Dismissed

Rbl Bank Limited v. M/s Chamundi Construction

DRAT23 Jun 2025MISC APPEAL/4/2024

Case brief

AI extract

What is this about?

In this appeal, the Debts Recovery Appellate Tribunal dismissed the Bank's challenge to the rejection of an application for a recovery certificate. The Tribunal held that the respondents' objections in pending proceedings precluded the issuance of a certificate as their admission of liability was not unequivocal.

What did the court decide?

The appeal filed by the Appellant Bank was dismissed.

Rbl Bank Limited versus M/s Chamundi Construction — Money Laundering | DRAT (2025)

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA (CAMP AT DRT, HYDERABAD)

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THE HON'BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA CHAIRPERSON

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Regular Appeal No.04 of 2024

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(Arising out of OA No.429 of 2022 in DRT-2, Hyderabad)

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RBL Bank Limited Branch Office at Sy.No.88 Krishna Sapphire, Ground Floor MSR Block, Hi-Tech City Main Road Madhapur, Hyderabad-500081

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…….Appellant

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-Versus-

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M/s Chamundi Constructions A Partnership Firm Having its Princi9pal Office at Flat No.101

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Sri Sai Apartments, Road No.5

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Street No.9, Nehru Nagar

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West Maredpally, Secunderabad Rep by its Partners Mr.M Nageswara Rao and Mrs.Manchala Venkata Ramana

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Also at 10-1-214/A1, A2, Sai Nivas, 3^rd Floor Above State Bank of India, West Maredpally Secunderabad-500026

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Mr. M. Nageswara Rao (Managing Partner and Guarantor) Aged about 60 years S/o Narasimham Manchala Resident of 10-02-28, Plot No.102 Flat No.501 & 502, Akshat Residency West Maredpally, Secunderabad-500026

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Mrs. Manchala Venkata Ramana (Partner and Guarantor) Aged about 52 years W/o Mr.M. Nageswara Rao Resident of 10-02-28, Plot No.102 Flat No.501 & 502, Akshat Residency West Maredpally, Secunderabad-500026

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		………Respondents
Learned Counsel for the Appellant	…	Mr. Pratik Ghosh (through virtual mode)
Learned Counsel for Respondents	…	Mr.Gangishetty Srinivas

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JUDGMENT : 23^RD JUNE, 2025

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The Appellate Tribunal :

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This Appeal has arisen against the order dated 20.12.2023 passed by learned DRT-2, Hyderabad in IA No.467 of 2022 arising out of OA No.429 of 2022 filed by RBL Bank Limited whereby IA No.467 of 2022 for issuance of Recovery Certificate under Section 19(5B) of the RDB Act, 1993 read with Rule 12(5) of the DRT (Procedure) Rules, 1993 was dismissed.

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Heard the learned counsel for the parties and perused the record.

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An OA No.429 of 2022 was filed by the Bank for issuance of Recovery Certificate to an extent of Rs.5,69,44,220.38ps. Pending OA, IA No.467 of 2022 was filed by the Bank alleging that there is an admission of the respondents in the letter dated 04.01.2021 wherein they have admitted their liability to an extent of Rs.5,90,93,873.28ps accordingly, a Certificate as per Section 19(5B) of the RDB Ac, 1993 read with Rule 12(5) of the DRT (Procedure) Rules, 1993 be issued. It was opposed by the learned counsel for the respondent on the ground that the admission was not categorical, there are issues to be adjudicated in the pending OA, there is no unequivocal admission by the respondents admitting the claim of the Bank accordingly, no such Certificate can be issued under the provisions of the law. Learned DRT held that it is a discretionary relief wherein there are issues to be addressed in the OA proceedings which were raised by the respondents in the counter affidavit and reply under Section 13(3A). Accordingly application IA No.467 of 2022 was dismissed.

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Learned counsel for the Appellant Bank submits that there is an admission by the respondents in their letter dated 04.01.2021. Placing reliance upon Section 19(5B) of the RDB Act, 1993 and Rule 12(5) of the DRT (Procedure) Rules, 1993, learned counsel submits that Certificate should have been issued by the learned DRT. There is an admission by the respondents in the opposition filed before the learned DRT, in paragraphs 4, 5, 6 and 12 wherein is no specific denial of the liability of respondents towards Bank. Learned counsel has placed reliance upon the judgments of Hon’ble Apex Court:-

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(i) Rajiv Ghosh vs. Satya Naryan Jaiswal in Special Leave Petition (Civil) No.9975 of 2025 decided on 07.04.2025;

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(ii) Payal Vision Limited vs. Radhika Choudhary reported in (2012) 11 Supreme Court Cases 405; and

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(iii) Hari Steel and General Industries Limited and Another vs. Daljit Singh and Others reported in (2019) 20 Supreme Court Cases 425.

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Per contra, learned counsel for the respondents opposed the prayer and submits that there is no categorical admission by the respondents. Learned counsel has placed reliance upon the reply sent to the bank under

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Section 13(3A) of the SARFAESI Act, 2002. It is further submitted that even in the reply filed before the DRT there was challenge to the claim filed by the Bank. Even in the order of the Hon’ble High Court there was a direction for consideration of the OTS proposal of the respondents which was not duly considered by the Bank.

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Section 19(5B)of the RDB Act, 1993 reads as hereunder:-

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“(5B) Where a defendant makes an admission of the full or part of the amount of debt due to a bank or financial institution, the Tribunal shall order such defendant to pay the amount, to the extent of the admission within a period of thirty days from the date of such order failing which the Tribunal may issue a certificate in accordance with the provisions of sub-section (22) to the extent of the amount of debt due admitted by the defendant.”

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Rule 12(5) of the DRT (Procedure) Rules, 1993 reads as hereunder:-

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“(5) Where a defendant makes an admission of the full or part of the amount of debt due to a bank or financial institution, the Tribunal shall order such defendant to pay the amount, to the extent of the admission, by the applicant within a period of one month from the date of such order failing which the Tribunal may issue a certificate in accordance with section 19 of the Act to the extent of amount of debt due admitted by the defendant.”

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Hon’ble Apex Court categorically held that the relief is discretionary in nature, which discretion should be exercised by the Courts judiciously in accordance with law. Considering the provision of Order 12 Rule 6 CPC, Hon’ble Apex Court held that the provision sufficiently empowers the court trying the suit could deliver the judgment based on the admissions. Whether or not there was an unequivocal and clear admission has to be looked into by the court. Admission should be unequivocal and clear.

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As far as present case is concerned, much reliance is placed on the letter dated 04.01.2021 which was a letter sent to the Bank. But thereafter in the reply to the notice under Section 13(2) of the SARFAESI Act, there are challenges made by the respondents about the claim made by the Bank. Those issues have to be adjudicated by the DRT in OA proceedings. Whether those issues raised by the respondents are sufficiently proved or not could only be ascertained by the DRT in the OA proceedings. Accordingly, the alleged admission could not be accepted as unequivocal. Accordingly I am of the view that learned DRT has rightly dismissed the IA. Appeal lacks merits and liable to be dismissed.

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O R D E R

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Appeal is dismissed.

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Interlocutory Application pending if any, shall stand disposed of.

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Copy of the order be supplied to Appellant Bank and the Respondents and a copy also be forwarded to the concerned DRT and uploaded in the official website.

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File be consigned to Record room.

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Order dictated and pronounced in open Court.

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(Anil Kumar Srivastava,J) Chairperson

Rbl Bank Limited v. M/s Chamundi Construction

Case brief

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Rbl Bank Limited v. M/s Chamundi Construction

Case brief

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