Allowed

Equital Small Finance Bank Limited v. Sri Bhavani Amman Engineering Works

DRT16 Jul 2026TA/446/2023

Case brief

AI extract

What is this about?

The DRT allowed the bank's application for recovery of a debt under Section 19 of the RDB Act. The court upheld the bank's claim for Rs. 42,98,084.02 plus further interest and costs based on document evidence, as the defendant appeared ex-parte.

What did the court decide?

Recovery of Rs. 42,98,084.02 plus further interest at 11.75% p.a. with monthly rests and costs from the date of application.

Equital Small Finance Bank Limited versus Sri Bhavani Amman… — Banking and Recovery | DRT (2026)

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T.A. No.446 of 2023

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16.07.2026

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 16^th day of July, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No.446 of 2023

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(Originally filed before DRT- II, Chennai as OA No.270 of 2021 and thereafter transferred to this Tribunal and renumbered as TA No.446 of 2023)

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Equitas Small Finance Bank Limited, No.F-39, 4^th floor, Phase-II, Spencer plaza, No.769, Anna salai, Chennai- 600 002 …Applicant

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-Vs-

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Sudha.R, Proprietrix, Sri Bhavani Amman Engineering Works, T 384, T387 Women Industrial Estate, Sidco Industrial Estate, Thirumullaivoyal, Chennai, Tiruvallur 600 062- Tamilnadu

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Residing at: Sudha.R, No.14, Meenatchi street, Nethaji Nagar, Pattabiram, Thandurai, Tiruvallore (Nearby Hindu college) Chennai, Tamilnadu- 600 072

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….Defendant

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Counsels on record / appeared:

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Counsel for Applicant : M/s. S. Suresh

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Defendant was set ex-parte on 03.06.2022

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: - FINAL ORDER- :

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This Original Application is filed on 22.03.2021 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 defendant, for recovery of a total sum of

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Rs.42,98,084.02p (Rupees Forty Two Lakhs Ninety Eight Thousand

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and Eighty Four and Two Paise only) due in respect of Working Capital facility (A/c No. 200001014818) repayable together with further interest @11.75% p.a., with monthly rests from the date of Application till the date of realization in full, for sale of schedule mentioned hypothecated property and for costs of this OA.

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Originally, this Application was filed before DRT-II, Chennai, assigned OA No. 270 of 2021, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.270 of 2021 stood transferred to this Tribunal and renumbered as TA No.446 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 Defendant is the Proprietrix of Sri Bhavani Amman Engineering works, engaged in manufacturing of all kinds of structural fabrication and also manufacturing and supplying of Jay bold, Scru jack, Foundation Anger Bold, Strait Bold. The defendant had submitted copy of the Registration Certificate dated 11.03.2010 (TIN No. 33121349441) issued by the Commercial Department and copy of the GST Registration Certificate dated 14.08.2018 bearing Registration no.33CORP3700NIZG of the defendant submitted with the applicant.

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T.A. No.446 of 2023

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It is submitted by the applicant bank that during the course of business the defendant approached the applicant in the month of February, 2019 with a request to extend business Working Capital Facility/overdraft facility (which is short term working capital facility) to her proprietrix concern to a limit of Rs.40,00,000/- (Rupees forty lakhs only) for the business purpose which is to be covered under CGTMSE scheme. During that period the defendant had an overdraft facility with the State Bank of India and had requested the applicant bank to take over the above said loan from the State Bank of India (in sanction limit the above said loan amount also to be included) and submitted a Working Capital Loan Application (No.2385) form dated 04.02.2019 duly filled and signed by the defendant.

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The applicant bank submits that acceding to the request of the defendant, the applicant bank had sanctioned Overdraft facility/Working Capital Facility vide Sanction Letter dated 22.02.2019 bearing No. ES/FB/CHE/2019/110045 to a limit of Rs.40 lakhs along with the terms and conditions.

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It is submitted that the above said loan agreement was covered under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). The defendant also has registered with Udyog Aadhar with the Ministry of Micro, Small & Medium enterprises with Udyog AadharTN02B0099675. The applicant bank had paid the necessary payment on 22.02.2019 in order to secure the loan amount. The applicant submits that the defendant had agreed to the terms and conditions of the loan

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facility. In confirmation of the same the applicant and the defendant had entered into Facility Agreement dated 26.02.2019 for a sum of Rs.40,00,000/-. As per the schedule of the said facility agreement, at the time of disbursal of the loan amount prevailing interest rate was 11.75% p.a. (6.75% MCLR being 5.18% over external bench mark rate).

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Under the terms and conditions annexed to the said facility letter,

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the following are the salient features of the sanctioning of the credit facility:

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i. The business working capital facility was overdraft in the nature of overdraft.

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ii. The facility amount was a sum of Rs.40,00,000/-

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iii. The said facility is covered under CGTMSE scheme

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iv. The validity period of the said facility was 12 months from date of sanction i.e. 22.02.2019 and the date of expiry was 22.01.2020

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v. The interest prescribed for the facility was applied on overdraft facility as per clause 1.4 of the facility agreement every month separately.

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vi. The above facility the interest rate will be reset and the reset date will be linked to the date of publication of MCLR by the bank on its website. The variable interest is linked to the MCLR which is the benchmark for floating lending product in the bank. The MCLR may change from time to time and any revision in this rate has an impact on the interest rate.

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vii. The interest rate prevailing on the date of setup of the facility and will be applicable till the next reset date.

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viii. The borrower shall use the facility only for working capital requirement.

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It is submitted by the applicant bank that as mentioned the defendant had submitted a Declaration Letter. The applicant bank submits that the defendant has submitted a requested letter dated 26.02.2019 and as per letter dated 26.02.2019 by the defendant the loan amount was disbursed in one lump sum and paid by way of transfer of funds to loan A/c No.200001014818 on 26.02.2019. Under the said agreement the defendant had undertaken to pay the applicant the amount due under the Facility Agreement together with interest in the manner as provided in the schedule-I to the Agreement.

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The defendant had undertaken to pay the loan amount without any default. If the defendant failed to pay the instalments amount, the bank is entitled to default interest @24% p.a. on the defaulted amount. The applicant submits the said facility agreement signified various event of default as per Clause-III and on the occurrence of any such events of default.

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The applicant bank further submits that in consideration of the loan facility availed, the defendant had executed Demand Promissory Note dated 26.02.2019 along with the Demand Promissory Note Delivery cum Waiver Letter dated 26.02.2019. The applicant submits that the defendant had executed Letter of Hypothecation dated 26.02.2019 and hypothecated

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the entire goods to and in favour of the applicant and submitted the details of the machinery/equipment vide separate letter and its valuation.

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The applicant submits that by letter dated 02.03.2019 the applicant bank as agreed to take over the loan of the defendant herein has paid the loan amount to the State Bank of India and requested the State Bank of India, Ambattur branch, and the same was acknowledged by the State Bank of India. The State Bank of India, Ambattur branch vide its letter dated 07.03.2019 had issued a letter and certified that the Cash Credit account of the defendant had been closed and there are no pending dues for the said account.

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It is submitted by the applicant bank that subsequent to availing of loan, the repayment made by the defendant under the said facility has been highly irregular and the defendants defaulted in payment of the principal and interest due under the agreement. The defendant utilized the entire facility of Rs.40,00,000/- sanctioned under the agreement but failed to pay the principal or the interest on the due date. Thus as on 20.01.2021, a sum of Rs.42,98,084.02/- was due and payable by the defendant towards and final settlement of the loan facility.

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As per the terms of the said facility availed by the defendant, in the event of default, the applicant has right to declare all the dues along with interest immediately payable till the date of payment in full or realization thereof. The loan account has been classified as Non Performing Asset on 31.10.2020. Therefore, the applicant had caused Loan Recall Notice dated 05.02.2021 to the defendant through its counsel thereby recalled/

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terminated the said loan facility and calling upon the defendant to pay a sum of Rs. 42,98,084.02/- as on 20.01.2021, despite which the defendant did not come forward to repay the dues. Hence, the present Original Application (OA) has been filed by the applicant bank for recovery of its dues from the defendant.

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After the filing of the OA, summons was sent to the Defendant through Registered Post with Acknowledgment Due, which was duly served. Applicant Bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 03.06.2022 even after giving sufficient time, there was no appearance or representation from the defendant. Hence, Defendant was placed ex-parte on 03.06.2022.

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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, Mr. S. Ramesh Kumar, Assistant Vice President-Legal 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-11.

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A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-11 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

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amount claimed against defendants.

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The defendant was set ex-parte on 03.06.2022 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 defendant.

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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 Defendant,

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a total sum of Rs.42,98,084.02p (Rupees Forty Two Lakhs Ninety Eight Thousand and Eighty Four and Two Paise only) due in respect of Working Capital facility (A/c No. 200001014818) repayable together with further interest @11.75% 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 of the

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schedule mentioned hypothecated assets morefully detailed in the OA schedule.

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(d) 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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(e) The applicant bank shall file memo of costs within ten days from the date of receipt of this final order.

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(f) 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 16^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. S. Ramesh Kumar, Assistant Vice President-Legal 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.	04.02.2019	Workingcapital loan application form	A-1
2.	22.02.2019	Sanction letter bearing no.ES/FB/CHE/2019/110045	A-2
3.	26.02.2019	Facilityagreement	A-3
4.	26.02.2019	Letter by the defendant to authorise to debit the loan amount to the loan A/c No. 200001014818	A-4
5.	26.02.2019	Demand promissory note along with demand promissory note delivery cum waiver letter dated 26.02.2019	A-5
6.	26.02.2019	Hypothecation agreement	A-6
7.	02.03.2019	Office copy of the letter by the applicant bank to the state Bank of India,Ambattur	A-7
8.	07.03.2019	Letter by the State Bank of India, Ambattur branch to the applicant bank	A-8
9.	05.02.2021	Notice caused by the applicant bank through its counsel	A-9
10.	-	Returned cover	A-10
11.	20.01.2021	Certified true copy of statement of accounts along with Banker’s Book evidence act,certificate	A-11

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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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S. No	Machine details	Machine Make	Qty
1	3phase Weldingmachine	Core Arc	5
2	2phase Weldingmachine	Power duty	3
3	1phase Weldingmachine	Invertor	2
4	Gase cuttingset	Kashmir	10
5	Bugcutting	Kashmir	2
6	AG4grindingmachine	Bosch Dewalt	15
7	AG7 Grindingmachine	Bosch Dewalt	4
8	Cutoff machine	Bosch Dewalt	5
9	Drillingmachine	Rajkot	1

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10	Conventional lathe 9 feet	Paras Rajkot	3
11	Conventional lathe 4feet	Paras Rajkot	1
12	Bandsaw cuttingmachine	Paras Rajkot	1

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

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Uploaded on 16.07.2026 at 15:00 hours

Equital Small Finance Bank Limited v. Sri Bhavani Amman Engineering Works

Case brief

What is this about?

What did the court decide?

Equital Small Finance Bank Limited v. Sri Bhavani Amman Engineering Works

Case brief

What is this about?

What did the court decide?

What the court decided

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