Allowed

Indian Overseas Bank v. M/s. Gratia Leathers

DRT18 Mar 2026MA/32/2026

Case brief

AI extract

What is this about?

The Tribunal allowed petitions seeking condonation of a 397-day delay in filing a substitution petition and permitting an assigned debtor recovery case to continue. The delay was attributed to restructuring and the death of counsel, impacting file retrieval.

What did the court decide?

Motions allowed; delay in filing substitution petition condoned; assignee permitted to continue the Transfer Application.

Indian Overseas Bank versus M/s. Gratia Leathers — Insolvency and Bankruptcy | DRT (2026)

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MAs 30/26, 31/26 & 32/26 in TA No.862/2025

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18.03.2026

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 18^th day of March, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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M.A. Nos.30/26, 31/26 and 32/26

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T.A. No.862 of 2025

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Alchemist Asset Reconstruction Company Ltd., Rep. by its Authorised Signatory Having its Registered Office at A-270, First and Second Floor Defence Colony, New Delhi – 110 024

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….Petitioner / Proposed Applicant -Vs –

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Indian Overseas bank Having its Registered Office at Maker Tower ‘E’, 5^th Floor, Cuffee Parade Mumbai – 400 005

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…..1^st Respondent / Applicant Bank

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M/ s. Gratia Leathers Ltd Represented by its Proprietor Mr. S. Sundaram, S/o. Mr. Selvaraj, New No. 20, Old No. 45, Thiruvengadamn Street, Periamet, Chennai - 600 017

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Mr. S. Sundaram, S/ o. Mr. Selvaraj, No. 39, Sankar Nagar, 2nd Street, Chromepet, Chennai - 600 044

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Mr. S. Sounder Rajan, S/o Mr. T. Selvaraj, No. 8, East Mada Street, Little Kancheepuram - 631 501

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Mr. S. Prabhu Kumar, No. 5, B.E. Colony,

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MAs 30/26, 31/26 & 32/26 in TA No.862/2025

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18.03.2026

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1st Street, Kodambakkam, Chennai - 600 024

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Mr. S. Arasu, No. 13/58, South Mada Street, Kancheepuram – 631 501 ……Respondents/Defendants

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: - ORDER ON MAs- :

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The Original Application is filed by Indian Overseas Bank, against the Defendants, seeking main relief to order the respondents 2 and 3, who are 1^st and 2^nd Defendants in the OA, to pay a sum of Rs.77,76,244/(Rupees Seventy Seven Lakhs Seventy Six Thousand Two Hundred and Forty Four only) with further interest and costs.

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The Petitioner has filed the present petitions i.e., MA No.30/26, 31/26 and 32/26 along with affidavit of Authorised Signatory, to re-open the TA, to condone the delay of 397 days in filing substitution petition and to permit proposed applicant herein to be added as Assignee Applicant in place of applicant bank to conduct the TA No.862/2025 / TRC No.204/2022.

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It is submitted that the OA No.449/2018 (before DRT-II) initiated by Indian Overseas Bank viz., the original applicant was allowed vide final order dated 02.12.2020 and DRC No.03 of 2021 came to be issued in terms of the final order. Subsequently the OA was transferred to this Tribunal and renumbered as TA No.862/2025. During the pendency of recovery proceedings in TRC No.204/2022, the applicant bank had assigned various loan accounts including the subject Loan of respondents 2 to 6, who are defendants / borrowers of credit facilities from Indian Overseas Bank, since

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MAs 30/26, 31/26 & 32/26 in TA No.862/2025

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18.03.2026

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assigned to M/s Alchemist Asset Reconstruction Company Limited by way of Assignment Agreement dated 16.11.2023.

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It is further submitted that subsequent to assignment, during the relevant point of time, the applicant company underwent significant organizational restructuring, but not limited to a comprehensive corporate reorganization, reallocation of portfolios among various teams and consequent reassignment of cases to different legal departments and other changes. In the midst of aforemention restructuring and allied changes, the Ld. Counsel who was originally entrusted with the matter tragically passed away which created unforeseen and exceptional circumstance beyond the control of the applicant. Following the untimely demise, there was substantial difficulty in locating and retrieving the relevant case files and documents pertaining to the instant matter, which could be recovered only after a substantial period of time. In the above said process of tracing out the file, there was a delay of 397 days in filing the petition seeking to substitute them in the place of 1^st respondent herein.

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The delay was only due to the aforesaid reasons, which is neither willful nor wanton but only due to the aforesaid reasons. Thus submitting, counsel prayed to re-open the case, for condonation of delay in filing substitution petition and for substitution of proposed applicant in place of assignor.

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Heard the counsel for petitioner and perused the records of

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the case .

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MAs 30/26, 31/26 & 32/26 in TA No.862/2025

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18.03.2026

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The 1^st respondent, being a financial institution has filed the OA for recovery of a sum of Rs.77,76,244/- along with interest and for sale of mortgaged properties. OA was filed before DRT-II, Chennai and assigned OA No.449/2018. Final order in the OA came to be passed on 02.12.2020 and DRC No.03/2021 was issued. Subsequently, due to bifurcation of jurisdiction, OA was transferred to this Tribunal and re-numbered as TA No.862 of 2025. During the pendency of the OA, the 1^st respondent /applicant, Indian Overseas Bank had assigned the debt along with underlying securities to M/s Asset Reconstruction Company (India) Limited, who in turn vide Assignment Agreement dated 16.11.2023.

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A memo vide SR No.2091/26 dated 05.03.2026 has been filed by counsel for defendants submitting that the defendants have no objection for allowing the said MAs and that no counter is being filed to all the MAs.

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In view of the fact that M/s Asset Reconstruction Company (India) Limited being a financial institution is the custodian of the public money held under trust, the Tribunal relying on the judgment of Hon’ble High

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Court of Madras (At Madurai) in the judgment of V.P. Rajula -Vs.K.J. Sakadeva Raja reported in LAWS (MAD)-2020-8-441 feels it apt to condone the delay and to permit the assignee to continue the TA in place of assignor bank, as per the Assignment Agreement.

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MAs 30/26, 31/26 & 32/26 in TA No.862/2025

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18.03.2026

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Accordingly, MAs 30/26, 31/26 and 32/26 stands allowed. Applicant to carry out amendment and file amended copy of TA after serving copies to the other side.

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Sd/-

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(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

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18^th day of March, 2026)

Indian Overseas Bank v. M/s. Gratia Leathers

Case brief

What is this about?

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Indian Overseas Bank v. M/s. Gratia Leathers

Case brief

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Indian Overseas Bank versus M/s. Gratia Leathers