Allowed

Cadyche Automation and Office Solution Pvt. Ltd. v. Canara Bank

DRAT17 Sept 2025TRANSFER PETITION/10/2025

Case brief

AI extract

What is this about?

This transfer petition sought to move a Securitisation Application from DRT-II, Bengaluru to DRT-I, Chennai. The Tribunal held that the jurisdiction notification applies to both Original and Securitisation applications and ordered the transfer to consolidate proceedings involving the same debt exceeding Rs. 100 Crores.

What did the court decide?

The transfer petition was allowed; the case records were directed to be sent from DRT-II, Bengaluru to DRT-I, Chennai for joint hearing.

Cadyche Automation and Office Solution Pvt. Ltd. versus… — Company and Corporate | DRAT (2025)

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 17^th of September, 2025

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PRESENT: Hon’ble Mr. Justice G. Chandrasekharan CHAIRPERSON

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T.P:10/2025

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[TSA 4/2025 on the file of DRT-II Bengaluru]

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Between

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M/s Cadryche Automation and Office Solution Pvt. Ltd. Registered under the Provisions of Companies Act, 1956 Having its registered office at: No.32, 1^st Floor, 11^th Main Road, Raghavendra Block, Srinagar, Bengaluru,

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Karnataka 560050

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Represented by its Managing Director,

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Krishnamurthy Kundapur Vishweshwara,

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CIN: U72200KA2013PTC069901

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Mr. Krishnamurthy V. K. Udupa, S/o Mr Vishweshwara Udupa, No. 57, Shop Street, NR Colony,

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Bassvanagudi, Bengaluru-560004

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Mrs. Jyothi Krishna Murthy, W/o Mr T.G. Krishnamurthy, Rep. by their POA Mr Krishnamurthy V Udupa, No. 57, Shop Street, NR Colony, Basavanagudi, Bengaluru-560004

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Mrs. Raksha K Udupa, W/o Mr Krishnamurthy Udupa, Aged about 45 years, No. 57, Shop Street, NR Colony, Basavanagudi, Bengaluru-560004

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Ms Indira V. Raj, No. 57, Shop Street, NR Colony, Basavanagudi, Bengaluru-560004

…Applicants

And

1.	Canara Bank,
	Special Mid Corporate Branch, Basavanagudi, No. 69, 9^thMain Road, Jayanagar, 3^rdBlock, Bangalore-560011, Represented by its Branch Manager.
2.	The Authorised Officer, Canara Bank, Assets Recovery Management Branch-I, 2^ndBlock, Co. Bldg., No. 86, Spencer Tower, MG Road, Bengaluru-560001 …..Respondents
	Counsel for Applicants : M/s. Gunasri M.P Counsel for Respondent Bank _:_Mr. T. S. Gopalan & Co.

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ORDER

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This Transfer Petition is filed seeking transfer of TSA No.4/2025, pending on the file of DRT-II, Bengaluru, to DRTI, Chennai for being heard along with OA 08/2023, SA 21/2024 and SA 7/2025.

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The case of the Petitioners is that the first Petitioner is

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the company incorporated under Companies Act, 2013, second and third Petitioners are its current Directors and fourth and fifth Petitioners are guarantors to the loan facilities availed by 1^st Petitioner. The Petitioners availed various export credit facilities from the Respondent Bank. The Respondent Bank unilaterally crystallized the export bills before sanction dated on 09.08.2021, Shipping Bill No. 3710034 on 24.05.2022, remaining Shipping Bills not lodged. Thus, converted the Pre shipment Credit in Foreign Currency limits from USD to INR, the Bank claimed outstanding of Rs.108.57 Crores as on 28.02.2023. This came to be known to the Petitioners only on receiving

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Demand Notice on 30.08.2022 under SARFAESI Act, 2002. The Bank already classified the loan as NPA on 26.08.2022 without prior intimation. There is significant discrepancy in the outstanding loan amount claimed and calculation of interest. Respondent No.2 initiated subsequent SARFAESI proceedings by issuing symbolic Possession Notice dated 25.04.2023 and multiple sale notices. Petitioners challenged e-auction Sale Notices through SA 21/2024 and SA 07/2025. First Respondent filed OA 08/2023 before DRT-I, Chennai under RDB Act, 1993 to issue Recovery Certificate for Rs.108,57,97,078.05p and it is pending. Respondent No.2 filed Miscellaneous Petition under Section 14 of the SARFAESI Act, 2002 on 30.08.2023 claiming due as Rs.99,52,02,742/-, without mentioning the due as on the date of filing the Application before Additional Chief Metropolitan Magistrate, Bangalore. They also obtained orders under Section 14 proceedings on the basis of wrong and contradictory statements. Petitioners filed IA 101/2024 in OA 08/2023 seeking production of certain documents. They also filed WP No. 1439/2025 and the Hon’ble High

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Court of Karnataka directed the Bank to furnish the documents specified in the prayer. First Respondent filed IA seeking extension of time to provide documents. The Hon’ble High Court passed an order on 08.04.2025, directing the Bank not to take any coercive steps against the Petitioners until they comply with order dated 27.02.2025. Meanwhile, the Respondents are seeking to take physical possession of the property on the basis of order passed by Additional CJM, Bengaluru. Therefore, the Petitioners filed Securitisation Application before DRT-I on the ground that other proceedings relating to the same debt are pending before DRT-I, Chennai. The DRT-I, Chennai vide order dated 23.04.2025 ordered the transfer of SA to DRT-II, Bengaluru and registered there as TSA No. 4/2025.

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It is the submission of Learned Counsel for Petitioners that the Bank filed OA 8/2023 for recovery of its dues in DRT-I, Chennai. Two other SAs in SA 21/2024 and SA 7/2025 are also pending before DRT-I, Chennai in respect of the same debt.

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The Bank deliberately had shown the value of the claim less than Rs.100 Crores and initiated Section 14 proceedings before Learned Additional CJM, Bengaluru. Unless all the matter are decided by one DRT, there is possibility of passing conflicting orders in these matters, therefore, this Transfer Application.

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In reply, Learned Counsel for Respondent Bank submitted that by Notification dated 04.10.2022, Central Government vested the jurisdiction with DRT-I, Chennai regarding the Applications involving debt amount of Rs.100 Crores and above, if otherwise falling under the jurisdiction of DRT-II and DRT-III, Chennai, DRT, Madurai, DRT-I and DRT-II, Bengaluru, DRT-I and DRT-II Ernakulum and DRT, Coimbatore. This Notification is piece of delegated legislation on business of jurisdiction. Demand Notice dated 30.08.2022 was issued claiming a sum of

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Rs.99,52,02,742.22p as on 28.08.2022 together with interest thereon. When the Borrowers failed to comply, sale notice

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was issued in respect of 15 properties for recovery of a sum of Rs.145,80,06,655/-. SA 21/2024 was filed before DRT-II, Bengaluru and later transferred to DRT-I, Chennai. This Application shows the credit facilities had been sanctioned at Canara Bank, Special Mid Corporate Branch, Basavanagudi, Bangalore- 560 011 and disbursed and that securities and immovable properties situate within the State of Karnataka. Demand Notice was issued by the Authorised Officer of the Bank. Under Section 17 of the SARFAESI Act, 2002, Securitisation Application can be filed only before DRT where the cause of action arose or secured assets are located or the Branch Bank maintaining the account is situated. Original Application was rightly filed before DRT-II, Bengaluru. However, it was returned for representation before DRT-I, Chennai on the ground that the debt claimed exceeds Rs.100 Crores.

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On 05.02.2025, sale notice was issued for three

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properties situated in Bengaluru. The Application in SA 7/2025 was filed before DRT-I, Chennai. The case of the

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Bank is that, the two SAs have to be filed only before DRT-II, Bengaluru. The Notification dated 04.10.2022 applies only to the Original Applications (OAs) filed for recovery of debt due of Rs.100 Crores and above, and it will not be applicable to Securitisation Applications. Therefore, he submitted that there is no need to transfer TSA 4/2025 from DRT-II, Bengaluru to DRT-I, Chennai, instead, the matter pending before DRT-I, Chennai can be transferred to DRT-II, Bengaluru.

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Considered the rival submissions and perused the records.

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It is seen from the Notification dated 04.10.2022, issued by the Ministry of Finance (Department of Financial Services) that in exercise of the powers conferred by Section 3 of the RDB Act, 1993, the jurisdiction of DRTs have been notified. As per this Notification all Applications involving debt amount of Rs.100 crores and above, if otherwise falling

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under the jurisdiction of DRT-II and DRT-III, Chennai, DRT,

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Madurai, DRT-I and DRT-II, Bengaluru, DRT-I and DRT-II Ernakulum and DRT, Coimbatore, is vested with DRT-I, Chennai. That is the reason why the Respondents filed OA 8/2023 for recovery of the dues of Rs.100 Crores and above. For the same reason, SA 21/2024 filed before DRT-II, Bengaluru was returned for it being represented before DRTI, Chennai. SA 7/2025 was filed before DRT-I, Chennai. In all these matters, the loan due involved is more than Rs.100 Crores.

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It is the case of the Applicants that in Section 14 proceedings, deliberately the loan due was shown less than Rs. 100 Crores i.e. at Rs.99,52,02,742.22p, without properly calculating the loan due as on the date of Application. If interest is calculated till the date of filing of Application, the loan due would have been more than 100 Crores, and to harass the Applicants, Section 14 proceedings were initiated by showing lesser loan due amount. This contention appears to have merit, especially when the three connected cases involve the debt due of more than Rs.100 Crores.

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With regard to the submission of Learned Counsel for Respondent that the Notification dated 04.10.2022 applies only to Original Applications and not SARFAESI Applications, this Tribunal finds that this claim has to be rejected outright. The aforesaid Notification was issued drawing powers from Section 3 of RDB Act, 1993. Section 17(7) of SARFAESI Act, 2002, requires DRT to dispose of the Application in accordance with the provisions of RDB Act, 1993 and the rules made thereunder. The provisions of RDB Act, 1993 is also made applicable to the SARFAESI proceedings, and if that be the case, the jurisdiction conferred on DRT-I, Chennai, to try the Applications involving debt amount of Rs.100 Crores and above, is perfectly in tune with the scheme of RDB Act, 1993 and SARFAESI Act, 2002 and it covers both Original Applications and SARFAESI Applications.

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There is no dispute with regard to the fact that the loan transactions involving in all these proceedings are the same loan transactions and parties involved in these cases are the

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same parties. When three connected matters are pending before DRT-I, Chennai and one connected matter is pending before DRT-II, Bengaluru, this Tribunal finds merits in the submission of Learned Counsel for Applicants that all the four matters should be decided by DRT-I, Chennai, to avoid passing conflicting orders. Though DRT-I, Chennai is conferred with the jurisdiction to try the Application to decide the debt due of Rs.100 Crores and above, where the situation like this, in which the connected matter involving less than Rs.100 Crores is pending before DRT-II, Bengaluru, as the Chairperson of Appellate Tribunal, exercising control over the Tribunals under the jurisdiction of DRAT, Chennai,

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this Tribunal has power to transfer, the TSA 4/2025 pending on the file of DRT-II, Bengaluru to DRT-I, Chennai, under Section 17A (2) of RDB Act, 1993.

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This view of mine is fortified by Hon’ble High Court of Delhi, in the case of Paramount Plastic Industries Vs. Corporation Bank and Ors. , reported in 2014 SCC OnLine Del 1763 , wherein it is observed in para 15 that as per

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Section 17A(2) of the DRT Act, the Chairperson of the DRAT has power to transfer any case from one Tribunal to another Tribunal, and in this view of the matter, the transfer made by DRAT Delhi by transferring the case pending before DRT, Jaipur to DRT-II, Delhi was upheld. Thus, this Tribunal, with a view to avoid the conflicting orders with respect to the same loan transactions between the same parties, orders transfer of TSA 4/2025 pending on the file of DRT-II, Bengaluru to DRT-I, Chennai, to be tried along with OA 08/2023, SA 21/2024 and SA 7/2025.

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For the above reasons, DRT-II, Bengaluru, is directed to send the case records relating to TSA 4/2025 to DRT-I, Chennai, within two weeks from the date of receipt of copy of this order. On receipt of records from DRT-II, Bengaluru, Learned Presiding Officer, DRT-I, Chennai, shall take up TSA 4/2025 and after giving opportunity to the parties, shall dispose of the TSA 4/2025 along with other connected Applications, OA 08/2023, SA 21/2024 and SA 7/2025, on

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merits and in accordance with law, as expeditiously as

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possible. It is for the Learned Presiding Officer, DRT-I, Chennai, to decide the three SAs in SA No. 21/2024 and SA No. 7/2025 and TSA No. 4/2025 to hear jointly and dispose

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in a common order or try them separately.

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In the result : Application in T.P:10/2025 is allowed. Both the parties shall bear their own costs. All pending IAs, if any, stand closed.

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[Dictated to Athistamani, PS, in open court, transcribed by her, corrected and signed by me, this 17^th of September, 2025]

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Cadyche Automation and Office Solution Pvt. Ltd. v. Canara Bank

Case brief

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What did the court decide?

Cadyche Automation and Office Solution Pvt. Ltd. v. Canara Bank

Case brief

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