Allowed

Dena Bank v. M/s Vinayaga Enterprises

DRT14 May 2026TA/414/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the applicant bank's application for recovery of dues from the respondents. The Tribunal affirmed the bank's claim of Rs.1.51 crores based on loan documents and admitted a default, ordering recovery with interest and liberty to sell secured immovable property.

What did the court decide?

Recovery of Rs.1,51,69,837.39 with interest @ 10.95% p.a. plus penal interest 2% p.a., costs, and liberty to sell mortgaged/other assets.

Dena Bank versus M/s Vinayaga Enterprises — Contract and Commercial Disputes | DRT (2026)

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T.A. No.414 of 2023

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14.05.2026

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 14^th day of May, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No.414 of 2023

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(Originally filed before DRT- II, Chennai as OA No.287 of 2020 and thereafter transferred to this Tribunal and renumbered as TA No.414 of 2023)

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Bank of Baroda, Erstwhile Dena bank, 105, General Patters Road, Mount road, Chennai- 600 002 Represented by its Senior Branch Manager …Applicant

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-Vs-

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M/s Vinayaga Enterprises,

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Represented by its Proprietor Mr. A.Ulaganathan

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Off.4/10, 2^nd street,

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West Saidapet, Chennai- 600015

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Mr. A. Ulaganathan, S/o Arumugham, Proprietor Sri Vinayaga Enterprises, Flat No.F1& F2, Bora Castle,

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3, Kamaraj Street, West Saidapet,

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Chennai- 600015

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Mrs. D. Pappa, W/o Mr. P. Dharamalimgam, No.4, New Colony 2^nd street, West Saidapet, Chennai- 600015

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Ms. D. Sutha, D/o Mr. P. Dharamalimgam

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16, First Street, Garden Woodroof Nagar, Pallavaram, Chennai- 600117 ….Defendants

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Counsels on record / appeared:

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Counsel for Applicant : Sh. S. Pandurangan

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Defendants 1 to 4 were set ex-parte on 28.03.2022

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T.A. No.414 of 2023

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14.05.2026

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: - FINAL ORDER- :

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This Original Application is filed on 10.07.2020 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 4, jointly and severally for recovery of a total sum of Rs.1,51,69,837.39 /- (Rupees One Crore Fifty One Lakhs Sixty Nine Thousand Eight Hundred and Thirty Seven and Thirty Nine Paise only) due in respect of Cash Credit Hypothecation Facility (A/c No.013713023860) repayable together with further interest @ 10.95% p.a. with monthly rests with simple penal interest of 2% p.a. from the date of Application till the date of realization in full, for sale of schedule mentioned immovable property and for costs of this OA.

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Originally, this Application was filed before DRT-II, Chennai, assigned OA No. 287 of 2020, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No. 287 of 2020 stood transferred to this Tribunal and renumbered as TA No. 414 of 2023.

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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 herein is a

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Proprietorship concern, represented by the 2^nd defendant, its Sole Proprietor, doing wholesale business in Timber. The 1^st defendant represented by the 2^nd defendant applied to the Applicant Bank for Cash Credit Hypothecation Limit for Working Capital requirements.

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It is submitted by the applicant bank that after examining the loan application, the applicant bank sanctioned Cash Credit Hypothecation facility of Rs.1,50,00,000/- against security of stock and book debt with interest at 4.25% above MCLR (8.55%) i.e. 4.25% +8.55%=12.80% p.a. with monthly rests repayable in 123 months subject to annual review for their Working Capital requirement.

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The defendants agreed to the terms and conditions of the sanction and signified their acceptance by signing the Sanction Letter bearing Ref no. DB/MTRADV/2017/18 dated 05.07.2017 with respect to Cash Credit Hypothecation Limit for Rs.1,50,00,000/- and availed the Cash Credit Hypothecation facility for Rs.1,50,00,000/vide account bearing No.013713023860 by executing the documents mentioned hereunder:

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i. D.P. Note (Proprietor) dated 11.07.2017 for Rs.1,50,00,000/executed by the 1^st defendant represented by the 2^nd defendant.

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ii. Letter of continuity dated 11.07.2017 executed by the 1^st defendant represented by the 2^nd defendant.

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iii. Agreement of hypothecation (Goods, Book Debts and other movables) to secure multiple facilities dated 11.07.2017 executed by the 1^st defendant represented by the 2^nd

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defendant.

iv. General undertaking dated 11.07.2017 executed by the 1^st defendant represented by the 2^nd defendant.

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v. Letter of Guarantee dated 11.07.2017 executed by the 2^nd and 3^rd defendant.

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vi. Letter of confirmation of guarantee dated 11.07.2017 executed by the 3^rd and 4^th defendant.

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vii. Letter of general lien and set off for borrowing arrangements from the borrowers dated 11.07.2017 executed by the 1^st defendant represented by the 2^nd defendant.

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viii. General letter of lien and set off for borrowing arrangements to be signed by guarantors/ Co-obligants executed by 3^rd and 4^th defendant.

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ix. Declarations &letter of consent from borrowers dated 11.07.2017 executed by the 1^st defendant represented by the 2^nd defendant.

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x. Undertaking dated 11.07.2017 executed by 3^rd and 4^th defendant.

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It is submitted by the applicant bank that the 1^st defendant represented by the 2^nd defendant hypothecated the stock of timber items and book-debts. The 3^rd defendant who stood as guarantor to the credit facility created mortgage by deposit of title deeds on 10.07.2017 relating to immovable property being Ground, First & Second floors bearing Plot no.B-5, Sri Ambal Nagar extension (as per CMDA planning permit No.

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1445/2008 dated 31.12.2008 building plan approval No.P.P.No.1235/2012 dated 27.06.2012 comprised in Survey Nos.170/1A. 170/2A situated at Kovoor village, Sriperumbudur taluk, Kancheepuram district morefully described in schedule A with an intention to create mortgage of the Schedule A property to secure the due repayment of the Cash Credit Hypothecation facility for Rs.90,00,000/- extended to the 1^st defendant represented by 2^nd defendant, together with interest cost and other charges thereon and executed Memorandum of deposit of title deeds dated 10.07.2017 duly registered as Document No.9298 of 2017 in Sub Registrar Office, Kundrathur.

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The applicant bank submits that subsequent to availing of loan, the defendants failed to operate the Cash Credit Hypothecation limit satisfactorily resulting in the account become sticky and non-performing and was classified as Non-Performing Asset (NPA) on 17.06.2019 and in spite of various demands/reminders to regularize the liability accounts, the defendant failed to regularize the liability accounts. As there was no positive response to demands of the applicant, SARFAESI action was initiated and Demand Notice dated 08.08.2019 was issued to the borrower and guarantors. Inspite of acknowledging notice, there was no payments forthcoming. Possessions notice dated 18.10.2019 was issued, which was also acknowledged by the defendants. There was no positive response.

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The applicant submits that on account of the default committed by the defendants in discharging their admitted liability in accordance with the terms accepted by them, the applicant bank called upon the

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defendants to discharge their liability. The defendants herein failed and neglected to discharge their liability. 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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In view of the commercial nature of the transaction the interest sis levied as per Bank’s extant guidelines under Sec 21a of the banking regulation Act and the defendants are liable to pay contractual rate of interest as provided under Sec 34 of C.P.C.

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After the filing of the OA, summons were sent to the Defendants 1 to 4 through Registered Post with Acknowledgment Due, which was served duly in respect of D-1 to D-4. When OA was taken up on 28.03.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 to 4 were placed ex-parte on 28.03.2022.

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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, Sh. R. Krishnan, 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-23.

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A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-23 evidence that the borrowal of credit facilities and execution of loan and security documents are true, in terms

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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 28.03.2022, 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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: O R D E R :

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16. The OA is allowed with costs,

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(a) The applicant bank is allowed to recover from the Defendants 1 to 4 jointly and severally, severally for recovery of a total sum of

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Rs.1,51,69,837.39 /- (Rupees One Crore Fifty One Lakhs Sixty Nine Thousand Eight Hundred and Thirty Seven and Thirty Nine Paise only) due in respect of Cash Credit Hypothecation Facility (A/c No.013713023860) repayable together with further interest @ 10.95% p.a. with monthly rests with simple penal interest of 2% p.a. 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 of the Schedule mentioned immovable properties morefully detailed in the OA schedule.

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(d) If the sale proceeds of the immovable property is not sufficient to satisfy the dues as ordered above, the applicant bank is at liberty to sell the personal assets of the Defendants (both movable and immovable) to recover the balance dues as required under law for which the Defendants to disclose to the Tribunal particulars of other properties or assets owned by the 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 14^th day of May, 2026)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sh. R. Krishnan, Chief Manager of the Applicant Bank

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Exhibits on the part of the Applicant:

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Sl.	Date	Description of Documents	Exhibit
No.			No.
1.	-	Application for credit facilities.	A-1
2.	05.07.2017	Sanction letter bearing Ref. No. DB/MTR/ADV/2017-18	A-2
3.	11.07.2017	Demand promissory note dated 11.07.2017 executed 1^stdefendant rep by 2^nddefendant.	A-3
4.	11.07.2017	Letter of continuity executed 1^st defendant rep by 2^nddefendant.	A-4
5.	11.07.2017	Agreement of hypothecation agreement (Goods Book-debts and other movable assets) dated executed 1^stdefendant rep by 2^nddefendant.	A-5
6.	11.07.2017	Letter of guarantee executed by 3^rdand 4^thguarantor	A-6
7.	11.07.2017	Letter of confirmation of guarantee by guarantor	A-7
8.	11.07.2017	General undertaking executed 1^st defendant rep by 2^nddefendant.	A-8
9.	11.07.2017	Letter of general lien and set off for borrowing arrangements from the borrowers dated 11.07.2017 executed 1^stdefendant rep by 2^nddefendant.	A-9
10.	11.07.2017	General letter of lien and set off for borrowing arrangements to be signed by guarantor/ co obligant dated	A-10

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		11.07.2017 executed by 3^rdand 4^th defendant.
11.	11.07.2017	Declaration 7 letter of consent from borrowers dated 11.07.2017 executed by 1^stdefendant rep by 2^nddefendant.	A-11
12.	11.07.2017	Undertaking by guarantors executed by 3^rdand 4^thdefendant.	A-12
13.	10.07.2017	Memorandum of deposit of title deeds dated 10.07.2017 executed by 3^rd defendant registered as Doc. No. 9298/2017 in SRO, Kunrathur.	A-13
14.	16.06.2017	Settlement deed dated 16.06.2017 in favour of 3^rddefendant registered as doc No.7564/2017 in SRO, Kunrathur	A-14
15.	08.08.2019	Demand notice Dated 08.08.2019 u/s 13(2) of SARFAESI act to borrower (1^st defendant)	A-15
16.	08.08.2019	Demand notice Dated 08.08.2019 u/s 13(2) of SARFAESI act to borrower (3^rd defendant)	A-16
17.	08.08.2019	Demand notice Dated 08.08.2019 u/s 13(2) of SARFAESI act to borrower (4^th defendant)	A-17
18.	09.08.2019	Postal acknowledgement cards in respect of demand notice by 1^stand 2^nd defendant	A-18
19.	09.08.2019	Postal acknowledgement cards in respect of demand notice to 3^rd defendant	A-19
20	09.08.2019	Postal acknowledgement cards in respect of demand notice to 4^th defendant	A-20
21.	18.10.2019	Possession notice u/s 13(4) of SARFAESI Act	A-21
22.	21.10.2019	Postal acknowledgement cards by 2^nd and 4^thdefendant	A-22
23.	-	Statement of accounts duly certified under Bankers Book evidence Act, 1891 in respect of the Cash credit under Account number. 013713023860 with affidavit confirming non-capitalisation of penal interest	A-23

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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-A:

All that piece and parcel of land with building on the ground floor, first floor &second floors bearing Plot no.B-5, Sri Ambal Nagar extension (as per CMDA planning permit No. 1445/2008 dated 31.12.2008 building plan approval No.P.P.No.1235/2012 dated 27.06.2012 comprised in Survey Nos.170/1A. 170/2A situated at Kovoor village, Sriperumbudur taluk, Kancheepuram district bounded on the

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North by: Plot No. B-4 South by: Survey No. 169 East by: 24 feet road West by: Survey No.171

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Land measuring:

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East to west on the northern side: 60feet East to west on the southern side: 68feet North to south on the eastern side: 56 feet

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North to south on the western side: 26 feet 9 inches

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Lying within the registration district of South Chennai and sub-registration district of Kundrathur.

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

Dena Bank v. M/s Vinayaga Enterprises

Case brief

What is this about?

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Dena Bank v. M/s Vinayaga Enterprises

Case brief

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