Allowed

Canara Bank v. M/s Vrb Tooling

DRT23 Sept 2025TA/769/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the bank's application for a recovery certificate. The court proved the defendants' liability for a secured overdraft loan, awarded interest at a reduced rate of 8% p.a., allowed realization of proceeds from a prior auction, and directed issuance of the certificate despite defendants being absent.

What did the court decide?

Direction to issue Recovery Certificate for recovery of Rs.69,81,187/- with interest at 8% per annum from filing date.

Canara Bank versus M/s Vrb Tooling — Banking and Recovery | DRT (2025)

¶1

BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

¶2

Dated this 23^rd day of September, 2025

¶3

PRESENT: SHRI SHARANG DHAR UPADHYAY PRESIDING OFFICER

¶4

TA No.769 of 2022

¶5

(Originally filed before DRT-I, Chennai as OA No.299 of 2020 and thereafter

¶6

transferred to this Tribunal and renumbered as TA No.769 of 2022)

¶7

Canara Bank (Erstwhile Syndicate Bank) Arni Road Branch Rep. by its Senior Branch Manager No.16, Arni Road, Kosapet Vellore – 632 011 …Applicant

¶8

Versus

¶9

M/s VRB Tooling

¶10

Represented by its Proprietor

¶11

V.R. Balasubramanian

¶12

No.82/177, South Avenue Road

¶13

Phase-I, Tamil Nadu Housing Board Phase-I Sathuvachari Road Vellore – 632 009

¶14

Also at M/s VRB Tooling Represented by its Proprietor V.R. Balasubramanian No.11, Bangalore to Chennai Highways Rangapuram, Vellore – 632 009

¶15

V.R. Balasubramanian S/o Mr. Rangaiyyan No.82/177, South Avenue Road Phase-I, Tamil Nadu Housing Board Phase-I Sathuvachari Road Vellore – 632 009

¶16

¶17

D. Saravanan S/o R. Duraisamy No.37/47, Saidapet Subburaman Street Vellore – 632 001 …Defendants

¶18

Counsels on Record / Appeared

¶19

Counsel for Applicant Bank : M/s K.V. Subramanian Associatez Defendants ex-parte on 14.06.2022

¶20

FINAL ORDER

¶21

This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 against the defendants’seeking issuance of a Recovery Certificate for recovery of a sum of Rs.69,81,187/- with further interest at the rate of 10.25% per annum with monthly rests plus 2% penal interest from the date of the application till the date of realisation along with costs of the application and for sale of schedule mentioned properties.

¶22

The subject matter of the case is the Secured Overdraft Loan availed by the defendants from the Applicant Bank.

¶23

It is the case of the applicant that the 1^st defendants proprietorship concern represented by the 2^nd defendant as its Proprietor approached the erstwhile bank for grant of Secured Overdraft loan by submitted Loan application on 11.10.2014 and considering the said request the erstwhile bank sanctioned a SOD Synd MSE Loan of Rs.45,00,000/- vide its

¶24

¶25

sanction dated 15.10.2014. It is stated that the 1^st defendant represented by the 2^nd defendant executed Composite Hypothecation Agreement on 15.10.2014 and the third defendant executed guarantee agreement on 15.10.2014.

¶26

It is also the case of the applicant that the 2^nd defendant deposited the title deeds of the schedule mentioned properties with the erstwhile bank with an intention to create equitable mortgage over the same and executed Memorandum of Deposit of Title deeds dated 08.03.2011 registered as Doc. No.3004 of 2011 and confirmed creation of mortgage by letter dated 27.01.2014 and 14.10.2014.

¶27

It is also the case of the applicant bank that the 1^st defendant violated the terms and conditions of sanction and also defaulted in repayment and hence the loan account was classified as NPA on 30.09.2017 and as no payment was forthcoming the applicant bank issued a legal notice dated 18.07.2018.

¶28

Despite the said notice the defendants did not come forward to clear the outstanding dues, hence the present OA is filed for recovery of its dues.

¶29

Summons was taken out to the defendants and the same were served. As there was no representation on behalf of the defendants continuously and on 14.06.2022 the defendants were called absent and placed ex-parte on

¶30

¶31

that day. Applicant Bank filed Proof Affidavit along with 10 documents, which were marked as Ex. A-1 to A-10 on 07.02.2024. The Ld. Counsel for Applicant Bank made his submissions on 26.08.2025 and thereafter the matter stood till this date for passing final orders.

¶32

The following issues arise for consideration in the matter: -

¶33

(a) Whether the applicant had succeeded in proving the liability of the defendants?

¶34

(b) What order as to cost of the proceedings need be passed?

¶35

These issues are considered together.

¶36

Heard the Ld. Counsel for the applicant, perused the OA averments and the record placed before the Tribunal.

¶37

The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-10 along with the proof affidavit. The documents produced in evidence are all found admissible. The proof affidavit of the applicant bank remained unchallenged and rebutted. Therefore, on careful consideration of proof affidavit along with exhibits filed on behalf of the applicant bank, besides the material placed before the Tribunal, the Tribunal is satisfied that the applicant bank has successfully proved the OA claim against the defendants. Further, the statement of accounts in

¶38

¶39

respect of the loan account produced and certified under the Banker’s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendant. It is clear from the statement of accounts that penal interest is not capitalized.

¶40

In view of the foregoing, it is clearly evident that the application filed by the applicant bank is well within the period of limitation and this Tribunal possesses the territorial and pecuniary jurisdiction to entertain this OA.

¶41

In view of the fact that the loan facility availed by the defendants is a secured overdraft loan and the applicant has claimed interest at contractual rate till the date of filing of the OA, this Tribunal is of the view that the pendente lite interest can be awarded at reduced rates and prayer for award of overdue interest is rejected.

¶42

During the pendency of the TA, the applicant bank filed a memo stating therein that the mortgaged property was sold in auction under SARFAESI Act held on 27.01.2022 and the applicant had realized a sum of Rs.16,60,000/- and the same was given credit to the loan account. This Tribunal vide its proceedings dated 07.02.2024 recorded part satisfaction of the TA claim.

¶43

In view of the afore mentioned discussions, the only conclusion this Tribunal can draw is that the applicant had clearly proved the

¶44

¶45

disbursement of the loan, which the applicant is entitled to realize. Hence,

¶46

OA is disposed off in the following manner: -

¶47

(a) TA No.769 of 2022 stands allowed.

¶48

(b) Applicant is permitted to realize a sum of Rs.69,81,187/- with further interest @8% per annum (simple) from the date of filing of the application till the date of realization in full, from the defendants jointly and severally after deducting all the amounts received / realized by them during the pendency of OA and also by selling the other assets of the defendants.

¶49

(c) The amount of Rs.16,60,000/- realized by the applicant bank by sale of schedule mentioned property be given due credit to the loan account on its respective date.

¶50

(d) It is made clear that the defendants 2 and 3 are personally liable for all such amounts due as ordered above.

¶51

(d) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 15 days from the date of receipt of the copy of the order.

¶52

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

¶53

¶54

Communicate a copy of the order to the parties concerned in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

¶55

Sd/(SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

¶56

(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 23^rd day of September, 2025)

¶57

EXHIBITS MARKED BY APPLICANT BANK

¶58

S. No.	Date	Description of Documents	Exhibit Nos.
1.	11.10.2014	Application for Secured Overdraft by the 1^st defendant represented by the 2^nddefendant	A-1
2.	15.10.2014	Composite Hypothecation Agreement executed by 1^stdefendant represented by 2^nddefendant	A-2
3.	15.10.2014	Guarantee Agreement executed by the 3^rd defendant.	A-3
4.	25.09.2017	Acknowledgement of debt executed by 1^st defendant.	A-4
5.	08.03.2011	Memorandum of deposit of title deeds executed by 2^nddefendant registered as Doc. No.3004 of 2011	A-5
6.	27.01.2014	Confirmation of creation of second / subsequent equitable mortgage registered as Doc. No.946 of 2014.	A-6
7.	14.10.2014	Confirmation of creation of second / subsequent equitable mortgage registered as Doc. No.11223 of 2014	A-7

¶59

¶60

8. 25.11.2010	Registered sale deed executed	by K.	A-8
	Manikandan and K. Kumar in favour	of V.R.
	Balasubramanian, S/o Rangaiyan No.13140/2010.	– Doc.
9. 18.07.2018	Legal notices sent to the defendants		A-9
10.	Statement of accounts along with c under Bankers’ Book Evidence Act.	ertificates	A-10

¶61

Sd/(SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

¶62

DESCRIPTION OF PROPERTY

¶63

NIL

¶64

Sd/(SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

¶65

Canara Bank v. M/s Vrb Tooling

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/s Vrb Tooling

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Mls Central Bank of India versus S.M. John Stephen (alias)

Canara Bank versus Sri Venkateshwara Industries

Canara Bank versus M. a. Salim

Bank of Baroda versus M/s. Sark Cosmetics Pvt. Ltd.

M/s. City Union Bank Limited versus M/s Spr Cashews

Canara Bank versus M/s. Sridhar Traders