Allowed

Yes Bank v. Kasthuri and Co.

DRT12 May 2026OA/76/2024

Case brief

AI extract

What is this about?

In an interim application filed by Yes Bank to seize hypothecated vehicles to prevent their disposal, the DRT-III Chennai allowed the application. The court appointed an advocate commissioner to identify and take possession of the machinery, directing the bank to assist and directing the respondents to produce relevant high court orders.

What did the court decide?

Appointment of Mr. M. Pugazhanthi as advocate commissioner to seize hypothecated machinery after fixing date and issuing notice; direction to respondents to produce Delhi HC order.

Yes Bank versus Kasthuri and Co. — Banking and Recovery | DRT (2026)

¶1

¶2

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

¶3

Dated this the 12^th day of May, 2026

¶4

Present: SMT. S.V. GOWRAMMA Presiding Officer

¶5

I.A. No.354 of 2024 in O.A. No.76 of 2024

¶6

M/s. Yes Bank, Parrys Branch, Dass India Towers, No.3, Second Line Beach Road, Parrys Comer, George Town, Chennai- 600 001 Rep by its Authorized Signatory

¶7

….Petitioner / Applicant

¶8

-Vs-

¶9

Kasthuri & Co, Proprietor - R Srinivasan, Gamma Block, 3rd Floor, Alpha City, Old Mahabalipuram Road, Near NavalurToll, Navalur, Kancheepuram- 603 103.

¶10

M/s. Kasthuri Infra Projects Pvt Ltd, Represented by its Directors, Gamma Block, 3^rd Floor, Alpha City, Old Mahabalipuram Road, Near Navalur Toll, Navalur, Kancheepuram- 603 103.

¶11

…..Respondents / Defendants

¶12

Counsels on record / appeared:

¶13

Counsel for Applicant : Mr. Kvp Deepak Raj Counsel for Respondents : M/s Lilly Francis

¶14

: - ORDER ON IA NO.354 of 2024 - :

¶15

The Original Application is filed by the Applicant Bank against the

¶16

Defendants, seeking for recovery of money due from Defendants jointly

¶17

and severally to pay a sum of Rs.2,89,37,897/- (Rupees Two Crores

¶18

¶19

Eighty Nine Lakhs Thirty Seven Thousand Eight Hundred and Ninety

¶20

Seven only) together with further interest and costs.

¶21

The Applicant Bank has filed the present petition i.e., I.A.No.354/2024 with affidavit of the Authorised Signatory of applicant bank, Sh. K. Dinakaran, praying to appoint an Advocate Commissioner to seize Bloero Camper 2 WDPS morefully detailed in the petition, pending disposal of OA.

¶22

It is the case of Applicant Bank that Respondents have approached the applicant bank for a Loan – I for purchasing a Construction Equipment, Loan – II for purchasing a Truck / Construction Equipment and Loan – III for purchasing Construction Equipemnt, which was accordingly sanctioned. The defendants have hypothecated the vehicles purchased out of loan funds in favour of applicant bank and also executed necessary loan documents on 29.08.2022 for an amount of RS.2,11,99,412/-. Subsequent to availing of loan, the defendants had been irregular in repaying the amounts due under the said accounts and hence the loan accounts became irregular and the Loan Account has been Declared as Non Performing Asset and the applicant bank had filed the above OA against the defendants Respondents to recovery of a total sum of Rs.2,89,37,897/-.

¶23

It is further submitted that the applicant bank came to understand that the defendants are trying to dispose of the Vehicle in order to create third party interests as also to cause the Applicant to suffer detrimental loss, hardships and impediments in recovering its dues of huge magnitude

¶24

¶25

Hence the present IA is filed praying to appoint Advocate Commissioner for the said purpose.

¶26

Although defendants remained ex-parte in the OA, after receipt of notice in IA No.354/2024, 1^st respondent / 1^st defendant filed counter along with typed set of documents. A memo has been filed by 2^nd respondent / 2^nd defendant adopting the counter and documents filed by 1^st respondent. 6. In the counter of the 1^st respondent, it is submitted that as early as on 18.03.2023, it had surrendered the custody of assets mortgaged to the Petitioner due to financial crisis. The surrender was in view of the continuous decline in value of assets, therefore requests were made to the Petitioner Bank to maximise the recoverable value of the asset. The voluntary surrendering of the asset for such disposition, thereby transferring and assigning to you title and interest, with an understanding that the Respondents are relieved from any and all liability or responsibility

¶27

in connection with the said asset at the time of its surrender. It was also brought to the notice of the Petitioner vide letter dated 13.07.2023 that disputes have arisen between Respondent No.1 and M/s. Welspun Enterprises Ltd and the same has been referred to arbitration. In an interim application filed by M/s. Welspun Enterprises Ltd seeking interim protection before the Hon’ble High Court of Delhi from removing the equipment from the site. The order has been extended from time to time. Furthermore, vide email dated 04.08.2023 Respondents informed that, a sum of Rs.5,67,675.94 is the outstanding on the EMI for Loan No.CELOOOSO 1002775 for Bolero Camper 2WD PS.

¶28

¶29

It is submitted that the Respondents requested co-operation of Petitioner to settle the same for Rs.4,90,000.00 and to foreclose the loan account to mitigate the losses. It also informed on 14.08.2023, that Respondents has arranged a purchaser to buy the Bolero Camper and for foreclosing the loan agreement. The Petitioner did not respond to any of the above communications. Similar foreclosing letters were addressed by the 1^st Respondent was addressed on 22.08.2023 & 13.09.2023. Owing to non-reply and inaction from the Petitioner, the Respondents issued Legal Notice dated 20.09.2023 calling up the Petitioner to take immediate steps for foreclosing the loan accounts and to take custody of the items. While the matter stood thus, there was distress call on 18.12.2023 from the plant reporting that thieves/local goons trespassed onto the property and has stolen machineries (Diesel generators-200KVA Kirloskar DG 8& 250 KVA AshokXeyland DG).

¶30

The 1^st Respondent also wrote to the Petitioner on its lethargic response / lack of corporation in foreclosing and limiting liabilities on 21.12.2023. The instant application has been preferred seeking attachment of the items morefully detailed in the IA - the vehicle is idle at the office premises of 1^st Respondent as Applicant bank is in custody of original RC. With respect to Schwing Setter - The Hon’ble Delhi High Court has already passed an interim order under section 9 of the Arbitration and Conciliation Act, 1996 prohibiting the Respondents to remove equipment from site. In any case, the Respondents had already surrendered the assets on 18.03.2023 including the items enlisted in the surrendered deed dated

¶31

¶32

18.03.2023. The same was acknowledged on 01.07.2023 by the Petitioner as well. In view of the surrender and acknowledgement by the Petitioner, the prayer for taking custody of equipment is infructuous and untenable. The 1^st Respondent had already narrated above the instance of robbery from plant on 18.12.2023. In respect of Ashok Leyland 250 KVA & 200 KVA Kirloskar DG Set –The DG sets have been stolen from the plant on 18.12.2023 and same was reported to the jurisdictional police station through a complaint. The Respondent was ready and willing to surrender all assets and foreclose the loans as early as on 18.03.2023. The allegations

¶33

that Respondents are trying to dispose the equipment by creating third party rights to the detriment of the Petitioner is thus denied as false. The 1^st Respondent had requested for early disposal of the equipment and vehicles for maximizing recovery to be set off against the outstanding dues.

¶34

Heard the counsels for both sides and perused the records of

¶35

produced along with the IA.

¶36

The applicant bank apprehends that the respondents are trying to dispose the equipment in order to create third party interest and hence prayed for appointment of Advocate Commissioner to seize the hypothecated vehicles.

¶37

Whereas it is the case of the 1^st respondent that they were willing to surrender all assets and foreclose the loans as early as on 18.03.2023 and the allegations that respondents are trying to dispose the equipment by creating third party rights to the detriment of the petitioner is denied. Further, the 1^st respondent submitted that in respect of Schwing Setter

¶38

¶39

equipment - The Hon’ble Delhi High Court has already passed an interim order under section 9 of the Arbitration and Conciliation Act, 1996 prohibiting the Respondents to remove equipment from site and the same has been extended from time to time. However, the 1^st respondent had failed to produce the order of Hon’ble High Court of Delhi before this Tribunal. The respondents, vide Deed of Voluntary Surrender dated 18.03.2023, have acknowledged their liability and have also surrendered the hypothecated machinery and also their consent to sell the hypothecated machines as per the process of the bank and adjust the sale proceeds to the loan account.

¶40

In the circumstances pleaded, IA No.354/24 stands allowed. Sh. M. Pugazhanthi, Advocate (Enrol. No. MS 3276/2023), (Mob.7200165017) is hereby appointed as Advocate Commissioner for the above said purpose. The applicant bank is directed to assist the Advocate Commissioner in identifying the location of the subject hypothecated machinery. The Advocate Commissioner is directed to issue notice to both parties by fixing a date, before proceeding to take possession of the machinery. The Advocate Commissioner is also directed take into consideration the order of Hon’ble Delhi High Court order in respect of ‘Schwing Setter’ machinery at the time of execution of the warrant. The 1^st respondent is hereby directed to furnish copy of Hon’ble Delhi High Court order to the Advocate Commissioner.

¶41

The initial remuneration of Advocate Commissioner for the purpose is fixed at Rs.25,000/- to be paid by applicant bank directly and file proof

¶42

¶43

thereof, apart from incidental expenses incurred by the Advocate Commissioner at the time of execution of warrant. After receiving the remuneration, the Advocate Commissioner is directed to file a memo acknowledging the receipt before this Tribunal.

¶44

Upon filing of memo by Advocate Commissioner, Registry is directed to issue warrant to the Advocate Commissioner, along with copy of IA No.354/2024. List the matter on 15.06.2026 for report of the Advocate Commissioner.

¶45

Sd/-

¶46

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

¶47

(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this the

¶48

12^th day of May, 2026)

Yes Bank v. Kasthuri and Co.

Case brief

What is this about?

What did the court decide?

Yes Bank v. Kasthuri and Co.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

Case details

Similar cases

M s Pmr Brick Works Rep by its Prop Mr S Mathivanan versus Indian Bank

State Bank of India versus Sheeba Esther

Vijaya Babu versus Union Bank of India

Bank of Baroda versus Green Kare Resources

Punjab National Bank versus Djeabalou

S Karthikeyani versus Idfc First Bank Ltd.