Allowed

Bank of Baroda v. Uthayam Foods

DRT4 Aug 2026OA/278/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the bank's original application for recovery of dues. The court held that the claim was valid, within limitation, and well-proven as the respondents failed to appear. It granted recovery of the principal amount plus future interest at 13.60% p.a. through sale of hypothecated assets.

What did the court decide?

Recovery of Rs. 87,17,700/- along with future interest at 13.60% p.a. from the sale of hypothecated assets.

Bank of Baroda versus Uthayam Foods — Banking and Recovery | DRT (2026)

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O.A. No.278 of 2023

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04.08.2026

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 04^th day of August, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No.278 of 2023

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Bank of Baroda,

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Purusawalkam branch,

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80, Ritherdon road, Purasawalkam,

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Chennai-600 007,

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Represented by its Chief Manager/Authorised officer ….Applicant

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-Vs-

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M/s Uthayam foods,

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A Proprietorship Concern,

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Represented by its Proprietor Mr. S.A. Barath Kumar,

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Shop No. S102, No.7 69, Spencer plaza,

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Anna salai, Chennai- 600 002

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Mr. S.A. Barath Kumar, S/o Mr. S.R. Anandan,

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No.9/50, Jeevarathinam Street, Arumbakkam, Chennai - 600 106 …..Defendants

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Counsels on record / appeared:

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Counsel for Applicant: M/s. E. Vijayaraghavan

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Defendants 1 and 2 were set ex-parte on 26.02.2024

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: - FINAL ORDER- :

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This Original Application is filed on 12.07.2023 by the applicant

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bank under Section 19 of Recovery of Debts and Bankruptcy Act, 1993

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(formerly Recovery of Debts Due to Banks and Financial Institutions Act,

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against the defendants 1 and 2, jointly and severally for recovery

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of a total sum of Rs.87,17,700/- (Rupees Eighty Seven Lakhs

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Seventeen Thousand Seven Hundred only) due in respect of Cash

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O.A. No.278 of 2023

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04.08.2026

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Credit facility (A/c No.06410500000420) repayable together with future interest at the rate of 13.60% p.a. from the date of Application till the date of realization in full, for sale of schedule mentioned hypothecated property 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 is a Proprietorship concern represented by its Proprietor Mr. S.A. Barath Kumar, who is the 2^nd defendant herein. The 1^st defendant represented by 2^nd defendant approached the applicant bank and applied for Cash Credit facility of Rs.85,00,000/- on 22.07.2022.

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It is submitted that considering the said request, the applicant bank sanctioned the Cash Credit facility for Rs.85,00,000/- on 29.07.2022 and the defendants have availed the same in Loan A/c No.06410500000420 after agreeing to the terms and conditions as per the sanction.

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The applicant bank submits that the defendants agreed to the terms and conditions and executed the following loan documents in favour of the applicant bank as follows:

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a) Demand Promissory Note for Rs.85,00,000/- dated 29.07.2022

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b) Letter of Sole Proprietorship dated 29.07.2022

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O.A. No.278 of 2023

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c) Letter of continuing security dated 29.07.2022

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d) Declaration cum Undertaking cum Authority dated 29.07.2022

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e) Letter of Undertaking dated 29.07.2022

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f) Composite Hypothecation Agreement dated 29.07.2022

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g) Draft Undertaking dated 29.07.2022

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h) General Undertaking dated 29.07.2022

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i) Power of Attorney in respect of book debts facility dated 29.07.2022

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The applicant bank submits that the Defendants have hypothecated the stocks raw materials, semi finished and finished goods both present and future as a prime security to the above credit facilities availed by the defendants and executed a composite hypothecation agreement on 29.07.2022.

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It is further submitted that subsequent to availing the loan, the defendants failed to repay the principle amount sum of Rs.85,00,000/along with interest at the rate of 12.00% per annum. The defendants did not abide with the agreement and have defaulted in repayment of their full liabilities with the applicant bank and did not repay the above loan was availed as agreed by them. Hence the loan account of the defendants became Non-Performing Asset (NPA) on 29.04.2023 when there was an outstanding of Rs.85,52,002/- in the Cash Credit facility account.

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The applicant bank demanded the defendants to repay the outstanding in the loan account, but there was no repayment made by the defendants. Inspite of repeated demands from the applicant bank the

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O.A. No.278 of 2023

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defendants failed to repay the outstanding to the applicant. 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 was returned with remarks “No such person” in respect of D-1, while summons to D-2 was duly served. Applicant Bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 26.02.2024 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 and 2 were placed ex-parte on 26.02.2024

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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. Venkata Ratnam, Chief Manager/Authorized officer 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-12

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A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-12 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

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of Accounts duly certified under Bankers’ Book Evidence Act, evidencing

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O.A. No.278 of 2023

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the amount claimed against defendants.

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The defendants were set ex-parte on 26.02.2024, 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, a total sum of Rs.87,17,700/(Rupees Eighty Seven lakhs seventeen thousand seven hundred only) due in respect of Cash credit facility (A/c No.06410500000420) repayable together with further interest at the rate of 13.60% p.a. from the date of Application till the date of realization in full, for sale of scheduled mentioned hypothecated property and for costs of this OA.

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O.A. No.278 of 2023

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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 morefully detailed in the OA schedule.

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

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(Dictated to Roshnee, transcribed by her, corrected, signed and pronounced by me on this the 04^th day of August, 2026)

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O.A. No.278 of 2023

04.08.2026

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sh. Venkata Ratnam, Chief Manager/Authorized officer of the Applicant Bank

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Exhibits on the part of the Applicant:

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Sl. No.	Date	Description of Documents	Exhibit No.
1.	22.07.2022	Loan application	A-1
2.	29.07.2022	Sanction letter	A-2
3.	29.07.2022	Demand promissory note for Rs.85,00,000/- (Rupees Eighty five lakhs only)	A-3
4.	29.07.2022	Letter of soleproprietorship	A-4
5.	29.07.2022	Letter of continuitysecurity	A-5
6.	29.07.2022	Declaration cum undertaking cum authority	A-6
7.	29.07.2022	Letter of undertaking	A-7
8.	29.07.2022	Composite hypothecation agreement	A-8
9	29.07.2022	Draft undertaking	A-9
10	29.07.2022	General undertaking	A-10
11.	29.07.2022	Power of attorney in respect of Book debt facility	A-11
12.	-	Statement of loan A/c No. 06410500000420	A-12

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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 PROPERTY

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The whole of the Borrower’s stocks both present and future and including but without prejudice to the generality of the foregoing words all stocks of raw materials, work in process, semi finished goods and finished goods such as hypothecation whatsoever and wheresoever situate and/or in transit whether now belonging to or that may at any time during the continuance of this security belong to the borrower or that may be held by any party anywhere to the order and disposition of the borrower.

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O.A. No.278 of 2023

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All the present and future book debts, outstanding money, receivables, claims, bills, contracts, engagements and securities which are now due and owing or which may at anytime hereafter during the continuance of this security become due and owing to the borrower in the course of its business by any person, firm, company or body corporate or by the government of India or any state government or Indian railways or any Government Department or office or any municipal or local or public or semi government body or authority whatsoever including those relating to the assets leased out and /or given or hire purchase basis.

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All the tangible movable machinery and plant and cranes, boats and crafts and all the vehicles of the borrower together with spares, tools and accessories and other movables, both present and future and the furniture, fixtures and fittings and office equipment whether installed or not and whether lying loose or incases which are now lying or stored in or about or shall be brought into or to be stored in be in or upon or about the borrower’s premises and go-downs or wherever else the same may be or be held by any party to the order or disposition of the borrower(including those on lease or hire-purchase) relating or pertaining to the borrower’s works at Spencer’s plaza, Mount road, Anna Salai, Chennai.

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

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Uploaded on 04.08.2026 at 15:00 hours

Bank of Baroda v. Uthayam Foods

Case brief

What is this about?

What did the court decide?

Bank of Baroda v. Uthayam Foods

Case brief

What is this about?

What did the court decide?

What the court decided

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