Allowed

Tamilnad Mercantile Bank Limited v. M S Sun Steels

DRT10 Jul 2026OA/234/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal (DRT) allowed the Bank's Interim Application seeking attachment of respondent properties and direction to furnish security. The Tribunal noted that much of the secured asset had already been sold, leaving a large unsecured balance. Fearing alienation of remaining assets, the Bank sought attachment. The Tribunal ordered conditional attachment and directed the 2nd respond

What did the court decide?

Directed 2nd respondent to furnish security of Rs. 4,64,20,386.27p (less realized amounts) or show cause why not; ordered conditional attachment of schedule properties.

Tamilnad Mercantile Bank Limited versus M S Sun Steels — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 10^th day of July, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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I.A. No.1158 of 2024 in O.A. No. 234 of 2022

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Tamilnad Mercantile Bank Ltd, Adayalampattu Branch Plot No 5, School Road, Millenium Town, Phase II, Chennai 600 095 Rep. by its Manager & Branch Head

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…Petitioner / Applicant

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-Vs-

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M/s Sun Steels Partnership Firm Rep. by its Partners, Mr R. Agastin & Mrs A Maria Roselin Survey No. 77/1, 76/2A3, Kallupatti Road Vadugapatti Village, Viralimalai Taluk Puthukkottai District, Tamil Nadu 621 316

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And Also at No.3/65, RC Street, Nedungulam, Sathankulam Thoothukudi-628704

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Mr R. Agastin, S/o Mr Y. Rajendran Partner, Sun Steels Old No. 15, New No. 36, B Block, Water Tank Road, MMDA Colony Arumbakkam, Chennai 600106

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And Also at No.3/65, RC Street, Nedungulam, Sathankulam Thoothukudi-628704

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Mrs. Maria Roselin W/o Mr R. Agastin Partner, Sun Steels Old No. 15, New No. 36, B Block, Water Tank Road, MMDA Colony

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Uploaded on 10.07.2026 at 13:30 hours

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Arumbakkam, Chennai 600106

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And Also at No.3/65, RC Street, Nedungulam, Sathankulam Thoothukudi-628704

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Mr. M.G. Manosunanthan, S/o Maria Gnanasekar R, 11, Laksmi Nagar, Sivaboothamedu, Vanagaram, Chennai — 600095

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Also at 311/4, Jeyajothi Nagar, Peedampalli Sulur, Coimbatore — 641 016

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...Respondents / Defendants

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: - ORDER ON IA NO.1158 of 2024 - :

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The Original Application is filed by the Applicant Bank against the Defendants, seeking for recovery of money due from Defendants jointly and severally to pay a sum of Rs.4,64,20,386.27p (Rupees Four Crores

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Sixty Four Lakhs Twenty Thousand Three Hundred and Eighty Six

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and Twenty Seven Paise only) repayable together with further interest and costs.

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The Applicant Bank has filed the present petition i.e., I.A.No.1158/2024 with affidavit of the Senior Manager and Branch Head of applicant bank, praying to direct the 2^nd respondent/ 2^nd defendant to furnish security in such sum as may be specified within the time fixed by the Tribunal, failing which to pass an order of attachment before judgement of the schedule mentioned property, pending disposal of the above OA.

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In the affidavit filed along with IA, it is submitted by the applicant bank that after filing of OA, the Applicant had sold the Hypothecated Goods morefully detailed as schedule A-2^nd item in the OA through the Public

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auction and a sum of Rs.60,20,000/- has been realised. Further the amount was appropriate in the said loan account on 22.08.2022.

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It is further submitted by the applicant bank that subsequently, the applicant bank issued Sale Notice dated 02.09.2023 for the immovable property morefully detailed as Schedule-B under SARFAESI Act in the Public auction conducted on 25.09.2023 and a sum of Rs.1,19,00,000/- was realised. The auction Purchaser purchased the property and remitted the entire sale proceeds/consideration. The entire sale consideration was credited to the loan account of the defendants on 15.11.2023. The Sale Certificate was issued on 27.11.2023.

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It is submitted that since the part of the Movable assets and whole immovable secured assets has been sold and credited to the loan account, and the said remaining movable assets value is not sufficient to recover the balance liabilities of Rs.3,73,97,416.57/- outstanding in the loan account date together with interest and costs etc.

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The applicant bank submits that as there is no response to clear the dues by the Respondents/Defendants, there is no other way except to attach and sell the property identified and mentioned in the schedule to the OA. However the same will not be sufficient to satisfy the dues of the bank. On discreet enquiry and on verification of the EC obtained from the SRO, Sathankulam, the applicant bank came to know that the properties mentioned in the schedule to the IA are in the name of Mr R. Agastin, S/o Mr Y. Rajendran who is 2^nd Respondent/2^nd defendant also partner of 1^st

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Uploaded on 10.07.2026 at 13:30 hours

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Respondent/1^st defendant Company as per the Title Deeds morefully detailed in the IA. The value of the properties mentioned in the schedule is around Rs.8.50 Lakhs (approx.) as per valuation made by the Manager of the Branch.

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The applicant bank submits that other than the properties mentioned in the Schedule to the IA, the Respondents / Defendants are not having any other valuable assets as per bank’s knowledge. It is given to understand that the Respondents / Defendants are taking steps to dispose the schedule mentioned properties and if Respondents, dispose the same, then the Petitioner will not able to recover its dues from the respondents. The Petitioner/Applicant has got a prima facie case and the balance of convenience is also in favour the Petitioner/Applicant for the reasons stated above. Hence the present application is filed praying to direct the respondents / defendants to furnish security to the in such sum as may be fixed by the Tribunal, failing which to order attachment of the properties mentioned in the Schedule to the IA, till the disposal of the OA.

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Heard both sides and perused the records produced along with the IA.

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The Applicant Bank has filed the above I.A. on the premise that the respondents / defendants may alienate or dispose of or create third-party interest on the properties morefully described in the schedule to the IA.

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It is a matter of record that the OA was filed for recovery of sum of Rs.4,64,20,386.27p, which is a colossal sum of money. The applicant bank

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Uploaded on 10.07.2026 at 13:30 hours

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had initiated proceedings under SARFAESI Act and sold part of the movable assets and whole of the immovable secured assets and recovered a sum of Rs.60,20,000/- and 1,19,00,000/- respectively. Now the remaining portion of the claim is unsecured.

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The defendants despite receipt of summons in the OA and entered appearance through their counsel, did not contest the matter by filing written statement. Hence they were placed ex-parte on 07.10.2022. The defendants did not take any steps to set aside the ex-parter order also. As the balance outstanding amount is unsecured, considering the amount of claim involved in this case and the balance of convenience, the present IA is to be allowed by keeping open the merits of the case and without prejudice to the rights of both the parties. By doing so, no prejudice, no harm and loss will be caused to the Defendants.

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As per Section 19 (13)(A) of RDB Act,

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“ Where, at any stage of the proceedings, [the Tribunal on an application made by the applicant along with particulars of property to be attached and estimated value thereof, or otherwise] is satisfied that the defendant, with intent to obstruct or delay or frustrate the execution of any order for the recovery of debt that may be passed against him

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(i)is about to dispose of the whole or any part of his property; or

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Uploaded on 10.07.2026 at 13:30 hours

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(ii)is about to remove the whole or any part of the property from the local limits of the jurisdiction of the Tribunal; or (iii)is likely to cause any damage or mischief to the property or affect its value by misuse or creating third party interest,

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the Tribunal may direct the defendant, within a time to be fixed by it, either to furnish security, in such sum as may be specified in the order, to produce and place at the disposal of the Tribunal, when required, the said property or the value of the same, or such portion thereof as may be sufficient to satisfy the certificate for the recovery of debt, or to appear and show cause why he should not furnish security.

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(B)Where the defendant fails to show cause why he should not furnish security, or fails to furnish the security required, within the time fixed by the Tribunal, the Tribunal may order the attachment of the whole

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or such portion of the properties claimed by the applicant as the properties secured in his favour or otherwise owned by the defendant as appears sufficient to satisfy any certificate for the recovery of debt.”

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As the Applicant Bank has prima facie established the essential ingredients for granting an order of temporary injunction restraining the 2^nd defendant / 2^nd respondent in respect of the properties mentioned in the schedule to the petition, this Tribunal proceeds to pass the following order:

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:ORDER:

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In the circumstances pleaded, 2^nd respondent / 2^nd defendant is hereby directed to show cause within 15 days from the date of receipt of this order, as to why he should not furnish security to the tune of OA claim in a sum of Rs.4,64,20,386.27p claimed in the O.A. (less the sum of Rs.60,20,000/- and 1,19,00,000/- respectively already realised by sale of part of Movable and whole of immovable secured asset under SARFAESI Act), failing which the IA schedule mentioned property shall be attached to answer the OA claim herein.

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Meanwhile, conditional attachment of the IA schedule mentioned property to the extent of Rs.4,64,20,386.27p claimed in the O.A. (less Rs.60,20,000/- and 1,19,00,000/- respectively already realised by sale of part of Movable and whole of immovable secured asset under SARFAESI Act) together with further interest, is hereby ordered to secure the dues of the applicant bank.

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The Registry is directed to communicate this Order to the Concerned Sub Registrar Office/ Village Officer for necessary action and for records.

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14. IA Schedule properties shall form part of this order.

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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 10^th day of July, 2026)

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Uploaded on 10.07.2026 at 13:30 hours

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SCHEDULE OF PROPERTIES

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Property No.1

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(Pertaining to Document of Sale Deed dated 20.10.2016 registered as Doc.No.1367 of 2016 with SRO Sathankumlam executed by Mr.Raiendra Nadar to and in favour of Mr R. Agastin, S/o Mr Y. Rajendran)

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Item No.1

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All the piece and parcel of property having 1 acres over the Eastern portion of 2.00 acres, comprised in old Sy.No.203, R.Sy.No.378/3, New Sy.No.378/3B of Nedungulam Village, Sathankulam Taluk, Thoothukudi District, with in the Registration District of Palayamkottai, Sub Registration District of Sathankulam.

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Bounded on

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North: Harijana Cremation land South: Canal East : Sundara Nadar and others property West: Agastin's land

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Item No.2

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All the piece and parcel of property having 311/2 cents over the Eastern portion of 63 cents, comprised in old Sy.No.203, New Sy.Nos. 378/5 of Nedungulam Village, Sathankulam Taluk, Thoothukudi District, with in the Registration District of Palayamkottai, Sub Registration District of Sathankulam.

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Bounded on

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North : Harijana Cremation land South: Canal East: Sundara Nadar and others property West: Agastin's land

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Uploaded on 10.07.2026 at 13:30 hours

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Property No.2

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(Pertaining to Document of Sale Deed dated 19.10.2016 registered as Doc.No.1358 of 2016 with SRO Sathankumlam executed by Mr.Singarapandi Nadar to and in favour of Mr R. Agastin, S/o Mr Y. Rajendran)

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Item No.1

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Undivided Share of 33.33 cents over the western portion of lacres out of the property having total extent of 2.00 acres, comprised in old Sy.No.203, R.Sy.Nos. 378/3 of Nedungulam Village, Sathankulam Taluk, Thoothukudi District, with in the Registration District of Palayamkottai Sub Registration District of Sathankulam.

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Item No.2

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All the piece and parcel of property measuring 1.00 acres (0.40.49 hectares), comprised in new Sy.No.378/3A of Nedungulam Village, Sathankulam Taluk, Thoothukudi District, with in the Registration District of Palayamkottai Sub Registration District of Sathankulam.

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Bounded on

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North: Harijana Cremation land South: Canal

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East : Rajendra Nadar's land West: Yosoppu Nadar's land

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Item No.3

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Undivided Share of 10 12/ cents over the western portion of 3112/ cents

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out of the property having total extent of 63 cents, comprised in old Sy.No.203, R Sy.No.378/5 of Nedungulam Village, Sathankulam Taluk, Thoothukudi District, with in the Registration District of Palayamkottai, Sub Registration District of Sathankulam.

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Uploaded on 10.07.2026 at 13:30 hours

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Bounded on North : Harijana Cremation land South: Canal East: Rajendra Nadar's land West: Yosoppu Nadar's land

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

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Uploaded on 10.07.2026 at 13:30 hours

Tamilnad Mercantile Bank Limited v. M S Sun Steels

Case brief

What is this about?

What did the court decide?

Tamilnad Mercantile Bank Limited v. M S Sun Steels

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

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