Allowed

Indian Overseas Bank v. M/S Vaizier Tailors Textiles

DRT29 May 2026TA/597/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the bank's original application for recovery of dues from a defaulting tailor concern principal, including principal, interest, and costs, authorizing recovery from hypothecated assets if not paid.

What did the court decide?

Recovery of Rs.12,00,787.88p with interest at 11.20% p.a. and overdue interest, plus costs; liberty to sell hypothecated assets.

Indian Overseas Bank versus M/S Vaizier Tailors… — Contract and Commercial Disputes | DRT (2026)

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T.A. No. 597 of 2023

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29.05.2026

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 29^th day of May, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 597 of 2023

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(Originally filed before DRT- II, Chennai as OA 574/2019 and thereafter transferred to this Tribunal and renumbered as TA No 597 of 2023)

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Indian Overseas Bank Purasaiwalkam Branch, 15, Hunters Road, Doveton, Purasaiwalkam, Chennai-600024 ….Applicant

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-Vs-

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M/s. Vaizier Tailors Textiles, A Proprietor Concern, Rep. by its Proprietor, K. Viswanathan, No. 70, Shree Sakthi Plaza, 1^st Floor, Shop No.49 & 50, Pondy Bazaar, T. Nagar, Chennai-600 017 ….Defendant

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Counsels on record / appeared:

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Counsel for Applicant : M/s. K.K. Sivasshanmugam

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Defendant was set ex-parte on 23.09.2019

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: - FINAL ORDER - :

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This Original Application is filed on 22.05.2019 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 Rs.12,00,787.88p

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(Twelve Lakh Seven Hundred and Eighty Seven and Eighty Eight

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Paise only) due in respect of Cash Credit Facility (Account No.

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007533000000001) repayable together with further interest @11.20%

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T.A. No. 597 of 2023

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p.a. with monthly rests along with Overdue interest @ 2% p.a. from the date of Application till the date of realization in full, for sale of schedule mentioned hypothecated assets and for costs of this OA.

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Originally, this Application was filed before DRT-II, Chennai, assigned OA No.574 of 2019, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.574 of 2019 stood transferred to this Tribunal and renumbered as TA No.597 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 Proprietorship Concern represented by its Proprietor K. Viswanathan. It is engaged in the business of tailoring and textiles. The defendant concern is an SME unit. The defendant concern sought for Cash Credit Limit of Rs.10 Lakhs from the applicant bank against the stock of textiles and book debts and submitted Loan Application dated 21.03.2016.

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It is submitted by the applicant bank that upon considering the loan application, the applicant bank sanctioned Working Capital Finance of Rs.10 Lakhs under Credit Sanction Advice dated 30.03.2016, against the stock of Textiles and Book Debts. The said loan is secured by primary security of stock of textiles and receivable book debts, morefully described in Schedule

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T.A. No. 597 of 2023

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to the OA.

The applicant bank submits that in consideration of receipt of Cash Credit Limit of Rs.10 lakhs, the defendant proprietorship concern executed following loan documents in favour of the applicant bank on 30.03.2016:

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a) Demand Promissory Note for Rs.10 lakhs executed by defendant in favour of the applicant bank.

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b) Letter agreeing the Demand Promissory Note given by him as security for the repayment of cash credit and other credit facility for Rs.10 Lakhs.

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c) Hypothecation of book debts for Rs.10,00,000/- executed by defendant in favour of the applicant bank.

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d) Letter of hypothecation (in case of open advances only) for Rs.10,00,000/- executed by defendant thereby hypothecating all kinds of textiles, shirtings and suitings etc in favour of the applicant bank.

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It is submitted by the Applicant Bank that subsequent to availing of loan, the defendant concern did not service interest properly and as well repay the principal amount. Therefore, on account of default committed by the defendant concern in the loan account, the loan account was classified and declared by the applicant bank as Non-Performing Asset (NPA) on 31.10.2018. In spite of repeated request and reminders, the defendant concern did not repay the entire liability due under the cash credit loan amount barring the intermittent service of interest. The defendant had also

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executed Revival Letter on 08.03.2019 in favour of the applicant bank in respect of the above said Cash Credit loan, which revives the period of limitation for this application.

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The Applicant submits that as per the statement of accounts maintained by applicant bank in the regular course of business in respect of Cash Credit loan of Rs.10 lakhs, there is a due of Rs.12,00,787.88p as on 16.05.2019 payable by defendant. Despite repeated requests, 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 Defendant through Registered Post with Acknowledgment Due, which was duly served. No representation from Defendant. When OA was taken up on 23.09.2019 even after giving sufficient time, there was no appearance or representation from the defendant. Hence, Defendant was placed ex-parte on 23.09.2019.

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Heard the submissions of Applicant Bank and perused the record s.

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To prove the case of the Applicant Bank, Sh. Subhasish Giri, 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-9 .

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A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-9 evidence that the borrowal of credit facilities

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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 defendants.

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The defendant was set ex-parte on 23.09.2019 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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The OA is allowed with costs,

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(a) The applicant bank is allowed to recover from the Defendant, for recovery of a total sum of Rs.12,00,787.88p (Twelve Lakh Seven Hundred and Eighty Seven and Eighty Eight Paise only) due in respect of Cash Credit Facility (Account

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No. 007533000000001) repayable together with further interest @11.20% p.a. with monthly rests along with Overdue interest @ 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 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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T.A. No. 597 of 2023

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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 Steno (Arti), transcribed by her, corrected, signed and pronounced by me on this the 29^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. Subhasish Giri, Chief Manager of the Applicant Bank

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Exhibits on the part of the Applicant:

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Sl. No.	Description of Documents	Exhibit No.
1.	Loan application submitted by the defendant dated 21.03.2016	A-1
2.	Credit sanction advice issued by the applicant bank to the defendant concern for the grant of cash credit limit of Rs.10 Lakhs dated 30.03.2016	A-2
3.	Demand promissory note executed by defendant in favour of the applicant bank for Rs.10,00,000/- dated 30.03.2016	A-3
4.	Letter agreeing the demand promissory note given by him as security for the repayment of cash credit and other credit facility for Rs.10 Lakhs dated 30.03.2016	A-4
5.	Hypothecation of book debts for Rs.10,00,000/- executed by defendant in favour of the applicant bank dated 30.03.2016	A-5
6.	Letter of Hypothecation (in case of open advances only) for Rs.10,00,000/- executed by defendant thereby hypothecating all kinds of textiles, shirtings and suitings etc in favour of the applicant bank dated 30.03.2016	A-6
7.	Revival letter executed by the defendant in favour of the applicant bank dated 08.03.2019	A-7

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T.A. No. 597 of 2023

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8.	Statement of account in Account	A-8
	No.007533000000001 for cash credit loan facility of Rs.10 Lakhs.
9.	Power of attorney executed by the applicant bank in favour of Chief Manager	A-9

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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-:

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All kinds of textiles, shirtings and suiting etc., found at the place of the defendant concern at No.70, Shree Sakthi Plaza, 1^st Floor, Shop No. 49 & 50, Pondy Bazar, T. Nagar, Chennai-600017.

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

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Uploaded on 29.05.2026 at 17:00 hours

Indian Overseas Bank v. M/S Vaizier Tailors Textiles

Case brief

What is this about?

What did the court decide?

Indian Overseas Bank v. M/S Vaizier Tailors Textiles

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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