Allowed

Axis Bank v. Msm Enterprises

DRT3 Aug 2026OA/236/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed an original application filed by Axis Bank for recovery of dues amounting to Rs. 69,55,868.43 from two defendant borrowers and a guarantor. The court found the claim proven and within limitation after the defendants failed to appear. An order for recovery with interest and costs was passed.

What did the court decide?

Recovery of Rs. 69,55,868.43 plus further interest at specified rates, penal interest, and costs; issuance of Recovery Certificate.

Axis Bank versus Msm Enterprises — Specific Performance | DRT (2026)

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O.A. No. 236 of 2024

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03.08.2026

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 03^rd day of August, 2026

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Present: SMT. S.V. GOWRAMMA

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Presiding Officer

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ORIGINAL APPLICATION No. 236 of 2024

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M/s. Axis Bank Ltd, Ambattur Branch, No.426/469, MTH Road, Ambattur, Chennai 600 053. Rep by its Authorized Signatory. ….Applicant

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-Vs-

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M/s. MSM Enterprises, Proprietor - S.Somasundaram, Ground Floor, No.23, 4th Avenue, Subramanya Apartments, Banu Nagar, Padur, Ambattur, Chennai – 600 053.

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S.Somasundaram, S/o.Subramanyan,

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D3, H Block, 4th Avenue,

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Subramanya Apartments, Banu Nagar,

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Padur, Ambattur, Chennai – 600 053. …..Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. Kvp. Deepak Raj

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Defendants were set ex-parte on 14.02.2025

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: - FINAL ORDER - :

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This Original Application is filed on 10.10.2023 by the Applicant Bank under Section 19 (1) of Recovery of Debts and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the Defendants for recovery of a total sum of

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Rs.69,55,868.43p (Rupees Sixty Nine Lakhs Fifty Five Thousand

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O.A. No. 236 of 2024

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03.08.2026

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Eight Hundred Sixty Eight and Forty Three Paise Only) as follows;

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(i) A sum of Rs.58,59,391.77p due in respect of Loan-I Cash Credit Facility (A/c No.918030085343574), repayable by defendants 1 and 2 together with further interest @ 15.40% p.a. with monthly rests and penal interest @ 2% p.a. from the date of filing the OA till date of realization in full;

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(ii) A sum of Rs.10,96,476.65p due in respect of Loan-II Term Loan Under ECLGS Scheme (A/c No.920060049766599), repayable by 1^st defendant, together with further interest @ 11.75% p.a. with monthly rests and penal interest @ 2% p.a. from the date of filing the OA, till date of realization in full and for costs of this application,

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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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LOAN I - CASH CREDIT FACILITY

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It is the case of the Applicant Bank that the 1^st Defendant had approached the Applicant Bank seeking for Cash Credit Facility under CGTMSE Scheme by submitting his Loan Application on 01.08.2018.

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The Applicant Bank submits that based on the documents furnished

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by the 1^st Defendant, the Applicant Bank had sanctioned the said Facility

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O.A. No. 236 of 2024

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03.08.2026

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on 05.09.2018 for an amount of Rs.50,00,000/- Vide Loan Account Nc:918030085343574, which was repayable in 12 months or on Demand.

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The Applicant Bank further submits that the Defendants have executed the necessary Loan documents on 05.09.2018 for the sum of Rs.50,00,000/- and agreed to repay the same in 12 months or on Demand along with interest at the rate of 11.50% per annum.

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It is submitted by the applicant bank that in order to secure the loan, the 1^st Defendant had executed the following Documents on 05.09.2018 in favour of applicant bank Viz.

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i. Demand Promissory Note

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ii. Facility Agreement

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iii. Deed of Hypothecation

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The Applicant Bank submits that the 2^nd Defendant stood as Guarantor for the due repayment of the above loan and executed Guarantee Agreement in his individual capacity for the sum of Rs.50,00,000/- in favour of applicant bank on 05.09.2018.

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Applicant Bank submits that based on the request of the 1^st Defendant, the above mentioned facility was renewed on 25.10.2019, 30.10.2020, 18.06.2021 & 01.02.2022 for an amount of Rs.50,00,000/-.

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LOAN II – TERM LOAN UNDER ECLGS SCHEMЕ

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It is the further case of the Applicant Bank that the 1^st Defendant had subsequently approached the Applicant Bank for a Term Loan under ECLGS Scheme by submitting his Loan Application on 13.07.2020.

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O.A. No. 236 of 2024

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03.08.2026

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The Applicant Bank submits that based on the documents furnished by the 1^st Defendant, the Applicant Bank had sanctioned the Term Loan on 22.07.2020 for an amount of Rs.11,90,000/- Vide Loan Account No:920060049766599, which was repayable in 48 monthly installments (1 - 12 Months - Interest will be served, 13th Month - Rs.35,000/- and next 14 to 48 Months - Rs.33,000/-).

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It is submitted that the 1^st Defendant had executed the Link Document Cum Amendment Agreement for Facilities Under Emergency Credit Line Guarantee Scheme along with Demand Promissory Note, on 27.07.2020 for an amount of Rs.11,90,000/- and agreed to repay the same in 48 monthly installments along with interest at the rate of 9.25% per annum.

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The Applicant Bank further submits that subsequent to availing of loan, the defendants were not regular in repayment, except for a few repayments which was not sufficient for maintaining the Loan accounts and hence the accounts became irregular and both the Loan Accounts have been declared as a Non Performing Asset (NPA) on 29.06.2022.

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The Applicant Bank issued a Legal notice dated 20.03.2023 to the defendants demanding the outstanding amount in respect of both the loan accounts. The notice sent to both the Defendants have been duly served. In spite of receiving the said notice, the defendants have deliberately failed to repay the loan amount. 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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O.A. No. 236 of 2024

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03.08.2026

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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, summons to D1 and D2 returned with postal endorsement as ‘Unclaimed’. Applicant bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 14.02.2025 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants 1 and 2 were placed ex-parte on 14.02.2025.

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Heard the submissions of Applicant Bank and perused the

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records.

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To prove the case of the Applicant Bank, Sh. S. Pon Surendiran, Authorized Signatory 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-16 .

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A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-16 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.

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The defendants were set ex-parte on 14.02.2025, 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

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O.A. No. 236 of 2024

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03.08.2026

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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, a total sum of Rs.69,55,868.43p (Rupees Sixty Nine Lakhs Fifty

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Five Thousand Eight Hundred Sixty Eight and Forty Three

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Paise Only) as follows;

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(ii) A sum of Rs.10,96,476.65p due in respect of Loan-II Term Loan Under ECLGS Scheme (A/c No.920060049766599), repayable by 1^st defendant,

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O.A. No. 236 of 2024

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03.08.2026

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together with further interest @ 11.75% p.a. with monthly rests and penal interest @ 2% p.a. from the date of filing the OA, till date of realization in full along with costs.

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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 Defendant to the applicant bank.

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the date of receipt of this final order.

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

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Sd/-

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

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(Dictated to Steno (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 03^rd day of August, 2026)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sh. S. Pon Surendiran, Authorized Signatory of the Applicant Bank.

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O.A. No. 236 of 2024

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03.08.2026

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Exhibits on the part of the Applicant:

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Sl. No.	Description of Documents	Exhibit No.
1.	Loan Application-I dated 01/08/2018.	A-1
2.	Promissory Note executed by the 1st Defendant dated 05/09/2018.	A-2
3.	Facility Agreement executed by the 1st Defendant dated 05/09/2018.	A-3
4.	Deed of Hypothecation executed by the 1st Defendant dated 05/09/2018.	A-4
5.	Deed of Guarantee executed by the 2nd Defendant dated 05/09/2018.	A-5
6.	Sanction Letter-Renewal dated 25/10/2019.	A-6
7.	Sanction Letter-Renewal dated 30/10/2020.	A-7
8.	Sanction Letter-Renewal dated 18/06/2021.	A-8
9.	Sanction Letter-Renewal dated 01/02/2022.	A-9
10.	Loan Application-II dated 13/07/2020.	A-10
11.	Sanction Letter dated 22/07/2020.	A-11
12.	Link Document Cum Amendment Agreement For Facilities Under Emergency Credit Line Guarantee Scheme along with Demand Promissory Note, executed by the 1st Defendant dated 27/07/2020.	A-12
13.	Legal Notice dated 20/03/2023.	A-13
14.	Acknowledgment Cards	A-14
15.	Statement of Accounts-1	A-15
16.	Statement of Accounts-2	A-16

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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

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Uploaded in E-Drt at 11:32 a.m., on 03.08.2026

Axis Bank v. Msm Enterprises

Case brief

What is this about?

What did the court decide?

Axis Bank v. Msm Enterprises

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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Case details

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