Allowed

Bank of Baroda v. Marudhu Enterprises

DRT6 Aug 2026OA/306/2023

Case brief

AI extract

What is this about?

DRT-III Chennai allowed an original application filed by Bank of Bardana under Section 19(1) of the RDB Act. The bank claimed recovery against two defaulting parties on a cash credit facility. Summons were returned unserved, and the hearing proceeded ex-parte.

What did the court decide?

Recovery of Rs. 28,60,825/- plus interest @ 13.50% p.a. with monthly rests; liberty to sell hypothecated movables and personal assets of the 2nd defendant.

Bank of Baroda versus Marudhu Enterprises — Banking and Recovery | DRT (2026)

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O.A. No. 306 of 2023

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06.08.2026

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 06^th day of August, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No. 306 of 2023

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Bank of Baroda (Erstwhile Dena Bank) Thandalam Branch Madha Medica College campus Kundrathur Main Road Thandalam – 600 122 Sriperumpudur Taluk Kancheepuram District Rep. by its Authorised Signatory

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….Applicant

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-Vs-

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M/s. Marudhu Enterprises

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Rep. by its Proprietrix Mrs. P. Sharmila W/o. M. periyasamy No.15 A, 85 A, Sakthi Govinda Flats Venkatesan Nagar 1^st Extension Virugambakkam Chennai- 600 093

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Mrs. P. Sharmila W/o. M. Periyasamy No.15 A, 85 A, Sakthi Govinda Flats Venkatesan Nagar 1^st Extension Virugambakkam Chennai- 600 093 ....Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. R.Kumararaja

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Defendants 1 and 2 were set ex-parte on 14.03.2024

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: - FINAL ORDER - :

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This Original Application is filed on 26.09.2023 by the applicant bank

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under Section 19 (1)of Recovery of Debts and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act,

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O.A. No. 306 of 2023

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06.08.2026

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against the defendants 1 and 2, jointly and severally for recovery of a total sum of Rs.28,60,825/- (Rupees Twenty Eight Lakhs Sixty

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Thousand Eight Hundred Twenty Five only) due in respect of Cash Credit Facility (Account No.86510400000008) repayable together with further interest @ 13.50% p.a. with monthly rests from the date of Application till the date of realization in full, for sale of schedule mentioned hypothecated movables 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 Sole proprietorship Firm, represented by the 2^nd defendant as its Proprietor, who is engaged in the business activities of whole sale trading of fruits, vegetables, spices, pulses, etc. In order to develop their business, the defendants applied for sanctioning of credit facilities with the applicant.

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It is submitted that considering the said request, the applicant vide Letter of Sanction dated 19.10.2020, sanctioned Cash Credit Limit of Rs.25,00,000/- (Rupees Twenty Five Lakhs only) as against the Hypothecation of stocks and book debts. The defendants accepted the terms and conditions of the said sanction in writing under their signatures. The 1^st defendant represented by the 2^nd defendant as its Proprietor availed

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O.A. No. 306 of 2023

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the said limit on and from 19.10.2020 as evident from the Statement of Account (A/c. No.86510400000008) relating to the said loan.

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The Applicant submits that to secure the said Cash Credit Loan Limit of Rs.25,00,000/-, the 1^st defendant represented by the 2^nd defendant as its Proprietor executed the following loan and security documents in favour of the applicant, viz.

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a) Demand Promissory Note for Sole proprietorship Firm executed by the 1^nd defendant represented by the 2^nd defendant as its proprietor on 19.10.2020 for a sum of Rs.25,00,000/- in favour of the applicant, promising to repay jointly and severally the said sum on demand, either to the applicant or order at their Office in Thandalam, Chennai-600 122 for value received, with interest thereon at the rate of 2.35% over BRLLR + SP of the Bank per annum with Monthly Rests. Present BRLLR is 7% and Strategic Premium is 0.25% totalling 9.60% per annum.

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b) Letter of Sole proprietorship Firm executed by the 2^nd defendant on 19.10.2020 in favour of the applicant undertaking sole responsibility and agreed to inform the applicant any change in the constitution of the 1^st defendant.

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c) Letter of continuing security executed by the 1^st defendant represented by the 2^nd defendant as its Proprietor on 19.10.2020 in favour of the applicant undertaking sole responsibility and agreed to inform the applicant any change in the constitution of

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the 1^st defendant.

d) Composite Hypothecation Agreement (For Stocks, Book Debts/ Vehicle/ Movable Machinery/ Immovable properties) and Power of Attorney executed by the 1^st Defendant represented by the 2^nd Defendant as its Proprietor on 19.10.2020 for a sum of Rs.25,00,000/- in favour of the applicant duly hypothecating the Stocks and Book Debts as detailed in the Schedule of this Original Application.

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e) Declaration cum Undertaking cum Authority executed by the 1^st Defendant represented by the 2^nd Defendant as its Proprietor on 19.10.2020 and agreed to abide by the terms and conditions embodied thereunder.

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The applicant submits that subsequent to availing of loan, the Defendants 1 & 2 failed to operate the said loan account as agreed to and were not regularizing the over dues and in view of the continued defaults in regularizing the loan account, the Defendant 1 & 2 allowed the said loan account to be declared/ classified as Non-Performing Asset (NPA) as on 08.08.2022.

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The Applicant submitted that in view the loan account (A/c. No.86510400000008) being classified as Non-Performing Asset, the applicant has issued a Request Letter to the Defendant 1 & 2 on 17.03.2023 requesting them to upgrade the loan account which was acknowledged by the Defendant 1 & 2 in person on 21.04.2023. Despite the said letter, the

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O.A. No. 306 of 2023

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defendants not only failed to regularize the loan account but also did not come forward to settle the loan account till date.

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The applicant submits that the sum due to the applicant and due by the Defendant 1 & 2 is due to a statutory Nationalised Bank and the debt is exempted from the provisions of the any of the Debt Relief Acts. The Defendant 1 & 2 are liable to pay the said sum with interest accrued at the contractual rates with Monthly Rests or at such rates or rests as may be revised by the bank on its own or as per instructions of RBI from time to time, since the loan transactions are commercial in nature.

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The Applicant submits that a total sum of Rs.28,60,825/- is due from the Defendant 1 & 2 and payable by them jointly and severally together with interests, costs, etc., as evident from the Statement of Accounts (A/c. No.86510100000010) relating to the said loan limit. As defendants did not come forward to repay the dues, despite repeated demands and reminders, 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 were returned unserved with postal endorsement as ‘left’. Applicant Bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 14.03.2024 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 and 2 were placed ex-parte on 14.03.2024.

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O.A. No. 306 of 2023

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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. M.V. Ramakrishna, Chief Manager 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-8 . As the Defendants remained ex-parte, the OA claim remains unchallenged. There is no contra evidence available on record to repudiate the claim of the Applicant Bank.

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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.28,60,825/(Rupees Twenty Eight Lakhs Sixty Thousand Eight Hundred Twenty Five only) due in respect of Cash Credit Facility (Account No.86510400000008) repayable together with further interest @ 13.50% p.a. with monthly rests from the date of Application till the date of realization in full along with costs of this application.

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O.A. No. 306 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 movables morefully detailed in the OA schedule.

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(d) If the sale proceeds of the hypothecated assets are not sufficient to satisfy the dues as ordered above, the applicant bank is at liberty to sell the personal assets of the 2^nd Defendant (both movable and immovable) to recover the balance dues as required under law for which the 2^nd Defendant to disclose to the Tribunal particulars of other properties or assets owned by the 2^nd Defendant.

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(e) 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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(f) The applicant bank shall file memo of costs within ten days from the date of receipt of this final order.

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(g) Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of the final order.

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O.A. No. 306 of 2023

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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 Steno (Arti), transcribed by her, corrected, signed and pronounced by me on this the 06^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: Sh. M.V. Ramakrishna, Chief Manager of the Applicant Bank

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Exhibits on the part of the Applicant:

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Sl. No.	Description of Documents	Exhibit No.
1.	Letter of Sanction for Rs.25,00,000/- by applicant dated 19.10.2020	A-1
2.	Demand Promissory Note by Defendants 1 and 2 for Rs.25,00,000/-dated 19.10.2020	A-2
3.	Letter of Sole Proprietorship by 2^ndDefendant dated 19.10.2020	A-3
4.	Letter of Continuing Security by Defendants 1 and 2 dated 19.10.2020	A-4
5.	Composite Hypothecation Agreement by Defendants 1 and 2 dated 19.10.2020	A-5
6.	Declaration cum Undertaking cum Authority by Defendants 1 and 2 dated 19.10.2020	A-6
7.	Letter by Applicant to Defendants with original endorsement of receipt by Defendants ( Bank’s Office Copy) dated 17.03.2023	A-7
8.	Statement of Accounts for Cash Credit Limit (Computer Generated Print Out Copy)	A-8

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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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O.A. No. 306 of 2023

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:-SCHEDULE OF MOVABLES-:

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(Stocks at the 1^st Defendant’s Business Premises at No.15A/1, 85A, Sakthi Govinda Flats, Venkatesan Nagar 1^st Extension Virugambakkam/ Saligramam, Chennai 600 093)

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Stocks of Whole Sale trading of fruits, vegetables, spices, pulses etc.

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

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Uploaded on 06.08.2026 at 14:00 hours

Bank of Baroda v. Marudhu Enterprises

Case brief

What is this about?

What did the court decide?

Bank of Baroda v. Marudhu Enterprises

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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Case details

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