Allowed

Arc v. Ssgm Industries Pvt. Ltd.

DRT1 Apr 2026TA/865/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the applicant bank's transfer application for recovery of dues of Rs.41.22 crores against several respondents including a private limited company and its directors/guarantors, ordering the bank to file a recovery certificate.

What did the court decide?

Recovery of Rs.41,22,75,074/- via sale of schedule A (movables) and B (immovables) assets and personal assets if insufficient.

Arc versus Ssgm Industries Pvt. Ltd. — Contract and Commercial Disputes | DRT (2026)

¶1

T.A. No. 865 of 2023

¶2

01.04.2026

¶3

¶4

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

¶5

Dated this the 01^st day of April, 2024

¶6

Present: SMT. S.V. GOWRAMMA Presiding Officer

¶7

TRANSFERRED APPLICATION No. 865 of 2023

¶8

(Originally filed before DRT- II, Chennai as OA 563/2017 and thereafter transferred to this Tribunal and renumbered as TA No 865 of 2023)

¶9

M/s Edelweiss Asset Reconstruction Company Limited acting in its capacity of Trustee of EARC Trust SC 19, having Registered Office at Edelweiss House, Off C.S.T. Road, Kalina, Mumbai 400 098

¶10

Through its Authorized Signatory ….Applicant

¶11

-Vs-

¶12

SSGM Industries Private Ltd., Regd. Office: 24/2, Ramasamy Street T.Nagar, Chennai – 600 017

¶13

Also at SSGM Industries Private Ltd., 44, Krishnapuram, Sakkottai PO Kumbakonam – 612 401 Thanjavur District

¶14

Mr. R. Swaminathan, S/o. S. Ramanujam Regd. Office: 24/2, Ramasamy Street T.Nagar, Chennai – 600 017

¶15

Also at Mr. R. Swaminathan, S/o. S. Ramanujam No.80, III Cross Extension Street, Srinagar Colony, Kumbakonam – 612 001 Thanjavur District

¶16

T.A. No. 865 of 2023

¶17

¶18

01.04.2026

¶19

Mr. R. Sundaravasan, S/o. S. Ramanujam Regd. Office: 24/2, Ramasamy Street T.Nagar, Chennai – 600 017

¶20

Also at

¶21

Mr. R. Sundaravasan, S/o. S. Ramanujam No.80, III Cross Extension Street, Srinagar Colony, Kumbakonam – 612 001 Thanjavur District

¶22

Mr. V. Durai, No.80, III Cross Extension Street, Srinagar Colony, Kumbakonam – 612 001 Thanjavur District

¶23

5. ***** Mr. G. Rajagopal, (Deceased)

¶24

Mrs. Vaiduriam W/o. Rajagopal Pillai, Old No.43, New No.24, East Fourth Street, Mannargudi Town & Taluk Thiruvarur District …Defendants

¶25

***** Claim against D-5 was closed vide order dated 27.04.2022

¶26

Counsels on record / appeared:

¶27

Counsel for Applicant : M/s. S. Indumathi Ravi

¶28

Defendants 1 to 6 were set ex-parte on 04.04.2018

¶29

: - FINAL ORDER - :

¶30

This Original Application is filed on 10.10.2017 by the applicant

¶31

bank under Section 19 (1) of Recovery of Debts and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions

¶32

Act, 1993) against the defendants 1 to 6 jointly and severally for recovery

¶33

T.A. No. 865 of 2023

¶34

¶35

01.04.2026

¶36

of a total sum of Rs.41,22,75,074/- (Rupees Forty One Crores

¶37

Twenty Two Lakhs Seventy Five Thousand and Seventy Four only)

¶38

as follows:

¶39

(i) A sum of Rs.8,78,38,020/- due in respect of Cash Credit facility (A/c No.800030110000080), repayable together with further interest @13.15% p.a. plus penal interest @2% compounded with monthly rests from the date of filing the OA, till date of realization in full;

¶40

(ii) A sum of Rs.5,54,89,096/- due in respect of Term Loan Facility (A/c No.800082610000022), repayable together with further interest @13.65%, p.a. plus penal interest @ 2% compounded with compounded with monthly rests from the date of filing the OA till date of realization in full;

¶41

(ii) A sum of Rs.26,89,47,958/- due in respect of Term Loan Facility (A/c No.800082610000022), repayable together with further interest @ 13.90% p.a. plus penal interest @ 2% with half yearly rests from the date of filing the OA till date of realization in full;

¶42

for sale of Schedule A mentioned hypothecated properties and Scheduled B mentioned immovable properties more fully detailed in the OA, and for costs of this application.

¶43

Originally, this Application was filed before DRT-II, Chennai, assigned OA No.563 of 2017, and thereafter in pursuance to the

¶44

T.A. No. 865 of 2023

¶45

01.04.2026

¶46

¶47

notification from Ministry of Finance, DFS dated 04.10.2022, OA No.563 of 2017 stood transferred to this Tribunal and renumbered as TA No.865/2023.

¶48

Brief Facts of the case:

¶49

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.

¶50

The applicant submits that the applicant is a Company incorporated under the Companies Act, 1956 and is registered with RBI under Section 3 of the SARFAESI Act. The Applicant is the assignee of Bank of India, which is the Original Lender. The Applicant acquired the loans granted to the Defendant No.1 along with all the rights, title and interests vide Assignment Agreement dated 31.03.2014.

¶51

The Applicant submits that Bank of India, had advanced certain credit facilities to the Defendant No.1 and in the event of default by the Defendant No.1 in repaying of the same with interest and other charges, the amounts under the said credit facilities are guaranteed by the Defendants Nos. 2 to 4. The Defendant No.5 and 6 are the mortgagors in respect of the loans availed by the Defendant No.1.

¶52

The applicant submits that by virtue of the Assignment Agreement dated 31.03.2014 between the Applicant and Bank of India, the debts due and payable by Defendant Nos.1 to 6 along with all its rights, title,

¶53

T.A. No. 865 of 2023

¶54

01.04.2026

¶55

¶56

interest and benefit, including the assignment of and benefits under the financial instruments relating to the said facilities are assigned in favour of the Applicant along with the securities under section 5 of the SARFAESI Act.

¶57

It is submitted that by virtue of Section 5(4) of the Act, and under the said Assignment Agreement, this applicant by operation of law has become the full and absolute owner and as such the only person legally entitled to receive the repayment of the financial assets or any part thereof including the right to file a suit or institute such other proceedings in its own name and to take such other action as may be required for the purpose of the recovery of the said financial assets. The Applicant has become the lender and all rights, title and interest of the said Bank in respect of the said debt of defendants are now vested in the Applicant.

¶58

The Applicant submits that the 1^st defendant is a Company incorporated under the provisions of the Companies Act 1956 and is engaged in the business of Logistics and earth moving machineries. Vide Board Resolution dated 22.05.2006, the Defendant No.1 Company had authorized Defendant No.2 to execute various documents for availing the said facilities from the said Bank. The defendant No.2, Chairman of the 1^st Defendant, has apart from guaranteeing the repayment as director of the defendant No.1 has secured the said loan facilities by executing personal guarantee agreement and by way of equitable mortgage of his personal property in favour of the said bank. The defendant No.3, in the capacity of the Director of the 1^st defendant has also secured the said loan facilities

¶59

T.A. No. 865 of 2023

¶60

01.04.2026

¶61

¶62

availed by defendant No.1 by executing personal guarantee agreement and by way of equitable mortgage of his personal property in favour of the said bank. The defendant No.4 has also secured the said loan facilities availed by Defendant No.1 by executing personal guarantee agreement and by way of equitable mortgage of his personal property in favour of the said bank. Defendant No.5 and 6 have also mortgaged their personal properties for securing the facilities availed by the Defendant No.1.

¶63

The Applicant further submits the 1^st defendant represented to the said bank that in the event of the said bank sanctioning the financial facility, the same would be repaid together with interest accrued thereon in accordance with the repayment schedule prescribed by the bank without any delay/default. The 2^nd to 4^th defendants also offered to extent their personal guarantee to the said bank towards securing the prompt and due repayment of the aforesaid financial facilities along with interest accrued thereon. The 5^th and 6^th Defendant mortgaged their personal properties and secured the credit facilities granted by the said bank. The applicant submits that the Defendant No.2 to 4 herein also offered to credit equitable mortgage in and over the schedule mentioned properties in favour of the said bank towards securing the prompt and due repayment of the aforesaid financial facilities along with interest accrued thereon.

¶64

It is submitted that based on the representations and promises made by the 1^st defendant, relying on the personal guarantee of the 2^nd to

¶65

4^th defendants and on the equitable mortgage offered to be created by

¶66

T.A. No. 865 of 2023

¶67

01.04.2026

¶68

¶69

the Defendant No. 2 to 6 in favour of the said bank in and over the schedule mentioned properties, the said bank sanctioned the following financial facilities to the first defendant. Financial assistance of Rs.3,39,25,000/- was granted on 23.05.2006 under the following categories:

¶70

i) Cash Credit of Rs.1,45,00,000/- at the rate of interest of 1.50% above BOI BPLR, minimum 12.75% p.a. with monthly rests.

¶71

ii) Term Loan Limit of Rs.1,83,75,000/- at the rate of interest of BOI BPLR, minimum 11.25% p.a. with monthly rests, repayable in 18 half yearly instalments of Rs.7,43,000/- each commencing from 31.03.2008.

¶72

iii) WCTL of Rs.10,50,000/- at the rate of interest of 1.50% above BOI BPLR, minimum 12.75% p.a. with monthly rests, repayable in half yearly instalments of Rs.2,62,500/- each in April and October every year.

¶73

The applicant further, to secure the repayment of the amounts due and payable to the Bank in respect of said facility and other monies payable in respect thereof, the Respondent No.1 to 3 executed various documents in favour of the Bank and created securities as mentioned hereunder:

¶74

i) Demand Promissory Note for Rs.3,39,25,000/- at the rate of 12.75% p.a. with monthly rests dated 23.05.2006.

¶75

ii) Declaration by guarantors dated 23.05.2006 that none of the

¶76

T.A. No. 865 of 2023

¶77

¶78

01.04.2026

¶79

Directors are related to any of the senior officers of the bank officials.

¶80

iii) Undertaking by guarantors dated 23.05.2006 that the said facility is granted on the faith and representation made by the Defendants that there are no advances or other credit facilities with any other financial institution.

¶81

iv) Hypothecation cum Loan Agreement dated 23.05.2006 of stocks, book debts, plant and machinery.

¶82

v) Joint and several guarantee dated 23.05.2006 signed by the 2^nd and 3^rd defendants in their individual capacity.

¶83

vi) Letter of Undertaking dated 23.05.2006 by defendants 1 and 2 that they have not received any commission or fees for standing guarantee to the 1^st Defendant and that the 1^st defendant has not paid any such commission.

¶84

vii) Tripartite Agreement dated 23.05.2006 between 3^rd defendant as lessor, 1^st defendant and bank for the land taken on lease by the 1^st defendant from the 3^rd defendant.

¶85

viii) Letter of undertaking dated 23.05.2006 that the 1^st Defendant will increase its paid up capital to Rs.116.62 Lakh as on 31.03.2007.

¶86

ix) Memorandum of Deposit of title deeds dated 23.05.2006 by 2^nd and 3^rd defendants.

¶87

x) Memorandum of oral assent recorded on 23.05.2006.

¶88

T.A. No. 865 of 2023

¶89

¶90

01.04.2026

¶91

It is submitted that the Defendant No.1 by executing a Hypothecation Deed dated 23.05.2006 have not only Hypothecated/ created charge over the entire current assets of the Company including stocks, book debts, receivables and other current assets of the Company but also Exclusive First Charge by way of Hypothecation of entire fixed assets of the Company (Current Assets/movables/Plant and Machinery) which are more fully described in the Schedule-A.

¶92

It is further submitted that apart from the above said documents, the defendant No.2 in his individual capacity as guarantor and in his capacity as the Director of the 1^st defendant secured the repayment of the entire outstanding amount in the above said loan accounts at all material times, by creating the mortgage of the immovable properties owned by him which are more fully described in Schedule-B.

¶93

The Applicant submits that the defendant No.3 in his individual capacity as guarantor and in the capacity as the as the Director of the 1^st defendant secured the repayment of the entire outstanding amount in the above said loan accounts at all material times, by creating the mortgage of the immovable properties owned by him which are more fully described in Schedule-B.

¶94

Further the 3^rd Defendant has executed a Tripartite Agreement by creating an equitable mortgage of the lease hold rights of the 1^st defendant over the immovable properties owned by the 3^rd defendant along with the building constructed or storage/godown under construction by the 1^st defendant over the leased land which are more fully described

¶95

T.A. No. 865 of 2023

01.04.2026

in Schedule-B.

The applicant submits that on 17.10.2007, the 5^th and 6^th Defendants in order to further extend credit facilities, Term Loans and SRTO of Rs.2,05,00,000/- and to secure the repayment of the entire outstanding amount in the above said loan accounts at all material times, by creating the mortgage of the immovable properties owned by them which are more fully described in Schedule-B.

¶100

The applicant submits that in the year 2008, the bank further sanctioned additional Cash Credit of Rs.75,00,000/-, repayable at the rate of interest of 1.25% below BPLR raising or falling, with a minimum 14% p.a. with monthly rests.

¶101

To secure the repayment of the amounts due and payable to the Bank in respect of said facility of additional Cash Credit and other monies payable in respect thereof, the Respondent No.1 to 3 executed various documents in favour of the Bank and created securities on 30.10.2008 as follows:

¶102

i) Demand Promissory Note for Rs.75,00,000/- dated 30.10.2008 with a minimum 14% p.a. with monthly rests.

¶103

ii) Bearer letter dated 30.10.2008 to repay instalments of Rs.15.98 Lakh per half yearly commencing from April 2009.

¶104

iii) Term Loan Agreement dated 30.10.2008 agreeing to exclusively use the advances for the purpose it is sanctioned and that the advances shall be repaid as per the agreed instalments and to

¶105

T.A. No. 865 of 2023

¶106

01.04.2026

¶107

¶108

secure the repayment by extension of equitable mortgage of the property of the 2^nd Defendant already deposited on 25.05.2006.

¶109

iv) Joint and several guarantee dated 30.10.2008 signed by the 2^nd and 3^rd defendants in their individual capacity.

¶110

v) Declaration by guarantors/Defendants 2 & 3 dated 30.10.2008 that none of the Directors are related to any of the senior officers of the bank officials.

¶111

The applicant submitted that the Defendants 1 to 4 have further executed Deed of security undertaking and Acknowledgment of the debt for Rs. 1,87,99,000/- availed on 30.10.2008 vide their letter of acknowledgement dated 29.10.2009.

¶112

It is submitted that in the year 2009, the Bank provided financial assistance to the 1^st Defendant for a Term Loan of Rs.68,80,000/- at the rate of interest of 0.75% below BPLR, raising or falling presently 11.25% P.A with halt yearly rests repayable under 17 equated half yearly installments of Rs.6.39 Lakhs from 31.10.2010 for the purpose of purchasing machineries to be installed in the premises of the 1^st defendant.

¶113

To secure the repayment of the amounts due and payable to the Bank in respect of said facility and other monies payable in respect thereof, the Respondent No.1 to 3 executed various documents in favour of the Bank and created securities on 11.11.2009 as mentioned hereunder:

¶114

T.A. No. 865 of 2023

¶115

¶116

01.04.2026

¶117

i) Demand Promissory Note dated 11.11.2009 for Rs.68,80,000/at the rate of 11.25% P.A with half yearly rests repayable under 17 equated half yearly instalment of Rs.6.39 Lakhs from 31.10.2010.

¶118

ii) Bearer letter dated 11.11.2009 to repay in 17 equated half yearly instalments of Rs.6.39 Lakhs commencing from 31.10.2010.

¶119

iii) Hypothecation cum Loan Agreement dated 11.11.2009 hypothecating stocks, book debts, plant and machinery.

¶120

iv) Deed of Declaration by Defendants 2 & 3 dated 11.11.2009 that none of the Directors are related to any of the senior officers of the bank officials.

¶121

v) Term Loan Agreement dated 11.11.2009 executed for the loan advanced on 30.04.2008 for a sum of Rs.1,87,99,000/- agreeing with the terms and conditions of the original Term Loan Agreement dated 30.10.2008 and by extending the equitable mortgage of the property of the 2^nd Defendant already deposited on 25.05.2006.

¶122

vi) Joint and several guarantee by Defendants 1, 2, 3 & 4 dated 11.11.2009 guaranteeing the repayment of the amount sanctioned in their individual capacity.

¶123

The applicant submits that the 4^th Defendant has further extended his guarantee undertaking to repay the sum of Rs.1,87,99,000/- availed on 30.10.2008 vide Deed of Guarantee dated 11.11.2009.

¶124

T.A. No. 865 of 2023

¶125

¶126

01.04.2026

¶127

It is submitted that the said bank had earlier advanced a sum of Rs. 1,45,00,000/- under the cash credit facility to the 1^st Defendant on 23.05.2006. Subsequently at the request of the 1^st Defendant, an additional sum of Rs.75,00,000/- was sanctioned as additional cash credit advance totaling to an amount of Rs.2,20,00,000/- under sanction letter dated 17.10.2008. The 1^st Defendant executed a deed of hypothecation cum loan agreement dated 11.11.2009 agreeing to repay the loan amount with interest at the rate of 0.75% below BPLR rising and falling presently 11.25% PA with monthly rests.

¶128

A Deed of Guarantee was executed by the 1^st and 2^nd Defendants on 10.10.2008 guarantying the repayment of the amount sanctioned to the 1^st defendant. The 4^th Defendant has also executed a Deed of Guarantee dated 11.11.2009 guaranteeing the repayment of the amount sanctioned to the 1^st Defendant. It is submitted that the bank sanctioned Term Loan of Rs.1,05,40,000/- for purchase of earth moving machineries at the rate of interest of 0.75% below BPLR, presently 11.25% PA with monthly rests repayable in 96 monthly installments of Rs.1.68 Lakhs commencing from 31.10.2010.

¶129

To secure the repayment of the amounts due and payable to the Bank in respect of said facility and other monies payable in respect thereof, the Respondent No.1 to 3 executed various documents in favour of the Bank and created securities on 11.11.2009 as follows:

¶130

i) Demand Promissory Note for Rs.1,05,40,000/- at the rate of 0.75% below the Prime Lending Rate, at 11.25% PA as on

¶131

T.A. No. 865 of 2023

¶132

01.04.2026

¶133

¶134

11.11.2009 with monthly rests repayable in 96 monthly instalments of Rs.1.68 Lakh commencing from 31.10.2010 dated 11.11.2009.

¶135

ii) Bearer letter dated 11.11.2009 to repay in 96 monthly instalments of Rs.1.68 Lakh commencing from 31.10.2010.

¶136

iii) Deed of Hypothecation dated 11.11.2009 hypothecating stocks, book debts, plant and machinery.

¶137

iv) Deed of Declaration by guarantors/Defendants 2 & 3 dated 11.11.2009 that none of the Directors are related to any of the senior officers of the bank officials.

¶138

v) Joint and several Deed of Guarantee executed by Defendants 2, 3 & 4 dated 11.11.2009 guaranteeing the repayment of the amount sanctioned in their individual capacity. The copies of said documents executed on 11.11.2009.

¶139

It is submitted that the Bank further sanctioned Term Loan to the 1^st Defendant for Rs.2,75,00,000/- at the rate of interest at 0.75% below BPLR at 11.25% half-yearly repayable in 12 installments of Rs.25,54,000/- commencing from 31.10.2010 for the purpose of capital requirement for AMI Project.

¶140

To secure the repayment of the accounts due and payable to the Bank in respect of the said facility and other monies payable in respect thereof, the Respondent No.1 to 3 executed various documents in favour of the Bank and created securities on 11.11.2009 as mentioned hereunder:

¶141

T.A. No. 865 of 2023

¶142

01.04.2026

¶143

¶144

i) Demand Promissory Note for Rs.2,75,00,000/dated 11.11.2009, 11.25% half-yearly repayable in 12 instalments of Rs.25,54,000/- commencing from 31.10.2010.

¶145

ii) Bearer letter dated 11.11.2009 to repay in 12 instalments of Rs.25,54,000/- commencing from Oct 2010.

¶146

iii) Term Loan Agreement dated 11.11.2009 agreeing to exclusively use the advances for the purpose it is sanctioned and that the advances shall be repaid as per the agreed instalments and to secure the repayment by extension of equitable mortgage of the property of the 2^nd Defendant already deposited on 23.11.2007.

¶147

iv) Deed of Declaration by guarantors/Defendants 2 & 3 dated 11.11.2009 that none of the Directors are related to any of the senior officers of the bank officials.

¶148

v) Joint and several Deed of Guarantee executed by Defendants 2, 3 & 4 dated 11.11.2009 guaranteeing the repayment of the amount sanctioned in their individual capacity.

¶149

It is submitted that on 10.12.2010, the defendant No.2 in his individual capacity as guarantor and in his capacity as the Director of the 1^st Defendant secured the repayment of the entire outstanding amount in the above said loan accounts at all material times, extended the mortgage of the immovable properties owned by him which was already deposited on 23.11.2007 which are more fully described in Schedule-B as Item No.8 by deposit of title deeds with the said Bank.

¶150

That on 10.12.2010, the defendant No.4 as guarantor and in his

¶151

T.A. No. 865 of 2023

¶152

01.04.2026

¶153

¶154

capacity as mortgagor secured the repayment of the entire outstanding amount in the above said loan accounts at all material times, extended the mortgage of the immovable properties owned by him which was already deposited on 11.11.2009 which are more fully described in Schedule-B as Item No.7 by deposit of title deeds with the said Bank.

¶155

In the year 2011, the Bank sanctioned a Term Loan to the 1^st Defendant for Rs.2,86,00,000/- at the rate of interest of 14.25%, repayable in 17 equated half-yearly installments of Rs.27.11 Lakh from 30.05.2012 for the purpose of purchase of machineries and equipments.

¶156

To secure the repayment of the amounts due and payable to the Bank in respect of said facility and other monies payable in respect thereof, the Respondent No.1 to 3 executed various documents in favour of the said Bank and created securities on 11.01.2011 as follows:

¶157

i) Demand Promissory Note for Rs.2,86,00,000/- dated 11.01.2011 at the rate of interest of 14.25%, repayable in 17 equated half-yearly instalments of Rs.27.11 Lakh from 30.05.2012.

¶158

ii) Bearer letter dated 11.01.2011 to repay in 17 equated half-yearly instalments of Rs.27.11 Lakh from 30.05.2012.

¶159

iii) Hypothecation loan agreement dated 11.01.2011 hypothecating stocks, book debts, plant and machinery.

¶160

iv) Declaration by Defendants 2 & 3 dated 11.01.2011.

¶161

v) Joint and several Deed of Guarantee executed by Defendants 2, 3 & 4 dated 11.01.2011 guaranteeing the repayment of the amount sanctioned in their individual capacity.

¶162

T.A. No. 865 of 2023

¶163

01.04.2026

¶164

¶165

The Defendants 1 to 4 have further executed Deed of Security Undertaking and Acknowledgment of debt for Rs.3,39,25,000/- availed on 30.10.2008 vide their letter of acknowledgement dated 29.10.2009.

¶166

The Defendants 1 to 4 have further executed deed of security undertaking and acknowledgment of the debt for Rs.1,87,99,000/- availed on 30.10.2008 vide their letter of acknowledgement dated 11.01.2011.

¶167

It is submitted that in the year 2012, the Bank sanctioned a Temporary Overdraft facility for Rs.4,00,000/- at the rate of interest of 19% p.a. to the 1^st defendant in meeting the suppliers payment for a period of 30 days upto 10.05.2012.

¶168

To secure the repayment of the amounts due and payable to the Bank in respect of said facility and other monies payable in respect thereof, the Respondent No.1 to 3 executed various documents in favour

¶169

of the Bank and created securities on 11.04.2012 as mentioned hereunder:

¶170

i) Demand Promissory Note dated 11.04.2012 for Rs.4,00,000/- at 19% p.a. for a period of 30 days upto 10.05.2012.

¶171

ii) Bearer letter dated 11.04.2012. Joint and several Deed of Guarantee executed by Defendants No.2 dated 11.04.2012 guaranteeing the repayment of the amount sanctioned in his individual capacity.

¶172

iii) Request for TOD dated 11.04.2012 by the Defendant No.1.

¶173

The above referred loans were availed by the defendants for

¶174

T.A. No. 865 of 2023

¶175

¶176

01.04.2026

¶177

commercial purpose. The defendants committed defaults in repayment of the said loan/credit facilities as agreed by them. Hence, the applicant is entitled to charge interest at the contractual rate of interest as mentioned above which agreements are also as per the terms of the loan and on Demand Promissory Note and other documents referred to above. The defendants are also liable to pay the future interest at the present rate of interest as per the guidelines of RBI from time to time, from the fate of this application till its realization in full. As per the terms of the loan agreements, the applicant is also entitled to charge and levy additional interest in case of default.

¶178

The defendants also agreed to pay additional interest at such rates as prescribed by the bank subject to the guidelines of the RBI from time to time. The defendants also agreed that the principal amount under the agreements should deem to include also the interests specified herein above calculated and debited to the loan account from time to time cumulatively. Though the 1^st defendant herein was regular in repayment of both the installment moneys and in servicing of interest under the aforesaid financial facilities till June 07, 2012 they started to commit default thereafter. Though the 1^st defendant along with the Defendant No.2 to 4 repeatedly admitted and acknowledged their liability, and promised to discharge the same every now and then, for reasons best known to them only they continued with their default indefinitely. The applicant submits that the defendants herein have become due and liable to pay penal interest calculated at the rate of 2% per month on the sums

¶179

T.A. No. 865 of 2023

¶180

¶181

01.04.2026

¶182

overdue on account of and in consequence to the irregular remittance. The applicant submits that on account of the consistent failure of the 1^st defendant to discharge their admitted liability, they vide their advocate’s letter dated 10.12.2016 recalled the aforesaid financial facilities and called upon the defendants to discharge the same.

¶183

As per the terms of the agreements the applicant has the right to recall the entire facilities in case the Defendants fail to repay the installments on time as stipulated in the terms of Agreements. As the credit facilities was not regularized and repaid by the defendants as per the agreed terms, the applicant recalled all the facilities. Hence the defendants are liable to pay the entire Application claims. The present Original Application (OA) has been filed by the applicant bank for recovery of its dues from the defendants.

¶184

After the filing of the OA, summons were sent to the Defendants 1 and 6 returned with “Left/Unclaimed”, D2 to D4 served, D-5 was reported as dead. Applicant Bank had caused paper publication of the notice in respect of D-1 and D-6 and filed proof thereof. When OA was taken up on 04.04.2018 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1 to 6 were placed ex-parte on 04.04.2018.

¶185

Subsequently, it was observed that applicant bank did not take steps to implead the LRs of deceased 5^th defendant. Applicant bank vide memo dated 16.03.2022 submitted that 6^th defendant is the wife of 5^th defendant, who had already been set ex-parte in the OA. Despite

¶186

T.A. No. 865 of 2023

¶187

¶188

01.04.2026

¶189

attempts, the applicant was unable to trace the legal heirs of the 5^th defendant and therefore applicant may be permitted to proceed against the other defendants. The same was recorded vide proceedings dated 27.04.2022 and OA as against D5 was closed.

¶190

Thereafter, the applicant bank had filed three IAs vide Dy Nos.1460/2022 and 1461/2022 dated 06.06.2022 praying to set aside the order dated 27.04.2022 and to implead the LRs of deceased 5^th defendant and another IA vide Dy. No.7811/2022 dated 09.09.2022 seeking to condone delay of 1621 days in filing application to implead the LRs of deceased D-5. The applicant has not prosecuted the IAs since then before DRT-II and even after transfer of case to this Tribunal, despite appearing before this Tribunal on 24.03.2025, 06.06.2025 and 08.08.2025.

¶191

Heard the submissions of Applicant and perused the records.

¶192

To prove the case of the Applicant Bank, Ms. Anindita Ganguly, Authorized Signatory of the Applicant Bank, has filed her 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-59 .

¶193

A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-59 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 establishing its claim. Applicant filed Statement of Accounts

¶194

T.A. No. 865 of 2023

¶195

¶196

01.04.2026

¶197

duly certified under Bankers’ Book Evidence Act, evidencing the amount claimed against defendants.

¶198

The defendants were set ex-parte on 04.04.2018, 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.

¶199

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:

¶200

: O R D E R :

¶201

46. The OA is allowed with costs,

¶202

(a) The applicant bank is allowed to recovery from the defendants 1 to 4 and 6, jointly and severally for recovery of a total sum of Rs.41,22,75,074/- (Rupees Forty One Crores Twenty Two

¶203

Lakhs Seventy Five Thousand and Seventy Four only) as follows:

¶204

(i) A sum of Rs.8,78,38,020/- due in respect of Cash Credit facility (A/c No.800030110000080), repayable together

¶205

T.A. No. 865 of 2023

¶206

¶207

01.04.2026

¶208

with further interest @13.15% p.a. plus penal interest @2% compounded with monthly rests from the date of filing the OA, till date of realization in full;

¶209

¶210

(iii) A sum of Rs.26,89,47,958/- due in respect of Term Loan Facility (A/c No.800082610000022), repayable together with further interest @ 13.90% p.a. plus penal interest @ 2% with half yearly rests from the date of filing the OA till date of realization in full along with costs of this application. All pending IAs, if any stands closed.

¶211

(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 A mentioned hypothecated assets and Schedule B mentioned immovable properties more fully detailed in the OA.

¶212

¶213

(d) If the sale proceeds of the hypothecated assets and immovable properties are not sufficient to satisfy the dues as ordered above, the applicant bank is at liberty to sell the personal

¶214

T.A. No. 865 of 2023

¶215

¶216

01.04.2026

¶217

assets of the Defendants 2 to 4 & 6 (both movable and immovable) to recover the balance dues as required under law for which the Defendants 2 to 4 & 6 to disclose to the Tribunal particulars of other properties or assets owned by the Defendants 2 to 4 & 6.

¶218

(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.

¶219

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

¶220

(g) Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of the final order.

¶221

A copy of this order be communicated to the parties concerned.

¶222

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

¶223

(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this the 01^st

¶224

day of April, 2026)

¶225

T.A. No. 865 of 2023

01.04.2026

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK :

¶230

AW-1: Ms. Anindita Ganguly, Authorized Signatory of the Applicant Bank.

¶231

Exhibits on the part of the Applicant:

¶232

Sl. No.	Description of Documents	Exhibit No.
1.	Assignment Agreement dated 31.03.2014.	A-1
2.	Board Resolution dated 26.04.2014.	A-2
3.	Demand Promissory Note for Rs.3,39,25,000/- at the rate of 12.75% p.a. with monthly rests dated 23.05.2006.	A-3
4.	Declaration by guarantors that none of the Directors are related to any of the senior officers of the bank officials dated 23.05.2006.	A-4
5.	Undertaking by guarantors dated 23.05.2006.	A-5
6.	Hypothecation cum Loan Agreement of stocks, book debts, plant and machinery dated 23.05.2006.	A-6
7.	Joint and several guarantee signed by the 2^ndand 3^rd defendants in their individual capacity dated 23.05.2006.	A-7
8.	Letter of undertaking by defendants 1 and 2 dated 23.05.2006.	A-8
9.	Tripartite Agreement between 3^rdDefendant as lessor, 1^stdefendant and bank for the land taken on lease by the 1^stdefendant from the 3^rddefendant dated 23.05.2006.	A-9
10.	Letter of undertaking that the 1^stdefendant will increase its paid up capital for Rs.116.62 Lakh as on 31.03.2007 dated 23.05.2006.	A-10
11.	Memorandum of Deposit of title deeds executed by 5^thand 6^thdefendants dated 23.05.2006.	A-11
12.	Memorandum of oral assent dated 23.05.2006.	A-12
13.	Demand Promissory Note for Rs.75,00,000/- with a minimum 14% p.a. with monthly rests dated 30.10.2008.	A-13
14.	Bearer letter to repay instalments of Rs.15.98 Lakh per half yearly commencing from April 2009 dated 30.10.2008.	A-14
15.	Hypothecation cum Loan Agreement hypothecating stocks, book debts, plant and machinery dated 30.10.2008.	A-15
16.	Deed of Guarantee executed by 2^nd, 3^rdand 4^th defendants dated 30.10.2008.	A-16

¶233

T.A. No. 865 of 2023

¶234

¶235

01.04.2026

¶236

17.	Declaration by guarantors/Defendants 2 & 3 that none of the Directors are related to any of the senior officers of the bank officials dated 30.10.2008.	A-17
18.	Deed of Security Undertaking and Letter of Acknowledgement of the debt for Rs.3,39,25,000/- by defendants 1 to 3 dated 23.05.2006.	A-18
19.	Demand Promissory Note for Rs.1,87,99,000/- at the rate of 12.75% p.a. with monthly rests dated 30.10.2008.	A-19
20.	Bearer letter to repay in 17 equated monthly instalments of Rs.15.98 Lakh commencing from April 2009 dated 30.10.2008.	A-20
21.	Term Loan Agreement dated 30.10.2008.	A-21
22.	Joint and several guarantee signed by the 2^ndand 3^rd defendants in their individual capacity dated 30.10.2008.	A-22
23.	Declaration by guarantors/Defendants 2 & 3 dated 30.10.2008.	A-23
24.	Acknowledgment of the debt for Rs.1,87,99,000/- executed by Defendants 1 to 4 dated 29.10.2009.	A-24
25.	Demand Promissory Note for Rs.68,80,000/- at the rate of 11.25% p.a. with half yearly rests dated 11.11.2009.	A-25
26.	Bearer letter to repay in 17 equated half yearly instalments of Rs.6.39 Lakh commencing from 31.10.2010 dated 11.11.2009.	A-26
27.	Hypothecation cum Loan Agreement hypothecating stocks, book debts, plant and machinery dated 11.11.2009.	A-27
28.	Deed of Declaration by Defendant 2 & 3 dated 11.11.2009.	A-28
29.	Term Loan Agreement executed for the loan advanced on 30.04.2008 for a sum of Rs.1,87,99,000/-dated 11.11.2009.	A-29
30.	Joint and several guarantee by Defendant 1, 2, 3 and 4 dated 11.11.2009.	A-30
31.	Deed of Guarantee executed by 4^thdefendant dated 11.11.2009.	A-31
32.	Hypothecation cum loan agreement executed by the 1^stdefendant dated 11.11.2009.	A-32
33.	Deed of Guarantee executed by 4^thdefendant dated 11.11.2009.	A-33
34.	Demand Promissory Note for Rs.1,05,40,000/- at the rate of 0.75% below the Prime Lending Rate, at 11.25% p.a. dated 11.11.2009.	A-34
35.	Bearer letter to repay in 96 monthly instalments of Rs.1.68 Lakh commencing from 31.10.2010 dated	A-35

¶237

T.A. No. 865 of 2023

¶238

¶239

01.04.2026

¶240

	11.11.2009.
36.	Deed of Hypothecation hypothecating stocks, book debts, plant and machinery dated 11.11.2009.	A-36
37.	Deed of Declaration by guarantors/Defendants 2 & 3 that none of the Directors are related to any of the senior officers of the bank officials dated 11.11.2009.	A-37
38.	Joint and several deed of guarantee executed by Defendant 2, 3 and 4 dated 11.11.2009.	A-38
39.	Demand Promissory Note for Rs.2,75,00,000/- at the rate of 11.25% half yearly repayable in 12 instalments of Rs.25,54,000/- commencing from 31.10.2010 dated 11.11.2009.	A-39
40.	Bearer letter to repay in 12 instalments of Rs.25,54,000/- commencing from October 2010 dated 11.11.2009.	A-40
41.	Term Loan Agreement dated 11.11.2009.	A-41
42.	Deed of Declaration by guarantors/Defendants 2 & 3 that none of the Directors are related to any of the senior officers of the bank officials dated 11.11.2009.	A-42
43.	Joint and several deed of guarantee executed by Defendant 2, 3 and 4 guaranteeing the repayment of the amount sanctioned in their individual capacity dated 11.11.2009.	A-43
44.	Memorandum of deposit of title deeds dated 10.12.2010.	A-44
45.	Memorandum of deposit of title deeds dated 10.12.2010.	A-45
46.	Demand Promissory Note for Rs.2,86,00,000/- at the rate of 14.25% repayable in 17 equated half yearly instalments of Rs.27.11 Lakh from 30.05.2012 dated 11.01.2011.	A-46
47.	Bearer letter to repay in 17 equated half early instalments of Rs.27.11 Lakh from 30.05.2012 dated 11.01.2011.	A-47
48.	Hypothecation Loan Agreement hypothecating stocks, book debts, plant and machinery dated 11.01.2011.	A-48
49.	Declaration by Defendant 2 & 3 dated 11.01.2011.	A-49
50.	Joint and several deed of guarantee executed by Defendant 2, 3 and 4 dated 11.01.2011.	A-50
51.	Deed of security undertaking and Acknowledgment of the debt for Rs.3,39,25,000/- by the Defendants 1 to 4 dated 29.10.2009.	A-51
52.	Deed of security undertaking and Acknowledgment of the debt for Rs.1,87,99,000/-executed by the	A-52

¶241

T.A. No. 865 of 2023

¶242

¶243

01.04.2026

¶244

	Defendants 1 to 4 dated 11.01.2011.
53.	Demand Promissory Note for Rs.4,00,000/- at 19% p.a. for a period of 30 days upto 10.05.2012.	A-53
54.	Bearer letter and Joint and several Deed of Guarantee executed by Defendant No.2 guaranteeing the repayment of the amount sanctioned in his individual capacity dated 11.04.2012.	A-54
55.	Request for TOD by the Defendant No.1 dated 11.04.2012.	A-55
56.	Legal Notice issued by the Applicant to the Defendants with Acknowledgement card and returned covers dated 10.12.2016.	A-56
57.	Statement of Accounts by the Bank.	A-57
58.	Banker’s Certificate	A-58
59.	Statement of accounts by the Applicant.	A-59

¶245

Witness Examined for the Defendants: -Nil-

¶246

List of Documents Exhibited for the Defendants: -Nil –

¶247

SCHEDULE-A

¶248

Item No.1

¶249

12 Numbers Double Roller Normal size Platt Brothers Model Gins with Seed Conveyor and other accessories situate at the factory building at 44, Krishnapuram Village, Sakkottai Post, Kumbakonam.

¶250

Item No.2

¶251

All tangible movable assets including in particular stocks of cotton kapas, semi finished and finished stocks of material consisting of cotton lint of all grades, shades, standards and descriptions, and cotton seeds and other agro seeds of all grades, shades, standards and description lying or being at the factory building of the Company at 44, Krishnapuram Village, Kumbakkonam Taluk, and or elsewhere and or elsewhere.

¶252

Item No. 3

¶253

All the present and future book-debts, outstanding, money receivables claims, bills which are now due and owing or which may any time hereafter during the continuance of this security become due and owing to the borrower in the course of its business by any person, firm,

¶254

T.A. No. 865 of 2023

¶255

¶256

01.04.2026

¶257

company or body corporate or by the Central Government or any State Government or any Government Department or office or any Municipal or local or public or semi-governmental body or authority or anybody corporate or undertaking or Project whatsoever.

¶258

SCHEDULE-B

¶259

Item No.1 (Belonging to Mr. R. Sundaravasan, Director)

¶260

Equitable mortgage of Thanjavur District, Kumbakonam Registration District, Kumbakonam Taluk, Nachiyarkoil Sub-Registration District, Sannankulam Hamlet, Krishnapuram Village, R.S.No.64/1, admeasuring A 0.52 Cents and R.S.No.64/2, admeasuring A 0.75 Cents

¶261

Bounded on the

¶262

North by : Saroja's Nanja and Kanni

¶263

South by : Krishnapuram Vaikkal

¶264

East by : Subramanian's Nanja

¶265

West by : 64/1, belonging to Mr. R. Sundaravasan

¶266

Item.No.2:

¶267

Equitable mortgage of Thanjavur District, Kumbakonam Registration District, Kumbakonam Taluk, Nachiyarkol Sub-Registration District, Krishnapuram Village, R.S.No.63/3, Nanja 74 Cents and 63/4 Narija 73 cents, bounded on this

¶268

North by : Kanni

¶269

South by : Subramanian and Sundarvasan's Nanja

¶270

East by : Naganatha Swami Koil Nanja

¶271

West by : T.S.Narayanakumar's Nanja under the cultivation of M. Ganesan

¶272

T.A. No. 865 of 2023

¶273

¶274

01.04.2026

¶275

Item No.4 (Belonging to Mr. G. Rajagopal, Mortgagor)

¶276

i) Nagapatinam Registration District, Mannargudi Sub-Registry, Mannargudi Taluk, 37, Asesham Revenue Village, Mannargudi Town, Ward No.2, Block No.56, T.S.No.3319-1 with an extent of 37462 sq.ft. vacant site.

¶277

ii) Nagapatinam Registration District, Mannargudi Sub-Registry Mannargudi Taluk, 37, Asesham Revenue Village, Mannargudi Town, Ward No.2, Block No.56, T.S.No.3319-2 with an extent of 6534 sq.ft. vacant site.

¶278

iii) Nagapatinam Registration District, Mannargudi Sub-Registry Mannargudi Taluk, 37, Asesham Revenue Village, Mannargudi Town, Ward No.2, Block No.56, T.S.No.3322 with an extent of 15158 sq.ft. vacant site.

¶279

(Total extent of the above items: 59294 sq.ft.)

¶280

bounded on the

¶281

East by : Land belonging to Banumathi

¶282

West by : Panchayat Road, Cremation ground Road

¶283

North by : Land belonging to Kaliyaperumal Thevar

¶284

South by : Land belonging to Pushparaj

¶285

Item No.5: (Belonging to Mr. G. Rajagopal, Mortgagor)

¶286

Nagapatinam Registration District, Mannargudi Sub-Registry Mannargudi Taluk, 37, Asesham Revenue Village, Mannargudi Town, Ward No.2, Block No.52 in T.S.No.3320 with an extent of 10957 sq.ft. vacant site bounded on the

¶287

East by : Land belonging to Rajagopal

¶288

West by : Panchayat Cart Road,

¶289

T.A. No. 865 of 2023

¶290

¶291

01.04.2026

¶292

North by : Land belonging to G. Rajagopal

¶293

South by : Land belonging to G. Rajagopal

¶294

Item No.6 (Belonging to Mr.Vaiduriam, Mortgagor)

¶295

a) Nagapatinam Registration District, Mannargudi Sub-Registry Mannargudi Taluk, 37, Asesham Revenue Village, Mannargudi Town, Municipal limits of Keelathotti Karai, Ward No.2, Patta No.57 in T.S.No.3321 C.M.P. dry entire extent of 60 cents le. 25961 sq.ft. vacant site bounded on the

¶296

East by : Property belong to Kanagavalli Land P.W.D. Chennel

¶297

West by : Property belong to Sivabagyathammal & Chockalingam and others

¶298

North by : Government Voikkal

¶299

South by : Property belong to Sivabagyathammal

¶300

b) Nagapatinam Registration District, Mannargudi Sub-Registry Mannargudi Taluk, 37, Asesham Revenue Village, Mannargudi Town, Municipal limits of Keelathotti Karai, Ward No.2, Patta No.57 in T.S.No.3319 C.M.P. dry entire extent of 42 cents i.e. 18295 sq.ft. vacant site bounded on the

¶301

East by : Property belong to Sivabagyathammal

¶302

West by : Road

¶303

North by : Property belong to Sivabagyathammal

¶304

South by : Patta Kanni.

¶305

Item No.7 (Belonging to Mr.V. Durai, Guarantor)

¶306

All that piece and parcel of land situated at Alakarai Village, Thottiam Vattam, Musiri Taluk, Trichy District bearing Survey No.128/3, measuring 4 Acres and 67 cents out of an extent of 3.78.0 Hecter (equalling 9 Acres and 34 Cents) including pathway right under Patta No.1186 and bounded on the

¶307

T.A. No. 865 of 2023

¶308

¶309

01.04.2026

¶310

North by : Property belonging to Veerappan

¶311

South by : Property belonging to Swaminathan

¶312

East by : Property belonging to Raju

¶313

West by : Main Road

¶314

Item No.8 (Belonging to Mr.R. Swaminathan)

¶315

All that piece and parcel of land situated at Alakaral Village, Thottiam Vattan, Musiri Taluk, Trichy District bearing Survey No.128/3, measuring 4 Acres and 62 cents out of an extent of 3.78.0 Hecter (equaling 9 Acres and 34 Cents) including pathway right under Patta No. 1186 and bounded on the

¶316

North by : Property belonging to V.Durai

¶317

South by : Property belonging to Servaikaran

¶318

East by : Property belonging to Raju

¶319

West by : Main Road

¶320

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

Arc v. Ssgm Industries Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Arc v. Ssgm Industries Pvt. Ltd.

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

Similar cases

State Bank of India versus Thirupathi Balaji Tiles Rep By Mrs N Selvi And Two Others

bhavani versus Indian Overseas Bank

Axis Bank versus M/S Hyagreeva Lines Pvt. Ltd.

Canara Bank versus R

Charles Rajakumar versus State Bank of India

D v K Rathinamma versus Indian Overseas Bank