Allowed

Punjab National Bank v. M/S Snn Travels

DRT18 Jun 2025TA/961/2023

Case brief

AI extract

What is this about?

The Tribunal decided an ex-parte application filed by Punjab National Bank for recovery of a defaulted term loan. Finding the debt unchallenged and evidenced, the court allowed the application, permitting the bank to recover the principal, interest, and costs, and authorizing the sale of the proprietor's other assets if necessary.

What did the court decide?

Recovery of Rs. 23,88,872 plus future interest at 12.10% p.a., costs, and authority to sell the proprietor's other assets for balance dues.

Punjab National Bank versus M/S Snn Travels — Banking and Recovery | DRT (2025)

¶1

T.A. No. 961 of 2023

¶2

18.06.2025

¶3

¶4

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

¶5

Dated this the 18^th day of June, 2025

¶6

Present: SMT. S.V. GOWRAMMA Presiding Officer

¶7

TRANSFERRED APPLICATION No. 961 of 2023

¶8

(Originally filed before DRT- II, Chennai as OA 350/2021 and thereafter transferred to this Tribunal and renumbered as TA No 961 of 2023)

¶9

Punjab National Bank, Circle Sastra Centre, Chennai South, Mezzananine Floor, 46-49 BNB Towers, Royapettah High Road, Chennai – 600 014. Represented by its Chief Manager. ….Applicant

¶10

-Vs-

¶11

M/s. SNN Travels, Represented by its Mrs. Sumathi (Proprietrix),

¶12

No. H-8, 1^st Block,

¶13

TNHB Flat, S.P. Gardens,

¶14

T. Nagar, Chennai – 600 017.

¶15

Mrs. M. Sumathi,

W/o. Muthukumar,

Proprietrix

No. H-8, 1^st Block,

TNHB Flat, S.P. Gardens,

¶20

T. Nagar, Chennai – 600 017. …. Defendants

¶21

Counsels on record / appeared:

¶22

Counsel for Applicant : M/s. M.S. Viswanathan

¶23

Defendants 1 & 2 were set ex-parte on 10.03.2022

¶24

: - FINAL ORDER - :

¶25

This Original Application is filed on 17.07.2021 by the applicant bank

¶26

under Section 19 of Recovery of Debts and Bankruptcy Act, 1993

¶27

T.A. No. 961 of 2023

¶28

¶29

18.06.2025

¶30

(formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the Defendants 1 & 2 for recovery of a total sum of Rs.23,88,872/(Rupees Twenty Three Lakhs Eighty Eight Thousand Eight Hundred and Seventy Two only) due in respect of Term Loan (Account No. 438600JT00000151) repayable together with further interest @ 12.10% p.a. compounded with monthly rests from the date of Application till the date of realization in full and for costs of this Original Application.

¶31

Originally, this Application was filed before DRT-II, Chennai, assigned OA No.350 of 2021, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.350 of 2021 stood transferred to this Tribunal and renumbered as TA No.961 of 2023.

¶32

Brief Facts of the case:

¶33

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.

¶34

It is the case of the Applicant Bank that the 1^st Defendant is a registered Proprietorship firm in the year 2017 and 2^nd defendant is the proprietorix of the firm. The 1^st defendant had been carrying out the

¶35

T.A. No. 961 of 2023

¶36

¶37

18.06.2025

¶38

Business of Tours and Travels in premises situated at Flat No. H-8, 1^st Block, TNHB Flat, S.P. Gardens, T. Nagar, Chennai - 600 017. The 2^nd defendant on behalf of the 1^st defendant had approached applicant bank seeking for a Term Loan of Rs.25,00,000/- vide application dated 02.03.2017.

¶39

The Applicant submits that the defendants hypothecated the Tata Indica V2 LS Cars to be purchased out of the bank finance worth about Rs.28.81 lakhs as security and the 2^nd defendant being the Proprietrix had agreed and undertaken to pay the same on demand in writing and the Bank is entitled to recover and receive the amount so incurred/expended to the debit of the Loan account and or from him/her personally. In addition to this CGTSME cover is also available.

¶40

It is submitted that the applicant bank after verifying and completing the required documentation and formalities, , had sanctioned the loans on 21.03.2017 vide Confirmation Letter dated 01.09.2018 from the Defendants for the dues payable to the Applicant and requesting the Applicant to sell the vehicles for a reasonable price and adjust for the loan amount.

¶41

It is submitted by applicant bank that upon perusal of the documents and completion of the required formalities on 21.03.2017, the applicant bank sanctioned Term Loan of Rs.24,48,000/-, which is also

¶42

T.A. No. 961 of 2023

18.06.2025

covered by CGTMSE.

It is further submitted by the applicant bank that in order to secure the loan, the 1^st defendant, represented by its Proprietrix, 2^nd defendant herein had executed the following loan and security documents in favour of applicant bank:

¶47

(i) Hypothecation Agreement (for Transport Operator and other Commercial Vehicle) dated 21.03.2017 thereby creating a hypothecation charge over the assets of Five Tata Indica Cars;

¶48

(ii) Balance and Security Confirmation Letter dated 10.07.2018 and 14.02.2020 for Term Loan availed by the defendants, as acknowledgment of Debt and Security;

¶49

(iii) Confirmation Letter dated 01.09.2018 from the defendants for the dues payable to the applicant and requesting applicant to sell the vehicles for a reasonable price and adjust for the loan amount.

¶50

The Applicant submits that subsequent to availing of loan, the defendants did not pay the monthly instalments as per the repayment schedule. Due to non-servicing of interest and non payment of dues in the Term Loan, the account became NPA on 20.08.2018 in accordance with RBI guidelines. The Applicant requested the Defendants to regularize the Term Loan Account several times which was not effective and hence a Recall Notice was sent to the Borrower on 20.08.2018 recalling the entire

¶51

T.A. No. 961 of 2023

¶52

18.06.2025

¶53

¶54

dues to pay, which was replied by defendants on 01.09.2018 that as such they were unable to manage the operations of the vehicle and unable to generate income out of the vehicles and requested the applicant to arrange for selling the vehicles at a reasonable price and thereby adjust the entire sale proceeds in the Term Loan Account and also assured to pay the remaining dues, if any, by way of monthly remittance in a reasonable time.

¶55

The Applicant submits that since the defendants had neither chosen to regularize the payments of instalment nor paid the entire dues and also informed the applicant bank to seize and sell the vehicle at a reasonable price and adjust the dues in question. Accordingly, the Vehicles were seized, sold for Rs.9,22,0000/- by the recovery agent and after adjusting a sum of Rs.59,225/- towards expenses incurred on account of sale of five vehicles, the balance amount of Rs.8,62,775/- was credited on 11.10.2018 in the Term Loan A/c. No. 438600JT00000151 of the borrower, as detailed at Page No.10 of the OA. Even after recovery by sale of hypothecated vehicles, defendants did not come forward to repay the balance dues. Hence the present Original Application (OA) has been filed for recovery of amounts due from defendants.

¶56

After the filing of the OA, summons were sent to the Defendants 1 and 2 through Registered Post with Acknowledgment Due, which were

¶57

T.A. No. 961 of 2023

¶58

18.06.2025

¶59

¶60

duly served to both the defendants. When OA was taken up on 10.03.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 and 2 were placed ex-parte on 10.03.2022.

¶61

Heard the submissions of Applicant Bank and perused the records.

¶62

To prove the case of the Applicant Bank, Sh. M. Velayutham, 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-10 . 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.

¶63

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:

¶64

: O R D E R :

¶65

The OA is allowed with costs,

¶66

(a) The applicant bank is allowed to recover from the Defendants of a total sum of Rs.23,88,872/- (Rupees Twenty Three Lakhs Eighty Eight Thousand Eight Hundred and Seventy

¶67

T.A. No. 961 of 2023

¶68

18.06.2025

¶69

¶70

Two only) due in respect of Term Loan (Account No. 438600JT00000151) repayable together with further interest @ 12.10% p.a. compounded with monthly rests from the date of Application till the date of realization in full along with costs of this application.

¶71

(b) 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 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 2^nd Defendant;

¶72

(c) 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.

¶73

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

¶74

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

¶75

T.A. No. 961 of 2023

¶76

¶77

18.06.2025

¶78

Recovery Officer in terms of the final order.

¶79

A copy of this order be communicated to the parties concerned.

¶80

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

¶81

(Dictated to Steno (Ponmalar), transcribed by her, corrected, signed and pronounced by me

¶82

on this the 18^th day of June, 2025)

¶83

ANNEXURES

¶84

WITNESSES EXAMINED FOR THE APPLICANT BANK :

¶85

AW-1: Sh. M. Velayudam, Chief Manager of the Applicant Bank

¶86

Exhibits on the part of the Applicant:

¶87

Sl. No.	Date	Description of Documents	Exhibit No.
1.	02.03.2017	The defendants application for purchase of cars to do Business of Tours and Travels	A-1
2.	21.03.2017	Sanction of Term Loan under the Scheme “Stand up India” for Rs. 24,48,000/- for the purchase of 5 Indica Cars	A-2
3.	21.03.2017	Hypothecation Agreement for Road Transport Operator and other Commercial Vehicle created by 1^st defendant	A-3
4.	10.07.2018	Balance and Security Confirmation Letter dated 10.07.2018 for Term Loan A/c. No. 438600JT00000151 by the defendants	A-4
5.	20.08.2018	Recall Notice sent to Defendants on 20.08.2018 and translation memo of the recall notice	A-5

¶88

T.A. No. 961 of 2023

¶89

¶90

18.06.2025

¶91

6.	01.09.2018	Confirmation letter from defendants expressing inability to run the business and requesting the applicant to sell the vehicles and adjust for the Term Loan amount	A-6
7.	11.10.2018	Recovery details made by the recovery agent M/s. SMA Resolution Services (P) Ltd. By sale of hypothecated vehicles.	A-7
8.	14.02.2020	Balance and Security Confirmation Letter dated 14.02.2020 for Term Loan A/c. No. 438600JT00000151	A-8
9.	01.03.2017	Proprietorship concern Registration Document dated 01.03.2017	A-9
10.	--	Statement of Accounts of Term Loan A/c. No. 438600JT00000151	A-10

¶92

Witness Examined for the Defendants: -Nil-

¶93

List of Documents Exhibited for the Defendants: -Nil –

¶94

Sd/-

¶95

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

Punjab National Bank v. M/S Snn Travels

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. M/S Snn Travels

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

Coram

Case details

Similar cases

Canara Bank versus M/S Mathan Leather Company

Uco Bank versus Vinay and Co.

Canara Bank versus Cahandraprabha

Punjab National Bank versus Mother Graphics

Indian Bank versus Viivaan Foods

Indian Overseas Bank versus Sri Alumalai Ayyan Traders and Another