In an ex-parte application under Section 19 of the RDB Act, the tribunal allowed Punjab National Bank's claim against borrowers for Rs.46.41 lakhs defaulting on a term loan used to purchase ten vehicles, permitting recovery via asset sale.
Recovery of Rs.46,41,166.28 along with interest and penalty; liberty to sell hypothecated vehicles and personal assets.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
T.A. No. 880 of 2023
21.03.2025
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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI
Dated this the 21st day of March, 2025
Present: SMT. S.V. GOWRAMMA Presiding Officer
TRANSFERRED APPLICATION No. 880 of 2023
(Originally filed before DRT- II, Chennai as OA 758/2018 and thereafter transferred to this Tribunal and renumbered as TA No 961 of 2023)
Punjab National Bank
AGMO: 150, Luz Church Road, Mylapore Through its Chief Manager & Authorised Officer Chennai – 600 004. ….Applicant
-Vs-
Counsels on record / appeared:
Counsel for Applicant : Sh. Sunit Kumar Agarwal
Defendants 1 to 3 were set ex-parte on 26.05.2022
: - FINAL ORDER - :
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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 3, jointly and severally for recovery of a total sum of Rs.46,41,166.28 (Rupees Forty Six Lakhs Forty One Thousands One Hundred Sixty Six and paise Twenty Eight only) due in respect of Term Loan (Vehicle) (Account No.034300JT00001038) together with further interest @ 11.25% p.a., with monthly rests along with Penal interest @ 2% p.a. (simple) and Non Observance charges @1% from the date of Application till the date of realization in full, for sale of scheduled mentioned hypothecated vehicles and for costs of this OA.
Brief Facts of the case:
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(Vehicle) the defendants had submitted and executed the following loan documents in favour of applicant bank.
a) Request for Loan dated 01.07.2016 along with Tax invoice dt.25.05.2016 and dt.02.08.2016 of TAFE Reach Limited, Chennai quoting the price of each vehicle as Rs.5,82,520/-
b) Certificate dt. 13.07.2016 from ministry of micro, small & medium enterprises, Government of Inida. Tamil nadu chapter, Chennai about of registration for providing services of Cab/Transport Hiring with UAN-TN02E0017981.
c) Sanctioning of Term Loan of Rs.48.00 lakhs on 02.08.2016 with due intimation to the defendants and obtaining acknowledgement on sanction in token of acceptance of terms and conditions of sanction.
d) Hypothecation Agreement (For Road Transport Operator and other Commercial Vehicle) dt. 02.08.2016 for Rs.48.00 lakhs with interest @12.30% p.a. with monthly rest and penal interest @2% and non-observation of terms & conditions charges @1%. The present applicable rate of interest is 11.25% p.a. with monthly rest with.
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ten vehicles with RTO: Tambaram, Chennai with copy of the permit.
g) Letter dt.02.08.2016 agreeing and declaring hypothecation the ten vehicles in favour of bank.
h) Letter dt.05.08.2016 confirming that all formalities o all other applicable acts will be done at her level and will pay all taxes etc and will attach all such receipts and that the vehicles were available for inspection.
I) Execution of Balance and Security Confirmation Letter dt.10.10.2018, thus extending the limitation till 10.10.2021.
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applicant bank was left with no option but to seize vehicles and to take swift action by putting them to sale/auction. Consequent to it, the applicant bank got the valuation of each vehicle done and put the vehicles for auction. Out of 10 vehicles, only 8 could be sold as rest two were categorised as SCRAP and none were inclined to purchase. The Scrap sale realisation value will be taken into consideration only after actual sale is made and the expenses in auction of vehicles are adjusted. The details of the auction and amount recovered are detailed in the Original Application and the amount recovered is Rs.4,70,0000/-. It is further submitted by applicant bank that after adjustment of part recovery of Rs.53,43,353.10p made, a sum of Rs.46,41,166.28p due as on 31.10.2019 is liable to be recovered from defendants.
Heard the submissions of Applicant Bank and perused the records.
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: O R D E R :
Forty Six Lakhs Forty One Thousand One Hundred Sixty Six
and Twenty Eight paise only) due in respect of Term Loan (Vehicle) (Account No.034300JT00001038) together with further interest @ 11.25% p.a., with monthly rests along with Penal interest @ 2% p.a. and Non-Observance charges @1% from the date of Application till the date of realization in full and for costs of this application;
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amount, the bank is at liberty to recover the amount by sale of the schedule mentioned hypothecated movables morefully detailed in the OA schedule.
(c) Schedule mentioned hypothecated vehicles shall be appended to this final order.
(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 2nd and 3rd Defendants (both movable and immovable) to recover the balance dues as required under law for which the 2nd and 3rd Defendants to disclose to the Tribunal particulars of other properties or assets owned by the Defendants;
(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 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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Recovery Officer in terms of the final order.
Sd/(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI
(Dictated to Steno (Mogesh), transcribed by him, corrected, signed and pronounced by me on this the 21st day of March, 2025)
ANNEXURES
WITNESSES EXAMINED FOR THE APPLICANT BANK :
AW-1: Mr.P. Mahendran, Chief Manager of the Applicant Bank
Exhibits on the part of the Applicant:
| Sl. No. |
Description of Documents | Exhibit No. |
|---|---|---|
| 1. | Request Application of defendant for a loan 01.07.2016 |
A-1 |
| 2. | Tax Invoice of TATA Motors dt.25.05.2016 for 10 vehicles and individual invoice dt.02.08.2016 for each vehicle for cost of the vehicle. 25.05.2016 & 02.08.2016 |
A-2 |
| 3. | Registration as Transport Hiring services with MSME, Govt. of India, on 13.07.2016 with Reg. No.TN02E0017981. |
A-3 |
| 4. | Sanction of Term Loan Vehicle of Rs.48.00 lakhs on 02.08.2016, duly acknowledged by defendants. |
A-4 |
| 5. | Hypothecation Agreement (for Road Transport Operators & Other Commercial Vehicles) dt.02.08.2016 for Rs.48.00 lakhs executed by the defendant |
A-5 |
| 6. | Request of defendant to cover the account under CGTSME Scheme. 27.07.2016 |
A-6 |
| 7. | Vehicles Registration Certificates dt.04.08.2016 for | A-7 |
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| 10 vehicles from RTO Tambaram, Chennai with hypothecation in favour of applicant bank. |
||
|---|---|---|
| 8. | Letter from defendants for hypothecating the vehicles in favour of bank. 02.08.2016 |
A-8 |
| 9 | Letter dt.05.08.2016 of defendants for inspection of the vehicles after registration confirming that all taxes etc. have been paid. |
A-9 |
| 10 | Balance & Security Confirmation Letterdt.10.10.2018 signed by defendants extending the limitation till 10.10.2021. |
A-10 |
| 11 | Demand notice dt.25.10.2018 to pay due amount of Rs.49,97,992.00 as on 30.09.2018 |
A-11 |
| 12 | Statement of account for Term Loan (vehicle) | A-12 |
Witness Examined for the Defendants: -Nil-
List of Documents Exhibited for the Defendants: -Nil –
:- SCHEDULE OF HYPOTHECATED VEHICLES-:
| Sr. No |
Registrtti on No. |
Chasis No. |
Eng ine No. |
Valua tion Rs. |
Auctio ned For Rs. |
Expen ses incurr ed Rs. |
Amount Appropriate d Rs. |
|---|---|---|---|---|---|---|---|
| 01 | TN-11- T1722 |
MAT60 0185G PC0947 4 |
475 1D1 03C TYP 135 17 |
Scrap- No Value |
Not sold | NA | NIL Not sold |
| 02 | TN-11-T- 1921 |
MAT60 0185G PC0946 4 |
475 1D1 03C TYP 135 14 |
Scrap- No Value |
Not sold | NA | NIL Not sold |
Sd/-
(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI
3 issues framed by the court
Whether the application under Section 19 of RDB Act for recovery of dues is maintainable and supported by evidence.
Whether the claim for recovery including interest and penalty amounts is sustainable in the absence of defendant response.
Whether the tribunal can direct sale of hypothecated vehicles and personal assets for recovery of dues.
2 provisions across 1 enactments
Punjab National Bank
M/s. Ari Travels
Mrs. Lourdu Mary Caroline
Mr. Aashique Ignatious
S.V. Gowramma
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
