Allowed

Indian Overseas Bank v. M/S Deepa Colour Lab

DRT4 Jun 2026TA/557/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the original application filed by Indian Overseas Bank for recovery of dues totaling approximately Rs. 93 lakhs from a proprietary concern comprising interest, costs, and a power to sell mortgaged properties.

What did the court decide?

Recovery of Rs. 93,34,663/- along with costs and power to sell mortgaged properties (Item Nos. I and II).

Indian Overseas Bank versus M/S Deepa Colour Lab — Company and Corporate | DRT (2026)

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T.A. No. 557 of 2023

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04.06.2026

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 04^th day of June, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No.557 of 20 23

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(Originally filed before DRT- II, Chennai as OA No.57 of 2021 and thereafter transferred to this Tribunal and renumbered as TA No.557 of 2023)

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Indian Overseas Bank, Saidapet Branch, No.84, Karaneeswarar Koil North Mada Street, Saidapet, Chennai- 600 015 Rep. by its Chief Manager …Applicant

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-Vs-

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M/s Deepa Colour Lab & Digital Studio Represented by its proprietor, Mr. V. Kandhan, S/o Late Mr. T. Vijayakumar A person of unsound mind, Represented by his mother Mrs. V. Shanthi, W/o Late Mr. T. Vijayakumar, No.F-1, First Floor, Door No.64/126, Karuneegar Street, Adambakkkam, Chennai- 600 088 ….Defendant

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Counsels on record / appeared:

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Counsel for Applicant : M/s. A. Sermaraj

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Defendant was set ex-parte on 29.10.2021

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: - FINAL ORDER- :

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This Original Application is filed on 16.12.2020 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 defendant, for recovery of a total sum of

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T.A. No. 557 of 2023

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Rs.93,34,663/- (Rupees Ninety Three Lakhs Thirty Four Thousand

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Six Hundred and Sixty Three only) as follows:

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(i) A sum of Rs.19,03,138/- (Rupees Nineteen Lakhs Three Thousand One Hundred and Thirty Eight only) due in respect of Cash Credit Facility (A/c No.030733000000013) repayable together with further interest @ 12.85% p.a. compounded with monthly rests from the date of filing till the date of realization in full;

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(ii) A sum of Rs.54,48,089/- (Rupees Fifty Four Lakhs Forty Eight Thousand and Eighty Nine only) due in respect of Term loan (A/c No.0307037070000003) repayable together with further interest @ 12.85% p.a. with monthly rests from the date of Application till the date of realization in full;

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(iii) A sum of Rs.19,83,436/- (Rupees Nineteen Lakhs Eighty Three Thousand Four Hundred and Thirty Six only) due in respect of Term loan (A/c No.030703707000004) repayable together with further interest @ 12.85% p.a. with monthly rests from the date of Application till the date of realization in full;

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for sale of schedule mentioned immovable properties morefully described as Item Nos.I and II in the schedule to the OA and for costs of this OA.

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T.A. No. 557 of 2023

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04.06.2026

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Originally, this Application was filed before DRT-II, Chennai, assigned OA No.57 of 2021, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.57 of 2021 stood transferred to this Tribunal and renumbered as TA No.557 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 a Proprietary Concern represented by its sole proprietor-Mr. V. Kandhan. The defendant in the year December-2017 approached the applicant and requested to provide financial assistance for his business purposes. The defendant agreed to mortgage his immovable property which is morefully described in as Item No.1 in the schedule hereto as security for the credit facilities to be sanctioned in favour of the defendant.

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It is submitted by the applicant bank that considering the request of the defendant, the applicant bank sanctioned the following credit facilities in favour of the defendant on 28.12.2017 viz:

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a) Cash credit limit of Rs.10 Lakhs

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b) Term loan for the purpose of purchasing machineries of Rs.39.80 Lakhs

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The applicant submits that the defendant has accepted the Credit

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T.A. No. 557 of 2023

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Sanction dated 29.12.2017 and terms and consideration enumerated thereon. The defendant availed the credit facilities sanctioned by the applicant and inconsideration thereof, the defendant on 29.12.2017 executed following loan documents in favour of the applicant viz:

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For cash credit limit of Rs.10 Lakhs:

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a) Demand Promissory Note for a sum of Rs.10 Lakhs together with interest at the rate of MCLR + 2.35% per annum compounded with monthly rests executed by the defendant.

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b) Letter of Continuity to the Demand Promissory Note for a sum of Rs.10 lakhs executed by the defendant.

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c) Deed of Hypothecation of Goods for Rs.10 lakhs executed by the defendant

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For Term loan limit of Rs.39.80 Lakhs:

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a) Demand Promissory Note for a sum of Rs.39.80 Lakhs together with interest at the rate of MCLR + 2.35% per annum compounded with monthly rests executed by the defendant.

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b) Letter of Repayment of loan amount of Rs.39.80 lakhs executed by the defendant agreeing to repay the loan amount by 84 Equated Monthly Instalments of Rs.69,311/- commencing from 30.04.2018

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c) Term Loan Agreement for Rs.39.80 lakhs executed by the defendant

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d) Deed of Hypothecation for securing machineries/vehicles/goods/ book-debts) for Rs.49.80 lakhs executed by the defendant.

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The applicant submits that as agreed, the defendant had already

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deposited the original title deeds pertaining to his immovable property on 28.12.2017, which is morefully described as Item No.I in the schedule hereto, with the applicant with the intention to create an equitable mortgage in favour of the applicant as a collateral security for the credit facilities of Rs.49.80 Lakhs to be sanctioned by the applicant.

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The applicant submits that the defendant enjoyed the aforesaid credit facility of Rs.49.80 lakhs sanctioned by the applicant. Thereafter the defendant represented to the applicant that he is going to purchase a commercial shop bearing No. F-5 situated in the first floor premises of the building having super-built area of 311sq.ft including common area together with 94sq.ft undivided share of land out of the land measuring 2531sq.ft situated at old door Nos. 125, 126,127, 128 & 129, Karuneegar street, Adambakkam, Chennai- 600 088 and morefully described as Item No. II in the schedule hereto from one Mr. M. Mayan for his business purposes for a sale consideration of Rs.19.20 Lakhs and requested the applicant to sanction fresh loan of Rs.14.40 lakhs.

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It is submitted by the applicant bank that considering the request of the defendant, the applicant on 10.01.2018 sanctioned a sum of Rs.14.40 Lakhs in favour of the defendant for the purpose of purchasing Item No. II of the schedule mentioned property. Having accepted the loan sanction letter and the terms and condition enumerated thereon, the defendant executed the following loan documents in favour of the applicant on 10.01.2018 viz:

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a) Demand Promissory Note for a sum of Rs.14.40 lakhs together with

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interest at the rate of MCLR + 2.35% per annum compounded with monthly rest executed by the defendant.

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b) Letter of Repayment of loan amount of Rs.14.40 lakhs executed by the defendant agreeing to repay the loan amount by 84 Equated Monthly Instalments of Rs.24,618/- commencing from 10.05.2018.

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c) Term loan agreement for Rs.14.40 lakhs executed by the defendant

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The applicant submits that the defendants, from and out of the aforesaid loan disbursed by the applicant, purchased Item No. II of the schedule mentioned property from one Mr. M. Mayan under a registered Sale Deed dated 10.01.2018, registered as Document no.125 of 2018 before SRO, Alandur. Thereafter as per the loan sanction terms, the defendant deposited the original title deeds pertaining to Item no.II of the schedule mentioned property with the applicant with the intention to create equitable mortgage as a prime security for the Term loan of Rs.14.40 Lakhs sanctioned by the applicant.

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It is submitted that the defendant on 01.02.2018 executed a Letter evidencing deposit of title deeds in favour of the applicant confirming the Equitable Mortgage created in respect of Item No. II of the schedule mentioned property.

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The applicant submits that the defendant fully enjoyed the Cash Credit limit sanctioned by the applicant. However, subsequent to availing the aforesaid credit facilities, the defendant was highly irregular in repaying the loan installments in the aforesaid two Term Loan accounts. Therefore, liabilities of the defendant in his Cash Credit and Term Loan

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accounts were going on increasing without proper remittance. Despite repeated demands and personal calls made by the applicant’s officials, the defendant did not pay any amount to regularize his loan accounts. Therefore, the loan accounts were classified as Non Performing Asset (NPA) on 31.10.2018 per the RBI guidelines. Subsequently, the applicant on 01.11.2018 issued Demand Notice under Section 13(2) of the SARFAESI Act and called upon the defendant to pay the due amount. Having received the demand notice, the defendant did not come forward to settle his liabilities.

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The applicant further submits that in response to the applicant’s Demand Notice, the defendant’s mother namely Mrs. V. Shanthi issued Reply Notice dated 06.12.2019, 04.02.2020 and 24.02.2020 through her counsel stating that her son Mr. V. Kandan become mentally ill and hence he is not in position to understand the contents of the applicant’s demand notice. She also produced a Doctor Certificate in this regard. Therefore, the defendant’s proprietor, namely Mr. V. Kandan is being represented through his mother and natural guardian Mrs. V. Shanthi.

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The applicant submits that they are charging interest for credit facilities sanctioned to the defendant as per contractual rate of MCLR (8.50%) + 2.35%= 10.85% per annum compounded with monthly rest. Further the defendant is liable to pay default interest at the rate of 2% per annum over and above the contractual rate since he is willful defaulter. As such the present rate of interest for the cash credit limits and term loan limits are 10.85% + 2%= 12.85% per annum compounded with monthly

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rest.

The applicant submits that the Term Loan-I limit sanctioned by the applicant is secured by way of hypothecation of machineries purchased by the defendant from and out of the loan sanctioned by the applicant. But presently no machineries are available in the business premises of the defendant. The defendant did not disclose the whereabouts of the machineries. Therefore the applicant unable to enforce their security rights against the machineries. Despite repeated requests and demands, as defendant did not come forward to repay the dues, 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 sole Defendant through Registered Post with Acknowledgment Due, which was returned with remarks “Unclaimed”. Applicant Bank had caused paper publication of the notice and filed proof thereof. When OA was taken up on 29.10.2021 even after giving sufficient time, there was no appearance or representation from the defendant. Hence, Defendant was placed ex-parte on 29.10.2021.

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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. N. Nageswaran, 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

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came to be marked as Ex A-1 to A-26.

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A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-26 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 defendant.

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The defendant was set ex-parte on 29.10.2021, 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 defendant 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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21. 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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Rs.93,34,663/- (Rupees Ninety Three Lakhs Thirty Four

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T.A. No. 557 of 2023

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Thousand Six Hundred and Sixty Three only) as follows:

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(i) A sum of Rs.19,03,138/- (Rupees Nineteen Lakhs Three Thousand One Hundred and Thirty Eight only) due in respect of Cash Credit Facility (A/c No.030733000000013) repayable together with further interest @ 12.85% p.a. compounded with monthly rests from the date of filing till the date of realization in full;

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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 Item Nos. I and II immovable properties 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 04^th day of June, 2026)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Mr.N.Nageswaran, 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.	28.12.2017	Loan sanction letter from the applicant	A-1
2.	29.12.2017	Demand promissory note for Rs.10 lakhs executed by the defendant	A-2
3.	29.12.2017	Letter of continuity to DPN for Rs.10 lakhs executed by the defendant	A-3
4.	29.12.2017	Deed of hypothecation of Book debts for Rs.10 lakhs executed by the defendants	A-4
5.	29.12.2017	Demand promissory note for Rs.39.80 lakhs executed by the defendant	A-5
6.	29.12.2017	Letter of repayment of loan amount executed by the defendant	A-6
7.	29.12.2017	Term loan agreement for Rs.39.80 lakhs executed by the defendant	A-7
8.	29.12.2017	Deed of hypothecation for securing machineries/vehicle/good/book-debts for Rs.49.80lakhs executed by the defendant	A-8
9.	29.12.2017	Letter evidencing deposit of title deeds executed by the defendant	A-9
10.	22.11.2010	Agreement for construction of flat pertaining to item No: I of the schedule mentioned flat deposited by the defendant	A-10
11.	22.11.2010	Sale deed document no.3644/2010 pertaining to item no.1 of the schedule mentioned flat deposited by the defendant	A-11
12.	03.01.2018	Memorandum of deposit of title deeds executed by the defendant in favour of the applicant for Rs.49.80lakhs Doc. No. 24/2018	A-12
13.	10.01.2018	Loan sanction letter from the applicant to the defendant	A-13
14.	10.01.2018	Demand promissory note for Rs.14.40 lakhs executed by the defendant	A-14
15.	10.01.2018	Letter of repayment of loan amount Rs.14.40 lakhs executed by the defendant	A-15
16.	10.01.2018	Term loan agreement for Rs.14.40 lakhs executed by the defendant	A-16
17.	01.02.2018	Letter evidencing deposit of title deeds pertaining to Item No. II of the schedule mentioned property executed by the defendant.	A-17
18.	10.01.2018	Sale deed Doc.No.125/2018 pertaining to Item No. II of the schedule mentioned	A-18

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		property deposited by the applicant
19.	01.11.2018	Demand notice from the applicant to the defendant	A-19
20		Acknowledgement card	A-20
21.	06.12.2019	Notice from the defendant’s advocate	A-21
22.	04.02.2020	Notice from the defendant’s advocate	A-22
23.	24.02.2020	Notice from the defendant’s advocate	A-23
24.	30.11.2020	Statement of account pertaining to cash credit A/c No.0373300000013	A-24
25.	30.11.2020	Statement of account pertaining to cash credit A/c No.30703707000003	A-25
26.	30.11.2020	Statement of account pertaining to cash credit A/c No.30703707000004	A-26

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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 THE MORTGAGED PROPERTIES-:

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Item No.I:

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All that piece and parcel of commercial shop bearing No.F-1, situated in the first floor premises of the building having super built up area of 800sq.ft including common area together with 350 sq.ft of undivided share of land out of the land measuring 2531.75 Sq.ft situated at Old door. Nos. 125, 126, 127, 128 & 129, Karuneegar Street, Adambakkkam, Chennai- 600 088 comprised in old Pymash No.115, Survey No.204/25 of Adambakkam village, Alandur taluk previously in Kancheepuram district now in Chennai district and the land is bounded on the

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North by: House property bearing Door.No.130 belonging to suri,

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South by: Property of Munusamy Naidu,

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East by: Karuneegar street,

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West by: Property belonging to Ranjitha & others Admeasuring

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On the northern side: 127 feet

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On the southern side: 120 feet

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T.A. No. 557 of 2023

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On the eastern side: 20 feet and 6 inches

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On the western side: 20 feet and 6 inches

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and situated within the registration district of Chennai South and the Sub Registration District of Alandur.

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Item No. II

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All that piece and parcel of commercial shop bearing No.F-5, situated in the first floor premises of the building having super built up area of 311 sq.ft including common area together with 94 sq.ft of undivided share of land out of the land measuring 2531.75 Sq.ft situated at Old door. Nos. 125,126,127,128 & 129, Karuneegar Street, Adambakkkam, Chennai- 600- 088 comprised in old Pymash No.115, Survey No.204/25, T.S.No.104 in block No.14, Ward-G of Adambakkam village, Alandur taluk previously in Kancheepuram district now in Chennai district and the land is bounded on the

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North by: House property bearing Door.No.130 belonging to suri,

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South by: Property of Munusamy Naidu,

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East by: Karuneegar street,

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West by: Property belonging to Ranjitha & others

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Admeasuring

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On the northern side: 127 feet

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On the southern side: 120 feet

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On the eastern side: 20 feet and 6 inches

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On the western side: 20 feet and 6 inches

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and situated within the registration District of Chennai South and the Sub Registration District of Alandur.

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

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Indian Overseas Bank v. M/S Deepa Colour Lab

Case brief

What is this about?

What did the court decide?

Indian Overseas Bank v. M/S Deepa Colour Lab

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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