Allowed

Bank of Baroda v. M/S City Garments

DRT8 May 2026TA/694/2023

Case brief

AI extract

What is this about?

DRT allowed the bank's original application for recovery of dues. The respondents failed to file a written statement or counter-proof affidavit despite summons and showed lack of interest in prosecuting the defense. The Tribunal accepted the bank's evidence and allowed recovery of the principal amount with interest and costs, enabling the issuance of a recovery certificate.

What did the court decide?

Recovery of Rs.1,13,97,691.22 with further interest at 10.70% p.a. and penal interest of 2% p.a., along with costs of the application. Liberty granted to sell assets for recovery.

Bank of Baroda versus M/S City Garments — Execution and Attachment | DRT (2026)

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T.A. No. 694 of 2023

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08.05.2026

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 08^th day of May, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 694 of 2023

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(Originally filed before DRT- II, Chennai as OA 224/2020 and thereafter transferred to this Tribunal and renumbered as TA No 694 of 2023)

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Bank of Baroda (Erstwhile Dena bank) Sembudoss Street Branch, 80/81, Broadway, Chennai- 600 108 Represented by its Chief Manager …Applicant

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-Vs-

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M/s City garments, Represented by its Proprietor Mrs.N.Jayanthi, 6A, West Veera Kutti Street, Old Washermenpet, Chennai-600 021

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Mrs. N.Jayanthi W/o Nelson Chelladurai, Proprietor, City garments, 23/21, 6^th street, Vinoba nagar, Tondiarpet, Chennai- 600 081 ….Defendants

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Counsels on record / appeared:

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Counsel for Applicant : Sh. W.S. Jayaprakash

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Counsel for Defendants : M/s B. Janakiram

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: - FINAL ORDER- :

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This Original Application is filed on 18.02.2020 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,

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against the defendants 1 and 2 , jointly and severally for recovery

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T.A. No. 694 of 2023

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of a total sum of Rs.1,13,97,691.22p (Rupees One Crore Thirteen Lakhs Ninety Seven Thousand Six Hundred and Ninety One and Twenty Two paise only) due in respect of Cash Credit facility (A/c No.068313023846) repayable together with further interest @ 10.70% p.a. with monthly rests along with simple penal interest of 2% p.a. from the date of Application till the date of realization in full and for costs of this OA.

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Originally, this Application was filed before DRT-II, Chennai, assigned OA No.224 of 2020, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No.224 of 2020 stood transferred to this Tribunal and renumbered as TA No. 694 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 a Proprietorship concern represented by the 2^nd defendant its Sole Proprietor. The 1^st defendant represented by the 2^nd defendant applied to the applicant bank for Cash Credit Hypothecation Limit for meeting Working Capital requirements of manufacture of readymade garments and wholesale trading of garments.

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T.A. No. 694 of 2023

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08.05.2026

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It is submitted by the applicant bank that after examining their application, the applicant bank had sanctioned Cash Credit facility of Rs.95,00,000/- on 12.04.2017, repayable at 10.40% i.e.2.30% minus 0.50% for CGTSME above 1 year MCLR at 8.60% with monthly rests repayable in 12months subject to annual review.

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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/SEMBUD/ADV/2017 dated 12.04.2017 with respect to Cash Credit limit of Rs.95,00,000/- and availed the said Cash Credit limit on 12.04.2017 vide account bearing No.068313023846 by executing the documents as follows:

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i. D.P. note for (from individual/ proprietor ) dated 12.04.2017 for Rs.95,00,000/- executed by the 1^st defendant represented by the 2^nd defendant

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

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iii. Agreement of hypothecation agreement dated 12.04.2017 executed by 1^st defendant represented by the 2^nd defendant.

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iv. Power of attorney from borrowers (Book-debts) executed by 1^st defendant represented by the 2^nd defendant

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v. General letter of lien and security for borrowing arrangements from the borrowers executed by 1^st defendant represented by the 2^nd defendant.

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vi. Letter of consent from borrowers dated 12.04.2017 executed by 1^st defendant represented by the 2^nd defendant.

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vii. Declaration in respect of pending court cases of banks & financial institutions dated 12.04.2017 executed by 1^st defendant represented by the 2^nd defendant.

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It is submitted by the applicant bank that subsequent to availing of loan, the defendants defaulted in repayment of the installments, resulting in account becoming sticky and non-performing and was classified as Non-Performing Asset (NPA) on 10.01.2019. Inspite of various demands/reminders to regularize the liability, the defendants failed to regularize the accounts or repay the dues.

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The applicant submits that as the defendants failed to respond to the personal requests to regularize the account and in spite of such requests the defendants failed to pay the outstanding, the applicant had caused to issue Demand notice dated 07.02.2019 under section 13(2) of the SARFAESI act to proceed under SARFAESI. Though the defendants acknowledged the notices there was no positive response to regularize the account.

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It is submitted that in view of the commercial nature of the transaction the interest is levied as per Bank’s extant guidelines under sec21 a of the banking regulations 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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As per the directives of Reserve bank of India interest should not be

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T.A. No. 694 of 2023

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applied to the accounts once the account is classified as NPA. Accordingly the applicant bank has not applied interest in the accounts of the defendants for the period from 01.02.2019. However the same will not relieve the defendants in respect of unapplied interest on the overdraft till date and the defendants are jointly and severally liable to pay further interest along with overdue interest for the period form date of filing OA onwards till date of realization.

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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 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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After the filing of the OA, summons was sent to the Defendants 1 and 2 through Registered Post with Acknowledgment Due, which was duly served in respect of D-1 and D-2. The defendants entered appearance and filed Vakalath. However, despite availing substantial adjournments, as written statement was not filed, opportunity to file Written Statement was closed on 27.05.2022.

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Heard the submissions of Applicant Bank and perused the

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record s.

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To prove the case of the Applicant Bank, Sh. V. Raj Shekar, Chief

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T.A. No. 694 of 2023

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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-14 .

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Despite availing sufficient adjournments, as defendants did not file their Counter Proof Affidavit, opportunity to file CPA was closed on 20.10.2023.

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However, subsequently defendants filed an interlocutory application vide IA No.1638/2023 praying to set aside the order of closing the chance of filing written statement dated 27.05.2022 and to accept the written statement of defendants. Despite filing the said IA, the defendants neither appeared nor prosecuted the same. However, on 25.02.2026, a memo is filed by Ld. Counsel for the defendants withdrawing the Vakalath filed by them on behalf of defendants. It is submitted in the memo that the counsel had tried to reach the defendants through several phone calls and messages, but there has been no response from the defendants. Without any instructions, the counsel is unable to appear on behalf of the defendants. It is further submitted that due to this attitude of the defendants, the counsel had sent letters dated 19.07.2024 and 29.12.2025 to the defendants to contact him immediately, failing which the counsel will be forced to withdraw the vakalat from the above case. Though notices were received by the 2^nd defendant, who is the Proprietor of 1^st defendant, the defendants have not contacted the counsel till date. Hence the counsel is constrained to withdraw the vakalat from the above

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case. Consequently, IA No.1638/2023 stands dismissed for non-

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prosecution.

A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-14 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 defendants.

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The defendants, though had received the summons, did not choose to contest the case by filing their Written Statement or Counter Proof Affidavit. Despite filing IA to re-open the chance for filing written statement, defendants did not prosecute the case diligently. The defendants did not even respond to the letters sent by their counsel seeking instructions to appear in the matter, despite receipt of the letters, which goes to prove that defendants are not interested to prosecute their case.

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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

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T.A. No. 694 of 2023

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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 for recovery of a total sum of Rs.1,13,97,691.22p (Rupees One Crore Thirteen Lakhs Ninety Seven Thousand Six Hundred and Ninety One and Twenty Two paise only) due in respect of Cash Credit Facility (A/c No.068313023846) repayable together with further interest @ 10.70% p.a. with monthly rests along 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 OA. All pending IAs, if any also stands closed.

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(b) The applicant bank is at liberty to sell the personal assets of the 2^nd Defendant (both movable and immovable) to recover the balance dues as required under law for which the 2^nd Defendant to disclose to the Tribunal particulars of other properties or assets owned by the 2^nd Defendant.

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(c) 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

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prepare Recovery Certificate for the amount to be paid by

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T.A. No. 694 of 2023

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Defendants to the applicant bank.

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

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(e) 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 PS, transcribed by her, corrected, signed and pronounced by me on this the 08^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. V. Raj Shekar, 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.		Application for credit facilities by 1^st defendant rep by 2^nddefendant	A-1
2.	12.04.2017	Sanction letter bearing Re.no.DB/SEMBUD/ADV/2017 dated 12.04.2017 duly acknowledged by 1^st defendant rep by 2^nddefendant	A-2
3.	12.04.2017	Demand promissory note executed by 1^st defendant rep by 2^nddefendant	A-3
4.		Letter of continuity	A-4
5.	12.04.2017	Agreement of hypothecation (Goods, Book debts and other movable assets to secure multiple facilities)	A-5
6.		Power of attorney from borrower (book debts) executed by 1^stdefendant rep by	A-6

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		2^nddefendant
7.	12.04.2017	General lien and set off of borrowing arrangements from borrowing	A-7
		arrangements from the borrowers executed by 1^stdefendant rep by 2^nd defendant
8.	12.04.2017	Letter of consent from borrower executed by 1^stdefendant rep by 2^nddefendant	A-8
9.	12.04.2017	Declaration in respect of pending court cases of banks &financial institutions executed by 1^stdefendant rep by 2^nd defendant	A-9
10.	07.02.2019	Demand notice u/s 13(2) of SARFAESI act	A-10
11.	12.02.2019	Postal acknowledgement card duly acknowledged	A-11
12.		Postal acknowledgement card duly acknowledged	A-12
13.	11.02.2019	Postal acknowledgement card duly acknowledged
14.		Statement of accounts duly certified under Bankers Book evidence Act.1891 in respect of cash credit account 068313023846 with BBE certificates and affidavit for non-capitalisation duly attested by the authorised signatory

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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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-NIL-

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

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Bank of Baroda v. M/S City Garments

Case brief

What is this about?

What did the court decide?

Bank of Baroda v. M/S City Garments

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

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