Allowed

Indian Overseas Bank v. Rams International Co. And Two Others

DRT12 Mar 2025TA/829/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the bank's application for recovery of dues under Section 19 of the RDB Act. The court rejected contentions without appearance from the respondents and directed recovery from their joint assets, including scheduled immovable properties and personal assets.

What did the court decide?

Ordered recovery of Rs. 57,81,197.99 plus interest and costs from respondents jointly and severally; liberty to sell Schedule A and B properties and personal assets.

Indian Overseas Bank versus Rams International Co. And Two Others — Money Laundering | DRT (2025)

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T.A. No. 829 of 2023

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12.03.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 12^th day of March, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 829 of 2023

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(Originally filed before DRT- II, Chennai as OA 758/2018 and thereafter transferred to this Tribunal and renumbered as TA No 829 of 2023)

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Indian Overseas Bank Adyar Branch, No. 12, Sardar Patel road, Adyar, Chennai – 600020 ….Applicant

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-Vs-

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Rams International Co, Proprietorship Concern Represented by its Properties A.S.Jyothi 109/1, P.S. Sivasamy Road, Mylapore, Chennai – 600004.

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A.S. Jyothi,

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W/o. M.S.A. Sankaralingam, 109/1, P.S. Sivasamy Road, Mylapore, Chennai – 600004.

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S. Kannan, S/o. Srinivasan Flat No. 5, 2^nd Floor, Old No. 24, New No. 53, Alamelumangapuram, Chennai – 600004.

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Counsels on record / appeared:

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Counsel for Applicant : M/s K.K. Sivasshanmugam

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Defendants 1 to 3 were set ex-parte on 02.08.2021

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: - FINAL ORDER - :

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This original application is filed on 24.09.2018 by the applicant bank under

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Section 19 of Recovery of Debts and Bankruptcy Act, 1993 (formerly Recovery of

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T.A. No. 829 of 2023

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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.57,81,197.99p (Rupees Fifty Seven Lakhs Eighty One Thousand One Hundred and Ninety Seven and Ninety Nine Paise Only) due in respect of Cash Credit Facility (Account No.000233000000005) together with further interest @ 12.20% p.a., with monthly rests along with overdue interest @ 2% p.a. from the date of Application till the date of realization in full, for sale of scheduled 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.758 of 2018, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.758 of 2018 stood transferred to this Tribunal and renumbered as TA No.829/2023.

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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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The case of applicant bank is that the 1^st defendant, an MSME unit, is a Proprietorship concern, doing the business of trading in paper waste, represented by its proprietrix, second defendant herein. 1^st defendant represented by 2^nd defendant approached applicant bank on 30.06.2016 seeking Cash Credit facility.

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It is submitted by applicant bank that the applicant bank acceding to the request of the borrower concern, sanctioned Easy Trade Finance Cash Credit limit of

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T.A. No. 829 of 2023

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Rs.49 Lakhs to the 1^st defendant concern.

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As per the terms and conditions of sanction advice, the cash credit facility is secured by prime securities of residual value of property belonging to Ms. A S Jyothi and property belonging to Mr. Kannan by way of equitable mortgage to be executed by 2^nd and 3^rd defendants in respect of “Schedule A and B” mentioned properties respectively.

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It is submitted by applicant bank that in acceptance of terms and conditions of Credit Sanction Advice dated 27.06.2016 and in consideration of receipt of cash credit facility, the 1^st defendant represented by 2^nd defendant executed the following loan documents in favour of applicant bank on 27.06.2016:

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a. Demand promissory note for Rs. 49 Lakhs;

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b. Letter executed by the 1st defendant borrower having given DPN as security for the repayment of overdraft/cash credit or any other cash credit facilities.

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c. Letter of hypothecation for securing machineries/ vehicles/ goods/ book debts.

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It is further submitted by applicant bank that 2^nd defendant had already availed a Housing Term Loan of Rs.89 lakhs from the applicant bank under Credit Sanction Advice dated 15.02.2016 for the purpose of purchasing and completing the construction of “Schedule A” property.

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The 2^nd defendant deposited her title deeds relating to the “Schedule A” property on 07.03.2016 with intention to create security interest thereon and to secure the repayment of the loan and executed a letter evidencing deposit of title deeds on 08.03.2016 in favour of the applicant bank for the Housing Term Loan. On

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the same day i.e., on 08.03.2016, 2^nd defendant executed Registered memorandum of deposit of title deeds in Doc. No. 331/2016 in favour of the applicant bank for the Housing Term Loan. Thereafter the 2^nd defendant executed a confirmation letter dated 23.06.2016 for continuing the said title deeds documents given as prime security for the housing term loan as supplemental mortgage for the advances to be made to M/s Ram international Co. Hence the residual value of 2^nd defendant‟s prime security of immovable property created for the Housing Term Loan has been given as supplemental mortgage for this loan transaction.

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It is the case of applicant bank that 3^rd defendant agreed to guarantee the above said loan transactions availed by 1^st defendant concern and executed a Letter of Guarantee dated 27.06.2016 in favour of the applicant bank. The 3^rd defendant besides executing letter of guarantee, also executed a letter evidencing deposit of title deeds dated 23.06.2016 evidencing the deposit of title deeds on 22.06.2016 relating to the “Schedule B” mentioned property in favour of the applicant bank with intent to create security interest thereon and secure the repayment of moneys to the bank. The 3^rd defendant also executed registered memorandum of deposit of title deeds dated 22.09.2016 in Doc.No. 2023 of 2016 in favour of the applicant bank.

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It is submitted that the 1^st defendant failed to service interest in respect of cash credit facility. On account of the default of 1^st defendant, cash credit facility was classified as Non Performing Asset on 31.03.2018. Inspite of various demands/remainders to clear the outstanding, defendants failed to respond to the personal requests to clear the outstanding. It is submitted that the guarantor‟s liability is co-extensive with that of principal borrower on their default. Hence, borrowers and

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guarantor are jointly and severally liable to discharge total debt of Rs.57,81,197.99p in respect of cash credit facility to the applicant bank. Hence, this Original Application (OA) has been filed to recover the 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 returned unserved with postal endorsement as „left‟ in respect of D-1 and D-2, while summon to D-3 is duly served. Although one Mr. G. Veerabadran, Advocate appeared for defendants and undertook to file vakalat, despite availing substantial adjournments, neither vakalat nor written statement has been filed. When OA was taken up on 02.08.2021 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants1 to 3 were placed ex-parte on 02.08.2021.

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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, Mr. Praveen Kumar, 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-31 . 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, a sum of Rs.57,81,197.99p (Rupees Fifty Seven Lakhs Eighty One Thousand One Hundred and Ninety Seven and Ninety Nine Paise Only) due in respect of Cash Credit Facility (Account No.000233000000005) together with further interest @ 12.20% p.a., with monthly rests along with overdue interest @ 2% p.a. from the date of Application till the date of realization in full and for 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 schedule A and B mentioned immovable properties morefully detailed in the OA schedule.

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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 2^nd and 3^rd Defendants (both movable and immovable) to recover the balance dues as required under law for which the 2^nd and 3^rd Defendants to disclose to the Tribunal particulars of other properties or assets owned by the Defendant;

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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 Defendants duly considering the amounts, if any, paid by the Defendant and/or amount realized

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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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(f) The applicant bank shall file memo of costs within ten days from the date of this final order.

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(g) Recovery Certificate shall be drawn up and issued to the Recovery

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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 12^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: Mr. Praveen Kumar, Chief Manager 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.
1.	Application form filed by the Borrower concern to the applicant bank along with certificate of registration issued by Commercial Taxes Department, Govt of Tamilnadu. 03.06.2016	A-1
2.	Credit sanction advice issued by applicant bank granting cash credit facility of Rs. 49 lakhs to the 1^stdefendant borrowerconcern. 27.06.2016	A-2
3.	Demand promissorynote executed by proprietrix A.S.	A-3

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	Jyothi for Rams International Co. for Rs.49 Lakhs 27.06.2016
4.	Letter executed by the 1^stdefendant borrower having given DPN as security for the repayment of overdraft/cash credit orany othercashcreditfacilities27.06.2016	A-4
5.	Letter of hypothecation (for securing machineries/vehicles/goods/ book debts executed by the 1^st defendant borrower 27.06.2016	A-5
6.	Guarantee letter executed by the 3^rddefendant for the payment up to 49 lakhs for the loan to be advanced to the principaldebtor 27.06.2016	A-6
7.	Confirmation letter executed by 2^nd defendant for supplement mortgage authorizing the bank to continue to hold the said title deeds as continuing collateral security for the advances made to Ram International Co. in respect of Schedule”A”property23.06.2016	A-7
8.	Registered sale deed executed by Parvati Bai through her power of attorney agent G. Balakrishnadas in favour of M. Natarajan(Registered asDoc. No. 735/1970)15.07.1970	A-8
9	Registered release deed executed by N.Meenakshiammal, Mr. N. Thirunavukarasu and Mr.N. Muruganandam to and in favour of Mr. Thirugnanasambandam (Registered as Doc. No.827of 2013) 31.05.2016	A-9
10	Sale deed dated 18.02.2016 document No.227/2016 executed by Mr. Thirugnansambandam to and in favour of Mrs. A.S.Jyothi(Registered asDoc. No.227/2016)	A-10
11	Extract from the permanent land register dated 28.06.1972 inthename of Mr.Natarajan	A-11
12	DeathCertificate of Mr. Natarajandated19.11.2014	A-12
13	True copy of Legal heirship Certificate of Mr. Natarajan dated 06.08.2008	A-13
14	Approved building plan dated 17.02.1997 B.P. No. 765/1997	A-14
15	Property Tax Receipt dated 18.10.2013 No. 2013/14/OG/015005	A-15
16	Encumbrance certificate for survey No. 375/140, 375/167 periodfrom 29/01/1987to 31/12/2015 01.01.2016	A-16
17	Encumbrance certificate for the period from 01/01/2013 to 06/03/2018 07/03/2018	A-17
18	Encumbrance certificate for the special from 01/01/2016 to 05/07/2016 06/07/2018	A-18
19	Letter executed by 3^rddefendant guarantor for having deposited with the applicant bank, Adyar Branch the title deed and other documents relating to schedule “B” properties on 22.06.2016 with intent to secure repayment to the bank 23.06.2016	A-19

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20	Registered Memorandum of deposit of title deeds executed by Kannan, the 3^rddefendant in favour of applicant bank (Doc. No.2023/2016)22.06.2016	A-20
21	Registered sale deed executed by Mr.C. Balakrishnan through his power of Attorney agent, Mr.A. Mohammed Yaseen, in favour of the H.Srinivasan. (Registered as Doc. No. 23889//1995)29.09.1995	A-21
22	Memorandum of agreement executed between M/s. Coronet Construction and favour of H. Srinivasan 25.02.1995	A-22
23	General power of attorney deed executed by H. Srinivasan in favourofS. Ramesh 29.05.1997	A-23
24	Registered sale deed executed by H. Srinivasan through its power agent S. Ramesh in favour of V. Saravanan (Registered asDoc. No. 2045/2008) 01.09.2008	A-24
25	Registered sale deed executed by V. Saravanan in favour of S. Kannan i.e., 2^nddefendant herein (Registered as Doc. No. 1348/2013) 09.05.2013	A-25
26	Registered settlement deed executed by Kannan in favour of his sister K. Karpagam (Registered as Doc. No. 1348/2013) 09.05.2013	A-26
27	Registered settlement deed executed by K. Karpagam in favour of S. Kannan i.e., 2^nddefendant herein (Registered doc. No. 2011/2016)21.06.2016	A-27
28	Encumbrance certificate for the period from 01.04.83 to 03.06.2016	A-28
29	Encumbrance certificate for the period from 01.05.2016 to 08.06.2016	A-29
30	Letter executed by the borrower agreeing to make the payment on or before 30.06.2018 to clear all over dues of borrowerconcernandher housingloan05.05.2018	A-30
31	Certified copy of the statement of accounts for the period from 27.06.2016 to 10.09.2018 for the borrower concern of RamsInternationalCo.	A-31

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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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SCHEDULE A PROPERTY BELONGING TO 2^ND DEFENDANT Mrs.A.S.JYOTHI

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All that piece and parcel of house, ground and premises bearing Door No. 58, New No. 4, Lodd Govindas Nagar Road (LGN Road), (In the previous documents

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mentioned as General Patterns Road) Anna Salai, Chennai – 600002, comprised in R.S. No. 375/140, as per patta R.S. No. 375/167 of Triplicane Village, measuring in two items and the

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Item No. 1

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Measuring North to South on the Eastern Side-31 feet and 11 inches, North to South on the Western side-31 feet and 11 inches, East to West in the Northern side-27 feet and inches, East to West on the Southern side-25 feet and 1 inches admeasuring 835.5 Sq.ft., bounded on the;

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North by: Property comprised is S.No. 377/11 and 375/168 and Srirangan Chettiar Property.

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South by: Portion allotted to N. Thirunavukkarasu

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East by : Property Belongs to K.P. Arumugam Chettiar & Aziz

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West by : Property belongs to Ram and sons comprised in S.No. 375/140.

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Item No. 2

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Measuring North to South on the Eastern side-25 feet and 8 inches, East to West on the Northern side-9feet and 6inches, East to West on the southern side-9feet and 6 inches admeasuring 252.4 Sq.ft., bounded on the:

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North by: Property Comprised in S. No. 377/11 belongs to V.V. Ramasamy Chettiyar.

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South by: Portion described in Item 1 above

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East by : Property belongs to Srirangan Chettiyar.

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West by : Property belongs to Ram and sons comprised in S.No. 375/140.

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The total extent of Item-1 and Item-2 are measuring 1088 Sq.ft., together with 175.5 Sq.ft., undivided share of land, being the ½ undivided share in the common passage situated in the property and comprised in the above survey numbers is measuring North to South on the Eastern sude-43 feet and 10 inches, North and South on the Western side-43 feet and 10 inches, East to West on the Northern side-9 feet and 0 inches, East to West on the Southern side-7 feet and 0 inches admeasuring 351 Sq. ft., Bounded on the;

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North by : Property described in Item 1 above

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South by: Lodd Govindas Nagar Lane.

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East by : Portion allotted to Jothiramalingam and Muruganandam and property belongs to Velusamy Chettiyar.

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West by : Property allotted to Thirunavukkarasu and the common stair case belongs to Thirunavukkarasu and Thirugnanasambandam, and 66.5 Sq.ft., undivided share, being the ½ undivided share in the staircase situated on the Southern side of the property described in Item 1 above measuring North to South on both side-7 feet and 6 inches, East to West on both side-17 feet and 8 inches, admeasuring 133 Sq.ft., and totaling in all the land measuring 1300 Sq.ft., (835.5 + 252.4 + 175.5 UDS + 66.5 UDS = 1300 Sq.ft.,) together with the building thereon and situated within the Registration District of Chennai Central and Sub Registration District of Trplicane.

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SCHEDULE B PROPERTY RELONGING TO 3^RD DEFENDANT S.KANNAN

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All that piece and parcel of land and Building bearing Flat No.5, Second Floor, Old door. No. 24, New door No. 53, Alamelumangapuram, Mylapore, Chennai – 600004 Comprised in R.S. No. 3550, Mylapore Village, Land measuring an extent of 1/6^th Undivided Share (i.e., 207 Sq. feet) out of 1242 Sq. feet, together with Flat area 425 Sq. feet,

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Bounded on the:

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North by: Alamelumangapuram 3^rd street, South by: House bearing Door No.24/1, East by : House bearing Door No.24/1, West by : Door No.25, Alamelumangapuram,

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Within the Sub Registration District of Mylapore and Registration District of Central Chennai.

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

Indian Overseas Bank v. Rams International Co. And Two Others

Case brief

What is this about?

What did the court decide?

Indian Overseas Bank v. Rams International Co. And Two Others

Case brief

What is this about?

What did the court decide?

What the court decided

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