(As per sale deed No.4026/2015, dated 11.06.2015, with SRO Virguambakkam is in the name of Mr.A P Murugan S/o Mr. Subramani & Mrs. Nagarani W/o Mr.A.P Murugan – 2^nd and 3^rd Defendant)

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All the flat numbered S1 in the second floor measuring an extent of 1200 sq.ft. along with 365 sq.ft. UDS of land comprised in Plot No.2, New door No.20, Shanmugasundharam street, Devaraj Nagar, Saligramam, Chennai – 600 093, comprised in Survey Nos.61/2A, 61/2B as per new patta S. No.61/2B2A, 61/2A2 PART Block 14 T.S. No.84/2 of Saligramam Village, Egmore Nungambakkam Taluk, Chennai District and lies within Registration district of Chennai South and Sub-Registration district of Virugambakkam and bounded on the

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North by: S.No. 61 & Mosque street

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South by: 20 feet road

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East by : Plot No.3, Saroja Road

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West by : Plot No.1, T.N Kumari & V.D.S, Prabhavathy ammal’s Land and lying within the Registration District of Chennai South and SubRegistration District Virugambakkam.

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

State Bank of India v. M/S No 1 City Mobile Coffee Suppliers

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/S No 1 City Mobile Coffee Suppliers

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

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