Allowed

Bank of Baroda v. Morigot Food Industry

DRT4 Feb 2026OA/264/2022

Case brief

AI extract

What is this about?

DRT-III, Chennai adjudicated an Original Application filed by Bank of Baroda for recovery of dues. The defendants were set ex-parte due to non-appearance. The court allowed the application and directed recovery of the principal amount with interest.

What did the court decide?

Allowed recovery of Rs. 1,24,85,292/- with interest and liberty to recover by sale of hypothecated assets.

Bank of Baroda versus Morigot Food Industry — Banking and Recovery | DRT (2026)

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O.A. No. 264 of 2022

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04.02.2026

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 04^th day of February, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No. 264 of 2022

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BANK OF BARODA, (Erstwhile VIJAYA BANK) Rep. by its Chief Manager No.1, 100 Feet Road PONDICHERRY– 605 013. ….Applicant

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-Vs-

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M/s. MORIGOT FOOD INDUSTRY

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Prop. of Mrs. S. Latha R. S. No.162/9, Pillayar Koil Street Karuvadikuppam, Lawspet Pondicherry-605 008.

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Factory: M/s. MORIGOT FOOD INDUSTRY 115-A, Industrial Estate Mettupalayam Pondicherrry.

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Mrs. S. Latha, W/o.Mr.Sithananda Ganesh Proprietrix: M/s. MORIGOT FOOD INDUSTRY R. S. No.162/9, Pillayar Koil Street Karuvadikuppam, Lawspet Pondicherry-605 008. …..Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. S. Pandurangan

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Defendants were set ex-parte on 21.10.2022

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: - FINAL ORDER - :

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This Original Application is filed on 24.06.2022 by the Applicant Bank

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under Section 19 (1) of Recovery of Debts and Bankruptcy Act, 1993

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O.A. No. 264 of 2022

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04.02.2026

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(formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the Defendants jointly and severally for recovery of a total sum of Rs.1,24,85,292/- (Rupees One Crore Twenty Four Lakhs Eighty Five Thousand Two Hundred Ninety Two only) as follows;

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(i) A sum of Rs.1,05,31,401/- due in respect of Cash Credit Hypothecation Limit (A/c No.76720500000050) availed by the 1^st defendant, repayable together with further interest @ 11.80%, p.a. with monthly rests from the date of filing the OA, till date of realization in full;

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(ii) A sum of Rs.19,53,891/- due in respect of Term Loan (BGECLS) Account availed by the 1^st defendant (A/c No.76720500001681) , repayable together with further interest @ 7.90%, p.a. with monthly rests from the date of filing the OA, till date of realization in full;

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for sale of schedule mentioned property more fully detailed in Schedule to the OA, 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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It is the case of the Applicant Bank that at the request of the Defendants vide their Loan Application dated 30.01.2014, the applicant had sanctioned the Cash Credit Hypothecation Limit of Rs.70 Lakhs to the 1^st

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Defendant represented by the 2^nd defendant as its Proprietrix vide its sanction letter dated 30.01.2014 subject to the terms and conditions contained in the sanction letter.

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The applicant submits the 1^st defendant had availed various credit facilities from the erstwhile Vijaya Bank, Pondicherry Branch and the Defendants have executed security documents and created Securities in favour of the erstwhile Vijaya Bank, Pondicherry Branch, which is since merged with the Bank of Baroda, the applicant herein pursuant to the Notification No.02 Part II, Section 3, Sub-Section (i) and Order No. G.S.R.2 (E) dated 02.01.2019 of the Government of India.

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It is further submitted that pursuant to the Notification No.02 Part II, Section 3, Sub-Section (i) and Order No. G.S.R.2 (E) dated 02.01.2019 of the Government of India, the Vijaya Bank, has been amalgamated with the Bank of Baroda (BOB), under Section 9 of Banking Companies (Acquisition

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and Transfer of Undertakings) of India Act, 1970 and Section 9 of the Banking Companies (Acquisition & Transfer of undertakings) Act, 1980 with effect from 01.04.2019. The applicant submits that in terms of the said notification, on and from the effective date, (i.e., 01.04.2019) the undertaking of the transferor Bank (i.e; Vijaya Bank), as it stood before the effective date, shall without any further act, instrument or deed, stand transferred to, and vest in, the Transferee Bank (i.e. Bank of Baroda ).

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The applicant submits that the 1^st defendant is a proprietary concern represented by the 2^nd defendant as its proprietor carrying on the business

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of manufacturing and trading of Food Items of Semiya, Wheat Flour, Noodles, Rice Sevai etc. The applicant further submits that at the request of 1^st defendant vide letter dated 30.01.2014, the applicant has sanctioned the Cash Credit Hypothecation Limit to Rs.70 Lakhs vide Sanction Letter dated 30.01.2014 to the 1^st defendant. It is submitted that the above limit is repayable with interest @ Base rate 10.20% + 1.30% (floating) i.e., 11.50% p.a with Monthly Rests. The above limit is secured by the Hypothecation of Stocks of Semiya, Wheat Flour, Noodles, Rice Sevai etc and Book Debts of the 1^st defendant.

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In consideration of the Applicant Bank granting the aforesaid credit facility, the Defendant have executed the following security documents in favour of the Applicant Bank on 30.01.2014 in order to evidence and secure

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the due repayment of the limit sanctioned to the 1^st Defendant .

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(i) D.P. Note for Rs.70 Lakhs dated 30.01.2014.

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(ii) Letter of repayment dated 30.01.2014.

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(iii) Hypothecation Agreement dated 30.01.2014.

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It is submitted by the applicant bank that at the request of 1^st defendant vide loan application, the applicant had sanctioned/enhanced the Cash Credit Hypothecation limit to Rs. 95 Lakhs from Rs. 70 Lakhs vide sanction letter dated 19.02.2015. It is submitted that the above limit is repayable with interest @ Base rate + 1.30% (floating) i.e., 11.55% p.a with Monthly Rests. The above limit is secured by the Hypothecation of Book debts and Stocks of Semiya, Wheat Flour, Noodles, Rice Sevai etc of the 1^st defendant.

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It is submitted that the Defendants accepted the sanction stipulation and conditions while granting the above Credit facility to the 1^st defendant. The defendants have availed said facility after executing the following security documents.

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a. D.P. Note for Rs. 95 Lakhs dated 19.02.2015.

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b. Letter of repayment dated 19.02.2015.

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c. Loan Agreement cum Hypothecation dated 19.02.2015.

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d. Letter of Access dated 19.02.2015.

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It is further submitted that the 1^st defendant requested the applicant for renewal of the above Cash Credit Hypothecation Facility of Rs. 95 Lakhs vide Loan Application dated Nil. The applicant considering the above request of the 1^st defendant has sanctioned the renewal of the Cash Credit Hypothecation Limit of Rs.95,00,000/- vide sanction letter dated 30.03.2019 . It is submitted that the above limit is repayable with interest @ MCLR + 3.85% (floating) i.e., 12.60% p.a with Monthly Rests. The above limit is secured by the Hypothecation of Book debts and Stocks of Semiya, Wheat Flour, Noodles, Rice Sevai etc of the 1^st defendant.

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It is submitted that the Defendants accepted the sanction stipulation and conditions while granting the above Credit facility to the 1^st defendant. The defendants have availed said facility after executing the following security documents.

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a. Letter of Authority dated 25.09.2020.

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b. Letter of Access dated 25.09.2020.

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c. Overdraft Agreement dated 25.09.2020.

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d. Agreement cum Hypothecation dated 25.09.2020.

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It is further submitted that the 1^st defendant requested the applicant seeking Additional Working Capital Term Loan limit of Rs.18,47,000/- for working capital requirements to meet liquidity mismatch & to build up current assets in view of the Covid 19 crisis, from the Applicant Bank. The Applicant Bank considering the request of the 1^st defendant sanctioned the Additional Working Capital Term Loan Facility (BGECLS) with a Limit of Rs.18,47,000/- to the defendant vide its Sanction Letter dated 15.12.2020. It is submitted that the above limit is repayable of with interest @ BRLLR + 1% (floating) i.e., 8.00% p.a with Monthly Rests. The above limit is secured by the existing primary securities of the 1^st defendant. It is submitted that the above limit was availed by the 1^st Defendant after executing the following security documents.

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a. Acceptance of Offer BOBGECL Scheme dated 15.12.2020

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b. D.P. Note for Rs.18.47 Lakhs dated 15.12.2020.

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c. Letter of installment with acceleration clause dated 15.12.2020.

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d. Loan cum hypothecation agreement dated 15.12.2020.

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It is submitted that the Defendants failed to conduct/operate the

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account in terms of the sanction and operation of the account was highly irregular. The Defendants were making empty promises but failed to keep up their promises. Therefore, the Applicant was constrained to declare the borrowal account of the defendants as Non-Performing Asset (NPA) as on 22.11.2021 in terms guidelines of Reserve Bank of India. The Applicant also issued several reminders calling upon the Defendants to repay the entire

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dues. The Defendants failed to repay the dues despite reminders. However, the Defendants executed Letters of Acknowledgments of Liability dated 12.12.2017 and 28.03.2018 duly acknowledging the debt. 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, summons to D1 ‘Served’. Summons to D2 returned with endorsement ‘left’. Applicant bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 21.10.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, defendants 1 and 2 were placed ex-parte on 21.10.2022.

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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, Mr. P. Ravichandran, Chief Manager representing 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-23 .

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A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-23 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

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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 21.01.2022, 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 jointly and severally, a total sum of Rs.1,24,85,292/- (Rupees One Crore Twenty Four Lakh Eighty Five Thousand Two Hundred Ninety Two only) as follows;

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(i) A sum of Rs.1,05,31,401/- due in respect of Cash Credit Hypothecation Limit (A/c No.76720500000050) availed

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by the 1^st defendant, repayable together with further interest @

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O.A. No. 264 of 2022

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11.80%, p.a. with monthly rests from the date of filing the OA, till date of realization in full;

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(ii) A sum of Rs.19,53,891/- due in respect of Term Loan (BGECLS) Account (A/c No.76720500001681) availed by the 1^st defendant, repayable together with further interest @ 7.90%, p.a. with monthly rests from the date of filing the OA, till date of realization in full along with costs.

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(b) 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 schedule mentioned hypothecated assets.

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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 Defendant 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/-

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(S.V. GOWRAMMA)

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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 04^th day of February, 2026)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sh. P. Ravichandran, Chief Manager representing the Applicant Bank.

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Exhibits on the part of the Applicant:

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Sl. No.	Dated	Description of Documents	Exhibit No.
1.	26.12.2022	Proof Affidavit	A-1
2.	Nil	Loan Application	A-2
3.	30.01.2014	Sanction Letter for Rs.70 Lakhs	A-3
4.	30.01.2014	D.P. Note for Rs.70 Lakhs	A-4
5.	30.01.2014	Letter of Repayment	A-5
6.	30.01.2014	Hypothecation Agreement	A-6
7.	----	Loan Application	A-7
8.	19.02.2015	Sanction Letter for Rs.95 Lakhs (enhancement)	A-8
9.	19.02.2015	D.P. Note for Rs.95 Lakhs	A-9
10.	19.02.2015	Letter of Repayment	A-10
11.	19.02.2015	Pledge of Goods	A-11
12.	19.02.2015	Loan cum Agreement Hypothecation Deed	A-12
13.	Nil	Loan Application	A-13
14.	30.03.2019	Sanction Letter for Rs.95 Lakhs	A-14
15.	30.03.2019	Letter of Access	A-15
16.	30.03.2019	Overdraft Agreement	A-16
17.	30.03.2019	Agreement cum Hypothecation Deed	A-17
18.	15.12.2020	Sanction Advice	A-18
19.	15.12.2020	D.P. Note for Rs.18.47Lakhs	A-19
20.	15.12.2020	Letter of instalments	A-20

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21.	15.12.2020	Loan cum Agreement Hypothecation Deed	A-21
22.	12.12.2017	Acknowledgement of liability	A-22
23.	29.03.2019	Acknowledgement of liability	A-23
24.	------	Statement of Accounts	A-24
25.	25.03.2006	Power of Attorney	A-25

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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 HYPOTHECATED MOVABLES

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(Hypothecated Assets/movables belonging to 1^st Defendant)

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Hypothecation of Stocks of Semiya, Wheat Flour, Noodles, Rice Sevai etc and Book Debts of the 1^st defendant kept at R. S. No.162/9, Pillayar Koil Street, Karuvadikuppam, Lawspet, Pondicherry-605 008 or 115-A, Industrial Estate, Mettupalayam, Pondicherry or wherever they are kept/found.

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

Bank of Baroda v. Morigot Food Industry

Case brief

What is this about?

What did the court decide?

Bank of Baroda v. Morigot Food Industry

Case brief

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What did the court decide?

What the court decided

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