Allowed

Indian Bank v. Sun Star Modular Kitchen

DRT25 Mar 2026OA/151/2024

Case brief

AI extract

What is this about?

The DRT allowed the bank's original application filed under Section 19 of the RDB Act for recovery of Rs.23,26,230/- from two defaulting borrowers, noting the ex-parte hearing due to absence of respondents. The order authorized recovery via sale of hypothecated assets and subsequent personal assets.

What did the court decide?

Recovery of Rs.23,26,230/- plus interest and costs; liberty to sell hypothecated assets and personal assets of the 2nd defendant.

Indian Bank versus Sun Star Modular Kitchen — Execution and Attachment | DRT (2026)

¶1

O.A. No. 151 of 2024

¶2

25.03.2026

¶3

¶4

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

¶5

Dated this the 25^th day of March, 2026

¶6

Present: SMT. S.V. GOWRAMMA Presiding Officer

¶7

ORIGINAL APPLICATION No. 151 of 2024

¶8

INDIAN BANK

¶9

Maduravoyal Branch Represented by its Branch Manager No.4 A1 & A2, 1^st Main Road, MMDA Colony, Maduravoyal, Chennai 600 095

¶10

… Applicant

¶11

-Vs-

¶12

M/s. Sun Star Modular Kitchen, Represented by its Proprietor Mr.T. Manikandan 73, 5^th Cross Street,

¶13

Maduranaikar Street,

¶14

Maduravoyal, Chennai – 600 095.

¶15

Mr.T. Manikandan, S/o.Mr.Thankaraj No.24/7A, Kannan Nagar 3^rd Annex, Maduravoyal Chennai 600 095.

¶16

….Defendants

¶17

Counsels on record / appeared:

¶18

Counsel for Applicant : Mrs. V. Rajeswari

¶19

Defendants 1 and 2 were set ex-parte on 12.08.2024

¶20

: - FINAL ORDER - :

¶21

This Original Application is filed on 19.05.2023 by the applicant bank

¶22

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

¶23

sum of Rs.23,26,230/- (Rupees Twenty Three Lakhs Twenty Three

¶24

O.A. No. 151 of 2024

¶25

¶26

25.03.2026

¶27

Thousand Two Hundred and Thirty only) as follows

¶28

(i) A sum of Rs.18,56,627/- due in respect of Secured OCC account (A/c No.6270740918) repayable together with interest at the rate of 11.95% p.a. with monthly rests besides penal interest at the rate of 2% p.a. from the date of filing till date of realization in full;

¶29

(ii) A sum of Rs.3,39,263/- due in respect of Mudra/IND-GECLS Term Loan (A/c No.6885132356) repayable together with interest at the rate of 9.25% with monthly rests besides penal interest at the rate of 2% p.a. from the date of filing till date of realization in full;

¶30

(iii) A sum of Rs.1,30,340/- due in respect of Ind MSE Covid Emergency TL (A/c No.6885145424) repayable together with subsequent interest at the rate of 8.75% with monthly rests besides penal interest at the rate of 2% p.a. from the date of filing till date of realization in full;

¶31

for sale of hypothecated assets morefully detailed in schedule to the OA and for costs of this OA.

¶32

Brief Facts of the case:

¶33

The Applicant submits that the application is filed within the period of limitation as prescribed under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993, and the subject recovery claim falls within the jurisdiction of this Tribunal.

¶34

O.A. No. 151 of 2024

¶35

¶36

25.03.2026

¶37

It is the case of the applicant bank that the first Defendant is the Proprietary Concern of the 2^nd Defendant, which is engaged in the business of Interior Decorator in Wood, UPVC. The Defendants approached the Applicant Bank during the year 2020 requesting for Working Capital limit for their business. Considering the said request, the applicant bank had sanctioned an Open Cash Credit limit (0CC) of Rs.15,00,000/- against Prime security of Stocks and Book debts, vide its Sanction Letter dated 13.01.2020 by the Maduravoyal Branch of the Applicant Bank and said limit is covered under CGTMSE Scheme.

¶38

It is submitted that in order to secure the loan, the Defendants 1 & 2

¶39

have executed loan /security documents on 13.01.2020 as follows:

¶40

i. Demand Promissory Note for Rs.15,00,000/- agreeing to repay the amount with interest at REPO Rate (5.15%) plus 5.45% = 10.60% compounded monthly;

¶41

ii. Letter of Continuity stating that the DPN shall operate as continuing security for the OCC account among other terms.

¶42

iii. Agreement of Hypothecation of movables hypothecating the Stocks consisting of Goods, Produce, Merchandise, Stocks stored from time to time in the premises of the 1 Defendant and Book debts of 1 Defendant morefully described in Schedule hereunder. The Defendants as well agreed for charging overdue interest on the defaulted amount at 2% over and above the contractual/maximum interest rates or at such rates as per the

¶43

O.A. No. 151 of 2024

¶44

25.03.2026

¶45

¶46

RBI/Bank's rules in force from time to time in the event of default in complying with payment of interest, any irregularity in the account or non any of the terms and conditions contained therein besides consenting to the bank for disclosure of all or any such information and data relating to them to CIBIL and any other agency authorized by RBI in that behalf:

¶47

iv. Agreement for Open Cash Credit (Stocks and Book debts) wherein the 1 Defendant agreed to repay the dues without default among other terms therein.

¶48

v. Declaration on details of relatives etc of the Borrower

¶49

vi. Declaration by the Sole Proprietor of the Concern that he is the Sole Proprietor and nobody else has any right or interest over the Concern

¶50

It is the further case of the applicant bank that during the COVIDPandemic period, at the request of the Defendants, a Term Loan of Rs.3.03 Lakhs was sanctioned under Mudra/MSME-IND GECLS Scheme to the 1^st Defendant vide Sanction letter dated 08.06.2020 the terms of which were duly accepted by the Defendants by executing the following loan documents on 08.06.2020:

¶51

a) Demand Promissory Note for Rs.3,03,000/- agreeing to repay the amount with interest at REPO Rate (4.40) plus 3.50% = 7.90% compounded monthly;

¶52

b) Agreement of Hypothecation of movables hypothecating the

¶53

O.A. No. 151 of 2024

¶54

25.03.2026

¶55

¶56

Stocks consisting of Goods, Produce, Merchandise, Stocks stored from time to time in the premises of the 1 Defendant and Book debts of 1 Defendant morefully described in Schedule hereunder. The Deferndants as well agreed to repay the dues in the Termn Loan account in 48 EMI commencing from June 2021 (after a holiday period of 12 months) and also for charging overdue interest on the defaulted amount at 2% over and above the contractual/maximum interest rates or at such rates as per the RB/Bank's rules in force from time to time in the event of default in payment of interest, any irregularity in the account or non complying with any of the terms and conditions contained therein besides consenting to the bank for disclosure of all or any such information and data relating to them to CIBIL and any other agency authorized by RBI in that behalf

¶57

c) Term Loan Agreement wherein the 1 Defendant agreed to repay the dues in 48 EMIs from June 2021 among other terms therein.

¶58

d) Declaration by the Sole Proprietor of the Concern that he is the Sole Proprietor and nobody else has any right or interest over the concern.

¶59

It is further submitted by the applicant bank that, another Term Loan limit of Rs.1.50 Lakhs was sanctioned to the defendants as Ind MSE Covid Emergency Term Loan by the Maduravoyal branch of the Applicant bank vide Sanction Ticket dated 08.06.2020, the terms of which were duly agreed by the Defendants. The 1^st Defendant availed the above limit of Rs.1.50 Lakhs by executing the following loan documents on 08.06.2020:

¶60

O.A. No. 151 of 2024

¶61

25.03.2026

¶62

¶63

a. Demand Promissory Note for Rs.1,50,000/- agreeing to repay the amount with interest at 8.75% compounded monthly;

¶64

b. Term Loan Agreement wherein the 1st Defendant agreed to repay the dues in 36 EMIs starting from December 2021 among other terms therein.

¶65

The applicant bank submits that the Defendants executed Acknowledgement of Debt in respect the OCC limit of Rs.15.00 Lakhs on 26.03.2021 and committed default in repayment of installments and/ or interest thereof rendering the said loan accounts as Non-Performing Asset (NPA) as on 13.11.2021. The Applicant Bank had caused Legal Notice dated 09.04.2022 and in spite of receiving legal notice, the defendants failed to repay the said loan. Hence, the present Original Application (OA) has been filed by the applicant bank for recovery of its dues from the defendants.

¶66

After the filing of the OA, summons were sent to the Defendants 1 and 2 through Registered Post with Acknowledgment Due. The covers of Private Notice of D1 returned as “unclaimed”, which is deemed service and notice to D2 was received on behalf of D1. When OA was taken up on 12.08.2024 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 and 2 were placed ex-parte on 12.08.2024.

¶67

Heard the submissions of Applicant Bank and perused the

¶68

record s.

¶69

To prove the case of the Applicant Bank, Mr. Pravin Kumar, Senior

¶70

O.A. No. 151 of 2024

¶71

25.03.2026

¶72

¶73

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-18.

¶74

A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-18 evidence that the borrowal of credit facilities and execution of loan and security documents are true, in terms of averments made in Original Application as well as Proof Affidavit filed 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.

¶75

The defendants were set ex-parte on 12.08.2024 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 the applicant bank has proved its claim against defendants.

¶76

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:

¶77

O.A. No. 151 of 2024

25.03.2026

: O R D E R :

The OA is allowed with costs,

¶82

(a) The applicant bank is allowed to recover from the Defendants jointly and severally, for recovery of a total sum of Rs.23,26,230/(Rupees Twenty Three Lakhs Twenty Three Thousand Two Hundred and Thirty only) as follows

¶83

(i) A sum of Rs.18,56,627/- due in respect of Secured

¶84

OCC account (A/c No.6270740918) repayable together with interest at the rate of 11.95% p.a. with monthly rests besides penal interest at the rate of 2% p.a. from the date of filing till date of realization in full;

¶85

(ii) A sum of Rs.3,39,263/- due in respect of Mudra/INDGECLS Term Loan (A/c No.6885132356) repayable together with interest at the rate of 9.25% with monthly rests besides penal interest at the rate of 2% p.a. from the date of filing till date of realization in full;

¶86

(iii) A sum of Rs.1,30,340/- due in respect of Ind MSE Covid Emergency TL (A/c No.6885145424) repayable together with subsequent interest at the rate of 8.75% with monthly rests besides penal interest at the rate of 2% p.a. from the date of filing till date of realization in full; along with costs of this OA.

¶87

(b) In the event of failure of the Defendants to pay the aforesaid

¶88

O.A. No. 151 of 2024

¶89

¶90

25.03.2026

¶91

amount, the bank is at liberty to recover the amount by sale of the schedule mentioned hypotheca morefully detailed in the OA schedule.

¶92

¶93

(d) 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.

¶94

(e) 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.

¶95

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

¶96

(g) Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of the final order.

¶97

O.A. No. 151 of 2024

¶98

¶99

25.03.2026

¶100

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

¶101

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

¶102

(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this the 25^th day of March, 2026)

¶103

ANNEXURES

¶104

WITNESSES EXAMINED FOR THE APPLICANT BANK :

¶105

AW-1: Mr. Pravin Kumar, the Senior Manager of the Applicant Bank

¶106

Exhibits on the part of the Applicant:

¶107

Sl. No.	Description of Documents	Exhibit No.
1.	13.01.2020 Sanction Ticket for Secured IND SME- OCC Limit of Rs.15.00 Lakhs to the 1st Defendant	A-1
2.	13.01.2020 DPN for Rs.15.00 Lakhs executed by 1 st Defendant	A-2
3.	13.01.2020 Letter continuity for IND SME-OCC facility	A-3
4.	13.01.2020 Letter of Continuity for IND SME-OCC facility for Rs.15.00 lakhs executed by the 1st Defendant Agreement of Hypothecation of Movables executed by the 1st Defendant for Rs.15.00 Lakhs	A-4
5.	13.01.2020 Agreement of Open Cash Credit (Stocks/Book Debts) for Rs.15.00 Lakhs executed by the 1st Defendant	A-5
6.	26.03.2021 Acknowledgement of Debt in respect of OCC limit of Rs.15.00 Lakhs	A-6
7.	15.05.2023 Statement of Account in respect of secured IND SMЕ-ОСС A/c No. 6270740918 from 13.01.2020 to 15.05.2023 along with BBEA Certificate	A-7
	Document for “IND-GECLS-COVID-19” Term Loan (A/c.No.6885132356)
8.	Sanction Letter for "IND-GECLS-COVID8 08.06.2020 19" Term Loan for Rs.3,03,000/- duly acknowledged by the 1st Defendant	A-8

¶108

O.A. No. 151 of 2024

¶109

25.03.2026

¶110

¶111

9.	08.06.2020 DPN for Rs.3,03,000/- executed by the 1 st Defendant	A-9
10,	08.06.2020 Agreement of Hypothecation of Movables executed by the Defendant for Rs.3,03,000/-	A10
11.	08.06.2020 Term Loan Agreement for Rs.3,03,000/-executed by the 1st Defendant	A11
12	15.05.2023 -Statement of Account in respect of IND-GECL-COVID-19 Term Loan A/c No. 688513336 from 08.06.2020 to 15.05.2023 along with BBEA Certificate.	A-12
	Documents for IND-MSE Covid Emergency Loan– Term Loan (A/c No. 6885145424)
13.	08.06.2020 - Sanction Ticket for IND-MSE Covid Emergency Loan for Rs. 1.50 Lakhs to the 1st Defendant	A-13
14.	08.06.2020 -DPN for Rs. 1.50 Lakhs executed by the 1st Defendant	A-14
15.	08.06.2020 Term Loan Agreement for Rs. 1.50 Lakhs executed by the 1st Defendant	A-15
16.	15.05.2023 Statement of Account in respect of IND- MSE Covid Emergency Loan A/c No. 6885145424 from 08.06.2020 to 15.05.2023 along with BBEA Certificate	A-16
	Documents common to all the above loans
17.	09.04.2022 -Legal Notice issued on behalf of the Applicant Bank to the 1st Defendant in respect of the Credit/Term Loan facilities availed from the Respondent Bank	A-17
18.	Postal acknowledgement for the receipt of Legal Notice	A-18

¶112

Witness Examined for the Defendants: -Nil -

¶113

List of Documents Exhibited for the Defendants: -Nil –

¶114

:-SCHEDULE-:

¶115

HYPOTHECATED ASSETS

¶116

Stocks:

¶117

Goods, Produce, Mercandise of Stock stored/ are to be stores from time to time in the premises of the 73, 5^th Cross Street, Maduranaiken Street, Maduravoyal, Chennai 600 077.

¶118

O.A. No. 151 of 2024

25.03.2026

Book-Debts:

Book Debts, Receivables other claims of 1^st defendant.

¶123

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

Indian Bank v. Sun Star Modular Kitchen

Case brief

What is this about?

What did the court decide?

Indian Bank v. Sun Star Modular Kitchen

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

State Bank of India versus Prathapsingh

Idbi Bank versus Mohamed Mustafa

A J Satheshkumar versus Idbi Bank

State Bank of India versus Haribaskar

State Bank of India versus Thirupathi Balaji Tiles Rep By Mrs N Selvi And Two Others

bhavani versus Indian Overseas Bank