Allowed

Bank of Baroda v. Ungal Balaji Bhavan

DRT14 Jul 2026OA/94/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the bank's original application for recovery of a defaulted business loan. Based on uncontradicted bank evidence and an ex-parte hearing, the Tribunal directed joint and several recovery of the outstanding principal, accrued interest, and costs from the borrower and proprietor.

What did the court decide?

Recovery of Rs.39,05,553.38 plus interest @12.25% p.a. from the date of application costs to be paid by defendants jointly and severally.

Bank of Baroda versus Ungal Balaji Bhavan — Banking and Recovery | DRT (2026)

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O.A. No. 94 of 2024

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14.07.2026

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 14^th day of July, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No.94 of 2024

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M/s Bank of Baroda, Represented by its Chief Manager, No.198/2, Baba Nagar, 1^st Main Road Srinivasa Nagar, Villivakkam, Chennai-600 049 ….Applicant

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-Vs-

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M/s Ungal Balaji Bhavan,

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Rep by its Prop Mr. Kesavan N

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No.209, C.T.H. road, (Opp Avadi Bus terminus) Avadi, Chennai- 600 054

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Mr. Kesavan.N

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Prop M/s Ungal Balaji Bhavan,

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S/o Nagarajan,

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No. 1240/E, 61^st street,

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TNHB Korattur, Chennai- 600 080

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Also at:

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Mr. Kesavan.N

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Prop M/s Ungal Balaji Bhavan, S/o Nagarajan,

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No. 3/214, Sarabojirajapuram Vedaranyam taluk, Vaduvancheri, Thulajapattinam. Nagapattinam - 614 714 …..Defendants

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Counsels on record / appeared:

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Counsel for Applicant: M/s. G. Sudhakar

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Defendants 1 and 2 were set ex-parte on 24.07.2024

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: - FINAL ORDER- :

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This Original Application is filed on 07.11.2023 by the applicant

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bank under Section 19 of Recovery of Debts and Bankruptcy Act, 1993

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O.A. No. 94 of 2024

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14.07.2026

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(formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendants 1 and 2, jointly and severally for recovery of a total sum of Rs.39,05,553.38p (Rupees Thirty Nine Lakhs Five Thousand Five Hundred and Fifty Three and Thirty Eight Paise only) due in respect of Home Loan (A/c No.19680600011313) repayable together with further interest @12.25% p.a. with monthly rests from the date of Application till the date of realization in full 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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It is the case of the applicant bank that the 1^st defendant is the Proprietorship Firm and the 2^nd defendant herein is the Proprietor of the said firm. The defendants herein approached the applicant bank for a Business Loan under MSME scheme to start a restaurant business in the name and style of Ungal Balaji Bhavan. The 1^st defendant submitted the loan application dated 24.03.2022. The defendants herein accepted all the terms and conditions of the applicant bank.

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It is submitted by the applicant bank that after scrutinizing the loan application of the defendants, the applicant bank considered their application favourably and sanctioned the fresh Term Loan to the limit of

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O.A. No. 94 of 2024

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14.07.2026

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Rs.40,00,000/- vide Sanction Letter dated 30.03.2022 subject to the terms and conditions of the said loan. The loan is covered under CGTMSE Scheme.

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The applicant further submits that to secure the said loan amount, the defendants have executed the necessary loan documents on 31.03.2022:

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i. D.P. note (for sole proprietorship firm)

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ii. Letter of installment with acceleration clause

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iii. Letter of sole proprietorship

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iv. Letter of undertaking (in respect of Book debts)

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v. Composite hypothecation agreement

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vi. Declaration cum undertaking cum authority

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vii. Power of attorney in respect of Book-debt facility

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viii. Letter of authority in bank’s favour to disclose or publish name of borrower in case of default of loan/advances

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ix. Draft undertaking

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The defendants agreed to repay the loan with rate of interest @3.00% over BRLLR +SP presently 9.75% p.a. for unrated rank with monthly rests subject to change in BRLLR and/or credit rating from time to time.

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The applicant submits that the above loan is repayable in 84 monthly instalments of which 83 principle monthly installment is Rs.47,620/- and the final principal installment of Rs.47,540/- starting from the date of first disbursement. Interest to be serviced as and when

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O.A. No. 94 of 2024

14.07.2026

applied.

The applicant submits that out of the loan availed form the applicant bank, the 2^nd defendant running the restaurant business in the name and style of Ungal Balaji Bhavan at No.209 C.T.H. Road, (Opp Avadi Bus terminus) Avadi, Chennai- 600 054. The 2^nd defendant hypothecated stocks and book debt, machineries, equipments in favour of the applicant bank.

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It is submitted by the applicant bank that subsequent to availing of loan, since beginning the operation and conduct of the account of the defendants is irregular and unsatisfactory and the defendants failed to repay their monthly instalments of Term Loan account. Therefore, the applicant bank made several communication to the defendants over phone and sent demand notices and requested him to repay their instalments. Despite repeated requests and demands of the applicant bank, the defendants failed to repay their instalments. Consequently, the applicant bank classified the defendant’s loan account as Non Performing Asset (NPA) on 01.05.2023.

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The applicant bank submits that they have issued the Legal Notice dated 30.09.2023 through their lawyer and demanded to repay the outstanding amount of Rs. 39,05,553.38/- as on 30.09.2023 and the said notice was received by the 2^nd defendant in his native address at Nagapattinam but he has not chosen to regularise his account or to repay

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the entire outstanding amount. Therefore the 2^nd defendant wilfully and wantonly neglected to repay the loan amount. However, the notices sent

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O.A. No. 94 of 2024

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14.07.2026

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to the Chennai addresses of the 1^st and 2^nd defendants have been returned. Hence, the present 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 was sent to the Defendants 1 and 2 through Registered Post with Acknowledgment Due, which was returned with postal endorsement ‘Left’ in respect of D-1 and summons to 2^nd defendant’s, 1^st address returned as ‘No such person’, while it was duly served at the 2^nd address. Applicant Bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 24.07.2024 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 and 2 were placed ex-parte on 24.07.2024.

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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. C. Mohan Raja, 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-16.

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A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-16 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

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by applicant bank establishing its claim. Applicant bank filed Statement

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O.A. No. 94 of 2024

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14.07.2026

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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 24.07.2024, 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.

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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 and 2 jointly and severally, for recovery of a total sum of Rs.39,05,553.38p (Rupees Thirty Nine Lakhs Five Thousand Five Hundred and Fifty Three and Thirty Eight Paise only) due in respect of Home Loan (A/c No.19680600011313) repayable together with further interest @12.25% p.a. with monthly rests from the date of Application till the date of realization and for costs

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O.A. No. 94 of 2024

14.07.2026

of this application.

(b) 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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(d) 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 14^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. C. Mohan raja, Chief Manager of the Applicant Bank

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O.A. No. 94 of 2024

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14.07.2026

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Exhibits on the part of the Applicant:

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Sl.	Date	Description of Documents	Exhibit
No.			No.
1.	24.03.2022	Loan application for MSME loan	A-1
2.	30.03.2022	Sanction letter	A-2
3.	31.03.2022	Attestation memo	A-3
4.	31.03.2022	D.P. Note (for sole-proprietorship firm)	A-4
5.	31.03.2022	Letter of installment with acceleration clause	A-5
6.	31.03.2022	Letter of sole-proprietorship	A-6
7.	31.03.2022	Letter of undertaking (in respect of Book- debts)	A-7
8.	31.03.2022	Composite hypothecation agreement	A-8
9.	31.03.2022	Declaration cum undertakings cum authority	A-9
10.	31.03.2022	Power of attorney in respect of book debts facility	A-10
11.	31.03.2022	Letter of authority in bank’s favour to disclose or publish name of borrower in case of default of loan/advances	A-11
12.	31.03.2022	Draft undertaking	A-12
13.	30.09.2023	Legal notice	A-13
14.	30.09.2023	Statement of account (with BBE certificates)	A-14
15.	-	Returned covers from 1^st and 2^nd defendants	A-15
16.	-	Acknowledgement card from 2^nd defendant	A-16

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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 PROPERTY

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-NIL-

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

Bank of Baroda v. Ungal Balaji Bhavan

Case brief

What is this about?

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Bank of Baroda v. Ungal Balaji Bhavan

Case brief

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