Bank of Baroda Vs R.M. Enterprises (DRT Chennai)
The Original Application was filed on 03.02.2023 before the Debts Recovery Tribunal, Chennai under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993 by the applicant bank against the defendants for recovery of ₹37,80,322.66 along with interest and costs. The amount relates to an overdraft facility granted to the first defendant, an MSME enterprise registered under the Udyam Scheme engaged in the business of trading oil and groceries. The enterprise was represented by its proprietor, the second defendant. The applicant bank stated that the application was filed within the period of limitation prescribed under Section 24 of the Act and that the Tribunal had jurisdiction to entertain the claim.
According to the applicant bank, the first defendant approached the bank seeking working capital facilities for business development. After considering the loan proposal submitted through an application dated 25.11.2021, the bank sanctioned a working capital overdraft limit of ₹35,00,000 under the CGTMSE Scheme on the same date. In connection with the facility, the defendants executed several loan and security documents in favour of the bank. These included a demand promissory note for ₹35,00,000 agreeing to repay the loan with interest at monthly rests as per the bank’s norms, and a composite hypothecation agreement through which the borrower hypothecated stocks in trade, book debts and machinery in favour of the bank.
