Allowed

Bank of Baroda v. Sidedish Zone Private Ltd.

DRT20 Jul 2026OA/64/2024

Case brief

AI extract

What is this about?

DRD-III Old. Chennai allowed the bank's application under RdB Act. The court adjudicated the claim of Rs.31.94 lakhs due from a company and its directors, upholding the bank's entitlement to recovery and subsequent action against realizable assets.

What did the court decide?

Recovery of Rs.31.98 lakhs with interest allowed; liberty to sell hypothecated assets and personal assets of directors upon failure to pay.

Bank of Baroda versus Sidedish Zone Private Ltd. — Company and Corporate | DRT (2026)

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O.A. No.64 of 2024

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20.07.2026

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 20^th day of July, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No.64 of 2024

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Bank of Baroda, Venkatanarayana Road Branch, Represented by its Chief Manager, No.31, Palani towers, Venkatnarayana road,

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T. Nagar, Chennai- 600 017 ….Applicant

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-Vs-

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M/s Sidedish Zone Private Ltd,

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A Private Limited Company

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Rep by its Directors

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Mr. Tilak Bhogineni & Mr. Arepalli Siva Rama Krishna, Registered office at Door No.1-98 SF2, Sai Nilayam, Vijayanagar colony Poranki Rural, Vijayawada- 520 008 Krishna district, Andhra Pradesh

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Also at:

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M/s Sidedish Zone Private Ltd, A Private Limited Company Rep by its Directors Mr. Tilak Bhogineni & Mr. Arepalli Siva Rama Krishna H7/A1, Twin Roses Apartments Rajaji nagar, Thiruvanmiyur East Coast Road, Chennai- 600 041

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Mr. Thilak Bhogineni,

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S/o Narasimhaswami Bhogineni Flat No.1, Karanai main road, Ottiambakkam, St Thomas Mount Block, Chengalpet district,

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O.A. No.64 of 2024

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20.07.2026

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Mr. Arepalli Siva Rama Krishna, S/o Venkateswara Rao, No.8- 353-1, Bhogandrudi Bazaar, 8^th ward, Vuyyuru-521137, Krishna District, Andhra Pradesh …..Defendants

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Counsels on record / appeared:

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Counsel for Applicant: M/s. R. Kumaraja

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Defendants 1 to 3 were set ex-parte on 07.05.2024

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: - FINAL ORDER- :

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This Original Application is filed on 28.08.2023 by the applicant 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 to 3, jointly and severally for recovery of a total sum of Rs.31,98,256.58p (Rupees Thirty One Lakhs Ninety Eight Thousand Two Hundred Fifty Six and Fifty Eight Paisa only) due in respect of Cash Credit Hypothecation Limit (A/c No. 75120500000027) 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 scheduled mentioned hypothecated assets 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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O.A. No.64 of 2024

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20.07.2026

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It is the case of the applicant bank that the 1^st defendant company carries business in India and abroad in the name and style of M/s Sidedish Zone Private Ltd. The applicant submits that the 1^st defendant Represented by its Director applied for sanctioning of credit facilities with the applicant under Cash Credit Hypothecation limit towards Working Capital requirements and accordingly vide Sanction Memo dated 17.06.2020, the applicant sanctioned Cash Credit Hypothecation Limit of Rs.15,00,000/- secured by Prime security of Hypothecation of Stocks and Book Debts and also with collateral security under CGTMSE coverage of Rs.15,00,000/-.

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The applicant submits that the 1^st defendant company represented by its Directors viz., the 2^nd defendant and one Mr. Hitakiran Raavi, the then Additional Director having acknowledged the receipt of Sanction Memo dated 17.06.2020 from the applicant in connection with the grant of Cash Credit/Over Draft limit of Rs.15,00,000/- in favour of the company vide Board Resolution dated 17.06.2020 resolved and authorized that the 2^nd defendant Mr. Tilak Bhogineni Director of the company to execute necessary security loan documents required by the bank and that the common seal of the company be affixed where ever necessary in terms of Bye-laws embodied in the Articles of Association in the presence of the said Additional Director Mr. Hitakiran Raavi.

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The applicant further submits that the 1^st defendant represented by its Directors availed the sanctioned Cash Credit Hypothecation Limit of Rs.15,00,000/- on and from 18.06.2020 as evident from the statement of

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O.A. No.64 of 2024

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accounts - loan account no. 75120500000027 relating to the said limit.

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It is submitted by the applicant bank that in order to secure the said Cash Credit Loan limit of Rs.15,00,000/-, the 1^st defendant executed the following loan and security documents in favour of the applicant viz:

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a) Demand Promissory Note executed by the 1^st defendant viz., the 2^nd defendant on 18.06.2020 for a sum of Rs.15,00,000/promising to pay Bank of Baroda or order at their office in Venkatnarayana Road, Chennai for value received with interest thereon at the rate of 7.95% p.a. (at present), which is a sum of RBI repo rate: 4% mark up 2.85%, Strategic premium of 0.25%, credit spread of 0.85% and risk premium of 0%. The interest shall be payable at monthly rests. The bank shall be entitled to reset the interest rate on monthly basis.

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b) Composite Hypothecation Agreement (for stocks, book debts/vehicles/movable machinery/immovable properties) executed by the 1^st defendant represented by its Directors on 18.06.2020 for a sum of Rs.15,00,000/- in favour of the applicant duly hypothecating the stocks and book debts.

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c) Letter of Undertaking executed by the 1^st defendant by its Directors on 18.06.2020 for a sum of Rs.15,00,000/- in favour of the applicant duly hypothecating the stocks and book debts.

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d) Declaration cum Undertaking cum Authority executed by the 1^st defendant represented by its Director in favour of the applicant and agreed to abide by the terms and conditions embodied there

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under.

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e) Draft Undertaking (for covering the loan limit under CGTMSE guarantee scheme) executed by the 1^st defendant for a sum of Rs.15,00,000/- in favour of the applicant.

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The applicant submits that during the course of operation of the loan account by the 1^st defendant, the Additional Director vide letter dated 23.12.2020 addressed to the 1^st defendant, resigned from the position which was accepted and accordingly by a resolution of the Board Meeting of the 1^st defendant dated 23.12.2020, the 3^rd defendant had been appointed as Additional Director of the 1^st defendant company.

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It is submitted by the applicant bank that the 1^st defendant company represented by its Directors, defendants 2 and 3 applied for sanctioning of credit facilities with the applicant under enhanced Cash Credit Hypothecation Limit towards Working Capital requirements and accordingly vide Sanction Memo dated 29.12.2020, the applicant sanctioned an enhanced Cash Credit Hypothecation limit from Rs.15,00,000/- to Rs.30,00,000/-. The said enhancement is secured by prime security of hypothecation of stocks and book debts and also with collateral security under CGTMSE Coverage of Rs.30,00,000/- with Personal Guarantee of Directors viz., defendants 2 and 3.

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The applicant submits that the defendants acknowledged the receipt of Sanction Memo dated 29.12.2020 from the applicant in connection with the grant of enhanced Cash Credit limit of Rs.30,00,000/- in favour of the company vide Board Resolution dated 29.12.2020, resolved and

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O.A. No.64 of 2024

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authorized that the 2^nd defendant to executed necessary security loan documents required by the bank and the common seal of the company be affixed where ever necessary in terms of Bye-laws embodied in the Articles of Association in the presence of the 3^rd defendant.

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The applicant submits that the 1^st defendant availed the sanctioned enhanced Cash Credit Hypothecation limit of Rs.30,00,000/- on and from 30.12.2020 as evident from the statement of account relating to the limit.

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The applicant submits that to secure the said enhanced Cash Credit Loan of Rs.30,00,000/-, the defendants have executed the following loan and security documents in favour of the applicant:

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a) Demand Promissory Note executed by the 1^st defendant represented by its Directors, 2^nd and 3^rd defendants on 30.12.2020 for a sum of Rs.30,00,000/- promising to pay Bank of Baroda or order at their office in Venkatnarayana Road, Chennai for value received with interest thereon at the rate of 9.30% p.a.(at present) which is a sum of RBI repo rate: 4% mark up 2.85%, Strategic premium of 0.25%, credit spread of 0.85% and risk premium of 0%. The interest shall be payable at monthly rests. The bank shall be entitled to reset the interest rate on monthly basis.

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b) Composite Hypothecation Agreement (for stocks, book debts/ vehicles/movable machinery/immovable properties) executed by the 1^st defendant represented by its Directors on 30.12.2020 for a sum of Rs.30,00,000/- in favour of the applicant duly

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hypothecating the stocks and book debts at the place of business Karanai Main Road, Ottiambakkam, Kancheepuram District now Chengalpet District.

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c) Letter of Undertaking with the negative lien clause executed by the defendants on 30.12.2020 for a sum of Rs. 30,00,000/- in favour of the applicant accepting the terms and conditions embodied there under.

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d) Letter of Undertaking executed by the 1^st defendant by its Directors on 30.12.2020 for a sum of Rs. 30,00,000/- in favour of the applicant duly hypothecating the stocks and book debts.

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e) Declaration cum Undertaking cum Authority executed by the 1^st defendant represented by its Director and 2^nd and 3^rd defendants on 30.12.2020 for a sum of Rs.30,00,000/- in favour of the applicant and agreed to abide by the terms and conditions embodied there under.

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f) Board Resolution for availing & security credit facilities executed by the defendants on 30.12.2020 for a sum of Rs.30,00,000/- in favour of the applicant.

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g) General Undertaking executed by the 1^st defendant represented by its Directors 2^nd and 3^rd defendants on 30.12.2020 for a sum of Rs.30,00,000/- in favour of the applicant accepting the terms and conditions.

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h) Draft Undertaking (for covering the loan limit under CGTMSE guarantee scheme) executed by the 1^st defendant company

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O.A. No.64 of 2024

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represented by its Directors, 2^nd and 3^rd defendants on 30.12.2020 for a sum of Rs.30,00,000/- in favour of the applicant.

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i) General form of Guarantee executed by the defendants 2 and 3 on 30.12.2020 for a sum of Rs.30,00,000/- in their personal and individual capacities duly guaranteeing the repayment of the Cash Credit Hypothecation limit of Rs.30,00,000/- availed by the 1^st defendant company.

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The applicant submits that subsequent to availing of loan, the 1^st defendant company represented by its Directors, 2^nd and 3^rd defendants failed to operate the loan account as agreed to and committed default. Hence the applicant issued a request letter dated 02.12.2022 calling upon the 1^st defendant to regularize the outstanding as on 01.12.2022 in the said loan account. The said request letter dated 02.12.2022 returned unserved. The defendants 1 to 3 committed default and not regularized the loan account but allowed the said loan account to be classified as Non Performing Asset (NPA) on 13.03.2023.

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The applicant submits that the sum due by the defendants 1 to 3 is due to a statutory nationalized bank and the debt is exempted from the provisions of any of the Debt Relief Act. The defendants 1 to 3 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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After the filing of the OA, summons was sent to the Defendants 1 to 3 through Registered Post with Acknowledgment Due, which was returned with postal endorsement ‘Addressee not located’ and ‘No such person’ in respect of two addresses D-1, summons to D-2 returned as ‘insufficient address’, while summons to D-3 was duly served. Applicant Bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 07.05.2024 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 to 3 were placed ex-parte on 07.05.2024.

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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, Mr. 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-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 07.05.2024 but till this day they did not take any action to set aside the ex-parte order and did not

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O.A. No.64 of 2024

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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.

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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 to 3 jointly and severally, severally for recovery of a total sum of Rs.31,98,256.58p (Rupees Thirty One Lakhs Ninety Eight Thousand Two Hundred Fifty Six and Fifty Eight Paisa only) due in respect of Cash Credit Hypothecation Limit (A/c No. 75120500000027) 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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(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

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of the schedule mentioned property 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 and 3^rd Defendants (both movable and immovable) to recover the balance dues as required under law for which the 2^nd and 3^rd Defendants to disclose to the Tribunal particulars of other properties or assets owned by the 2^nd and 3^rd Defendants.

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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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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 20^th day of July, 2026)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Mr. 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.	Date	Description of Documents	Exhibit No.
1.	17.06.2020	Board resolution of the 1^stdefendant	A-1
2.	18.06.2020	Demand promissory note by 1^stdefendant rep by its Directors for Rs.15,00,000/-	A-2
3.	18.06.2020	Composite hypothecation agreement by 1^st defendant Rep by its director	A-3
4.	18.06.2020	Letter of undertaking in respect of book debts by 1^stdefendant Rep by its Directors	A-4
5.	18.06.2020	Declaration cum undertaking Rep by its Directors	A-5
6.	18.06.2020	Drat undertaking (for covering under CGTMSE guarantee scheme)by 1^st defendant Rep by its Directors	A-6
7.	23.12.2020	Letter of resignation by director Mr. Hitakiran Raavi from his Directorship of	A-7
		the company addressed to the 1^st defendant
8.	23.12.2020	Board resolutions for inducting 3^rd defendant as the new director of the company	A-8
9	29.12.2020	Sanction memo for enhanced cash credit hypothecation limit from Rs.15 lakhs to Rs.30,00,000/-	A-9
10	29.12.2020	Board resolution for availing the enhanced CCH limit	A-10
11.	30.12.2020	Demand promissory note by 1^stdefendant	A-11

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		Rep by its Directors for Rs.30,00,000/-
12.	30.12.2020	Composite hypothecation agreement by 1^st defendant Rep by its director	A-12
13.	30.12.2020	Letter of undertaking with negative lien clause by 1^stdefendant Rep by its Directors for Rs.30,00,000/-	A-13
14.	30.12.2020	Letter of undertaking in respect of book debts by 1^stdefendant Rep by its Directors for Rs.30,00,000/-	A-14
15.	30.12.2020	Declaration cum undertaking Rep by its Directors	A-15
16.	30.12.2020	Board resolutions for availing & security credit facilities Rep by its Directors for Rs.30,00,000/-	A-16
17.	30.12.2020	General undertaking by 1^stdefendant Rep by its Directors for Rs.30,00,000/-	A-17
18.	30.12.2020	Draft undertaking (for covering under CGTMSE guarantee scheme)by 1^st	A-18
		defendant Rep by its Directors for Rs.30,00,000/-
19.	30.12.2020	General form of guarantee by defendants 2 and 3 for Rs.30,00,000/-	A-19
20	02.12.2022	Request letter by applicant to 1^st defendant	A-20
21.	-	Returned unserved notice	A-21
22.	-	Memorandum of association for D1	A-22
23.	-	Articles of association for D1	A-23
24.	-	Certificate of incorporation	A-24
25.	-	Statement of account	A-25

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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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Stocks and book debts at the place of business at Plot No. 1, Arasankazhani, Karanai Main Road, Ottiambakkam, Kancheepuram district now Chengalpet District.

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

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Bank of Baroda v. Sidedish Zone Private Ltd.

Case brief

What is this about?

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Bank of Baroda v. Sidedish Zone Private Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

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