Allowed

City Union Bank Limited v. M/S Es R Es Impex

DRT30 Jul 2025TA/994/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the applicant bank's recovery application against three defendants for an overdraft facility. In their absence, the court confirmed the debt amount including interest, granted permission for sale of secured property, and directed issuance of a recovery certificate.

What did the court decide?

Allowed recovery of Rs.77,63,256.81 plus interest and costs; liberty to sell secured property; directed issuance of recovery certificate.

City Union Bank Limited versus M/S Es R Es Impex — Contract and Commercial Disputes | DRT (2025)

¶1

T.A. No. 994 of 2023

¶2

30.07.2025

¶3

¶4

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

¶5

Dated this the 30^th day of July, 2025

¶6

Present: SMT. S.V. GOWRAMMA Presiding Officer

¶7

TRANSFERRED APPLICATION No. 994 of 2023

¶8

(Originally filed before DRT- II, Chennai as OA 815/2019 and thereafter transferred to this Tribunal and renumbered as TA No 994 of 2023)

¶9

City Union Bank Limited, Mylapore Branch, Rep. by its Branch Manager, Old No.18-19, New No.20 East Mada Street, Mylapore, Chennai 600 004. ….Applicant

¶10

-Vs-

¶11

M/s. ES. R.ES Impex

¶12

By its Sole Prop. R. Sekar,

¶13

At Old No.2, New No.15/2, First Floor Aranganathan Subway, Saidapet, Chennai 600 015.

¶14

Mr. R. Sekar,

¶15

S/o. A. Rengaraj,

¶16

Residing at 74/121, Ramachandran Street,

¶17

Vasudeva Nagar,

¶18

Jaffarkhanpet, Chennai 600 083.

¶19

Mrs. S. Shanthi,

¶20

W/o. R. Sekar aged,

¶21

Residing at 74/121, Ramachandran Street,

¶22

Vasudeva Nagar,

¶23

Jaffarkhanpet, Chennai 600 083. …..Defendants

¶24

Counsels on record / appeared:

¶25

Counsel for Applicant : Mr. R. Balachander

¶26

Defendants 1 to 3 were set ex-parte on 21.07.2022

¶27

: - FINAL ORDER - :

¶28

This Original Application is filed on 03.08.2019 by the applicant

¶29

bank under Section 19 (1) of Recovery of Debts and Bankruptcy Act,

¶30

T.A. No. 994 of 2023

¶31

¶32

30.07.2025

¶33

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 Rs.77,63,256.81p (Rupees Seventy Seven Lakhs Sixty Three Thousand Two Hundred Fifty Six and Eight One Paise only) due in respect of Overdraft facility (A/c No.512120020003545), repayable together with further interest @ 13.25% p.a. compounded with monthly rests from the date of application till the date of realization in full, for sale of schedule mentioned immovable property and for costs of this application.

¶34

Originally, this Application was filed before DRT-II, Chennai, assigned OA No.815 of 2019, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.815 of 2019 stood transferred to this Tribunal and renumbered as TA No.994 of 2023.

¶35

Brief Facts of the case:

¶36

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.

¶37

It is the case of the applicant bank that the second defendant along with his wife the Third defendant herein, approached the applicant bank seeking for credit facility for the working capital requirements of their business carried on by them in the name of the

¶38

T.A. No. 994 of 2023

¶39

¶40

30.07.2025

¶41

first defendant herein offering to be bound by the terms conditions subject to which those credit facility would be sanctioned/enhanced/ varied/modified from time to time, and agreed to deposit the title deeds, relating to the immovable property owned by him, more fully described in the schedule “A” hereunder, with an intention to create an equitable mortgage over the same.

¶42

It is submitted by the applicant bank that considering the need and assurances and securities offered, the applicant bank by its sanction letter dated 19.01.2015 sanctioned a credit facility of Rs.25,00,000/- (Rupees Twenty Five Lakhs Only) subject to certain terms and conditions stipulated therein. The defendants in token of their acceptance of the terms and conditions, counter signed the same stipulated therein.

¶43

In respect of the said Credit limit of Rs.25,00,000/- (Rupees Twenty-Five Lakhs Only) the defendants executed the following documents on 19.01.2015 in favour of applicant bank:-

¶44

A demand promissory note for Rs.25,00,000/- (Rupees

¶45

Twenty Five Lakhs Only) agreeing to repay the same together with compound interest with the then existing Prime Lending Rate of 18% with monthly rest.

¶46

A letter of continuity with OD Rules.

¶47

A Hypothecation agreement whereby the goods of the first

¶48

defendant set out in the schedule B hereunder was hypothecated with the applicant.

¶49

T.A. No. 994 of 2023

¶50

30.07.2025

¶51

¶52

It is submitted that the second defendant on 19.01.2015 called on the applicant’s Mylapore Branch and deposited the Release deed dated 09.01.2015 registered as Doc. No.39/2015 and the Rectification Deed dated 12.01.2015, document No.65/2015, both on the file of SRO, Mayiladuthurai in respect of the “A” schedule property, with intent to create an equitable mortgage over the same for the due repayment of the amounts for the advances made to be made including interest costs that might become due and repayable by the First defendant to the applicant bank. Latter on 20.01.2015 the second defendant executed a Memorandum of Deposit of Title Deeds Doc.No.79/2015 on the file of SRO, Mylapore.

¶53

Applicant Bank further states that at the request of the defendants 1 and 2, the applicant by its sanction letter dated 06.10.2015 enhanced the cash credit limit from Rs.25,00,000/- to Rs.45,00,000/- (Rupees Forty-Five Lakhs Only) subject to certain terms and conditions stipulated therein. The defendants in token of their acceptance of the terms and conditions counter signed the same stipulated therein.

¶54

In respect of the said enhanced cash Credit Limit of Rs.45,00,000/- (Rupees Forty-Five Lakhs Only), the defendants on 06.10.2015 executed the following documents:-

¶55

A demand promissory Note for Rs.45,00,000/- (Rupees Forty-Five Lakhs Only) agreeing to repay the same together with

¶56

T.A. No. 994 of 2023

¶57

30.07.2025

¶58

¶59

compound interest with the then existing Prime Lending Rate of 13.75% with monthly rest.

¶60

A letter of continuity with OD Rules.

¶61

A supplemental Hypothecation agreement whereby the goods

¶62

of the first defendant set out in the schedule B hereunder was hypothecated with the applicant.

¶63

It is submitted by applicant bank that pursuant thereto the second defendant on 11.11.2015 called on the applicants Mylapore Branch and constructively re-deposited the Release deed dated 09.01.2015 Doc. No.39/2015 and the Rectification Deed dated 12.01.2015, document No.65/2015 both on the file of SRO Mayiladuthurai in respect of the “A” schedule property with intend to create an equitable mortgage over the same for the due repayment of the amounts for the advances made/to be made including interest costs

¶64

that might become due and repayable by the First defendant to the applicant bank. Latter on 12.11.2015 the second defendant executed a Memorandum of Extension of Deposit of Title Deeds Doc. No.2238/2015 on the file of SRO Mylapore.

¶65

Again the first requested the applicant for an enhancement of the Overdraft limit to 75 Lakhs from the existing limit of Rs.45 Lakhs. 12. The second defendant on 04.09.2017 called on the applicants Mylapore Branch and constructively re-deposited the Release deed dated 09.01.2015 Doc. No.39/2015 and the Rectification on Deed dated

¶66

T.A. No. 994 of 2023

¶67

30.07.2025

¶68

¶69

12.01.2015, document No.65/2015 both on the file of SRO Mayiladuthurai in respect of the “A” schedule property with intent to create an equitable mortgage over the same for the due repayment of the amounts, for the advances made/to be made including interest and

¶70

costs that might become due and repayable by the First defendant to the applicant bank. Latter on 04.09.2017 the Second defendant executed a Memorandum of Deposit of Title Deeds Doc.No.1459/2017 on the file of SRO, Mylapore.

¶71

The applicant Bank by its sanction letter dated 06.09.2017 enhanced limit to Rs.65,00,000/- (Rupees Sixty-Five Lakhs Only) subject to certain terms and conditions stipulated therein in the name of the second defendant, the defendant in token of their acceptance of the terms and conditions stipulated therein counter signed the same in respect of the enhanced the defendants on 06.09.2017 executed the following documents:-

¶72

1. Demand Promissory Note for Rs.65,00,000/- (Rupees SixtyFive Lakhs Only) agreeing to repay the same together with compound interest with the then existing Prime Lending Rate of 13.25% with monthly rest.

¶73

1. A letter of continuity with OD Rules.

¶74

Supplementary Agreement of Loan cum Hypothecation where under the goods of the first defendant set out in the Schedule B hereunder was hypothecated with the applicant.

¶75

It is submitted by applicant bank that having availed the

¶76

T.A. No. 994 of 2023

¶77

30.07.2025

¶78

¶79

aforesaid credit facilities from the applicant, the operation and conduct of the loan accounts by the first defendant was not satisfactory and did not adhere to the terms and conditions. Consequently, the loan account was declared as Non-Performing Asset (NPA) on 29.12.2017 in accordance to RBI guidelines. The effort to meet the defendants did not yield the desired result but however the first defendant over the phone was promising to settle the loan accounts, however did not make any payment. The applicant bank through its Authorised Officer had issued Demand Notice under 13(2) of the SARFAESI Act 2002 on 29.01.2018. The said notices were returned un-served. There after the applicant also took possession of the secured property which was challenged by the first defendant in SA. No.150/2018 before this Tribunal, which was also dismissed. As defendants did not come forward to repay the dues, the present Original Application (OA) has been filed by the applicant bank for recovery of its dues from defendants.

¶80

After the filing of the OA, Summons were sent to defendants 1 to 3 through Registered Post with Acknowledgment Due, summons to D1 returned with remarks as “Left”, while summons to D2 and D3 served. Applicant bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 21.07.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants 1 to 3 were placed ex-parte on 21.07.2022.

¶81

T.A. No. 994 of 2023

¶82

¶83

30.07.2025

¶84

Heard the submissions of Applicant Bank and perused the

¶85

records.

¶86

To prove the case of the Applicant Bank, Sh. M. Narayanan, Branch Manager and Constituted Attorney representing 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 14 . 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.

¶87

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:

¶88

: O R D E R :

¶89

18. The OA is allowed with costs,

¶90

(a) The applicant bank is allowed to recover from the Defendants a sum of total sum of Rs.77,63,256.81p (Rupees

¶91

Seventy Seven Lakhs Sixty Three Thousand Two Hundred Fifty Six and Eight One Paise only) due in respect of Overdraft facility (A/c No.512120020003545), repayable together with further interest @ 13.25% p.a. compounded with monthly rests from the date of application till the date of realization in full, along with costs.

¶92

T.A. No. 994 of 2023

¶93

¶94

30.07.2025

¶95

(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 immovable property morefully detailed in the OA.

¶96

¶97

(d) 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.

¶98

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

¶99

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

¶100

Recovery Officer in terms of the final order.

¶101

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

¶102

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

¶103

(Dictated to Steno (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 30^th day of July, 2025)

¶104

T.A. No. 994 of 2023

30.07.2025

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK :

¶109

AW-1: Sh. M. Narayanan, Branch Manager and Constituted Attorney representing the Applicant Bank.

¶110

Exhibits on the part of the Applicant:

¶111

Sl. No.	Description of Documents	Exhibit No.
1.	Sanction Letter for Rs.25,00,000/- with terms & conditions dated 19.01.2015.	A-1
2.	Demand Promissory Note of Rs.25,00,000/- dated 19.01.2015.	A-2
3.	Letter of Continuity with OD Rules dated 19.01.2015.	A-3
4.	Hypothecation Agreement dated 19.01.2015.	A-4
5.	Sanction Letter for Rs.45,00,000/- with terms and conditions dated 05.10.2015.	A-5
6.	Demand Promissory Note for Rs.45,00,000/- dated 08.10.2015.	A-6
7.	Letter of Continuity with OD Rules dated 08.10.2015.	A-7
8.	Supplemental Hypothecation Agreement dated 08.10.2015.	A-8
9.	Sanction letter for Rs.65,00,000/- with terms and conditions dated 06.09.2017.	A-9
10.	Demand Promissory Note for Rs.65 Lakhs dated 06.09.2017.	A-10
11.	Letter of Continuity with OD Rules dated 06.09.2017.	A-11
12.	Agreement of loan cum Hypothecation dated 06.09.2017.	A-12
13.	SARFAESI Notice U/S 13(2) dated 29.01.2018.	A-13
14.	Statement of A/c with certificates.	A-14

¶112

Witness Examined for the Defendants: -Nil-

¶113

List of Documents Exhibited for the Defendants: -Nil –

¶114

SCHEDULE-A

¶115

All that piece and parcel of land situate at Pasupathi Street, Ward No.3, Mayiladuthurai (then Mayavaram) comprised in T.S. No.614, Block

¶116

T.A. No. 994 of 2023

¶117

30.07.2025

¶118

¶119

No.16 of Mayiladuthurai Town, Mayiladuthurai (Taluk, Nagapattinam district measuring an extent of 9355 sq.ft., equivalent to 869 sq. meters of land bounded North of Pasupathi Street, South of Pazhang Cauvery: East of 5 feet common passage & property belongs to Mrs. S. Shanthi & R. Sekar: and West of property belongs to Mr. Muthu Pathar. Measuring an extent of 9355 Sq.ft., of land within the Registration District of Mayiladuthyrai and Sub-Registration District of Mayiladuthurai Joint I. The building in the said property is completely removed and now it is a vacant site.

¶120

SCHEDULE-B (Hypothecated Items)

¶121

NIL.

¶122

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

City Union Bank Limited v. M/S Es R Es Impex

Case brief

What is this about?

What did the court decide?

City Union Bank Limited v. M/S Es R Es Impex

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

Indian Overseas Bank versus M/S Sai Cabs

Punjab National Bank versus On Track Bi Solutions Rep By P Venkatesan

Uco Bank versus K Dilli Raj And Three Others

State Bank of India versus Senthil

Uco Bank versus E. Thirugnansambandam

Canara Bank versus Man Soil