Allowed

City Union Bank Limited v. R Chandrasekaran

DRT11 Aug 2026OA/100/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an Original Application filed by City Union Bank for recovery of dues amounting to Rs. 39,64,668/- plus interest from two defaulting borrowers. The tribunal confirmed the bank's claim based on loan documents and revival letters, granting liberty to sell mortgaged/schedule assets if payment is not made.

What did the court decide?

Recovery of Rs. 39,64,668/- plus interest at 14.25% p.a. and penal interest; liberty to sell mortgaged and hypothecated assets in case of default.

City Union Bank Limited versus R Chandrasekaran — Contract and Commercial Disputes | DRT (2026)

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O.A. No.100 of 2023

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11.08.2026

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 11^th day of August, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No.100 of 2023

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City Union Bank, Chennai-600 002 Represented by its Branch Manager No.149, T.S.R. Big Street, Kumbakonam “GANI COMPLEX” Sivan Koil North Street, Thirumakkottai- 614 017, Thiruvarur district ….Applicant

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-Vs-

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Mr.R.Chandrasekaran,

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S/o Ramadoss,

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No. 159/10, West Street, Paravakottai Village, Mannargudi Taluk, Thiruvarur District- 614 015

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Mrs.C.Sathya,

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No. 159/10 West Street, Paravakottai Village, Mannargudi Taluk, Thiruvarur District- 614 015 …..Defendants

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Counsels on record / appeared:

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Counsel for Applicant: M/s. Hasmukh S Surana

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Defendants 1 and 2 were set ex-parte on 03.10.2023

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: - FINAL ORDER- :

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This Original Application is filed on 29.04.2023 by the applicant bank

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under Section 19(1) 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

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a total sum of Rs.39,64,668/- (Rupees Thirty Nine Lakhs Sixty Four

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O.A. No.100 of 2023

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Thousand Six Hundred and Sixty Eight only) as follows:

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(i) A sum of Rs.34,11,282/- due in respect of Loan A/c No.030012000376499 repayable together with further interest @14.25% p.a. with monthly rests along with 2% penal interest from the date of Application till the date of realization in full;

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(ii) A sum of Rs.5,53,386/- due in respect of Loan A/c No.030012000398951 repayable together with further interest @14.25% p.a. with monthly rests along with 2% penal interest from the date of Application till the date of realization in full;

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for sale of Schedule A mentioned mortgaged property and Schedule B mentioned hypothecated vehicle and for costs of this OA.

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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 Tribunal.

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It is the case of the applicant bank that they had extended financial assistance as requested by the 1^st defendant for purchase of Tractor, for which the 2^nd defendant stood as co-obligant/s. Further the 2^nd defendant had created equitable mortgage over the schedule ‘A’ mentioned property. Accordingly, the applicant bank under loan A/c No. 030012000376499

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O.A. No.100 of 2023

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sanctioned a sum of Rs.4,50,000/- to the defendants.

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The applicant bank submits that to evidence availing of the aforesaid credit facility, the following documents were executed by the defendants in favour of applicant bank:

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a) Sanction ticket dated 22.11.2007

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b) Loan application dated 30.11.2007

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c) On Demand Promissory note dated 30.11.2007 executed by the defendants

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d) Hypothecation (machinery) agreement dated 30.11.2007 executed by the 1^st defendant

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e) Agreement of hypothecation of vehicles dated 30.11.2007 executed by the 1^st defendant

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f) Consent letter dated 14.11.2007 by the 2^nd defendant expressing her willingness to offer her unencumbered property as security for the credit facility availed by the defendants

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g) Registered memorandum of deposit of title deed dated 29.11.2007 executed by the 2^nd defendant infavour of the applicant bank.

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h) Letter of revival for secured advances along with confirmation of balance dated 19.11.2010 executed by the defendants

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i) Letter of revival for secured advances along with confirmation of balance dated 11.10.2013 executed by the defendants

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j) Letter of revival for secured advances along with confirmation of balance dated 30.06.2016 executed by the defendants

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k) Letter of revival for secured advances along with confirmation of balance dated 10.06.2019 executed by the defendants

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l) Letter of revival for secured advances along with confirmation of balance dated 15.05.2022 executed by the defendants

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It is the further case of the applicant bank that they had further sanctioned financial assistance as requested by the 1^st defendant for purchase of Tipper, for which the 2^nd defendant stood as co-obligant/s. Further the 2^nd defendant had created equitable mortgage over the schedule-A mentioned property. Accordingly the applicant bank under loan A/c No. 0300120003298951 sanctioned sum of Rs.73,000/- to the defendants.

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The applicant bank submits that to evidence availing of the aforesaid credit facility the following documents were executed by the defendants, in favour of applicant bank:

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a) Sanction ticket dated 06.02.2008

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b) Loan application dated 06.02.2008

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c) On Demand Promissory note dated 06.02.2008 executed by the defendants

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d) Hypothecation (machinery) agreement dated 06.02.2008 executed by the 1^st defendant

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e) Agreement of hypothecation of vehicles dated 06.02.2008 executed by the 1^st defendant

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f) Letter of confirmation of extension of mortgage by deposit of title deed dated 20.03.2008 executed by the 2^nd defendant to cover

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the enhanced limits/additional credit facilities/adhoc limits/or creation of equitable mortgage on additional properties for securing the existing limits and/or enhanced limits and additional/adhoc credit facilities.

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g) Letter of revival for secured advances along with confirmation of balance dated 27.01.2011 executed by the defendants

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h) Letter of revival for secured advances along with confirmation of balance dated 09.12.2013 executed by the defendants

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i) Letter of revival for secured advances along with confirmation of balance dated 30.06.2016 executed by the defendants

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j) Letter of revival for secured advances along with confirmation of balance dated 10.06.2019 executed by the defendants

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k) Letter of revival for secured advances along with confirmation of balance dated 13.05.2022 executed by the defendants

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The applicant bank submits that apart from executing the aforesaid documents like Demand Promissory Note and other loan documents, the 2^nd defendant vide Consent Letter dated 14.11.2007 had expressed her willingness to offer her unencumbered property as security for the credit facilities and had executed Registered Memorandum of Deposit of Title Deeds on 29.11.2007 (which was later extended on 20.03.2008). Thus the 2^nd defendant had created equitable mortgage in favour of the applicant bank in respect of schedule ‘A’ mentioned property for the loan availed by them.

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It is further submitted that in view of the Hypothecation Agreements

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dated 30.11.2007 and 06.08.2008 executed by the 1^st defendant, the applicant bank has also got charge over the movables more particularly detailed in schedule ‘B’ to the OA and the said Tractor bearing Registration No.TN 50 X 0450 hypothecated with the applicant bank is presently not traceable, despite the best efforts made by the applicant bank. The said movables hypothecated in favour of the applicant are relocated by the defendants and hence could not be recovered.

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It is submitted by the applicant bank that the defendants after availing the aforesaid credit facilities had neither repaid the amount nor settled their dues inspite of various demands made by the applicant bank. The defendants failed and neglected to comply with and adhere to the terms and conditions of the credit facilities. The applicant bank states that several requests were made to the defendants to repay the said loan amounts and regularize the account maintained by them, but defendants did not come forward to repay the dues. Consequently, the loan accounts of the defendants were classified as Non-Performing Asset (NPA) on 29.09.2009.

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In pursuance to the default committed by the defendants, applicant bank had issued Recall Notices dated 23.09.2009, 21.07.2010, 18.06.2012 & 06.12.2014 and Legal Notice dated 09.06.2022, the service of which was purposely evaded by the defendants. The defendants knowing well the default committed by them, have failed to repay the outstanding amount due to the applicant bank. The applicant bank submits that a sum of Rs.39,64,668/- is due and payable by the

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defendants as on 27.04.2023 together with interest. This amount is due to the applicant bank and the defendants are liable to pay the sum with interest on contractual rates with monthly rests from the date of filing until realization. Despite repeated requests and demands, 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 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 was duly served in respect of D-1 and D-2. No representation for the Defendants. When OA was taken up on 03.10.2023 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 and 2 were placed ex-parte on 03.10.2023

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Heard the submissions of Applicant Bank and perused the

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records.

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To prove the case of the Applicant Bank, Sh. G. Ramesh, Branch 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-36 .

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A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-36 evidence that the borrowal of credit facilities and execution of loan and security documents are true, in terms

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of averments made in Original Application as well as Proof Affidavit filed

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O.A. No.100 of 2023

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by applicant bank establishing its claim. Applicant bank filed Statement of Accounts duly certified under Bankers’ Book Evidence Act, evidencing the amount claimed against defendants.

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The defendants were set ex-parte on 03.10.2023, but till this day they did not take any action to set aside the ex-parte order and did not choose to contest the claim. Further, a careful scrutiny of records makes it clear that present application is filed well within limitation and this Tribunal possesses necessary and proper jurisdiction to entertain and adjudicate the claim. No oral or documentary evidence on the side of defendants are produced or filed to dispute the claim of applicant bank. Hence, it can be concluded that applicant bank has proved its claim against defendants.

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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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16. 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 total sum of Rs.39,64,668/-

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(Rupees Thirty Nine Lakhs Sixty Four Thousand Six Hundred

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and Sixty Eight only) as follows:

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(i) A sum of Rs.34,11,282/- due in respect of Loan A/c No.030012000376499 repayable together with further

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O.A. No.100 of 2023

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interest @14.25% p.a. with monthly rests along with 2% penal interest from the date of Application till the date of realization in full;

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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 A mentioned immovable property and schedule B mentioned hypothecated vehicle morefully detailed in the OA schedule.

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(d) If the sale proceeds of the mortgaged property and hypothecated vehicle are not sufficient to satisfy the dues as ordered above, the applicant bank is at liberty to sell the personal assets of the Defendants (both movable and immovable) to recover the balance dues as required under law for which the Defendants to disclose to the Tribunal particulars of other properties or assets owned by the Defendants.

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(e) The applicant bank shall file the latest memo of calculation of

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OA amount together with interest, costs etc., to be paid by the

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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.

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(f) The applicant bank shall file memo of costs within ten days from the date of receipt 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 Roshnee, transcribed by her, corrected, signed and pronounced by me on this the 11^th day of August, 2026)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sh. G. Ramesh, Branch Manager of the Applicant Bank

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Exhibits on the part of the Applicant:

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Sl.	Date	Description of Documents	Exhibit
No.			No.
1.	22.11.2007	Sanction ticket	A-1
2.	30.11.2007	Loan application	A-2
3.	30.11.2007	On Demand Promissory note executed by the defendants	A-3

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4.	30.11.2007	Hypothecation (machinery) agreement executed by the 1^stdefendant	A-4
5.	30.11.2007	Agreement of hypothecation of vehicles executed by the 1^stdefendant	A-5
6.	19.11.2010	Letter of revival for secured advances along with confirmation of balance executed by the defendants	A-6
7.	11.10.2013	Letter of revival for secured advances along with confirmation of balance executed by the defendants	A-7
8.	30.06.2016	Letter of revival for secured advances along with confirmation of balance executed by the defendants	A-8
9	10.06.2019	Letter of revival for secured advances along with confirmation of balance executed by the defendants	A-9
10	13.05.2022	Letter of revival for secured advances along with confirmation of balance executed by the defendants	A-10
11	06.02.2008	Sanction ticket	A-11
12	06.02.2008	Loan application	A-12
13	06.02.2008	On Demand Promissory note executed by the defendants	A-13
14.	06.02.2008	Consent letter signed and agreed by the defendants	A-14
15.	06.02.2008	Agreement of hypothecation of vehicles executed by the 2^nddefendant
16.	27.01.2011	Letter of revival for secured advances along with confirmation of balance executed by the defendants	A-15
17.	09.12.2013	Letter of revival for secured advances along with confirmation of balance executed by the defendants	A-16
18.	30.06.2016	Letter of revival for secured advances along with confirmation of balance executed by the defendants	A-17
19.	10.06.2019	Letter of revival for secured advances along with confirmation of balance executed by the defendants	A-18
20.	13.05.2022	Letter of revival for secured advances along with confirmation of balance executed by the defendants	A-19
21.	14.11.2007	Consent letter by the 2^nddefendant expressing her willingness to offer her unencumbered property as security for	A-20

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		the credit facility availed by the defendants
22.	29.11.2007	Registered memorandum of deposit of title deed executed by the 2^nddefendant infavour of the applicant bank	A-21
23.	20.03.2008	Letter of confirmation of extension of mortgage by deposit of title deed executed by the 2^nddefendant to cover the enhanced	A-22
24.	01.11.2007	Settlement deed executed by R Chandrasekaran infavour of C.Sathya, the 2^nddefendant herein, registered as Doc No. 1698 of 2007 in the office of the Sub- Registrar, Madukkur	A-23
25.	08.12.2007	Invoice for purchase of tractor	A-24
26.	08.12.2007	Receipt for payment of Rs.5,25,060/- towards purchase of tractor	A-25
27.	08.12.2007	Delivery challan issued by Sri Vinayaga Agencies favouring the 1^stdefendant	A-26
28.	21.01.2008	R.C. Book pertaining to the tractor bearing Reg No. TN 50 X 0450	A-27
29.	23.09.2009	Recall notice issued by the applicant bank to the defendants	A-28
30.	21.07.2010	Legal notice issued on behalf of the applicant bank to the defendants	A-29
31.	21.07.2010	Legal notice issued on behalf of the applicant bank to the defendants	A-30
32.	18.06.2012	Legal notice issued on behalf of the applicant bank to the defendants	A-31
33.	06.12.2014	Recall notice issued by the applicant bank to the defendants	A-32
34.	06.12.2014	Recall notice issued by the applicant bank to the defendants	A-33
35.	09.06.2022	Legal notice issued on behalf of the applicant bank to the defendants	A-34
36.	-	Statement of account pertaining to Loan A/c No. 030012000376499 along with memorandum of interest calculation	A-35
37.	-	Statement of account pertaining to Loan A/c No.512020010011766 along with memorandum of interest calculation	A-36

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Witness Examined for the Defendants: -Nil-

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List of Documents Exhibited for the Defendants: -Nil –

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O.A. No.100 of 2023

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SCHEDULE OF PROPERTIES

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[MORTGAGED TO THE APPLICANT BANK]

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Property owned by the 2^nd defendant

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Thiruvarur district, Pattukottai registration, Mudukkur, Sub-Registry,

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Mannargudi taluk, 35/2 Paravakottai village:

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S.No	Survey No	Classification of	A.C.	Name of the
		land		Property Owner
1	519-5A2	Punjai Poora	1.30	C.Sathya
2	519-5B	Punjai Poora	0.06	C.Sathya
3	519-6	Punjai Poora	0.37	C.Sathya

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Boundaries of above three items:

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Vaikal on North, Punjai on East, Gulothungan Punja on South and

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Ramakrishnan Punjai on West

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4	523-15 Punjai Poora	0.33	C.Sathya
5	517-7 Punjai Poora	1.67	C.Sathya
	TOTAL	3.73

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SCHEDULE-B PROPERTY (HYPOTHECATED TO THE APPLICANT BANK)

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Registration No : TN 50 X 0450

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Class vehicle : Tractor (Agriculture) Maker’s Name : TAFE Type of Body : OPEN Year of Manufacture : 2007 Number of cylinders : 3 Chassis No : 410 761 Engine No : 33251B25229

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O.A. No.100 of 2023

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Horse Power : 40 Seating capacity : 1 Unladen weight : 1850 Colour : Green

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

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City Union Bank Limited v. R Chandrasekaran

Case brief

What is this about?

What did the court decide?

City Union Bank Limited v. R Chandrasekaran

Case brief

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