Allowed

Cfm Asset Reconstruction Private Limited v. Dhanalakshmi Srinivasan Charitable and Education Trust

DRT4 Feb 2026OA/362/2022

Case brief

AI extract

What is this about?

The DRT allowed the Original Application filed by CFM Asset Reconstruction Private Limited against a Trust and guarantors for recovery of a Term Loan. The court accepted the bank's evidence, dismissed an IA to set aside ex-parte order for non-prosecution, and awarded a final decree for principal, interest, and costs.

What did the court decide?

The applicant bank is allowed to recover RS.49,06,46,701/- plus interest at 13% p.a. and costs from the defendants jointly and severally, restricted to the extent of inherited estate for the 5th defen

Cfm Asset Reconstruction Private Limited versus… — Contract and Commercial Disputes | DRT (2026)

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O.A. No. 362 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. 362 of 2022

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CFM Asset Reconstruction Private Limited 1st Floor, Wakefield House, Sprott Road, Ballard Estate, Mumbai 400 038, Represented by its Vice President & Authorized Signatory

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….Applicant -Vs-

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DHANALAKSHMI SRINIVASAN CHARITABLE & EDUCATIONAL TRUST 274, Thuraiyur Road, Perambalur - 621 212

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Represented by its Vice Chairman S. Kathiravan

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Mr. S. KATHIRAVAN Son of Mr. A. Srinivasan 274-G, Thuriayur Road, Perambalur - 621 212

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Mr. A. SRINIVASAN Son of Mr. Arunachalam 274-G, Thuralyur Road, Perambalur - 621 212

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MR. P. NEELARAJ 274-G, Thuraiyur Road, Perambalur - 621 212

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MRS. K.ANANTHALAKSHMI Legal heir of the late Mr. A. Duraiswami 274-C, Thuraiyur Road, Perambalur - 621 212 …..Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. Menon, Karthik, Mukundan & Neelakantan

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Defendants were set ex-parte on 27.03.2023

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O.A. No. 362 of 2022

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: - FINAL ORDER - :

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This Original Application is filed on 19.08.2022 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 jointly and severally for recovery of a total sum of Rs.49,06,46,701/- (Rupees Forty Nine Crores Six Lakhs Forty Six Thousand Seven Hundred and One Only) due in respect of Term Loan (Account No.129403251100001) repayable together with further interest @ 13% p.a. with monthly rests from the date of filing the OA, till date of realization in full and as against the 5^th defendant to the extent of estate inherited by her from late A. Duraiswami (guarantor), for sale of Schedule Mentioned Properties 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 that the 1st Defendant is M/s. Dhanalakshmi Srinivasan Charitable & Educational Trust, a Trust engaged in establishing and managing educational institutions. The 2nd to 4th Defendants are Guarantors, who have executed guarantees, guaranteeing the repayment of the debt by the 1st Defendant to the Applicant/its

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predecessor-in-interest. The 5th Defendant is the legal heir of the deceased Guarantor, Mr. A. Duraiswami. The defendants are called upon to disclose the other legal heirs, if any of the deceased Guarantor, Mr. A. Duraiswami. 4. The 1^st Defendant had sought for a Term Loan of Rs.28,00,00,000/(Rupees Twenty Eight Crores only) from Indian Overseas Bank, Perambalur ("IOB") towards building a new academic block in a college named "Dhanalakshmi Srinivasan Engineering College" at Perambalur, managed by the 1^st Defendant and the same was sanctioned by IOB by Sanction Letter dated 27.01.2011.

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TERM LOAN –(RS.28,00,00,000/-)

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On 28.01.2011, the Board of Trustees of the 1st Defendant had passed a Resolution to avail the above facility/loan and also authorized the 2nd Defendant to execute the loan and security documents to secure due repayment.

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On 28.01.2011, the 1st Defendant represented by the 2nd Defendant, executed the following loan/security documents in favour of the IOB to secure due repayment of the Term Loan of Rs.28,00,00,000/-

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(Rupees Twenty Eight Crores Only).

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a) Demand Promissory Note dated 28.01.2011 ('DPN') for a sum of Rs.28,00,00,000/- (Rupees Twenty Eight Crores Only) promising to repay the same with interest at the base rate of 9% plus 4% p.a. with monthly rests.

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b) Term Loan Agreement dated 28.01.2011

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c) Instalment Letter dated 28.01.2011 permitting the 1st Defendant to

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repay the said loan in 32 equal monthly instalments of Rs.87,50,000/(Rupees Eighty Seven Lakhs Fifty Thousand only) plus interest commencing from 01st April 2012.

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d) Undertaking dated 28.01.2011.

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e) Letter of Hypothecation (Machineries, Vehicles, Goods and Book Debts) dated 28.01.2011.

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The 1^st Defendant also executed a Memorandum of Deposit of Title Deeds dated 28.01.2011 registered as Document No.563/2011 at SRO Perambalur, in favour of the Indian Overseas Bank, Perambalur Branch, confirming the Deposit of the title deeds of its property situated at Perambalur District, Ariyalur Registration District, Perambalur Subregistration District, Perambalur Taluk, Aranai Village No.SF No.465/9 measuring an extent of Ac 0.97, (as per UDR Survey Part of S.F.No.81/9B), more fully set out in Schedule A to the OA.

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The 1^st defendant has deposited the title deeds and executed MODT with the intent to create a mortgage over the Schedule A property, including all buildings, super-structure, lab equipment constructed or to be constructed, installed or to be installed, present and future and all accretions thereto as security for the repayment of the Term Loan. The documents deposited by the 1st defendant are set out in Schedule B of this Original Application. By Affidavit dated 27.01.2011, the 3^rd defendant herein, that is the Chairman of the 1^st defendant Trust, has declared that by Gift Deed Doc.No.3064/1999 dated 06.09.1999 (SRO Perambalur) The schedule A property and certain other properties was gifted him to the 1^st

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defendant Trust.

The third defendant had also on 27.01.2011 declared that the original of the said Gift Deed has been deposited with Infrastructure Development Finance Corporation, to create mortgage in favour of such other properties, but that there is no mortgage in favour of Infrastructure Development Finance Corporation in respect of the Schedule A Property. 10. The 2nd, 3rd, 4^th defendants along with late Mr. A. Duraiswami, have executed Guarantee Agreements dated 28.01.2011, guaranteeing the repayment of the Term Loan.

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The 1^st defendant has also hypothecated the assets/receivables set out in Schedule C of the Original Application in favour of the applicant as security for repayment of the Term Loan.

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The 1^st Defendant had executed Revival Letter dated 23.01.2014, 29.12.2016 and 25.09.2019 in favour of the IOB, Perambalur Branch. Subsequently, the loan account was classified as NPA by the IOB Perambalaur Branch vide letter dated 01.04.2015.

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It is submitted by applicant that Mr. A. Duraiswami, one of the Guarantors, died and the 5th Defendant, is one of his legal heirs. She, along with other legal heirs are liable to the extent of the estate inherited by them. The Applicant has called upon the Defendants to disclose the legal heirs of the Deceased Mr. A.Duraiswami, which has not been furnished by the defendants.

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The Applicant and the Indian Overseas Bank have entered into an Assignment Agreement dated 31.10.2019, registered as Document No.

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6052 / 2019 at SRO, Perambalur with respect to the loan account held by the Defendants with IOB, in terms of which the Term Loan /facility, along with the underlying securities and guarantees have been assigned to the Applicant. A Copy of the Assignment Agreement dated 31.10.2019 is filed along with this Original Application. A notice of the Assignment of debt by the Indian Overseas Bank in favour of the Applicant was communicated to the 1^st defendant vide letter dated 03.01.2020.

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The applicant submits that the 1^st Defendant was irregular in repayment of the Term Loan. The Applicant granted several opportunities to the 1^st Defendant to repay the above loan, but the 1^st Defendant failed and neglected to repay the same. The 1st Defendant is the borrower in respect of the aforesaid Term Loan. The 2nd, 3rd, and 4th Defendants are the Guarantors of the said Term loan. The 5th Defendant is a legal heir of a deceased Guarantor. Consequently, all the Defendants are jointly and severally liable to repay the Term Loan to the Applicant, with interest and costs. However, the 5th Defendant's liability is restricted to the extent of the properties inherited by her from the deceased Mr. A. Duraiswami.

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It is further submitted that the 1st Defendant has been intermittently making part payments, which were made on 09.03.2020, 01.10.2020, 31.03.2021 and lastly on 30.03.2022. The Applicant on 03.01.2020 had issued an intimation cum demand notice to all the defendants (the borrower and the guarantors) calling upon them to jointly and severally pay a sum of Rs.34,50,04,924/- and despite receipt of the same, the defendants have not settled the debt. Hence, the present

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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 to 5 through Registered Post with Acknowledgment Due, which was duly served as per postal track report. Defendants 1 to 5 entered appearance through their counsel and filed vakalath. Despite availing three adjournments and undertaking to file written statement, defendants did not file their written statement. During the hearing on 27.03.2023, even after giving sufficient time, defendants did not file written statement and had again sought further time, which was not granted. Hence, Defendants 1 to 5 were placed ex-parte on 27.03.2023.

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Heard the submissions of Applicant and perused the records.

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To prove the case of the Applicant Bank, Mr. Karthiyk Viswanathan, Vice President and Authorized Signatory representing the Applicant, 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-30 .

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A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-30 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 27.03.2023. Subsequently, the defendants had filed IA No.580/23 on 13.04.2023 praying to set aside the ex-parte order dated 27.03.2023. Subsequently, there was no representation on behalf of defendants on 08.09.2023 and case was posted to 13.10.2023 for marking of documents. On 13.10.2023, though the counsel for defendants had appeared, did not press for hearing of IA No.580/23 and documents on the side of applicant bank were marked on that day and case was adjourned to 24.11.2023 for arguments. Thereafter, the case was adjourned to 12.01.2024, 12.04.2024 and 26.07.2024 by way of notification. Subsequently, the case was listed before Registrar court on 26.07.2024, 24.10.2024, 08.01.2025 and 03.04.2025. On 03.04.2025 and 10.09.2025, the case was adjourned by way of notification. When the case was taken up on 08.01.2026, there was no representation on behalf of defendants. Inspite of filing IA to set aside the ex-parte order, the defendants have not prosecuted the IA diligently. Hence IA No.580/23 stands dismissed for non-prosecution.

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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

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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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23. 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.49,06,46,701/- (Rupees Forty Nine Crores Six Lakhs Forty Six Thousand Seven Hundred

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and One Only) due in respect of Term Loan (Account No.129403251100001) repayable together with further interest @ 13% p.a. with monthly rests from the date of filing the OA, till date of realization in full along with costs. The liability of the 5^th defendant is restricted to the extent of estate inherited by her from late A. Duraiswami (guarantor). All pending IAs, if any stands closed.

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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 A and C mentioned immovable and hypothecated assets respectively.

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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

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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

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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 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. Karthiyk Viswanathan, Vice President and Authorized Signatory representing 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.	Sanction Letter dated 27.01.2011.	A-1
2.	Board Resolution of 1^stdefendant 28.01.2011.	A-2
3.	Demand Promissory Note for Rs.28,00,00,000/- dated 28.01.2011.	A-3
4.	Term Loan Agreement dated 28.01.2011.	A-4
5.	Instalment Letter dated 28.01.2011.	A-5
6.	Undertaking dated 28.01.2011.	A-6
7.	Letter of Hypothecation dated 28.01.2011.	A-7

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8.	Certified Copy of Memorandum of Deposit of Title Deeds Doc.No.563/2011 dated 28.01.2011.	A-8
9.	List of Documents deposited by 1^stdefendant dated 28.01.2011.	A-9
10.	Affidavit of 3^rddefendant dated 27.01.2011.	A-10
11.	Registered Copy of Gift Deed Doc.No.3064/1999 dated 06.09.1999	A-11
12.	Sale Deed Doc.No.1771/1997 dated 08.07.1997.	A-12
13.	Sale Deed Doc.No.2188/1988 dated 12.12.1988.	A-13
14.	Settlement Deed Doc.No.1982/1994 dated 07.09.1994.	A-14
15.	Patta dated 15.11.2010.	A-15
16.	Adangal Register Extract dated 15.11.2010.	A-16
17.	No kist arrears certificate with correlation certificate dated 15.11.2010.	A-17
18.	Guarantee of 2^nddefendant dated 28.01.2011.	A-18
19.	Guarantee of 3^rddefendant dated 28.01.2011.	A-19
20.	Guarantee of 4^thdefendant dated 28.01.2011.	A-20
21.	Guarantee of A. Duraiswami dated 28.01.2011.	A-21
22.	Revival Letter dated 23.01.2014.	A-22
23.	NPA Notice-23 with AD Cards dated 01.04.2015.	A-23
24.	Revival Letter by 1^stdefendant dated 29.12.2016.	A-24
25.	Revival Letter by 2^nddefendant dated 25.09.2019.	A-25
26.	Assignment Agreement Doc.No.6052/2019 dated 31.10.2019.	A-26
27.	Notice of Assignment of debt dated 03.01.2020.	A-27
28.	Statement of Accounts dated 31.10.2019 and 04.08.2022.	A-28
29.	Letter of Authority issued by the Applicant dated 06.06.2022.	A-29
30.	Board Resolution of Applicant dated 17.07.2021.	A-30
31.	BBE Certificates dated 19.11.2022.	A-31
32.	National Interest Certificate dated 19.11.2022.	A-32

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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 -A-:

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All that piece and parcel of land situated in Perambalur District, ariyalur Registration District, Perambalur, Sub-Registration District, Perambalur, Taluk, in Aranarai Village, now in Aranarai (South) Village

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bearing SF No.465/9 out of Ac.2.92 C, an extent of Ac 0.97 C, situated within the following boundaries;

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North: Thuraiyur Road

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East: 1^st defendant’s land and well West: Wari and 1^st defendant’s land

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South: Velusamy and 1^st defendant’s land

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As per UDR survey, this property now forms part of SF 81/9B Hec 0.66.5 Ares.

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Including all buildings, super-structure, lab equipment constructed or to be constructed, installed or to be installed, present and future and all accretions thereto.

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Schedule-B

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List of Title Deeds deposited.

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Registration Copy of Gift Deed executed in favour of the Applicant Trust by A. Srinivasan (Doc.No.3064/1999, SRO Perambalau)

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Original Sale Deed Executed in favour of A. Srinivasan by a) Muthusamy; b) Karikalvalavan; c) Pitchayee (Doc.No.1771/1997, SRO Perambalaur);

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Registration Copy of Settlement Deed Executed in favour of Karikalvalavan by Pitchayee (Doc.No.1982/1994, SRO Perambalur):

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Registration Copy of Sale Deed executed in favour of Minor Pitchayee, represented by natural guardian father Muthusamy by Ramanathan. (Doc.No.2189/1988, SRO Perambalur);

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EC 5806/2010 issued by SRO Perambalur for a period of 01.01.1980 to 31.12.1986.

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EC 5805/2010 issued by SRO Perambalur for a period of 01.01.1987 to 06.10.2010.

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True Copy of printed of A register extract.

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True of copy of Patta issued (dated 15.11.2010)

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True copy of Adangal Register Extract (Dated 15.11.2010)

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True copy of FMB Sketch given by V.A.O.

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No Kist Arrears Athakshi along with correlation certificate given by V.A.O

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Affidavit by A. Srinivasan

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Schedule-C

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Details of Hypothecation

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Hypothecation of Equipment such as computer, Lab Equipment, and library books etc., and vehicles, book debts and including machinery/goods which have already been fixed or available in the premises at 274, Thuraiyur

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Road, Perambalur -621 212.

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

Cfm Asset Reconstruction Private Limited v. Dhanalakshmi Srinivasan Charitable and Education Trust

Case brief

What is this about?

What did the court decide?

Cfm Asset Reconstruction Private Limited v. Dhanalakshmi Srinivasan Charitable and Education Trust

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

Coram

Case details

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