Allowed

State Bank of India v. Appar Ceramics

DRT21 May 2026OA/45/2025

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the Applicant Bank's Original Application for recovery of outstanding dues. The Court found the claim proved based on documentary evidence filed by the Bank in the absence of the Defendants ex-parte, directing them to pay the sum demanded along with interest.

What did the court decide?

Defendants directed to pay Rs. 47,56,691.98plus interest at 12.40% p.a. with half yearly rests, failing which the Bank is entitled to sell mortgaged/hypothecated properties.

State Bank of India versus Appar Ceramics — Banking and Recovery | DRT (2026)

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OA No. 45/2025

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 21^ST DAY OF MAY, 2026 PRESENT: SEEMA SINHA,

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[PR. DISTRICT & SESSIONS JUDGE – Retd] PRESIDING OFFICER

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OA No.45/2025

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Between

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State Bank of India, Amayapuram Branch, l5/24, Kulathurampatty Bus Stop, Amayapuram Post, Manapparai Taluk, Thiruchirappalli District - 621307. Rep. By its Branch Manager.

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---Applicant Bank

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And

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M/s. Appar Ceramics, New Door No.11/S2/2, Appanampatty, Kalkothanur,

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Purathakudi Post, Manapparai Taluk, Thiruchirappalli Diskict - 621306.

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Also at:

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M/s. Appar Ceramics, No. 1 1/82/4, Kalkorhanoor, Palayakottai, Manapparai, Thiruchirappalli - 6213 06.

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Page 1 of 10

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OA No. 45/2025

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Mrs. G. Balasenthurani, W/o R.A.Gokulraj, No. l/52F, Jeyakumar Illam, ARK Nagar, Chennai Bye Pass Road, Thiruchirappalli – 620010.

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Also at:

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Mrs. G. Balasenthurani, D/o Godhandaraman, Proprietor of Appar Ceramics, 94/2, West Street, Ellapatti, Anjukulipatti, Dindigul-624308. ---Defendants

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Counsel for the Applicant Bank : M/s T. Govindasamy

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This Original Application was heard and fixed for passing final order before me in the presence of the above said Advocate for Applicant Bank and the Defendants having been set ex-parte and upon hearing the arguments of Counsel for Applicant Bank and upon perusing the material available on the records and having stood over for consideration till this day, this Tribunal delivered the following:

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JUDGEMENT

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1 . This Application has been filed under Sec.19 (1) of the "The Recovery of Debts due to Banks and Financial Institutions Act, 1993" now amended as The Recovery of Debts and Bankruptcy Act, 1993 by the Applicant Bank on 27.12.2024 to recover from the Defendants a sum of Rs.47,56,691.98p together with interest at the rate of 12.40% p.a. with monthly rests in respect of MSME Term Loan from the date of filing of Application till the date of realization with cost and by sale of mortgaged/hypothecated properties, more fully described in Schedules of the application.

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2 . The brief averments of the application filed by the Applicant Bank are as follows:-

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The Defendant No.1 (D-1) and Defendant No.2 (D-2) are the borrowers. D-1 is a proprietary concern and D-2 is the sole proprietor of D-1. D-2 also stood as guarantor for the loan transaction. Both the Defendants approached the Applicant Bank seeking financial assistance by submitting an application for MSME Loan duly signed by them. Along with the loan

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OA No. 45/2025

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application, they furnished various supporting documents including the Aadhaar Card bearing No. 606849434090 of D-2, PAN Card bearing No. GKFPB6321C of D-2, GST Registration Certificate bearing No. 33GKFPB6321C1ZT standing in the name of D-1 and D-2, UDYAM Registration Certificate bearing No. UDYAM-TN-27-0058269 dated 21.06.2023, Electricity Bill Receipt dated 13.01.2023 standing in the name of Dr. M. Karthikayan, Rental Agreement dated 26.06.2023 executed between D-1 and D-2 as tenants and Dr. M. Karthikayan as landlord, Project Report submitted by the Defendants, quotation dated 29.07.2023 issued by Guru Plywood & Hardwares, Hosur, quotation dated 04.07.2023 issued by Sri Lakshmi Balaji Interior & Hardware, Manapparai, stock statement relating to Tiles Godown for the period from 01.06.2023 to 31.07.2023, and an affidavit dated 20.07.2023 requesting sanction of a loan amount of Rs.45,00,000/- for the purpose of carrying on tile trading business. D-2 voluntarily agreed to stand as guarantor to facilitate sanction of the loan in favour of D-1.

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After scrutinizing the loan application and the documents submitted by the Defendants, the Applicant Bank sanctioned an MSME Term Loan of Rs.45,00,000/- in favour of the Defendants. Accordingly, the Bank issued a Letter of Arrangement dated 21.08.2023 containing the terms and conditions governing the sanction. The Defendants acknowledged receipt of the said Letter of Arrangement and agreed to abide by all the terms and conditions stipulated therein.

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In consideration of the aforesaid sanction, D-1 and D-2 executed the necessary security documents in favour of the Applicant Bank on 21.08.2023. D-2 also executed the guarantee documents in her capacity as guarantor. The following documents were executed in favour of the Applicant Bank:

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Agreement of Loan-cum-Hypothecation dated 21.08.2023 executed by D-1 and D-2 for a sum of Rs.45,00,000/-; and

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Guarantee Agreement dated 21.08.2023 executed by D-2 guaranteeing repayment of the said loan amount.

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The the entire sanctioned loan amount of Rs.45,00,000/- was duly disbursed by the Applicant Bank and fully utilized by the Defendants for their business purposes. As per the terms contained in the Letter of Arrangement dated 21.08.2023, the Defendants agreed to repay the loan within a period of 84 months in monthly instalments of Rs.85,170/- each commencing from 05.12.2023 together with interest at the rate of 12.40% per annum with monthly rests.

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Page 3 of 10

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OA No. 45/2025

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However, after availing the loan facility, the Defendants failed to adhere to the repayment schedule and committed persistent defaults in payment of the instalments. In view of such defaults, the Applicant Bank issued a reminder letter dated 11.01.2024 calling upon the Defendants to regularize the loan account. Since the Defendants failed to comply, another reminder dated 24.04.2024 was issued. Despite repeated requests and reminders, the Defendants failed to regularize the account.

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Subsequently, the Applicant Bank, through its panel advocate, issued a legal notice dated 27.06.2024 demanding payment of the entire outstanding dues within seven days from the date of receipt of the notice. Even thereafter, the Defendants neither replied to the notice nor settled the dues. Thereafter, the Applicant Bank issued a notice dated 13.08.2024 informing the Defendants that their loan account was liable to be classified as a Non-Performing Asset (NPA) and that they would be responsible for all consequential actions arising therefrom.

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The Defendants still failed to make payment despite repeated opportunities granted by the Applicant Bank. Hence, the Applicant Bank issued another letter dated 03.09.2024 informing the Defendants that a sum of Rs.45,89,256/- remained outstanding in Loan Account No. 42195524790 and calling upon them to settle the dues within ten days, failing which appropriate legal proceedings would be initiated. The Defendants were also informed that continued default would result in reporting of their names to the Credit Information Bureau of India Limited (CIBIL).

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Despite several opportunities and repeated demands, the Defendants remained negligent, evasive, and indifferent towards repayment of the loan dues. Since the loan was unsecured and no property had been mortgaged in favour of the Applicant Bank, the Defendants failed to show any seriousness in settling the dues. Their conduct clearly demonstrates wilful default and disregard towards their contractual obligations.

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The Defendants are jointly and severally liable to repay the loan amount by virtue of the loan documents executed by them and the guarantee furnished by D-2. The Defendants cannot evade or deny their liability towards the Applicant Bank.

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All efforts undertaken by the Applicant Bank to recover the dues, including personal follow-up, reminder letters, notices, and legal notice, did not yield any positive result. Left with no other efficacious remedy, the Applicant Bank has approached this Hon’ble Tribunal seeking recovery of the outstanding dues together with future interest.

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Despite repeated demands and reminders, made by the Applicant Bank, the Defendants have failed and neglected to repay and adjust their

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OA No. 45/2025

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liability. Hence, the Applicant Bank has filed the OA for recovery of a sum of Rs.47,56,691.98p together with interest at the rate of 12.40% p.a. with monthly rests in respect of MSME Term Loan from the date of filing of Application till the date of realization with cost.

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The Applicant Bank has submitted the following documents in support its claim in the OA, which are as follows:

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Sl. No	Date	Description of Documents	Exhibit No
1	26.07.2023	Application for MSME Loan duly executed by D-1 & D-2 as the Proprietor and submitted before the Applicant Bank enclosing therewith “Aadhar Card bearing No.606849434090 of D-2, Pan Card bearing “	No. GKFPB6321C of D-2, Registration Certificate bearing No. 33GKFPB6321C1ZT held in the name of D-1 & D-2, UDYAM Registration Certificate bearing No.UDYAM- TN-27- 0058269 dated 21.06.2023, Electricity Bill Paid Receipt
2	21.08.2023	Letter of Arrangement for Rs.45,00,000/- issued by the Applicant Bank and acknowledged by D-1 & D-2	Ex.No.A-02

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OA No. 45/2025

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3	21.08.2023	Agreement of Loan-cum-Hypothecation executed by D-1 & D-2 in favour of the Applicant Bank	Ex.No.A-03
		Guarantee Agreement for Rs.45,00,000/-	Ex.No.A-04
4	21.08.2023	executed by D-2 in favour of the Applicant Bank
5	11.01.2024	Letter sent by the Applicant Bank to D-1	Ex.No.A-05
6	24.04.2024	Letter sent by the Applicant Bank to D-1	Ex.No.A-06
7	27.06.2024	Legal Notice issued by Panel Advocate of Applicant Bank to D-1 & D-2	Ex.No.A-07
8	13.08.2024	Notice sent by the Applicant Bank to D-1	Ex.No.A-08
9	03.09.2024	Letter sent by the Applicant Bank to D-1	Ex.No.A-09
10	19.12.2024	Undertaking letter to file English translation for Tamil documents	Ex.No.A-10
11	19.12.2024	Certificate under Sections 2(A)(a), 2(A)(b), 2(A)(c) of Bankers’ Books Evidence Act, 1891 and Certificate for Notional Interest	Ex.No.A-11
12	19.12.2024	Certificate stating no penal interest charged	Ex.No.A-12
13	19.12.2024	Cortficate for Not Capitalized the Quantum of Interest Accrued but not charged after the 12 classification of the Loan Account as NPA Account.	Ex.No.A-13
14	19.12.2024	Verification Affidavit	Ex.No.A-14
15	19.12.2024	Statement of Accounts	Ex.No.A-15

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SCHEDULE –A DESCRIPTION OF MOVABLE PROPERTIES

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All movables more fully described therein the Hypothecation Agreement, Stock in Trade and Trade Debtors, other movable items Hypothecated in favour of the Applicant Bank purchase out of bank finance the details described hereunder as may be notified by the Defendants or the Applicant Bank from time to time.

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Hypothecated Securities purchased out of Bank Finance and mentioned in the Tiles Godown stock - Stock Group Summary dated

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OA No. 45/2025

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31.07.2023 and such other items purchased as mentioned in the Quotation dated 04.07.2023 from Sri Lakshmi Balaji Interior and Hardware, Manapparai, Quotation dated 28.07.2023 from SVINFRA Builders, Tiruchi and Quotation dated 29.07.2023 from Guru Plywood and Hardwares, Hosur.

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3 . On the other hand, Notices were issued to Defendants and since from the beginning of the case, there was no representation on behalf of the Defendants. Hence, Defendants were set ex-parte.

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4. Now the main point for consideration before me is as to whether the Applicant has been able to prove his case on his own leg?

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Having gone through the affidavit of the applicant and the documents filed by them and also considering the submission of the counsel for the Applicant, I find that the Applicant Bank, in order to prove its claim, has filed Proof Affidavit executed by one Mr. M. Manoj kumar, who is the Branch Manager of the Applicant Bank.

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He has stated in his affidavit that the defendants has availed MSME Loan from the Applicant Bank, but they failed to pay the outstanding loan amount, hence he has filed the case. The applicant bank has also filed the documents signed by the defendants at the time of sanctioning the loan amount, which have been marked as exhibits No.A-01 to A-15 in support of its claim in the OA.

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The Application for MSME Loan duly executed by D-1 & D-2 as the Proprietor and submitted before the Applicant Bank enclosing therewith Aadhaar Card bearing No. 606849434090 of D-2, PAN Card bearing No. GKFPB6321C of D-2, Registration Certificate bearing No. 33GKFPB6321C1ZT held in the name of D-1 & D-2, UDYAM Registration Certificate bearing No. UDYAM-TN-27-0058269 dated 21.06.2023, Electricity Bill Paid Receipt dated 13.01.2023 held in the name of Dr. M. Karthikayan, Rental Agreement dated 26.06.2023 executed between D-1 & D-2 as tenants and M. Karthikayan as landlord, quotation dated 28.07.2023 furnished by SVINFRA Builders, Trichy, project report filed by D-1 & D-2, quotation dated 29.07.2023 furnished by GURU Plywood & Hardwares, Hosur held in the name of D-1, quotation dated 04.07.2023 issued by Sri Lakshmi Balaji Interior & Hardware, Manapparai held in the name of D-1, tiles godown stock statement of D-1 for the period 01.06.2023 to 31.07.2023, and affidavit executed by D-1 & D-2 dated 20.07.2023 requesting sanction of Rs.45,00,000/- as loan amount has been marked as Ex.No.A-01, Letter of Arrangement for Rs.45,00,000/- issued by the Applicant Bank and acknowledged by D-1 & D-2 has been marked as Ex.No.A-02, Agreement of Loan-cum-Hypothecation executed by D-1 & D-2

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OA No. 45/2025

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in favour of the Applicant Bank has been marked as Ex.No.A-03, Guarantee Agreement for Rs.45,00,000/- executed by D-2 in favour of the Applicant Bank has been marked as Ex.No.A-04, Letter issued by the Applicant Bank to D-1 has been marked as Ex.No.A-05, Letter issued by the Applicant Bank to D-1 has been marked as Ex.No.A-06, Legal Notice issued by Panel Advocate of the Applicant Bank to D-1 & D-2 has been marked as Ex.No.A07, Notice issued by the Applicant Bank to D-1 has been marked as Ex.No.A-08, Letter issued by the Applicant Bank to D-1 has been marked as Ex.No.A-09, Undertaking letter for filing English translation of Tamil documents has been marked as Ex.No.A-10, Certificate under Sections 2(A)(a), 2(A)(b), 2(A)(c) of Bankers’ Books Evidence Act, 1891 along with Certificate for Notional Interest has been marked as Ex.No.A-11, Certificate stating that no penal interest has been charged has been marked as Ex.No.A-12, Certificate stating that interest accrued but not capitalized after classification of the loan account as NPA has been marked as Ex.No.A-13, Verification Affidavit has been marked as Ex.No.A-14, and Statement of Accounts has been marked as Ex.No.A-15. So the averments of the applicant as well as the statement of the pleading have been corroborated by the above mentioned documents.

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As the Defendants remained ex-parte, the claim of the Applicant Bank is neither disproved nor dislodged and goes on record as proved. Accordingly a cumulative analysis of both the Proof Affidavit and documents marked by the Applicant Bank would prove the claim of the Applicant Bank in the OA.

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So far the claim of interest is concerned, it is a well settled Law that the Tribunal has got powers to award pendente lite interest in view of the Judgment of the Hon’ble Supreme Court in N.M. Veerapa Vs Canara Bank (reported in AIR 98(1), 1101 & in Central bank of India Vs Ravindra and OS (AIR, 2001(1), 3095).

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Therefore, this Original Application is allowed . The Applicant Bank

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is entitled for a final order on the following lines:-

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The Applicant Bank is entitled to recover from the Defendants, a sum of Rs.47,56,691.98p together with interest at the rate of 12.40% p.a. with half yearly rests in respect of MSME Term Loan from the date of filing of Application till the date of realization with cost. Accordingly, it is hereby

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OA No. 45/2025

ORDERED

(a) That the Defendants are directed to pay jointly/severally a sum of Rs.47,56,691.98p together with interest at the rate of 12.40% p.a. with half yearly rests in respect of MSME Term Loan from the date of filing of Application till the date of realization with cost within one month from the date of receipt of this order.

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(b) In case of default of payment by the above mentioned Defendants, the Applicant Bank is at liberty to sell the movable / immovable properties more fully described in Schedule of the original application for appropriation of sale proceeds towards the satisfaction of amount due to the Applicant Bank.

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(c) If the sale proceeds are not sufficient, after defraying the expenses of such sale, for the payment of all such amounts, the defendants are jointly/severally liable to pay the amount of such deficiency with interest mentioned above until realization.

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(d) Any amount remitted during the course of this proceedings shall be given due credit, to the loan account of the defendants.

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(e) Recovery Certificate be prepared, as per the directions given above, and issue accordingly. A copy of the order is to be communicated to the parties concerned, immediately.

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OA No. 45/2025

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(f) It is further ordered that the Applicant Bank shall file cost memo within a period of one month from the date of receipt of this order, so as to prepare the recovery certificate with cost for the MSME Loan and the Recovery Officer is also directed to proceed with the matter in accordance with law. In case, cost memo is not filed before said period of one month, Recovery Certificate will be prepared with available records.

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Dictated to T.P, taken down, transcribed, typed by her, corrected and pronounced by me in the Open Court in this the 21^st May, 2026.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 02.06.26

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State Bank of India v. Appar Ceramics

Case brief

What is this about?

What did the court decide?

State Bank of India v. Appar Ceramics

Case brief

What is this about?

What did the court decide?

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