Allowed

State Bank of India v. Excellent Engineering

DRT24 Mar 2026OA/3/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed the bank's recovery application ex-parte. Found the bank proved its claim through affidavits and documents. Ordered joint and several recovery of principal, interest, and costs.

What did the court decide?

Recovery of ₹33,02,394.10p (Term Loan and Cash Credit) with further interest and penal charges at 2% per annum, along with costs of the application.

State Bank of India versus Excellent Engineering — Specific Performance | DRT (2026)

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O.A. No.03 of 2024

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24.03.2026

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 24^th day of March, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No.03 of 2024

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State Bank of India, SME Centre, Ambattur Industrial Estate, No.86, A & B, II^nd Main Road, Ambattur, Chennai-600 058 Represented by its Chief Manager …Applicant

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-Vs-

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M/S Excellent Engineering

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No. T-353, SIDCO Women Industrial Park Vellanoor, Thirumullaivoyal

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Chennai - 600 062

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Rep. by its Proprietor Mr. P.Nagarajan

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Mr. P. Nagarajan,

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S/ o Palanivel

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No.3/927, Kuppusamy Street, Melapedu, Palavedu, Ambattur Tiruvallur- 600 055 …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 18.03.2024

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: - FINAL ORDER - :

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This Original Application is filed on 01.09.2023 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.33,02,394.10p (Rupees Thirty Three Lakhs Two Thousand

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O.A. No.03 of 2024

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24.03.2026

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Three Hundred and Ninety Four and Ten Paisa only) due in respect of

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(i) A sum of Rs.30,98,220.66p due in respect of Term Loan (Account No.39903337099) repayable together with further interest @ 12.75% p.a. with monthly rests and penal interest @ 2% p.a. simple from the date of application till the date of realisation in full;

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(ii) A sum of Rs.2,041,73.44p due in respect of Cash Credit Limit (Account No.39896570471) repayable together with further interest @ 12.75% p.a. with monthly rests and penal interest @ 2% p.a. simple from the date of application till the date of realisation in full; 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 represented by the 2^nd Defendant vide application dated 15.07.2020 had applied for Term Loan of Rs.30.82 lakhs for purchase of CNC Wire Cut Electro Discharge Machine, and Rs.2.00 lakhs towards Working Capital under New Entrepreneur and Enterprise Development Scheme of Government of India. Considering the said request, the Applicant Bank had sanctioned the same

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O.A. No.03 of 2024

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24.03.2026

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vide sanction letter dated 23.12.2020, the terms and conditions of which were acknowledged by the Defendants.

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The applicant further submits that 1^st Defendant represented by 2^nd Defendant had executed the following documents in favor of the Applicant Bank, agreeing to repay the Term loan in 56 monthly instalments of Rs.54,071/- from March, 2022 and the last instalment being 54,024/- and the CC facility on demand with interest at the rate of 10.25% per annum with monthly rests, with interest to be reset from the time as per the norms of the Bank:

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i. Letter of Arrangement dated 23.12.2020 (SME – 1)

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ii. Agreement of Loan cum Hypothecation – SME 2

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The applicant submits that the loan was disbursed on 23.12.2020 and the Defendants had produced invoice No.4SIMF202100099 dated 30/12/2020 issued by Electronica Hitech Machine Tools Pvt. Ltd. for supply of CNC Wire cut Electro Discharge Machine for an amount of Rs.32,45,000/-

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It is submitted that the loan was reviewed by the Applicant Bank as requested by Defendants vide Sanction letter dated 29.09.2021 and the Defendants executed Letter of Arrangement and Agreement of Loan cum Hypothecation for the existing limits of 32.82 lakhs with interest payable in the accounts. The defendants had accepted the terms of sanction letter dated 14.03.2023 and the Defendant executed following documents dated 12.06.2023 for the existing limits:

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i. Letter of Arrangement for renewal of limits as follows:

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O.A. No.03 of 2024

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24.03.2026

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Cash Credit: Rs.2.00 lakhs

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Term Loan: Rs.31,34,112/00

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The applicant submits that subsequent to availing of loan, the Defendants have not carried on the business as per terms of sanction and had not maintained sufficient stock to cover the dues of the Applicant Bank and had also not routed the proceeds of business through their account, and thereby violated the terms of agreement with the Applicant. The defendants have also failed to service the interest in the accounts as required in the restructuring proposal and have violated the terms and conditions of restructuring. The Defendants have also not submitted the stock statements for the Hypothecated Goods as required in the terms of sanction of the credit facility.

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The applicant further submits Applicant Bank has issued reminder notice dated 23.05.2023 which was received by the defendant, promised to repay before 26.05.2023. But they have failed to regularize the account and repay interest and principal as agreed, hence the account was classified as Non-Performing Asset (NPA) in the books of the bank as per RBI norms on 01.07.2023. The applicant bank has issued Recall Notice dated 12.07.2023 but no response was received from the defendant.

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The applicant further states the Defendants have closed down the business at the address given to the Bank, and shifted the Hypothecated machinery to some unknown premises, which is not known to the Applicant with a clear intention of fraud and deceit and with the ulterior motive of

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O.A. No.03 of 2024

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24.03.2026

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avoiding repayment of the facilities availed from the Bank. The applicant bank has therefore approached this Tribunal for recovery of its 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 returned unserved with an postal endorsement as “Left” in respect of D-1 and returned unserved with an postal endorsement as “Unclaimed” in respect of D-2. Service to D-2 is deemed to have been served. Since D-2 is the

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Proprietor of D-1, D-1 is also deed to have been served. When OA was taken up on 18.03.2024 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 and 2 were placed ex-parte on 18.03.2024.

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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, Ms. Yalla Suneetha, Manager, SME Centre, Ambattur Branch of the Applicant Bank has filed her Affidavit by way of evidence and same was considered as evidence of AW-

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1 and list of documents came to be marked as Ex A-1 to A-13 .

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A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-13 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

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O.A. No.03 of 2024

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24.03.2026

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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 18.03.2024, 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 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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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, for recovery of a total sum of Rs.33,02,394.10p (Rupees Thirty Three Lakhs Two Thousand Three Hundred and Ninety Four and Ten Paisa only) due as follows:

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(i) A sum of Rs.30,98,220.66p due in respect of

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O.A. No.03 of 2024

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24.03.2026

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Term Loan (Account No.39903337099) repayable together with further interest @ 12.75% p.a. with monthly rests and penal interest @ 2% p.a. simple from the date of application till the date of realisation in full;

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

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O.A. No.03 of 2024

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24.03.2026

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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 (Mogesh), transcribed by him, corrected, signed and pronounced by me on this the 24^th day of March, 2026)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Ms. Yalla Suneetha, Manager, SME Centre, Ambattur Branch 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 with KYC dated 15.07.2020	A-1
2.	Letter of Arrangement dated 23.12.2020	A-2
3.	Agreement of loan cum Hypothecation dated 23.12.2020	A-3
4.	Invoice No.4SIMF202100099 for CNC cutting machine dated 30.12.2020	A-4
5.	Sanction letter for renewal dated 29.09.2021	A-5
6.	Letter of arrangement dated 29.09.2021	A-6
7.	Supplemental agreement of loan cum hypothecation dated 29.09.2021	A-7
8.	Sanction letter for renewal of limits dated 14.03.2023	A-8
9.	Letter of arrangement dated 12.06.2023	A-9
10.	Reminder letter dated 23.05.2023	A-10
11.	Demand Notice dated 12.07.2023	A-11
12.	Statement of Term Loan A/c 39896570471 from 23.12.2020 to 01.07.2023 with calculation from 01.07.2023 to 22.08.2023	A-12

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O.A. No.03 of 2024

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24.03.2026

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Statement of Cash Credit A/c No.39903337099 from A-13 23.12.2020 to 01.07.2023 with calculation from 01.07.2023 to 22.08.2023.

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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-:

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- NIL -

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

State Bank of India v. Excellent Engineering

Case brief

What is this about?

What did the court decide?

State Bank of India v. Excellent Engineering

Case brief

What is this about?

What did the court decide?

What the court decided

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