Dismissed

Canara Bank v. Sunil Kumar Agarwal

DRAT19 Sept 2025REGULAR APPEAL/126/2024

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal, Kolkata dismissed an appeal by Canara Bank against a DRT order declaring a respondent not liable. The Tribunal upheld the DRT's finding that the bank failed to prove the respondent's signature on loan documents, relying on an uncontroverted handwriting expert report and the absence of the sanctioning officer.

What did the court decide?

Impugned order of DRT-I Hyderabad dated 21.06.2024 dismissing claim against respondent No.5 is confirmed.

Canara Bank versus Sunil Kumar Agarwal — Banking and Recovery | DRAT (2025)

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Reportable / not reportable

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL - KOLKATA

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HON'BLE Justice Anil Kumar Srivastava, Chairperson REGULAR APPEAL No. 126 of 2024

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(Arising out of O A 735 of 2014 – DRT-I Hyderabad)

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19.09.2025

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The Chief Manager, CANARA BANK, Masab Tank Branch, Hyderabad H.no.10-1-127/A, 1^st floor, Masab Tank Road, Humayun Nagar, Hyderabad, Telangana – 500028 through SAM Branch, Secunderabad, at H. No.1-7-1, TSR Complex, Sardar Patel Road, Secundrabad, Telangana – 500003.

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... Appellant

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--Vs--

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Sunil Kumar Agarwal at H. No.7-1-1087/2, Anil Bhawan, Sanath Nagar, Hyderabad – 500018.

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Ms Tanmayi Industries Ltd., office At Flat No 207, Silver Oaks Complex, Road No 1, Banjara Hills, Opp. Khaja Mansion Hall, Masab Tank, Hyderabad – 500028.

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Aditya Goel Residing at Flat No 501, Jyothi Prahlad Apartments, Plot No 74, Srinagar Colony, Hyderabad – 500034.

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Kavitha Goel Residing at Flat No 501, Jyothi Prahlad Apartments, Plot No 74, Srinagar Colony, Hyderabad – 500034.

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Surender Agarwal Residing at Plot No 33, Flat No 202, Sindhuja Apartments, Srinagar Colony, Hyderabad – 500034.

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M/s Adityaraj Industries Pvt Ltd., office at Flat No 207, Silver Oaks Complex, Road No 1, Banjara Hills, Opp. Khaja Mansion Hall, Masab Tank, Hyderabad – 500028.

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M/s Kunj Metals & Alloys Pvt Ltd office at H No 8-3-965/A/1, Flat No.404, KBR Manicoms Residency, Opp : Food World, MCH Park, Srinagar Colony, Hyderabad- 500073.

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... Respondents

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For Appellant : Ms. Sangeeta Ghosh, ld. Adv.

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For Respondent : Mr. Pronoy Sohibi, ld. Adv. Mr. Mainak Biswas, ld. Adv.

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The Appellate Tribunal

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Instant appeal has arisen against the judgement and order

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dated 21.06.2024 passed by learned DRT-I Hyderabad in O.A.

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735 of 2014 (Canara Bank Vs. M/s. Tanmayi Industries Ltd. & Ors.) dismissing the claim of the applicant bank against defendant no.5, Sunil Agarwal. However, recovery certificate was issued against defendant no. 1 to 4 and 6 and 7 and bank was given opportunity to proceed against as per recovery certificate.

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As per pleadings of the parties, O.A. 735 of 2014 was filed by the appellant bank against the defendants, who are respondents in appeal, for recovery of an amount of Rs.40,70,73,884/- with pendente lite and future interest and

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costs. It is stated that appellant bank sanctioned loan facility to the defendants on 04.12.2007 which was enhanced from time to

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time and necessary documents were duly executed by the defendants. But there was default in repayment of loan amount. Thereafter, legal notice was issued by the bank. O.A. was filed for issuance of recovery certificate.

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Before the learned DRT, proceedings were held exparte

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against defendant no.1 to 4 and 6 and 7. Vide order dated 08.11.2018, O.A. was allowed holding defendants no. 1 to 7 are

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jointly and severally liable to pay the O.A. claim to the appellant

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bank. Feeling aggrieved by the judgement and order defendant

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no.5 namely Sunil Agarwal preferred Writ Petition No. 44276 of 2018 before the Hon’ble High Court of Telangana at Hyderabad. Hon’ble High Court vide order 03.09.2019 remanded the matter to the learned DRT for deciding afresh on merits, as far as defendant no.5 is concerned, after giving opportunity of hearing to the parties.

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Defendant no.5 filed written statement before the learned DRT challenging the action of the bank against him. It was specifically denied that defendant no.5 stood guarantor for the loan sanctioned by the bank in favour of defendant no.1 company. Categorically execution of loan documents was also denied stating that no mortgage was created by defendant no.5 in favour of the bank. It is stated that defendant no.2, namely Aditya Goel, and defendant no. 5, Sunil Agarwal, are known to each other and they agreed to do business in the field of Iron and Steel and started a company namely M/s. Deccan Metllovs Pvt. Ltd. On the request of Defendant no.2, defendant no. 5 had handed over the original title deeds, described in ‘N’ schedule property, for obtaining permission from the concerned

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government departments to convert the land from agricultural to

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industrial for establishing a factory. Later on, some differences arose between them and company was not established, but the title deed was not returned by defendant no.2.

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When defendant no.5 received demand notice dated 30.10.2013 and 12.11.2013 issued by the appellant bank u/s 13(2) of the SARFAESI Act, 2002, he came to know about the loan availed by defendant no.1 company from the bank by creating equitable mortgage of his property. Documents were deposited by defendant no.2, wherein signatures of defendant no.5 are forged and fabricated on the relevant documents. This fact was brought to the notice to the bank vide reply notice dated 23.06.2014. Criminal complaint was also lodged on 16.01.2014

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before the Central Crime Station, Hyderabad against defendant no.2, 3 and 4 and the Chief Manager of the Bank. Defendant no. 5 also filed a suit for injunction against defendant no.1 before the Civil Court in O.S. No. 241 of 2014 wherein interim injunction was granted and said suit is pending. Some documents were executed by defendant no.2 showing that defendant no.5 is one of the Directors of the 1^st defendant company, which were never executed by defendant no.5.

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Learned DRT has formulated two issues for consideration:

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(i) Whether the applicant bank has established its claim as made in the O.A. against the 5^th defendant?

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(ii) To what relief?

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Learned DRT recorded the finding that there are no averments in the O.A. filed by the bank that defendant no.5 stood

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as guarantor for the credit facility granted in favour of defendant

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no.1 company by executing guarantee deed. The original deed

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was not exhibited by the bank. Reliance is placed by the defendant no.5 on the report of handwriting expert of AP Forensic

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Science Laboratories (APFSL) dated 18.03.2014, which was filed

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in a criminal proceeding, wherein it was held that “the person

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who wrote the red enclosed signatures marked S1 to S54 did not

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write the red enclosed signatures marked Q1 to Q41”. It was further held that bank failed to produce concerned officer who

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was actually present at the time of sanctioning the loan and in

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whose presence defendant no.5 signed the documents. Bank did

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not file any handwriting expert report. Concerned handwriting

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expert was also not cross-examined by the bank. Accordingly,

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learned DRT recorded the finding that bank failed to prove that

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defendant no.5 created mortgage of the property or executed the

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documents in favour of the bank. Accordingly, claim of the bank

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against defendant no.5 along with the charge on his property described in schedule ‘N’ of the O.A. was dismissed. However, claim of the bank against defendant no. 1 to 4 and 6 and 7 was

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allowed and bank was allowed to proceed for recovery according to recovery certificate.

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Feeling aggrieved by the impugned judgement and order, appellant bank preferred the appeal.

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I have heard the learned counsel for the bank as well as

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learned counsel for respondent no.1, Sunil Agarwal, and perused

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the records. Other respondents are served, but not represented.

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At the very outset, it is to be observed that as far as O.A. proceedings are concerned, they were allowed against defendant no. 1 to 4 and 6 and 7. As far as issue of liability of defendant no.5 is concerned, learned counsel for the appellant bank would

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submit that learned DRT mis-appreciated the report of the handwriting expert of APFSL in ascertaining as to whether it was submitted in accordance with law or not? It is further submitted

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that APFSL report was relied upon by the learned DRT without considering whether the same was presented by the Handwriting Expert or the Handwriting Expert was made available for cross-

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examination. It was alleged that original report was filed before

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the Civil Court. It is further submitted that report of Handwriting

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Expert is simply an opinion which could not be treated as conclusive proof rather DRT was required to arrive at its own finding individually regarding signatures of defendant no.5 in the loan documents. It is further submitted that neither the original report nor its copies were exhibited before the learned DRT. In the DRT proceeding report was not presented by the handwriting expert nor the expert was made available for cross-examination. Accordingly, learned counsel submits that no opportunity was granted to the appellant bank for controverting the report of the APFSL.

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Per contra, learned counsel for respondent no.1 would submit that the appellant bank failed to produce primary evidence during the hearing of O.A. proceeding. Bank officer who sanctioned the loan or in whose presence defendant no.5 put in his signatures has not been produced. No ground is shown for producing secondary evidence in accordance with law.

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Submission made by the learned counsel for the bank that report filed by handwriting expert of APFSL could not be controverted by the bank, cannot be taken into consideration since opportunity

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was given to the bank for the same, but was not availed by the

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bank.

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Very limited issue is to be decided in this appeal. O.A. was decided exparte against defendant no. 1 to 4 and 6 and 7, which

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was not under challenge and attained finality. As far as defendant no.5 is concerned, categorical statement is made that

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he was not entered into any agreement with the bank. He did not sign or executed the loan documents. His signatures have been forged and criminal complaint also lodged by the defendant no.5 before the competent court. Report of the handwriting expert of APFSL was filed wherein it was opined that disputed signatures allegedly signed by defendant no.5 are not his own signatures.

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APFSL is a government organization. Record shows that

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APFSL report was filed before learned DRT wherein it is specifically opined that signatures which are in dispute did not match with the admitted signatures of defendant no.5. This report was served upon the bank. Opportunity was granted, but

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not availed by the bank to controvert the report of the handwriting expert. A categorical finding is also recorded by the learned DRT to the effect that there are no reasons or ground to

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disbelieve the report of the handwriting export. Further, an

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observation was made by the learned DRT that DRT itself examined the concerned documents as well as signatures and opined an inference on the signatures. Accordingly, report of the handwriting expert was relied upon by the learned DRT. Learned DRT recorded a categorical finding that in the absence of any material on record to controvert the same, I find no reason to disbelieve as far as report of handwriting expert is concerned.

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AW1, Sri Vellanks Chakradhar, was examined on behalf of the bank to prove the execution of the documents. Admittedly, AW1 was not the officer in whose presence documents were executed by defendant no.5 rather he deposed on the basis of documents available. When a categorical denial was made regarding signatures of defendant no.5 on the relevant documents, it was incumbent upon the bank to produce the officer in whose presence the documents were executed by defendant no.5, but concerned officer was not produced.

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At this juncture it should also be very relevant to observe

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that the secured creditor bank despite evidence of the forensic report regarding signature of defendant no.5 did not opt to produce the concerned officer as evidence in whose presence

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allegedly defendant no.5 has put in signature on the documents.

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He could have been the best witness to prove the signatures of

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defendant no.5 and he should also be primary evidence for execution of the documents. Law is settled that evidence should be primary in nature. If primary evidence is not available then secondary evidence can be adduced in accordance with law. But burden lies upon the plaintiff to prove that primary evidence is not available and secondary evidence may be permitted to be adduced in the matter. In the present case, neither primary evidence is produced nor any ground is shown or proved as to why primary evidence is not produced. The issue attains importance when the handwriting expert has submitted a categorical report that documents of the secured creditor did not

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bear signature of defendant no.5, whose evidence was not rebutted by the secured creditor bank. Accordingly, I do not find any illegality or perversity in the findings of the learned DRT wherein it was held that the secured creditor failed to prove that defendant no.5 has executed and signed the documents and submitted the documents with intention to create equitable mortgage. Hence, defendant no.5 cannot be held liable as a

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Secured

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mortgager for non-payment of loan by borrower.

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creditor bank has no charge over the property of defendant no.5.

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Defendant no.5 was produced as witness in the witness box,

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but curious enough, for the reasons best known to the secured creditor bank, they did not choose to cross-examine defendant no.5. Accordingly, statement of defendant no.5 remains

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uncontroverted. An uncontroverted statement of a witness is admissible as evidence as it is made. It is the duty of the opposite party to cross-examine the witness to elicit some favourable statement, but if the secured creditor bank did not choose to cross-examine the witness, the witness statement, as it is made by defendant no.5, remains uncontroverted and cannot be disbelieved. In such circumstances, when a categorical denial of the signatures on the documents and its execution was made by defendant no.5 and the same was not challenged by crossexamining the witness, then the statement is admissible as evidence and it is proved that the documents were neither executed nor signed by defendant no.5.

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Learned DRT has rightly arrived at a conclusion that secured

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creditor bank failed to prove the case against the defendant no.5.

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I do not find any illegality or perversity in the impugned

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judgement and order. Accordingly, appeal is liable to be

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dismissed.

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Appeal is dismissed. Impugned order dated 21.06.2024

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passed by learned DRT-I Hyderabad is confirmed. Costs easy.

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File be consigned to record room.

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Copy of the judgement/Final Order be uploaded in the Tribunal’s website.

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Order dictated, signed and pronounced by me in the open Court on this the 19^th day of September, 2025.

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(Anil Kumar Srivastava, J) Chairperson

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Dated : 19.09.2025 /pkb

Canara Bank v. Sunil Kumar Agarwal

Case brief

What is this about?

What did the court decide?

Canara Bank v. Sunil Kumar Agarwal

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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