Allowed

Uco Bank v. M/s Chennai Team Lines

DRT4 Aug 2026OA/300/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an original application filed by UCO Bank against a proprietary concern and its proprietor for recovery of outstanding dues of approximately Rs. 50.43 lakhs arising from Cash Credit and Term loan facilities. The court found the bank's claim evidenced and granted permission for recovery via sale of hypothecated assets.

What did the court decide?

Recovery of Rs. 50,43,024.81 plus interest and costs; liberty to recover by sale of hypothecated assets; issuance of Recovery Certificate.

Uco Bank versus M/s Chennai Team Lines — Banking and Recovery | DRT (2026)

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O.A. No.300 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.300 of 2023

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UCO Bank,

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Represented by its Manager, Saidapet Branch,

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No.19, Velachery Main Road, Little mount, Saidapet, Chennai-600 015 ….Applicant

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-Vs-

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M/s Chennai Team lines,

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Prop, Mr.Uma Maheswaran,

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No.31/59, South Boag road,

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T.Nagar,

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Chennai- 600 017

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Mr.Uma Maheswaran,

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27/44, Flat No.7, Temple Tower Apts,

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Reddy Kuppam Road,

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Saidapet, Chennai- 600 015 …..Defendants

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Counsels on record / appeared:

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Counsel for Applicant: M/s. R. Iyappan

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Defendants 1 and 2 were set ex-parte on 04.06.2024

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: - FINAL ORDER- :

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This Original Application is filed on 04.08.2023 by the applicant

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bank under Section 19 of Recovery of Debts and Bankruptcy Act, 1993 (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.50,43,024.81p (Rupees Fifty Lakhs Forty Three

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Thousand Twenty Four and Eighty One Paisa only) as follows:

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O.A. No.300 of 2023

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04.08.2026

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i. A sum of Rs.20,32,314.01p due in respect of Cash Credit Facility (A/c No.09590510000311) repayable together with further interest @10.80% p.a. with monthly rests and penal interest @2% p.a. from the date of Application till the date of realization in full;

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ii. A sum of Rs.30,10,710.80p due in respect of Term loan (A/c No. 09590610131169) repayable together with further interest @10.80% p.a. with monthly rests and penal interest @2% p.a. from the date of Application till the date of realization in full;

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for sale of schedule mentioned hypothecated assets along with 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 Proprietary concern running its business under the name and style of M/s Chennai Tema lines and the 2^nd defendant is the Proprietor.

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The applicant bank submits that the 2^nd defendant had approached the applicant bank for sanction of credit facility for business purpose and accordingly as per his requisition a Cash Credit facility was sanctioned for

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O.A. No.300 of 2023

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04.08.2026

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a sum of Rs.20 lakhs under the CGTMSE scheme vide Sanction Letter dated 19.07.2014.

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It is submitted by the applicant bank that in furtherance to the said sanction of the credit facility, the defendants had executed security documents in favour of the applicant bank. The applicant states that the applicant bank had revised the sanctioned limit on the request of defendants vide Sanction Letter dated 13.02.2017 and the cash credit limit was revised to Rs.50 lakhs.

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The applicant bank submits that in furtherance of the said sanction, the defendants have executed the following documents on 28.08.2018 in favour of the applicant bank:

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i. Application for MSME loan

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ii. Demand promissory note for a sum of Rs.50,00,000/-

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iii. Letter of continuity for a sum of Rs.50,00,000/-

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iv. Letter of waiver for Rs.50,00,000/-

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v. Letter of guarantee for Rs.50,00,000/-

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vi. Composite deed of hypothecation for a sum of Rs.50,00,000/-

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It is further submitted that the applicant/bank has restricted the credit facility granted to the defendants WC Cash Credit limit to WCTL for Rs.30.00 Lakhs and Cash Credit for Rs.20.00 lakhs vide letter dated 30.10.2021 and the defendants had executed security documents in favour of the applicant bank.

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The account became irregular from the month of February 2023.

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O.A. No.300 of 2023

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04.08.2026

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The applicant bank submits that they had revised the sanction limit vide approval dated 21.04.2023 and renewed the Working Capital Fund Based Cash Credit with reduction from Rs.20.00 lakhs to Rs. 17.00 lakhs in a phased manner from Rs.20.00 lakhs to Rs.17.00 lakhs in two equal stages (on 30.09.2023 & 31.03.2024) and the Term Loan was renewed to rundown balance of Rs.29,00,000/- with total sanction of Rs.50 lakhs, subject to the regularization of the account and adjustment of the overdrawn amount in the Cash Credit Limit by defendants.

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In order to secure the loan, the defendants have executed the following documents on 21.04.2023 in favour of the applicant/bank:

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i. Demand Promissory Note for a sum of Rs.30,00,000/-

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ii. Letter of Continuity for a sum of Rs.20,00,000/-

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iii. Letter of Waiver for Rs.30,00,000/-

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iv. Letter of Guarantee for Rs.50,00,000/-

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v. Composite Deed of Hypothecation for a sum of Rs.50,00,000/-

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The applicant bank disbursed the sanctioned loan amounts as per the loan agreements/documents. The defendants failed and neglected to repay the applicant bank the loan amount, interest and other monies and also committed other defaults in observing the conditions of the loan agreement and sanction letter. Consequent to the defaults committed by the borrower in respect of the repayments the account was classified as Non Performing Asset (NPA) on 28.05.2023 in accordance with the directions/guidelines issued by the Reserve Bank of India. A Recall Notice

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O.A. No.300 of 2023

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04.08.2026

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dated 29.05.2023 was sent by the bank and the same was duly received by the defendants on 31.05.2023, despite which the defendants have failed to make payment.

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The applicant bank submits that in view of the defaults committed by the defendants the applicant bank vide their Recall Notice dated 29.05.223 demanded and called upon the defendants to discharge their entire liabilities by paying the applicant bank a sum of Rs.49,88,022/with interest from 30.04.2023 including the charges within 7 days from the date of the receipt of notice and further advised that in case of failure to make payment the applicant bank shall be constrained to take steps for enforcing the securities and realizing the dues. The applicant submits that inspite of the notices the defendants did not make the entire payment as per the demand notice. 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 as ‘No such person’ in respect of D-1 and D-2. Applicant Bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 04.06.2024 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 and 2 were placed ex-parte on 04.06.2024.

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Heard the submissions of Applicant Bank and perused the

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records.

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O.A. No.300 of 2023

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04.08.2026

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To prove the case of the Applicant Bank, Ms. Soumya Brata Das, Senior Manager of the Applicant Bank, has filed her 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-25.

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A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-25 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 04.06.2024, 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

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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.A. No.300 of 2023

04.08.2026

: O R D E R :

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, for recovery of a total sum of Rs.50,43,024.81p (Rupees Fifty Lakhs Forty Three Thousand

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Twenty Four and Eighty One Paisa only) as follows:

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(i) A sum of Rs.20,32,314.01p due in respect of Cash

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Credit Facility (A/c No.09590510000311) repayable together with further interest @10.80% p.a. with monthly rests and penal interest @2% p.a. from the date of Application till the date of realization in full;

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(ii) A sum of Rs.30,10,710.80p due in respect of Term Loan (A/c No. 09590610131169) repayable together with further interest @10.80% p.a. with monthly rests and penal interest @2% p.a. from the date of Application till the date of realization in full; along with costs of this OA.

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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

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OA amount together with interest, costs etc., to be paid by the

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O.A. No.300 of 2023

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04.08.2026

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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 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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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Ms. Soumya Brata Das, Senior Manager 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.	19.07.2014	Sanction letter issued by the applicant bank	A-1
2.	25.07.2014	Application form to register under CGTMSE	A-2
3.	13.02.2017	Sanction letter and the cash credit limit was revised to Rs.50 lakhs	A-3

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O.A. No.300 of 2023

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04.08.2026

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4.	18.08.2018	Application for MSME loan	A-4
5.	28.08.2018	Demand promissory note for a sum of Rs.50,00,000/-	A-5
6.	28.08.2018	Letter of continuity for a sum of Rs.50,00,000/-	A-6
7.	28.08.2018	Letter of waiver for a sum of Rs.50,00,000/-	A-7
8.	28.08.2018	Letter of guarantee a sum of Rs.50,00,000/-	A-8
9	28.08.2018	Composite deed of hypothecation for a sum of Rs.50,00,000/-	A-9
10	28.08.2018	Renewal of CC account	A-10
11.	30.10.2021	The applicant bank has restructured the credit facility granted to the defendant EC cash credit limit to WCTL for Rs.30.00 lakhs and cash credit for Rs.20.00 lakhs sanction	A-11
12	30.10.2021	Demand promissory note for a sum of Rs.30,00,000/-	A-12
13	30.10.2021	Letter of waiver for Rs.30,00,000/-	A-13
14.	30.10.2021	Agreement relating to term loan	A-14
15.	21.04.2023	The working capital and term loan account was renewed by the applicant	A-15
16.	31.03.2023	Acknowledgement of liability for a sum of Rs.29,20,261,.57/-	A-16
17.	31.03.2023	Acknowledgement of liability for a sum of Rs.20,80,966.11/-	A-17
18.	21.04.2023	Demand promissory note for a sum of Rs.30,00,000/-	A-18
19.	21.04.2023	Letter of continuity for a sum of Rs.20,00,000/-	A-19
20.	21.04.2023	Letter of waiver for a sum of Rs.30,00,000/-	A-20
21.	21.04.2023	Letter of guarantee a sum of Rs.50,00,000/-	A-21
22.	21.04.2023	Composite deed of hypothecation for a sum of Rs.50,00,000/-	A-22
23.	29.05.2023	Applicant bank issued a recall notice	A-23
24.	30.05.2023	Acknowledgement by the defendant	A-24
	01.08.2021 to 03.06.2023, 29.10.2021 to 03.06.2023	Statement of accounts	A-25

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O.A. No.300 of 2023

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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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Hypothecation of the company’s entire current assets viz, stocks of raw materials, work in process & finished goods stores and spares and receivables, bill and other chargeable current assets both present and future.

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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

Uco Bank v. M/s Chennai Team Lines

Case brief

What is this about?

What did the court decide?

Uco Bank v. M/s Chennai Team Lines

Case brief

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