Allowed

Bank of Baroda v. Kannan

DRT20 Jan 2026OA/189/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed the bank's application for recovery of Rs. 36.75 lakhs from a defaulting borrower firm. The bank obtained an interim attachment order which was now made absolute subject to a first charge held by another lender. Recovery procedures were directed.

What did the court decide?

Bank allowed to recover Rs.36,75,854/- plus interest; interim attachment of immovable property made absolute subject to prior charges; recovery certificate and sale of property directed.

Bank of Baroda versus Kannan — Contract and Commercial Disputes | DRT (2026)

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O.A. No. 189 of 2022

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20.01.2026

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 20^th day of January, 2026

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Present: SMT. S.V. GOWRAMMA

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Presiding Officer

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ORIGINAL APPLICATION No. 189 of 2022

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Bank of Baroda, Velappanchavadi Branch, Munusamy Naicker Avenue, No.126, Poonamallee High Road, Chennai-600 077

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Rep by the Senior Manager ….Applicant

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-Vs-

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M/s Chandra Bags, 20/10, Budha Chetty Street, Washermanpet, Chennai-600 021

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Mr.S.Kannan S/o Subbhaiah, 105/51, Govindappa Naicken Street, Sowcarpet, Chennai-600 001 ….Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. S. Vaidyanathan

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Defendants 1 and 2 were set ex-parte on 06.09.2022

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: - FINAL ORDER - :

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This Original Application is filed on 25.05.2022 by the applicant bank 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

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sum of Rs.36,75,854/- (Rupees Thirty Six Lakhs Seventy Five Thousand Eight Hundred and Fifty Four only) due in respect of Cash

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Credit Facility (Account No.4054050000061) repayable together with

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O.A. No. 189 of 2022

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20.01.2026

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further interest @7.35% p.a. plus penal interest of 2%, (simple) 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 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 the 1^st Defendant is a proprietorship firm of which the 2^nd Defendant is the Proprietor. The firm is engaged in the business of wood work and interior designing for homes and offices.

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It is submitted by the applicant bank that the 1^st Defendant Firm, represented by the 2^nd Defendant had applied to the Bank for a Cash Credit of Rs.35.00 lakhs for the business of manufacture and sale of bags vide application dated 17.03.2020. Based on the application, the Applicant Bank had sanctioned Rs.35.00 lakhs as cash Credit to the Defendant for the purpose of working capital and purchase of raw material, vide sanction letter dated 17.03.2020.

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The Applicant submits that in order to secure the loan, the 2^nd Defendant representing the 1^st Defendant executed the following documents dated 31.03.2020 in favour of applicant bank:

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i. D.P. note for Rs.35.00 lakhs

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ii. Letter of Sole Proprietorship

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iii. Declarations cum Undertakings cum authority

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iv. Composite Hypothecation Agreement-LDOC17B

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v. Letter of continuing security

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It is submitted that the Cash credit account was to be repaid on demand with interest @7.35% per annum plus 2.00% penal interest in case of default. As per the terms and conditions of sanction, the Defendants were to route all their transactions through their account with the Bank, and maintain sufficient stock of Goods to cover the limits sanctioned to them by the Bank.

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The applicant submits that subsequent to availing of aforesaid loan, the defendants have not carried on the business as per terms of sanction and have not maintained sufficient stock to cover the dues of the Applicant Bank and have also diverted funds for other purposes. The Defendant have since closed down their business and hence there is no stock available from which the bank can recover its dues. The defendants have also clandestinely sold the Machinery purchased out of the Loan sanctioned by the Applicant which was under Hypothecation to the Bank. The Applicant had repeatedly contacted the Defendants for regularisation of the account and had sent letters dated 09.08.2021 and 01.09.2021 to regularise the account but no response was received from the Defendants. The Applicant Bank had to therefore classify the account as Non-Performing Asset (NPA) as per RBI norms on 30.09.2021. Despite repeated requests and demands, the

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O.A. No. 189 of 2022

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defendants did not come forward to repay the dues. Hence 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 returned with endorsement ‘left’. Applicant Bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 06.09.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 and 2 were placed ex-parte on 06.09.2022.

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Heard the submissions of Applicant Bank and perused the

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record s.

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To prove the case of the Applicant Bank, Sh. J.P. Anbusivam, Chief Manager, ROSARB 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.

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During the pendency of OA, the applicant bank had filed IA No.1462/22 praying to order interim attachment of the immovable property morefully detailed in the schedule to the IA, which is since mortgaged with M/s Cholamandalam Investment Finance Co. Ltd., for credit facility of Rs.90 lakhs availed from the said institution. Despite notice, as respondents failed

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to appear and furnish security / file counter, they were set ex-parte in IA on 24.04.2023 the said IA was allowed vide order dated 24.04.2023, thereby granting interim attachment of the schedule mentioned property morefully detailed in IA No.1462/22 to the satisfaction of the OA claim, subject to first charge of M/s Cholamandalam Investment Finance Co. Ltd and Registry was directed to communicate the said order to the concerned SRO. Accordingly, the Registry vide letter dated 06.05.2023 had communicated the same to SRO, Thiruvottiyur.

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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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12. The OA is allowed with costs,

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(a) The applicant bank is allowed to recover from the Defendants jointly and severally, for recovery of a total sum of Rs.36,75,854/-

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(Rupees Thirty Six Lakhs Seventy Five Thousand Eight Hundred and Fifty Four only) due in respect of Cash Credit Facility (Account No.4054050000061) repayable together with further interest @7.35% p.a. plus penal interest of 2%, (simple) with monthly rests from the date of Application till the date of realization in full along with costs of this application.

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(b) The attachment order passed in IA No.1462/22 is made absolute.

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(c) 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 IA 1462/22 schedule mentioned immovable property morefully detailed in this order, however the same is subject to first charge of M/s Cholamandalam Investment Finance Co. Ltd.

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

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(f) 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 Steno (Arti), transcribed by her, corrected, signed and pronounced by me on this the 20^th day of January, 2026)

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O.A. No. 189 of 2022

20.01.2026

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sh. J.P. Anbusivam, Chief Manager ROSARB of the Applicant Bank

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Exhibits on the part of the Applicant:

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Sl. No.	Description of Documents	Exhibit No.
1.	Application for Credit facilities dated 17.03.2020	A-1
2.	Sanction letter dated 17.03.2020	A-2
3.	Demand Promissory note for Rs.35.00 lakhs dated 31.03.2020	A-3
4.	Letter of Continuing security dated 31.03.2020	A-4
5.	Letter of Sole Proprietorship dated 31.03.2020	A-5
6.	Declarations cum Undertaking cum Authority dated 31.03.2020	A-6
7.	Composite Hypothecation Agreement dated 31.03.2020	A-7
8.	Letter sent to defendants by Bank dated 09.08.2021	A-8
9.	Letter sent to defendants dated 01.09.2021	A-9
10.	Statement of Cash Credit A/c from 31.03.2020 to 30.09.2021 and calculation of interest and charges during NPA period.	A-10

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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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:-SCHEDULE of immovable property in IA No.1462/22-:

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Sale deed Doc.no.7264/2018 dated 12/10/2018

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Vendor : K.Muralindharan

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Purchaser : S. Kannan

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All that piece and parcel of land measuring 4925 sq.ft at HIG Type, Plot no.11, Block no.9, at Chennai Metropolitan Development Authority, Manali New Town, Chennai 600 103, at Sy.no.303 Part, Idayanchavadi Village, Ponneri Taluk, Thiruvallur District, with building thereon

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Bounded on the:

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North By : Bloc no.9, Plot no.10, South By : 40 feet Road, East by : Block no.9, Plot no.12 & 13, West by : 30 feet Road.

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Within the Registration District of North Chennai and Sub Registration District of Thiruvettiyur.

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Measuring:

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East to West on Northern side : 100 feet Southern side : 93 feet Northern to South On Eastern Side : 49.5 feet Western Side : 42.5 feet

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With splay of 10x10 feet.

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In all measuring 4925 sq.ft.

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

Bank of Baroda v. Kannan

Case brief

What is this about?

What did the court decide?

Bank of Baroda v. Kannan

Case brief

What is this about?

What did the court decide?

What the court decided

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