Allowed

Canara Bank v. Dharma Pharmacy Pvvt Ltd. And Others

DRT4 Dec 2025TA/824/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the Bank’s application filed under Section 19 of the RDB Act. It directed the joint and several recovery of approximately Rs. 2.37 Crores from the corporate borrower and guarantors. The order authorizes the sale of hypothecated assets and mortgaged immovable properties to satisfy the dues, including balance dues from personal assets of guarantors.

What did the court decide?

Recovery of Rs. 2,36,99,829/- with interest; liberty to sell hypothecated and mortgaged assets and personal assets of guarantors for balance dues.

Canara Bank versus Dharma Pharmacy Pvvt Ltd. And Others — Insolvency and Bankruptcy | DRT (2025)

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T.A. No. 824 of 2023

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04.12.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 04^th day of December, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 824 of 2023

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(Originally filed before DRT- II, Chennai as OA 628/2018 and thereafter transferred to this Tribunal and renumbered as TA No 824 of 2023)

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CANARA BANK,

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Rep. by its Senior Manager, No. 4, 1^st Main Road, Kasturba Nagar Branch, Adyar, Chennai – 600 020. ….Applicant -Vs-

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M/s. Dharma Pharmacy Pvt. Ltd.,

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Rep. by its Managing Director,

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No. 23, Parameswari Nagar,

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2^nd Street, Adyar,

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Chennai – 600 020.

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Dr. V. Dharmalingam,

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S/o. Velumailu,

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No. 23, Parameswari Nagar,

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2^nd Street, Adyar,

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Chennai – 600 020.

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Dr. M. Mageswari, W/o. V. Dharmalingam,

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No. 23, Parameswari Nagar, 2^nd Street, Adyar,

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Chennai – 600 020. ….. Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. S. Pandurangan

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Defendants 1 to 3 were set ex-parte on 10.06.2019

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: - FINAL ORDER - :

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This Original Application is filed on 06.08.2018 by the Applicant

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T.A. No. 824 of 2023

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04.12.2025

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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 1 to 3, jointly and severally for recovery of a total sum of Rs.2,36,99,829/- (Rupees Two Crores Thirty Six

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Lakhs Ninety Nine Thousand Eight Hundred and Twenty Nine only) as follows:

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(i) A sum of Rs.2,17,71,179/- due in respet of Secured Over Draft Facility (Account Nos. 0942261010418) repayable together with interest thereon at the rate of 11.65% p.a. with monthly rests from the date of Application till the date of realization in full;

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(ii) A sum of Rs.19,28,650/- due in respect of Term Loan (Account No.094276600008) repayable together with further interest @ 11.65% p.a., with monthly rests from the date of Application till the date of realization in full;

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for sale of schedule A mentioned hypothecated assets and Schedule B to D mentioned immovable properties and for costs of this Original Application.

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Originally, this Application was filed before DRT-II, Chennai, assigned OA No. 628 of 2018, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No. 628 of 2018 stood transferred to this Tribunal and renumbered as TA No. 824

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of 2023.

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T.A. No. 824 of 2023

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04.12.2025

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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 1^st defendant is a Private Limited Company duly registered under the Indian Companies Act, under the name and style as “M/s Dharma Pharmacy Pvt. Ltd". The 2^nd and 3^rd defendants are the Directors of the 1^st defendant company. The 2^nd and 3^rd defendants are the guarantors to the 1^st defendant company and have mortgaged their immovable properties as a security.

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It is submitted that the 2^nd defendant had created Equitable Mortgage over the schedule "B" & "C" immovable properties as a security. The 3^rd defendant created Equitable Mortgage over the schedule "D" immovable property as a security.

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The Applicant also submits that the 1^st defendant represented by its Directors approached the Applicant for availing credit facilities for the purpose of their business for manufacture of Herbal Based Medicines. The Applicant Bank considering the request of the 1 defendant sanctioned the

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Secured over Draft/OCC Credit facility of Rs.1 Crores to the 1st defendant. It is submitted that the above loan is repayable with interest @ base rate + 3% p.a (with a minimum 10.20% p.a at the time of

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sanction) (Floating rate) with monthly rests. The 1 defendant also submitted an application dated 13.08.2015 seeking additional limit of Rs. 30,00,000/- by way of Term Loan for purchase of the Machineries for producing Herbal Based Medicines. The applicant at the request of the defendants has also sanctioned the Term Loan Limit of Rs. 30,00,000/- to the 1st defendant on 12.08.2015 for the purchase of the machineries and the same is repayable in 60 monthly instalments of Rs.50,000/- p.m. together with accrued interest @2.25% above base rate. The above limits were availed by the 1^st defendant.

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The Applicant submits that the above facilities are secured by the Hypothecation of the machineries, Stocks and Books Debts mentioned in the "A" Schedule to the OA and equitable mortgage of the properties mentioned in the "B" to "D" Schedule to the OA belonging to the 2^nd & 3^rd defendants. In order to evidence and secure the due repayment of the above limits the following security documents were executed by the defendants.

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a. Board Resolution dated 03.08.2015 of the 1^st defendant company b. Request for Overdraft facilities dated 10.03.2015 by D-1.

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c. Common Hypothecation Agreement dated 10.03.2015.

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d. Guarantee covering letter along with guarantee agreement both dated 10.03.2015 executed by D-2.

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e. Guarantee covering letter along with guarantee agreement both dated 10.03.2015 executed by D-3.

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f. Confirmation letter dated 10.03.2015 from 1^st defendant that no commission was paid to the guarantors.

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e. Confirmation letter dated 10.03.2015 from 2^nd defendant that no commission was received for giving the guarantee.

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h. Confirmation letter dated 10.03.2015 from 3^rd defendant that no commission was received for giving the guarantee.

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i. Pronote dated 13.08.2015 for Rs.30 Lakhs.

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j. Take delivery Letter to DPN dated 13.08.2015.

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k. Letter of Undertaking Reg. loans/advances dated 13.08.2015.

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l. Agreement cum Deed of Hypothecation dated 13.08.2015.

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m. Letter Evidencing Deposit of Title Deeds dated 13.08.2015 by the 2^nd defendant.

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n. Letter Evidencing Deposit of Title Deeds dated 10.08.2015 by the 2^nd defendant.

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o. Letter Evidencing Deposit of Title Deeds dated 13.08.2015 by the 3^rd defendant.

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The Applicant submits that the 2^nd and 3^rd Defendants stood as guarantors to the limits granted to the 1^st defendant and they have executed the personal continuing guarantees in favour of the applicant bank. The 2^nd defendant deposited the title deeds including the Sale Deed dated 16.10.2007 in respect of schedule "B" property with the applicant bank at Kasturba Nagar, Chennai on 07.03.2015 with the intention to create a security thereon. The 2^nd defendant also executed the Registered Memorandum of Deposit of title Deeds dated 10.03.2015 bearing Doc. No.

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1904 of 2015 at SRO, Neelankarai confirming the mortgage over Schedule "B" property in favour of the Bank as a security. The 2^nd defendant also deposited the title deeds including the Sale Deed dated 26.06.2007 and Deed of Construction dated 14.07.2006 in respect of schedule "C" property with the applicant bank at Kasturba Nagar, Chennai on 07.03.2015 with the intention to create a security thereon. The 2^nd defendant also executed the Registered Memorandum of Deposit of title Deeds dated 10.03.2015 bearing Doc. No. 2675 of 2015 at JSRO, Saidapet confirming the mortgage over Schedule "C" property in favour of the Bank as a security. The 3^rd defendant also deposited the title deeds including the Sale Deed dated 26.06.2007 and Deed of Construction dated 14.07.2006 in respect of schedule "D" property with the applicant bank at Kasturba Nagar, Chennai on 07.03.2015 with the intention to create a security thereon. The 3^rd defendant also executed the Registered Memorandum of Deposit of title Deeds dated 10.03.2015 bearing Doc. No. 2676 of 2015 at SRO, Saidapet confirming the mortgage over Schedule "D" property in favour of the Bank as a security.

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The Applicant submits that the 1^st defendant had executed the Acknowledgement of Debts dated 06.02.2018 and 23.02.2018 respectively duly acknowledging the availment of the overdraft loan, creation of securities and execution of the above documents and thereby renewed the above documents and the loan.

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The Applicant submits that the operations of the loan accounts are not regular and the defendants are not operating the accounts in terms of

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sanction and therefore the conduct of the account was not satisfactory. Several Meetings held with the Directors of the 1^st defendant company did not yield any result. Despite several reminders the defendants failed and neglected to regularize the accounts. Therefore, the defendant’s loan accounts was treated as Non Performing Asset (NPA) as per the directions/guidelines of the Reserve Bank of India as on 30.05.2017.

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It is submitted by the applicant bank that the defendant had undertaken to pay the outstanding dues but failed to do so. Therefore, the applicant sent the Recall Notice dated 30.12.2017 to the defendants calling upon them to repay the dues. The applicant issued the demand notice dated 19.01.2018.

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The Applicant submits that the defendants 2 & 3 being the Guarantors of the 1^st defendant company, they are jointly and severally liable to repay the dues of the 1^st defendant. Besides it is submitted that the Defendants 2 & 3 have executed Letters of Continuing Guarantee in favour of Applicant for the due repayment of the limits sanctioned to the first Defendant, wherein they have categorically and specifically undertaken, agreed and guaranteed the due repayment of the monies payable by the 1^st Defendant. It is therefore submitted that the Defendants 2 & 3 are jointly and severally liable for the due repayment of the amounts outstanding and payable by the 1^st Defendant both under the law and under the contract of guarantee. Hence, the present Original Application (OA) has been filed by the applicant bank for recovery of its

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T.A. No. 824 of 2023

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dues from the defendants.

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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 served to all the defendants. Although defendants entered appearance through their counsel and filed vakalat, did not choose to file written statement despite availing five adjournments. When OA was taken up on 10.06.2019 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, the defendants 1 to 3 were placed ex-parte on 10.06.2019.

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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. D. Ravi Sankar, Senior Manager, ARM Branch 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-29 . 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 :

The OA is allowed with costs,

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(a) The applicant bank is allowed to recover from the defendants 1 to 3, jointly and severally for recovery of a total sum of Rs. 2 Rs.2,36,99,829/- (Rupees Two Crores Thirty Six Lakhs Ninety Nine Thousand Eight Hundred and Twenty Nine only) as follows:

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(i) A sum of Rs.2,17,71,179/- due in respet of Secured Over Draft Facility (Account Nos. 0942261010418) repayable together with interest thereon at the rate of 11.65% p.a. with monthly rests from the date of Application till the date of realization in full;

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(ii) A sum of Rs.19,28,650/- due in respect of Term Loan (Account No.094276600008) repayable together with further interest @ 11.65% p.a., with monthly rests from the date of Application till the date of realization in full along with costs of this application.

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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 hypothecated assets and immovable properties morefully detailed in the OA schedule A to D.

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(c) Schedule A mentioned hypothecated assets and Schedule B, C & D mentioned immovable properties shall be appended to this final order.

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(c) If the sale proceeds of the hypothecated assets and immovable properties are not sufficient to satisfy the dues as ordered above, the applicant bank is at liberty to sell the personal assets of the defendants 2 and 3 (both movable and immovable) to recover the balance dues as required under law for which the defendants 2 and 3 to disclose to the Tribunal particulars of other properties or assets owned by the Defendants 2 and 3.

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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 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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(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 PS, transcribed by her, corrected, signed and pronounced by me on this the 04^th day of December, 2025)

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T.A. No. 824 of 2023

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ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sh. D. Ravi Sankar, Senior Manager, ARM Branch of the Applicant Bank

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Exhibits on the part of the Applicant:

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Sl. No.	Date	Description of Documents	Exhibit No.
1.	06.03.2015	Sanction Letter	A-1
2.	12.08.2015	Sanction Note	A-2
3.	03.08.2015	Copy of Board Resolution	A-3
4.	10.03.2015	Request for Overdraft facilities	A-4
5.	10.03.2015	Common Hypothecation Agreement	A-5
6.	10.03.2015	Guarantee Covering Letter along with Guarantee Agreement by D-2	A-6
7.	10.03.2015	Guarantee Agreement by D-2	A-7
8.	13.08.2015	Letter for renewal	A-8
9.	13.08.2015	Pronote for Rs. 30,00,000/-	A-9
10.	13.08.2015	Delivery Letter to DPN	A-10
11.	13.08.2015	Agreement cum Deed of Hypothecation	A-11
12.	13.08.2015	Letter of Undertaking	A-12
13.	13.08.2015	Letter Evidencing Deposit of Title Deeds by D-2	A-13
14.	10.03.2015	Letter Evidencing Deposit of Title Deeds by D-2	A-14
15.	13.08.2015	Letter Evidencing Deposit of Title Deeds by D-2	A-15
16.	16.10.2007	Sale Deed in favour of D-2	A-16
17.	10.03.2015	Registered Memorandum of Deposit of Title Deeds by D-2	A-17
18.	26.06.2007	Sale Deed in favour of D-2	A-18
19.	14.07.2006	Deed of Construction	A-19
20.	10.03.2015	Registered Memorandum of Deposit of Title Deeds by D-2	A-20
21.	26.06.2007	Sale Deed in favour of D-3	A-21
22.	14.07.2006	Deed of construction by D-3	A-22
23.	10.03.2015	Registered Memorandum of Deposit of Title Deeds by D-3	A-23
24.	06.02.2018	Acknowledgement of Debt and Security	A-24
25.	23.02.2018	Acknowledgement of Debt and Security	A-25
26.	06.05.2017	Reminder	A-26

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27.	30.12.2017	Reminder	A-27
28.	19.01.2018	Demand Notice	A-28
29.	--	Statement of Accounts	A-29

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Witness Examined for the Defendants : -NilList of Documents Exhibited for the Defendants : -Nil –

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SCHEDULE - A

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Hypothecation of Book Debts and receivables and Herbal Medicines,Machineries such as 1.FBD 60 Kg. 2. Double Screw Juice Expeller, 3. Ointment mixing machine, 4. Ribbon blunder, 5. Rapid Bliister Packing 6. CAPFILL 2L (Double Loader), 7. Vaccum Pumps, 8 CPM Capsule Polishing Machine and 9. Dex Dust Extractor Oil Free for Capsule belonging to the 1^st defendant company kept at No.23, Parameswari Nagar, 2^nd Street, Adyar, Chennai 600 020 or at No.48, G.W.T. Road, Opp. Rajiv Gandhi Memorial, Sriperampudur Taluk, Kancheepuran District.

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SCHEDULE - B

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All that piece and parcel of land situated in S. No. 235 Part at Sholinganallur Village marked as Plot No. HIG-III/9 in the sanctioned plan of Sholinganallur Neighbourhood Phase-III Scheme and measuring 241.88 Meter Squire and thereabouts bounded as

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North East by	: 9.00 Metre Road
South East by	: Plot No. HIG-III/8
South West by	: Plot No. HIG-II/1
North West by	: 9.00 Metre Road

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Measuring on the North East 12.00 Metre, on the South East 18.00 Metre on the South West 13.50 Metre, Splay on the North East 2.12 Metre and on the North West 16.50 Metre in all measuring 241.88 Sq.m. land and lying within the Registration District of South Chennai and SubRegistration District of Neelankarai.

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04.12.2025

SCHEDULE - C

All that piece and parcel of land and building situated at a Flat No.11B, Eleventh Floor, measuring 423 sq. ft. of plinth area and 65 sq. ft. of common area aggregating to 488 sq. ft., One designated open car Park together with 172.635 sq. ft., undivided share out of 67 Cents comprised in T.S. No. 26, (Old S. No. 205/3 Part & 205/8) Block No.42 of Thiruvanmiyur, Chennai 600 041, bounded on the

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North by : Property Comprised in T.S. No. 126 & 127 East by : Property Comprised in T.S. No. 27, 31, 32 & 33 South by : Property Comprised in T.S. No. 33 & 34 West by : East Coast Road - Block No. 40, in T.S.No.27 & 31

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Situated within the Sub Registration District of Joint-1, Saidapet and Registration District of Chennai South.

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SCHEDULE- D

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All that piece and parcel of land and building situated at a Flat No.11E, Eleventh Floor, measuring 356 sq. ft. of plinth area and 55 sq. ft. of common area aggregating to 411 sq. ft., One designated open car Park together with 145.395 sq. ft., undivided share out of 67 Cents comprised in T.S. No. 26, (Old S. No. 205/3 Part & 205/8) Block No.42 of Thiruvanmiyur Village, situated at No. 18/1, East Coast Road, Thiruvanmiyur, Chennai 600 041, bounded on the

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Situated within the Sub-Registration District of Joint-I, Saidapet and Registration District of Chennai South.

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

Canara Bank v. Dharma Pharmacy Pvvt Ltd. And Others

Case brief

What is this about?

What did the court decide?

Canara Bank v. Dharma Pharmacy Pvvt Ltd. And Others

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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