Allowed

Bank of Baroda v. Rm Enterprises

DRT2 Feb 2026OA/43/2024

Case brief

AI extract

What is this about?

The DRT allowed an Original Application filed by Bank of Baroda for recovery of an overdraft facility loan amounting to Rs. 37.80 Lakhs from the defendants, as they failed to repay and were set ex-parte.

What did the court decide?

Declaration allowing recovery of Rs. 37,80,322.66 including interest at 14.65% p.a. and costs. Liberty to recover via sale of hijected assets.

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

OA No. 43/2024

02.02.2026

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

¶5

Dated this the 02^nd day of February, 2026

¶6

Present: SMT. S.V. GOWRAMMA Presiding Officer

¶7

ORIGINAL APPLICATION No. 43 of 2024

¶8

Bank of Baroda Kodambakkam Branch No.10, First Main Road United India Colony, Chennai – 600 024 Rep. by its Branch Manager

¶9

....Applicant

¶10

-Vs-

¶11

M/s. R.M. Enterprises

¶12

Rep. by its Proprietor Mrs. Rosemary Lazer Ground Floor, Old No.114, New No.135, Pillar Kovil Street

¶13

St. Thomas Mount,

¶14

Chennai – 600 016

¶15

Mrs. Rosemary D/o Mr. Lazer No.135, Vinayakar Kovil street Ambethkar Naagar St. Thomas Mount, Chennai – 600 016 ….Defendants

¶16

Counsels on record / appeared:

¶17

Counsel for Applicant : M/s. J. Ramanathan

¶18

Defendants 1 and 2 were set ex-parte on 02.04.2024

¶19

: - FINAL ORDER - :

¶20

This Original Application is filed on 03.02.2023 by the applicant

¶21

bank under Section 19 of Recovery of Debts and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendants 1 and 2, jointly and severally for recovery

¶22

of a total sum of Rs.37,80,322.66p (Rupees Thirty Seven Lakhs

OA No. 43/2024

02.02.2026

Eighty Thousand Three Hundred and Twenty Two and Sixty Six Paise only) due in respect of Overdraft Facility (Account No.49510400000414) repayable together with further interest @ 14.65% p.a., with monthly rests from the date of Application till the date of realization in full and for costs of this OA.

¶27

Brief Facts of the case:

¶28

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.

¶29

It is the case of the Applicant Bank that 1^st defendant is a MSME Enterprise registered under Udayam Scheme conducting business of trading Oil and groceries. The 1^st defendant represented by its Proprietor 2^nd defendant had approached the applicant bank for grant of Working Capital Facilities for the purpose of development of business. After careful consideration of the proposal submitted by the defendant through loan application dated 25.11.2021.

¶30

The applicant bank submits that considering the said request, the applicant bank sanctioned the Working Capital Overdue Limit under CGTMSE Scheme to a tune of Rs.35,00,000/- on 25.11.2021. In order to secure the loan, the 1^st defendant represented by 2^nd defendant had executed the following documents in favour of the applicant bank:

¶31

(i) Demand Promissory Note for a sum of Rs.35,00,000/executed by the defendants on 25.11.2021 agreeing to repay

OA No. 43/2024

02.02.2026

the dues with interest at monthly rests as per applicant bank’s norms.

¶36

(ii) Composite Hypothecation Agreement dated 25.11.2021 executed by the 1^st defendant agreeing to hypothecate the stocks in trade and book debts and machineries, if any etc., in favour of the applicant bank.

¶37

(iii) Declaration cum Undertaking cum Authority dated 25.11.2021 executed by the 1^st defendant agreeing to various terms and conditions for availing the credit facility and undertaking to follow the same.

¶38

(iv) Power of Attorney executed by the 1^st defendant on 25.11.2021 to appoint the applicant bank as its lawful attorney to receive and claim all the dues in respect of book debts.

¶39

(v) Undertaking from the borrowers covered under CGTMSE Guarantee Scheme executed by the 1^st defendant on 25.11.2021 in favour of the applicant bank to claim guarantee under CGTMSE scheme for the dues outstanding in case of default.

¶40

(vi) General Undertaking dated 25.11.2021 executed by the 1^st defendant agreeing to various terms and conditions regarding operations of Current Account.

¶41

(vii) Letter of continuing security dated 25.11.2021 executed by

OA No. 43/2024

02.02.2026

the 1^st defendant agreeing that Demand Promissory Note to be considered as continuing security for the loan sanctioned.

¶46

(viii) Letter of Sole Proprietorship dated 25.11.2021 executed by the 2^nd defendant confirming that the 2^nd defendant is the one and only Proprietor of the firm and is responsible for all the transactions.

¶47

The applicant submits that subsequent to availing of the loan, the defendants became irregular in repayment. The defendants failed to make payments as per agreed terms of the loan agreement. The defendants also did not come forward to settle the dues inspite of several requests made by the applicant. Consequently, the loan account was classified as NPA on 01.06.2022 in accordance with RBI guidelines. Despite repeated requests and demands, as defendants did not come forward to repay the dues, the present Original Application (OA) has been filed by the applicant bank for recovery of its dues from the defendants.

¶48

After the filing of the OA, summons was sent to the Defendants 1 and 2 through Registered Post with Acknowledgment Due, which were returned with postal endorsement as ‘unclaimed’, which is deemed service. When OA was taken up on 02.04.2024 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 and 2 were placed ex-parte on 02.04.2024.

¶49

Heard the submissions of Applicant Bank and perused the record s.

OA No. 43/2024

02.02.2026

To prove the case of the Applicant Bank, Sh. K.R. Saravanan, Senior Branch 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-11 .

¶54

A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-11 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.

¶55

The defendants were set ex-parte on 02.04.2024, 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.

¶56

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:

: O R D E R :

OA No. 43/2024

02.02.2026

The OA is allowed with costs,

¶62

(a) The applicant bank is allowed to recover from the Defendants jointly and severally total sum of Rs.37,80,322.66p (Rupees Thirty Seven Lakhs Eighty Thousand Three Hundred and Twenty Two and Sixty Six Paise only) due in respect of Overdraft Facility (Account No.49510400000414) repayable together with further interest @ 14.65% p.a., with monthly rests from the date of Application till the date of realization in full along with costs of this application.

¶63

(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.

¶64

¶65

(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.

¶66

(e) The applicant bank shall file memo of costs within ten days

OA No. 43/2024

02.02.2026

from the date of receipt of this final order.

¶71

(f) Recovery Certificate shall be drawn up and issued to the

¶72

Recovery Officer in terms of the final order.

¶73

A copy of this order be communicated to the parties concerned.

¶74

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

¶75

(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this the 02^nd day of February, 2026)

¶76

ANNEXURES

¶77

WITNESSES EXAMINED FOR THE APPLICANT BANK :

¶78

AW-1: Sh. K.R. Saravanan, Senior Branch Manager of the Applicant Bank

¶79

Exhibits on the part of the Applicant:

¶80

Sl. No.	Description of Documents	Exhibit No.
1.	Loan application dated 25.11.2021	A-1
2.	Sanction letter dated 25.11.2021	A-2
3.	Demand Promissory Note dated 25.11.2021	A-3
4.	Composite Hypothecation Agreement dated 25.11.2021	A-4
5.	Declaration cum undertaking cum authority dated 25.11.2021	A-5
6.	Power of Attorney in respect of Book Debts dated 25.11.2021	A-6
7.	Draft Undertaking dated 25.11.2021	A-7
8.	General undertaking cum Authority dated 25.11.2021	A-8
9.	Letter of Continuing security dated 25.11.2021	A-9
10.	Letter of Sole Proprietorship dated 25.11.2021	A-10
11.	Statement of accounts with BBE certificates	A-11

¶81

Witness Examined for the Defendants: -Nil-

OA No. 43/2024

02.02.2026

List of Documents Exhibited for the Defendants: -Nil –

¶86

:-SCHEDULE-:

¶87

Hypothecation of Stocks in Trade and Book Debts, Machineries etc.

¶88

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

Bank of Baroda v. Rm Enterprises

Case brief

What is this about?

What did the court decide?

Bank of Baroda v. Rm 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

Coram

Case details

Similar cases

Indian Overseas Bank versus M/S Raaman Builders Rep by Its Prop C v Ramasamy

R Parthiban versus Idbi Bank

Bank of Baroda versus Subash

Sivakumar versus Sundaram Home Finance Limited

Axis Bank versus Moorthy

K Kesavan versus Indian Overseas Bank