Allowed

Canara Bank v. Sreethika Enterprises

DRT22 Nov 2023OA/100/2022

Case brief

AI extract

What is this about?

The Tribunal allowed Canara Bank's Original Application under Section 19 of the SARFAESI Act for recovery of a loan of Rs. 95.52 lakhs plus interest from Sreethika Enterprises, holding that the bank's evidence was sufficient given the defendant failed to substantiate allegations of blank signatures.

What did the court decide?

Defendant liable to pay Rs. 95,52,490.62 plus future interest; OA schedule assets and property are available for recovery; costs allowed.

Canara Bank versus Sreethika Enterprises — Insolvency and Bankruptcy | DRT (2023)

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IN THE DEBTS RECOVERY TRIBUNAL-II AT HYDEMBAD

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DATED THIS THE 22ND DAY OF NOVEMBER, 2023

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PRESENT: SH. RAMESHWAR KOTHE, B.Com, L.LB, (Hons.), M.A. PRESIDING OFFICER

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ORIGINAL APPLICATION No. 1OO OF 2022

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Canara Bank Balanagar Branch lK Complex, 1't Floor, Main Road, Bala nagar, Hydera bad - 50003 7 Rep. by its GPA Holder.

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....Applica nt.

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Versus

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Sreethika Enterprises Rep by its Proprietrix Mrs. Racha Vepula Sreethika Wo R.V. Surender Kumar Age: about 36 yrs, Occ:Business Flat No. 402, Lumbini Enclave Beside Urvasi Bar Opp: NIMS, Punjagutta, Hyderabad-500082

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Also at: H. No. 7-46, Kindi Basti, Yarpral, Near Community Hall, Alwal, Secunderabad-500087 ...... Defendant.

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Counsel for the Applicant : Ms. Sangeeta Jalswal. Counsel for Defendant : Mr. V. Sethu Madhava Rao.

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ORDER

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The Applicant Bank Rled the present OA filed u/s 19 of the Recovery of the Debts Due to Banks an0 Financial Institutions [*r'

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oA.rool2022

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Act, 1993, for recovery^{of a sum of Rs.95,52,490.62psfrom the} defendant wlth future^{[email protected]/0plus 27o penal interest} p.a. with monthly rests frcm 25.07.?022^{till the date of} realisation along with costs^{and saleof OA scheduleassets.}

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The averments of applicant^{bank as per the OA, briefly, are that} defendant availed term loan of^{Rs.1,00,00,000/-vide sanction} letter dated 31.72.2020 for^{purchaseof moulds for minerals} (concrete) HS Code 848060000^{(form worksystems). The loan} was to be repayable in^{EMisRs'1,23,456/-for 80 monthsand} Rs.1,23,520/- for final 1 month^{at interest rate @9.90%p.a} compounded monthly.^{By August2021, the businessactivlties} of the defendant^{was closedand the hypothecatedassets were} not found. The account^{was classified as NPA ON 77.01.2022,} followed by legal notice^{dated 27.01-2022Defendant hasnot} liquidated the outstanding dues.^{Hence this Application.}

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Defendant fited written statement.^{The avermentsof defendant} as per the written statement,^{in brief, are that the applicant} bank got signatures of^{defendant on blank printeddocuments} at the time of sanctioning the^{loan. There is everyreason to} believe that the blank^{documents were made use of by the} applicant to suit their^{requlrements in the OA. The Affidavit and} Vakalatnama filed in the oA have^{not beenattestedby the} Advocate. The applicant bank^{failed torestructure and} convertlng into FITL as^{per RBl/Ministry} of^{Finance guidelines.} The^payments made by the defendant are^{not shownin the} statement of account. It is incorrect to^{state that the business} activities were closed and the^{hypothecatedassetswere found} missing and contrary to the^{lnformation furnishedin Para3 of} rily*p

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u7'v

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oA.7OO/2022

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the OA. Due to stoppage of activities during Covid.19, the machinery was lying idle and because of its exposure to the open air it became scrap. The applicant claimed exorbitant rate of interest contrary to the terms and conditions of the loan agreement. With these submissions, defendant prayed for dismissal of OA.

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The Applicant Bank examined T. Gaikwad, Manager of the Applicant, as AW-1 and marked 11 documents through him as Ex. A.1 to Ex. A.11.

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Defendant's right of evidence is forfeited vide docket order dated 01.11.2023.

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Heard learned counsel appearing for the applicant. Learned counsel appearing for the defendant reported that Written Statement filed by him may be treated as arguments. Perused the material placed on record.

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According to learned counsel for the applicant the defendant committed default in repayment of loan as per agreed terms. The defendant neither produced any documentary evidence to rebut the OA claim nor chose to cross examine the AW.1 to prove the contentions raised in the written statement. Hence the OA may be allowed on the basis of the recitals in the Exs. 4.1 to A.11.

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The point that arises for consideration is:-

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Whether the Applicant Bank is entitled for the claim made in the OA against

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oA.1oo/2022

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the Defendant^{and OA schedule} property?

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It is an admitted^{fact that defendantavailed loan from the} applicant bank.^{The contentions raised by the defendantin the} written statement are^{validity of amdavit/vakalatnamafiled in} the oA, obtaining^{signatures of defendanton blank printed loan} documents, extending^{the benefit of restructuring of loan as per} RBI^guldelines and^{charging hlgher rate of interest contrary to} agreed terms. Having^{contendedso, defendantneither} produced any documents in support of^{its contentions nor cross} examined the^{AW.1 to substantiate contentions over the validity} of documents, rate of^{interest etc. Under suchcircumstances,} the documents^relied on^{by the applicant bank along withthe} recitals mentioned therein^{clinches the OA claim in favour of the} applicant bank and^{againstthe defendant. Accordingly,I hold} that the defendant^{is liable to pay the OA claim to the applicant} along with^{interest and costs thereon.}

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In the result, the^{present Original Application No'100/2022is} allowed as under:^-

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i) The defendant is liable to^pay to^the Applicant Bank a sum of^{Rs.95,52,490.62ps} with future interest @9.90o/o^{p.a. simple from} the date of application tlll^{the date of} realization;

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ii) the OA claim is secured by way^of hypothecation of OA schedule assets and the fi**

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oA.7OO|2022

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applicant bank is entitled to proceed against the same for recovery of its dues;

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iii) the applicant bank is entitled to proceed against the person and properties of the defendant for realization of its dues; and

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iv) the applicant bank is entitled for the costs.

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The Applicant Bank is directed to file Cost Memo within 2 weeks from the date of receipt of this Order.

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Issue Recovery Certifi cate accordingly.

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Communicate a copy of this order to the parties concerned. (Dictated to the steno, siSned and pronounced by me in the open court on this the 22'd day of November, 2023). .A

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//X'n'".-1il\ / 1,/^''c,r'"-

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ffilresnwan^xorne; PRESIDING OFFICER

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Canara Bank v. Sreethika Enterprises

Case brief

What is this about?

What did the court decide?

Canara Bank v. Sreethika Enterprises

Case brief

What is this about?

What did the court decide?

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