Allowed

Syndicate Bank v. M/S Siva Sakthi Metals

DRT21 Mar 2025TA/950/2023

Case brief

AI extract

What is this about?

This Matter involves a money recovery claim filed by Canara Bank against two defendants for a defaulted loan. The Tribunal allowed the application, fixing the recoverable amount and empowering the bank to sell hypothecated assets.

What did the court decide?

Recovery of Rs.58,90,404.55 plus interest at 13.50% p.a. compounded monthly from application date, with liberty to sell hypothecated and personal assets.

Syndicate Bank versus M/S Siva Sakthi Metals — Banking and Recovery | DRT (2025)

T.A. No. 950 of 2023

21.03.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 21^st of March, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 950 of 2023

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(Originally filed before DRT- II, Chennai as OA 823/2019 and thereafter transferred to this Tribunal and renumbered as TA No 950 of 2023)

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*CANARA BANK

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(Erstwhile Syndicate Bank) Koyambedu Branch, Annai Mahal Complex, Raghavendra Colony, No.33/56, Kaliamman Koil Street, Virugambakkam, Chennai – 600 092. Rep. by its Senior Branch Manager ….Applicant

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(*Amended vide order dated 25.05.2022 in view of merger)

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-Vs-

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1. M/s. Siva Sakthi Metals

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Rep. by its Proprietorix Mrs. M. Sumithra Carrying on Business at

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No.40, Pillayar Koil Street,

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Maduravoyal, Chennai – 600 095.

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Mrs. M. Sumithra

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W/o G. Muruganantham, Proprietorix of M/s. Siva Sakthi Metals Having office at No.40, Pillayar Koil Street,

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Maduravoyal, Chennai – 600 095.

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Also At:

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No.8, Rajeshwari Street, Ramapuram, Chennai – 600 089. …..Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. P. Sreenivasulu Defendants 1 and 2 were set ex-parte on 20.10.2021

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21.03.2025

: - FINAL ORDER - :

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This Original Application is filed on 03.08.2019 by erstwhile Syndicate Bank (since merged with Canara 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 and 2 jointly and severally, for recovery of a total sum of Rs.58,90,404.55p (Rupees Fifty Eight Lakhs Ninety Thousand Four Hundred and Four and Fifty Five Paise Only) due in respect of SOD Facility (Account No.603114000000762) together with further interest @ 13.50% p.a. compounded monthly from the date of Application till the date of realization in full, to seize and sell the hypothecated goods morefully described in the OA schedule and for costs of this application.

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Originally, this Application was filed before DRT-II, Chennai, assigned OA No.823 of 2019, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.823 of 2019 stood transferred to this Tribunal and renumbered as TA No.950 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

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21.03.2025

Bankruptcy Act, 1993, and the subject recovery claim falls within the jurisdiction of this Hon’ble Tribunal.

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The case is Applicant Bank is that the 1^st Defendant represented by its Proprietorix, the 2^nd Defendant, carrying on business at Maduravoyal, approached applicant bank and submitted Loan Application dated 02.12.2015 seeking for a loan amount of Rs.40,00,000/- for meeting the working capital requirements of their business.

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It is submitted that the Applicant Bank, considering the said Loan Application of the 1^st Defendant represented by the 2^nd Defendant, sanctioned and granted loan amount of Rs.40,00,000/- to the 1^st Defendant under loan Account No. 603114000000762 on 18.12.2015.

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The Applicant submits that the 1^st Defendant represented by the 2^nd Defendant after availing the loan from the Applicant, executed Composite Hypothecation Agreement, in favour of the Applicant as security for the due repayment of the aforesaid loan amount sanctioned by the Applicant and availed by them from the Applicant.

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It is submitted by applicant bank that the Defendants have agreed and undertook to pay interest on the aforesaid loan amount availed by them at 11.50% per annum thereon compounded monthly, being 1.50% over and above Canara Bank base rate. The Defendants also agreed and

T.A. No. 950 of 2023

21.03.2025

undertook to pay overdue interest at such rate as may be fixed by the Applicant on the amounts over due in case of default. The defendants also accepted that notification of varied rate of interest in the Bank Notice Board, is sufficient notice to them and further they have agreed to pay interest at the rate notified by the Applicant in its notice board until all dues are cleared in full.

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It is submitted by applicant bank that the defendants have agreed and undertook to pay the aforesaid loan amount availed by them by operating the loan account briskly to the extent of limit/ drawing power fixed and bring it to credit at least once in a year and closing it in time by the end of one year.

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The Applicant bank submitted that in order to secure the loan availed, the Defendants have also hypothecated goods and found and lying at No.40, Pillaiyar Koil Street, Maduravoyal, Chennai – 600 095, to the Applicant as security for the due repayment of the aforesaid loan amount availed by them from the Applicant.

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It is submitted by the Applicant Bank that subsequent to availing of loan, Defendants have had not paid the loan amount and also the accrued interest due thereon as agreed and undertook by them and also even in spite of repeated requests and demands made on the Defendants by the Applicant and thereby the Loan account of the Defendant fell overdue aforesaid account of the defendant as NPA. The applicant submits that the

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21.03.2025

Defendant have willfully failed and neglected to renew the aforesaid SOD account and also failed to pay the loan amount, due to which Applicant had issued Lawyer Notice on 24-04-2010 calling upon the 2^nd Defendant to comply with the demand therein. The 2^nd defendant who is in the Proprietrix of the 1^st Defendant managed not to receive the said legal Notice. 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 and 2 through Registered Post with Acknowledgment Due, which returned unserved with postal endorsement as ‘insufficient address / left’. Applicant bank had caused paper publication of notice and filed proof thereof. When OA was taken up on 20.10.2021 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants were placed ex-parte on 20.10.2021.

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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, Sh. Venkatesh R.M., 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-4 . As the Defendants remained exparte, 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 1 and 2, jointly and severally, a sum of Rs.58,90,404.55p (Rupees Fifty Eight Lakhs Ninety Thousand Four Hundred and

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Four and Fifty Five Paise Only) due in respect of SOD Facility (Account No.603114000000762) together with further interest @ 13.50% p.a. compounded monthly rests 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 hypothecated assets 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

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at liberty to sell the personal assets of the 2^nd Defendant (both movable and immovable) to recover the balance dues as required under law for which the 2^nd Defendant 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 Defendant 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 Defendant 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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(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this the 21^st day of March, 2025)

T.A. No. 950 of 2023

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ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Sh. Venkatesh R.M., 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.	Loan Application 02-12-2015	A-1
2.	Original Composite Hypothecation Agreement 18-12-2015	A-2
3.	Legal Notice with returned covers 24-04-2019	A-3
4.	Statement of Account in respect of Account No.603114-762	A-4

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SCHEDULE OF PROPERTY

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Goods found and lying at No.40, Pillaiyar Koil Street, Maduravoyal,

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Chennai – 600 095.

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

Syndicate Bank v. M/S Siva Sakthi Metals

Case brief

What is this about?

What did the court decide?

Syndicate Bank v. M/S Siva Sakthi Metals

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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Case details

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