Allowed

Bank of Baroda v. v.Saravana kumar

DRT2 Apr 2026OA/234/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed an original application filed by Bank of Baroda to recover outstanding dues of approx. Rs.23.90 lakhs including interest from two respondents who were tried ex-parte, and directed realization by sale of mortgaged properties.

What did the court decide?

Directing respondents to jointly/severally pay Rs.23,90,821.62p inclusive of interest and costs within one month, with liberty to sell mortgaged properties in case of default.

Bank of Baroda versus v.Saravana kumar — Contract and Commercial Disputes | DRT (2026)

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OA No. 234/2024

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 02^ND DAY OF APRIL, 2026 PRESENT: SEEMA SINHA, [PR. DISTRICT & SESSIONS JUDGE – Retd]

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PRESIDING OFFICER

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OA No.234/2024

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Between

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Bank of Baroda, West Masi Street Branch, T S P Towers, First Floor, 326, West Masi Street, Madurai – 625 001. Rep. By its Senior Manager.

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---Applicant Bank

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And

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Mr. V. Saravana Kumar, Prop. M/s Vairamani Cement Agency,

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S/o T. Vairamani, 75/90/1, Tharun Nivas, Madakulam Main Street, Ponmeni, Madurai – 625 016.

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Also at

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Mr. V. Saravana Kumar, S/o T. Vairamani, No.7, Bodi Bungalow Lane, West Masi Street, Madurai – 625 001.

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Mr. T. Vairamani, S/o Thambiranpillai, No.7, Bodi Bungalow Lane, West Masi Street, Madurai – 625 001.

---Defendants

Page 1 of 11

OA No. 234/2024

Counsel for the Applicant Bank : M/s V. KasiRajan, A. Meenakshi Sundaram, R. Ajay Janarthan

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This Original Application was heard and fixed for passing final order before me in the presence of the above said Advocate for Applicant Bank and the Defendants having been set ex-parte and upon hearing the arguments of Counsel for Applicant Bank and upon perusing the material available on the records and having stood over for consideration till this day, this Tribunal delivered the following:

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JUDGEMENT

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1 . This Application has been filed under Sec.19 (1) of the "The Recovery of Debts due to Banks and Financial Institutions Act, 1993" now amended as The Recovery of Debts and Bankruptcy Act, 1993 by the Applicant Bank on 12.03.2024 to recover from the Defendants a total sum of Rs.23,90,821.62p i.e.,

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(i) Rs.16,95,175.12p together with interest at the rate of 13.60% p.a. in respect of Cash Credit facility and

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(ii) Rs.6,95,646.50p together with interest at the rate of 16.90% p.a. in respect of Personal Loan from the date of filing of Application till the date of realization with cost and by sale of mortgaged/hypothecated properties, more fully described in Schedules of the application.

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2 . The brief averments of the application filed by the Applicant Bank are as follows:-

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The defendant No.1 is doing trading of cements and paints business in the name and style of M/s. Vairamani Cement Agency as its proprietor. The defendant No.1 has approached the applicant bank for Cash Credit facility to develop his business and the defendant No.1 has agreed to hypothecate his under mentioned Schedule. The applicant sanctioned the Cash Credit facility a sum of Rs.5,00,000/- (Rupees Five Lakhs Only) (under Credit Guarantee Scheme For Micro And Small Enterprises) and the defendant No.1 has agreed to adjust and repay the facility enjoyed by the defendant No.1 under Cash Credit facility within a period of 12 months subject to renewal with accrued interest at the rate of 2.25% per annum over the vijaya banks MCLR rate of interest as may be fixed by the bank from time to time subject to a minimum of 11.70% per annum on daily balances with monthly rest or at such rest and such interest being added to the balance outstanding on the last working day of every month and the said interest if unpaid will become part of the amount advanced (ie. the principal amount as mentioned above) and bears interest at the same rate.

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Page 2 of 11

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OA No. 234/2024

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The cash credit facility was sanctioned for a period of 12 months subject to renewal. Further, the defendant No.1 agreed to pay higher and revised rate of interest on going base rate of the applicant along with other commission, insurance premium, expenses, charges etc, Further, the applicant is entitled to recall any time the entire loan or balance thereof as the case may be, in case of default of payment within a period of 12 months or violation of terms and conditions of sanction. The defendant No.1 has agreed to pay 2% additional interest in case of default. As security, evidence and cover, for the said cash credit facility a sum of Rs.5,00,000/-, the defendant No.1 has excented the following documents at West Masi street, Madurai Town on 24.08.2016 infavour of the applicant viz..

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a. LOAN AGREEMENT CUM HYPOTHECATION DEED FOR PRIORITY/NON PRIORITY SECTOR ADVANCES hypothecating the under mentioned Schedule property and created a paramount charge over the same and also agreeing to the terms and conditions inter alia to adjust the limit within a period of one year subject to renewal along with minimum interest at the rate of 11.70%% per annum. Further in case of default, he has agreed to pay additional interest at the rate of 2% per annum. For other terms and conditions, the said agreement may be referred to.

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b. PERMISSION LETTER FOR ACCESS TO THE GODOWN

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c. LIEN LETTER OF UNDERTAKING

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The Defendant No.2 in consideration of applicant granting aforesaid cash credit facilities to the defendant No.1 after knowing all the terms and conditions of the said cash credit facilities a sum of Rs.5,00,000/-, agreed to stand as guarantor for all the amounts due from the defendant No.1 to the applicant and to that effect, the defendant No.2 has executed Letter of Guarantee dated 24.08.2016 infavour of the applicant bank.

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The defendant No. I has admitted and acknowledged his liabilities and executed Acknowledgement of Liability on 04.02.2017 infavour of applicant bank

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ENHANCEMENT OF CASH CREDIT from Rs.5,00,000/- to Rs.9,00,000/dated 04.02.2017:

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The defendant No 1, approached the applicant bank for enhancement of Cash credit facility, from Rs.5,00,000/- to 9,00,000/-0 develop his business and the applicant bank also agreed for the same terms and conditions. In anent to that, the 1" defendant has executed the following

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Page 3 of 11

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OA No. 234/2024

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documents dated 04.02.2017 at West Masi Street, Madurai Town infavour of the applicant bank viz,

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a. SUPPLEMENTARY AGREEMENT hypothecating the under mentioned Schedule property and created a paramount charge over the same and also agreeing to the terms and conditions inter alia to adjust the limit within a period of one year subject to renewal along with minimum interest at the rate of 11.50%% per annum. Further in case of default, he has agreed to pay additional interest at the rate of 2% per annum. For other terms and conditions, the said agreement may be referred to.

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b. PERMISSION LETTER FOR ACCESS TO THE GODOWN

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C. LETTER OF AUTHORITY

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The Defendant No.2 in consideration of applicant granting the above said cash credit facilities to the defendant No.1. after knowing all the terms and conditions of the said cash credit facilities agreed to stand as guarantor for all the amounts due from the defendant No.1 to the applicant and to that effect, the defendant No.2 has executed a letter of guarantee on 04.02.2017 infavour of the applicant bank. The defendant No.1 has admitted and acknowledged his liabilities and executed Acknowledgement of Liability on 29.10.2018 infavour of applicant bank. The defendants have admitted and acknowledged their liabilities and jointly executed Acknowledgement of Liability on 18.10.2021 infavour of applicant bank.

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ENHANCEMENT OF CASH CREDIT Rs.15,00,000/- dated 11.02.2022: from Rs.9,00,000/- to

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The defendant No.1, approached the applicant bank for enhancement of Cash credit facility, from Rs.9,00,000/- to 15,00,000/- to develop his business and the applicant bank also agreed for the same terms and conditions. In anent to that, the 1^st defendant has executed the following documents dated 11.02.2022 at West Masi Street, Madurai Town infavour of the applicant bank viz,

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a. LETTER OF SOLE-PROPRIETORSHIP

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b. DEMAND PROMISSORY NOTE

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c. LETTER OF CONTINUING SECURITY

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d. COMPOSITE OF HYPOTHECATION AGREEMENT

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Page 4 of 11

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OA No. 234/2024

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hypothecating the under mentioned Schedule property and created a paramount charge over the same and also agreeing to the terms and conditions inter alia to adjust the limit within a period of one year subject to renewal along with minimum interest at the rate of 9.10%% per annum. Further in case of default, he has agreed to pay additional interest at the rate of 2% per annum. For other terms and conditions, the said agreement may be referred to.

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e. LETTER OF UNDERTAKING

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POWER OF ATTORNEY IN RESPECT OF BOOK DEBTS FACILITY

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The Defendant No.2 in consideration of applicant granting the above said cash credit facilities to the defendant No.1, after knowing all the terms and conditions of the said cash credit facilities agreed to stand as guarantor for all the amounts due from the defendant No.1 to the applicant and to that effect, the defendant No.2 has executed a General form of guarantee on 11.02.2022 infavour of the applicant bank.

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PERSONAL LOAN-Rs.7,00,000/- 11 Loan

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The defendant No.1 approached the applicant bank for financial assistance under personal loan, on application of the defendant No. 1. the applicant bank sanctioned personal loan a sum of Rs.7,00,000/- On condition of execution of necessary documents infavour of the applicant bank. The defendant No.1 has agreed to repay the principal amount a sum of Rs.7,00,000/- with accrued interest at the rate of 14.30% p.a (at present), which is sum of, RB1 Repo rate 5.90% (at present), markup of 2.55% (at present), strategic premium of 0.25% (at present), credit spread of 5.60% (at present) compounded at monthly rest or at such rest and such interest being added to the balance outstanding dues on the last working day of every calendar month and the said interest if unpaid will become part of the amount advanced (ie, the principal amount as mentioned above) and bears interest at the same rate.

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Further, the defendant No.1 agreed to pay higher and revised rate of interest on going Base rate of the applicant along with other commission, insurance premium, expenses, charges etc.. The loan amount is repayable in 60 equated monthly consecutive installment a sun of Rs.16,397/- and the first installment commencing from Next month. Further, the applicant is entitled to recall any time, the entire loan or balance thereof as the case may be, in case of default of payment of any installment or violation of the terms and conditions of sanction. The defendant No. 1 has agreed to pay 2% additional interest in case of default. As security, evidence and cover, for the

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Page 5 of 11

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OA No. 234/2024

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said personal loan a sum of Rs.7,00,000/- the defendant No.1 has executed the following documents at West Masi Street, Madurai Town on 20.10.2022 infavour of the applicant bank viz.,

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a) DEMAND PROMISSORY NOTE

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b) LETTER OF INSTALLMENT WITH ACCELERATION

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e) IRREVOCABLE UNDERTAKING/AUTHORITY/BY EMPLOYEE TO BANK FOR NOT SHIFTING SALARY ACCOUNT DURING CONTINUANCE OF LOAN

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d) DECLARATION CUM UNDERTAKING CUM AUTHORITY

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The Defendant No.2 in consideration of applicant granting aforesaid personal loan to the defendant No.1 after knowing all the terms and conditions of the said personal loan a sum of Rs.7,00,000/-, agreed to stand as guarantor for all the amounts due from the defendant No.1 to the applicant and to that effect, the defendant No.2 has executed General form of Guarantee dated 20.10.2022 infavour of the applicant bank. The defendant No.1 has availed the above said three credit facilities from the applicant bank. But he has paid only meager amount as reflected in the statement of accounts.

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The defendants have not cleared the liabilities despite the reminders of the applicant. Despite repeated demands and reminders, made by the Applicant Bank, the Defendants have failed and neglected to repay and adjust their liability. Hence, the Applicant Bank has filed the OA for recovery of a total sum of Rs.23,90,821.62p i.e.,

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(i) Rs.16,95,175.12p together with interest at the rate of 13.60% p.a. in respect of Cash Credit facility and

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(ii) Rs.6,95,646.50p together with interest at the rate of 16.90% p.a. in respect of Personal Loan from the date of filing of Application till the date of realization with cost.

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The Applicant Bank has submitted the following documents in support its claim in the OA, which are as follows:

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S. No.	Date	Description of document	Exhibits
		PART - I
1	02.01.2019	Xerox copyof Gazette Notification	Ex.No.A-01
		PART-II
		(Loan Documents)
		Cash Credit – First Loan – Rs.5,00,000/-

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Page 6 of 11

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OA No. 234/2024

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2	24.08.2016	Loan Agreement cum Hypothecation Deed (Priority/Non-PrioritySector Advances)	Ex.No.A-02
3	24.08.2016	Permission Letter for Access to Godown	Ex.No.A-03
4	24.08.2016	Lien Letter	Ex.No.A-04
5	24.08.2016	Letter of Guarantee(Defendant No.2)	Ex.No.A-05
6	04.02.2017	Acknowledgement of Liability	Ex.No.A-06

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PART-III

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Enhancement Cash Credit Facility from Rs.5,00,000/- to Rs.9,00,000/-

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7	04.02.2017	SupplementaryAgreement	Ex.No.A-07
8	04.02.2017	Permission Letter for Access to Godown	Ex.No.A-08
9	04.02.2017	Letter of Authority	Ex.No.A-09
10	04.02.2017	Letter of Guarantee(Defendant No.2)	Ex.No.A-10
11	29.10.2018	Acknowledgement of Liability	Ex.No.A-11
12	18.10.2021	Acknowledgement of Debt(Jointlyexecuted)	Ex.No.A-12

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Part-IV

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Enhancement Cash Credit Facility from Rs.9,00,000/- to Rs.15,00,000/-

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13	11.02.2022	Letter of Sole Proprietorship	Ex.No.A-13
14	11.02.2022	Demand PromissoryNote	Ex.No.A-14
15	11.02.2022	Letter of ContinuingSecurity	Ex.No.A-15
16	11.02.2022	Composite Hypothecation Agreement	Ex.No.A-16
17	11.02.2022	Letter of Undertaking	Ex.No.A-17
18	11.02.2022	Power of Attorney (Book Debts Facility)	Ex.No.A-18
19	11.02.2022	General Form of Guarantee(Defendant No.2)	Ex.No.A-19

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Part – V

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(Loan Security Documents)

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Personal Loan – Second Loan – Rs.7,00,000/-

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20	20.10.2022	Sanction Letter	Ex.No.A-20
21	20.10.2022	Demand PromissoryNote	Ex.No.A-21
22	20.10.2022	Letter of Installment with Acceleration	Ex.No.A-22
23	20.10.2022	Irrevocable Undertaking (SalaryAccount)	Ex.No.A-23
24	20.10.2022	Declaration cum Undertakingcum Authority	Ex.No.A-24
25	20.10.2022	General Form of Guarantee(Defendant No.2)	Ex.No.A-25
		Part-VI
26	---	Statement of Accounts – First Loan	Ex.No.A-26
27	---	Memorandum of Interest – First Loan	Ex.No.A-27
28	---	Statement of Accounts – Second Loan	Ex.No.A-28
29	---	Memorandum of Interest – Second Loan	Ex.No.A-29

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SCHEDULE

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(Evaluated Price Rs.5,00,000/-)

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Hypothecation of all current assets such as RAMCO cements

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Page 7 of 11

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OA No. 234/2024

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3 . On the other hand, Notices were issued to Defendants and since from the beginning of the case, there was no representation on behalf of the Defendants. Hence, Defendants were set ex-parte.

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4. Now the main point for consideration before me is as to whether the Applicant has been able to prove his case on his own leg?

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Having gone through the affidavit of the applicant and the documents filed by them and also considering the submission of the counsel for the Applicant, I find that the Applicant Bank, in order to prove its claim, has filed Proof Affidavit executed by one Mr. T. Vimal Ghosh, who is the Senior Manager of the Applicant Bank.

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He has stated in his affidavit that the defendants has availed Cash Credit facility and Personal Loan from the Applicant Bank, but they failed to pay the outstanding loan amount, hence he has filed the case. The applicant bank has also filed the documents given by the defendants at the time of sanctioning the loan amount, which have been marked as exhibits No.A-01 to A-29 in support of its claim in the OA.

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The Xerox copy of Gazette Notification has been marked as Ex.No.A01, Loan Agreement cum Hypothecation Deed (Priority/Non-Priority Sector Advances) has been marked as Ex.No.A-02, Permission Letter for Access to Godown has been marked as Ex.No.A-03, Lien Letter has been marked as Ex.No.A-04, Letter of Guarantee (Defendant No.2) has been marked as Ex.No.A-05, Acknowledgement of Liability has been marked as Ex.No.A-06, Supplementary Agreement has been marked as Ex.No.A-07, Permission Letter for Access to Godown has been marked as Ex.No.A-08, Letter of Authority has been marked as Ex.No.A-09, Letter of Guarantee (Defendant No.2) has been marked as Ex.No.A-10.

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The Acknowledgement of Liability has been marked as Ex.No.A-11, Acknowledgement of Debt (Jointly executed) has been marked as Ex.No.A12, Letter of Sole Proprietorship has been marked as Ex.No.A-13, Demand Promissory Note has been marked as Ex.No.A-14, Letter of Continuing Security has been marked as Ex.No.A-15, Composite Hypothecation Agreement has been marked as Ex.No.A-16, Letter of Undertaking has been marked as Ex.No.A-17, Power of Attorney (Book Debts Facility) has been marked as Ex.No.A-18, General Form of Guarantee (Defendant No.2) has been marked as Ex.No.A-19, Sanction Letter has been marked as Ex.No.A20.

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Page 8 of 11

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OA No. 234/2024

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The Demand Promissory Note has been marked as Ex.No.A-21, Letter of Installment with Acceleration has been marked as Ex.No.A-22, Irrevocable Undertaking (Salary Account) has been marked as Ex.No.A-23, Declaration cum Undertaking cum Authority has been marked as Ex.No.A-24, General Form of Guarantee (Defendant No.2) has been marked as Ex.No.A-25, Statement of Accounts – First Loan has been marked as Ex.No.A-26, Memorandum of Interest – First Loan has been marked as Ex.No.A-27, Statement of Accounts – Second Loan has been marked as Ex.No.A-28, Memorandum of Interest – Second Loan has been marked as Ex.No.A-29. So the averments of the applicant as well as the statement of the pleading have been corroborated by the above mentioned documents.

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As the Defendants remained ex-parte, the claim of the Applicant Bank is neither disproved nor dislodged and goes on record as proved. Accordingly a cumulative analysis of both the Proof Affidavit and documents marked by the Applicant Bank would prove the claim of the Applicant Bank in the OA.

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So far the claim of interest is concerned, it is a well settled Law that the Tribunal has got powers to award pendente lite interest in view of the Judgment of the Hon’ble Supreme Court in N.M. Veerapa Vs Canara Bank (reported in AIR 98(1), 1101 & in Central bank of India Vs Ravindra and OS (AIR, 2001(1), 3095).

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Therefore, this Original Application is allowed . The Applicant Bank

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is entitled for a final order on the following lines:-

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The Applicant Bank is entitled to recover from the Defendants, a total sum of Rs.23,90,821.62p i.e.,

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(i) Rs.16,95,175.12p together with interest at the rate of 13.60% p.a. in respect of Cash Credit facility and

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(ii) Rs.6,95,646.50p together with interest at the rate of 16.90% p.a. in respect of Personal Loan from the date of filing of Application till the date of realization with cost. Accordingly, it is hereby

Page 9 of 11

OA No. 234/2024

ORDERED

(a) That the Defendants are directed to pay jointly/severally a total sum of Rs.23,90,821.62p i.e.,

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(i) Rs.16,95,175.12p together with interest at the rate of 13.60% p.a. in respect of Cash Credit facility and

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(ii) Rs.6,95,646.50p together with interest at the rate of 16.90% p.a. in respect of Personal Loan from the date of filing of Application till the date of realization with cost within one month from the date of receipt of this order.

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(b) In case of default of payment by the above mentioned Defendants, the Applicant Bank is at liberty to sell the movable / immovable properties more fully described in Schedule of the original application for appropriation of sale proceeds towards the satisfaction of amount due to the Applicant Bank.

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(c) If the sale proceeds are not sufficient, after defraying the expenses of such sale, for the payment of all such amounts, the defendants are jointly/severally liable to pay the amount of such deficiency with interest mentioned above until realization.

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(d) Any amount remitted during the course of this proceedings shall be given due credit, to the loan account of the defendants.

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Page 10 of 11

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OA No. 234/2024

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(e) Recovery Certificate be prepared, as per the directions given above, and issue accordingly. A copy of the order is to be communicated to the parties concerned, immediately.

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(f) It is further ordered that the Applicant Bank shall file cost memo within a period of one month from the date of receipt of this order, so as to prepare the recovery certificate with cost for the Cash Credit facility and Personal Loan and the Recovery Officer is also directed to proceed with the matter in accordance with law. In case, cost memo is not filed before said period of one month, Recovery Certificate will be prepared with available records.

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Dictated to T.P, taken down, transcribed, typed by her, corrected and pronounced by me in the Open Court in this the 02^nd April, 2026.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 16.04.26

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Page 11 of 11

Bank of Baroda v. v.Saravana kumar

Case brief

What is this about?

What did the court decide?

Bank of Baroda v. v.Saravana kumar

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

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