Allowed

Bank of Baroda v. M/S Celebrity Corporate Club

DRT26 May 2025TA/907/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed the original application filed by Bank of Baroda against a corporate firm and its directors for recovery of dues. The court dismissed the suit summarily due to non-appearance of respondents and directed realisation of the amount from assets.

What did the court decide?

Recover Rs.3,08,49,762 along with interest @ 14.25% p.a. and costs by sale of mortgaged or personal assets.

Bank of Baroda versus M/S Celebrity Corporate Club — Contract and Commercial Disputes | DRT (2025)

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T.A. No. 907 of 2023

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26.05.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 26^th day of May, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 907 of 2023

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(Originally filed before DRT- II, Chennai as OA 546/2020 and thereafter transferred to this Tribunal and renumbered as TA No 907 of 2023)

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Bank of Baroda, (Erstwhile Vijaya Bank) ARM Branch, No.144, Moore Street, Chennai – 600 001 Rep. by its Chief Manager

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….Applicant

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-Vs-

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M/s. Celebrity Corporate Club, Rep. by its Directors 1. Mr. S. Murugesan, S/o. Late S. Subbaiah, 2. Mr. Karthigeyan, S/o. Murugesan, Door No.3, Fourth Floor, “City Centre Plaza”, Mount Road, Chennai – 600 002

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Mr. S. Murugesan, S/o. Late S. Subbaiah, No.37, Nainiappa Naicken Street, Chindadripet, Chennai – 600 002

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Mr. Karthigeyan, S/o. Mr. S. Murugesan, No.37, Nainiappa Naicken Street, Chindadripet, Chennai – 600 002

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…..Defendants

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Counsels on record / appeared:

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Counsel for Applicant : Mr. K. Radhakrishna Murthy

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Defendants were set ex-parte on 18.07.2022

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T.A. No. 907 of 2023

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26.05.2025

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: - FINAL ORDER - :

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This original application is filed on 30.01.2020 by the applicant 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 jointly and severally for recovery of a total sum of

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Rs.3,08,49,762/- (Rupees Three Crores Eight Lakhs Forty Nine Thousand Seven Hundred and Sixty Two Only) due in respect of Term Loan (A/c No.300808391000011) together with further interest thereon @ 14.25% p.a., with monthly rests from the date of application till the date of realization in full, for sale of Schedule mentioned property morefully detailed in Schedule to the OA and for costs of this application.

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Originally, this Application was filed before DRT-II, Chennai, assigned OA No.546 of 2020, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.546 of 2020 stood transferred to this Tribunal and renumbered as TA No.907 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 first defendant,M/s

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T.A. No. 907 of 2023

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26.05.2025

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Celebrity Corporate Club, is a private limited company, wherein the second and third defendants are its Directors. The 1^st Defendant by its Board Resolution dated 22.07.2015 requested the applicant for sanction of Term Loan facility of Rs.2.8 Crores against the property under the scheme of V Mortgage for running their club activities.

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It is submitted that at the request of the 1^st defendant by its application dated 28.07.2015, the applicant bank has sanctioned a Term Loan facility of Rs.2.8 Crores against property on 12.08.2015 for their business purpose under the scheme of V mortgage. The 1^st defendant had availed the loan of Rs.2.8 Crores on 28.08.2015 and had executed Articles of Agreement dated 28.08.2015 in favour of applicant bank.

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It is further submitted that for the above facilities availed by the first defendant, the second and third defendants have jointly executed a letter of personal guarantee on 28.08.2015 for Rs.2.8 Crores, guaranteeing the due repayment of the amount payable by the first defendant with further interest and costs.

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The Applicant Bank submitted that the 2^nd defendant had called at the Applicant’s Branch at Chennai on 03.09.2015 and deposited with the Applicant Bank the original title Deeds relating to his property at Chennai morefully described in the Schedule hereunder with an intent to create an Equitable Mortgage thereon and as security for the due repayment of the

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T.A. No. 907 of 2023

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advances made to the first defendant with interest and costs. The above mortgaged properties have been also registered before the SRO, Triplicane on 03.09.2015 vide Registered Document No.1208 of 2015 by way of Memorandum of Deposit of Title Deeds.

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The Applicant has caused a search to be made in the register of the Registrar of Assurances of the Sub-District in which the property described in Schedule hereunder is situated and is not aware of any encumbrance on the said properties other than those herein mentioned or of any person possessing any interest on the said property other than those who are parties to this application.

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It is further submitted that subsequent to availing of loan, the operation of the loan account was very irregular. In spite of several demands the defendants did not regularize the account. The Applicant sent a demand letter dated 03.05.2016 to the defendants but there was no payment. However, the 1^st Defendant by his letter dated 19.07.2018 admitted his liabilities and requested time to pay the outstanding dues. The first defendant has executed an acknowledgment of liability dated 31.07.2018.

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It is submitted by applicant bank that as defendants miserably failed to make repayments in the aforesaid loan account, the applicant bank classified the aforesaid loan account as NPA (Non-Performing Assets) on

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T.A. No. 907 of 2023

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26.05.2025

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27.10.2018, as per the guidelines issued by the RBI. The applicant also sent notices under Section 13(2) and 13(4) of SARFAESI Act to the defendants on 05.11.2018 and 19.01.2019 respectively, but there was neither reply from defendants nor any payments was forthcoming. The Applicant had also filed an application under Section 14 of the SARFAESI Act before CMM, Egmore at Chennai for physical possession is pending before the Court. As defendants did not come forward to repay the dues, 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 Defendants 1 to 3 through Registered Post with Acknowledgement due, which was returned unserved from D1 with endorsement ‘Addressee Moved’ while Summons to D2 & D3 were duly served. Applicant Bank had caused Paper Publication of Notice with respect to D1 and filed proof thereof. When OA was taken up on 18.07.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants were placed exparte on 18.07.2022.

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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. P. TamilMani, Chief Manager/Constituted Attorney 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-16 . As the defendants

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T.A. No. 907 of 2023

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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 :

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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 a total sum of Rs.3,08,49,762/- (Rupees Three Crores Eight Lakhs Forty Nine Thousand Seven Hundred and Sixty Two Only) due in respect of Term Loan (A/c No.300808391000011) repayable together with further compound interest thereon @ 14.25% 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 schedule mentioned property morefully detailed in the OA;

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T.A. No. 907 of 2023

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(d) If the sale proceeds of the schedule mentioned mortgaged 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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(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 defendants 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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(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 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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T.A. No. 907 of 2023

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26.05.2025

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(Dictated to Steno (Sudhakar), transcribed by him, corrected, signed and pronounced by me on this the 26^th day of May, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Mr. TamilMani, Chief Manager/Constituted Attorney 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.	Board Resolution by 1^st Defendant dated 22.07.2015	A-1
2.	Loan Application by 1^st Defendant dated 28.07.2015	A-2
3.	Sanction Letter by Applicant dated 12.08.2015	A-3
4.	Articles of Agreement dated 28.08.2015	A-4
5.	Letter of Guarantee by 2^ndDefendant dated 28.08.2015	A-5
6.	Regd. MOD dated 03.09.2015	A-6
7.	Demand Letter by Applicant dated 03.05.2016	A-7
8.	Letter by 1^stDefendant dated 19.07.2018	A-8
9.	Acknowledgment of liability by 1^stDefendant dated 31.07.2018	A-9
10.	13(2) SARFAESI Notice by Applicant dated 05.11.2018	A-10
11.	13(4) SARFAESI Notice by Applicant dated 19.01.2019	A-11
12.	Application filed by Applicant before CMM, Chennai	A-12
13.	Proof Affidavit filed by the Applicant	A-13
14.	Gazette of India (Banks Amalgamated) dated 02.01.2019	A-14
15.	Certified statement of accounts	A-15
16.	Sale Deed favouring Mr. S. Murugesan vide Doc. No.277/2002 dated 16.07.1998	A-16

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Witness Examined for the Defendants: -Nil-

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T.A. No. 907 of 2023

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List of Documents Exhibited for the Defendants: -Nil –

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SCHEDULE

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All that piece and parcel of 970/12767 th of undivided share of land out of 5 grounds and 767 Sq.ft., together with flat in Fourth Floor, having a super built up area of 4730 Sq.ft., and in building known as City Centre Plaza situated at Triplicane Village, Old D.No.3, New D.No.3 to 34 present No.7/61, Mount Road (Anna Salai), Chennai – 600 002, comprised OS No.199 to 201 and RS No.10 and part of S.No.8 in Mylapore-Triplicane Taluk, Chennai District, within the Regn. District of Chennai Central and Sub-Regn., District of Triplicane. The entire land bounded on the:

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North by : Wallajah Road South by : R.S.No.120 East by : Ellis Road West by : R.S.Nos.11 & 12

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

Bank of Baroda v. M/S Celebrity Corporate Club

Case brief

What is this about?

What did the court decide?

Bank of Baroda v. M/S Celebrity Corporate Club

Case brief

What is this about?

What did the court decide?

What the court decided

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