Allowed

State Bank of India v. M/S Artcrafts

DRT8 Jul 2026TA/924/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the applicant bank’s original application for recovery of dues totaling Rs. 54,91,773/- plus future interest and costs against M/s Artcrafts and proprietor Mr. Radha Madhab Sahoo, who were set ex-parte for non-appearance. The court found the bank proved its claim via sworn affidavit and documentary evidence.

What did the court decide?

Recovery of total sum of Rs.54,91,773/- due in respect of Cash Credit facility along with further interest @16.35% p.a. with monthly rests from the date of Application till date of realization in full

State Bank of India versus M/S Artcrafts — Contract and Commercial Disputes | DRT (2026)

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T.A. No.924 of 2023

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08.07.2026

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 08^th day of July, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No.924 of 2023

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(Originally filed before DRT- II, Chennai as OA No.38 of 2020 and thereafter transferred to this Tribunal and renumbered as TA No.924 of 2023)

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State Bank of India, SME Centre, Ekkattuthangal, No.5, Jawaharlal Nehru road, Ekkattuthangal, Chennai- 600 032 Rep by its Chief Manager …Applicant

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-Vs-

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M/s Artcrafts,

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Rep by its Proprietor Mr. Radha Madhab Sahoo,

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Old No.13, New No.28, Lake View Street, Taramani, Chennai - 600 113,

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Also at

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M/s Artcrafts, Rep by its Proprietor Mr. Radha Madhab Sahoo, No.5/5 6, Ramnagar North Ext, 9^th Street, Madipakkam, Chennai - 600 091

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Mr. Radha Madhab Sahoo Proprietor M/s Artcrafts, C/o Laxmikanta Sahoo, Kuansh Bhadrak, Odisha- 756 100 ….Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. Nattarajan Gopinath

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Defendants 1 and 2 were set ex-parte on 22.03.2022

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: - FINAL ORDER- :

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This original application is filed on 16.12.2019 by the applicant bank

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T.A. No.924 of 2023

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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 Defendants 1 and 2, for recovery of a total sum of Rs.54,91,773/- (Rupees Fifty Four Lakhs Ninety One Thousand

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Seven Hundred and Seventy Three only) due in respect of Cash Credit facility (A/c No.67251585111) repayable together with further interest @16.35% p.a. with monthly rests 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.38 of 2020, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 04.10.2022, OA No. 38 of 2020 stood transferred to this Tribunal and renumbered as TA No.924 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 defendants originally approached the applicant bank during the year 2007 seeking Cash Credit facilities for their Working Capital requirement. The above facility was renewed and enhanced from time to time.

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It is submitted by the applicant bank that the defendants herein on

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T.A. No.924 of 2023

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31.12.2012 approached and after thorough scrutiny of the application submitted by the defendants herein, the applicant bank on 31.12.2012 sanctioned the Cash Credit (Hypothecation of stocks and building materials) loan vide A/c No. 67251585111. The repayment of the advances are secured by hypothecation of stocks of building materials which was purchased out of loan amount in favour of the applicant bank.

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The applicant bank submits that the defendants have executed the following documents in favour of the applicant bank, thereby acknowledging the said loan amount availed from the applicant bank. The defendants undertook to repay the loan amount in time without committing any default. In consideration of the Cash Credit limit facility, the defendants executed the following documents in favour of the applicant bank:

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i. Arrangement Letter dated 28.02.2018

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ii. Agreement of Loan–cum-Hypothecation dated 28.02.2018

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iii. Supplemental Agreement of Loan cum Hypothecation dated 28.02.2018

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It is submitted that the defendants have undertaken to repay the loan amount together with interest as per the terms and conditions of the sanction and loan agreement dated 28.02.2018. The defendants have agreed to pay interest at @11.75% p.a. (presently @12.35% p.a.) at the bank’s ruling rate prevailing from time to time with monthly rests and also agreed to repay the amount borrowed on demand the above facility is for 12 months and may be reviewed, renewed, enchased or cancelled subject

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to performance of the defendant’s unit.

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The defendants agreed to repay the amount borrowed towards the repayment of principal and interest. However, subsequent to availing of loan, the defendants herein have become chronic defaulters in repayment of the Cash credit (Hypothecation of stocks of building materials) loan to the applicant bank. As the defendants failed to pay the interest and principal due under the loan account, consequently it has become Non Performing asset (NPA) on 28.05.2019 in the books of the applicant bank.

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The applicant bank submits that they have repeatedly requested the defendants to regularize the Cash credit (Hypothecation of stocks of Building materials) loan account but defendants did not bother to regularize the loan account or repay the loan outstanding amount. The defendants have been enjoying the cash credit (Hypothecation of stocks of building materials) loan from 2012. The defendants have not shown significant transaction to the utmost satisfaction of the applicant bank. The Legal 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 were 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. Although defendants entered appearance through their counsel and filed vakalat, did not choose to file written statement despite availing two adjournments. When OA was taken up on 22.03.2022 even after giving sufficient time, there was no appearance or representation from the defendants. Hence, Defendants 1

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T.A. No.924 of 2023

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and 2 were placed ex-parte on 22.03.2022.

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Heard the submissions of Applicant Bank and perused the

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records.

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To prove the case of the Applicant Bank, Mr. S. Ashok Kumar, City Case Officer of the Applicant Bank, has filed his Affidavit by way of evidence and same was considered as evidence of AW-1 and list of documents came to be marked as Ex A-1 to A-11.

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A careful examination of the pleadings in the Proof Affidavit and documents Exhibits A-1 to A-11 evidence that the borrowal of credit facilities and execution of loan and security documents are true, in terms of averments made in Original Application as well as Proof Affidavit filed by applicant bank establishing its claim. Applicant bank filed Statement of Accounts duly certified under Bankers’ Book Evidence Act, evidencing the amount claimed against defendants.

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The defendants were set ex-parte on 22.03.2022, but till this day they did not take any action to set aside the ex-parte order and did not choose to contest the claim. Further, a careful scrutiny of records makes it clear that present application is filed well within limitation and this Tribunal possesses necessary and proper jurisdiction to entertain and adjudicate the claim. No oral or documentary evidence on the side of defendants are produced or filed to dispute the claim of applicant bank. Hence, it can be concluded that applicant bank has proved its claim against defendants.

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T.A. No.924 of 2023

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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 Defendants 1 and 2, for recovery of a total sum of Rs.54,91,773/- (Rupees Fifty Four Lakhs Ninety One Thousand Seven Hundred and Seventy Three only) due in respect of Cash Credit facility (A/c No.67251585111) repayable together with further interest @16.35% p.a. with monthly rests from the date of Application till the date of realization in full, along with costs of this application. (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) If the sale proceeds of the hypothecated assets are not sufficient to satisfy the dues as ordered above, 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

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Defendant.

(e) The applicant bank shall file the latest memo of calculation of

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

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(g) 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)

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PRESIDING OFFICER, DRT-III, CHENNAI

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(Dictated to Roshnee, transcribed by her, corrected, signed and pronounced by me on this the 08^th day of July, 2026)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Mr.S.Ashok Kumar, City Case Officer of the Applicant Bank

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T.A. No.924 of 2023

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Exhibits on the part of the Applicant:

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Sl. No.	Date	Description of Documents	Exhibit No.
1.	12.01.2018	Application form	A-1
2.	21.02.2018	Sanction letter	A-2
3.	28.02.2018	Arrangement letter	A-3
4.	28.02.2018	Agreement of loan cum hypothecation	A-4
5.	28.02.2018	Supplemental agreement of loan cum hypothecation	A-5
6.	26.06.2019	Legal notice	A-6
7.	29.06.2019	Returned cover	A-7
8.	26.09.2019	Legal notice	A-8
9.	10.10.2019	Postal track record (Door locked)	A-9
10.	12.10.2019	Postal track record (Refused)	A-10
11.	15.12.2019	Statement of account	A-11

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Witness Examined for the Defendants: -Nil-

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List of Documents Exhibited for the Defendants: -Nil –

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:-SCHEDULE OF HYPOTHECATED PROPERTY-:

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SCHEDULE-A

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Hypothecation of stock of building materials and related goods in favour of the applicant’s branch are lying at the defendants address at Old No.13, New No.28, Lake view street, Taramani, Chennai- 600 113 and at no.5/56, Ramnagar North Extn, 9^th street, Madipakkam, Chennai- 600009 and also at C/o Laxmikanta Sahoo at Kuansh Bhadrak, Odisha - 756 100 above mentioned or in transit or where ever found.

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

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State Bank of India v. M/S Artcrafts

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/S Artcrafts

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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