Allowed

Canara Bank v. Balaraj

DRT18 Dec 2023OA/198/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an Applicant Bank's application for recovery of approximately Rs. 27 lakhs in default interest and principal against a Defendant who failed to repay secured loans, in an ex parte proceeding where no evidence was placed by the Defendant. The order sanctioned the sale of hypothecated properties and issuance of a Recovery Certificate.

What did the court decide?

OA allowed with interest and costs; liberty to sell hypothecated properties; issuance of Recovery Certificate.

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

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IN THE DEBTS^{RECOVERYTRIBUNAL-I, KARNATAKA}

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AT BENGALURU

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Dated this the^{18th dayof Decembet,2023}

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Present: Sri Imtiaz Ali

Presiding officer

oA No.19al2022

BETWEEN:

CANARA BANK

SME Peenya Branch Peenya Industrial^Estate BENGALURU -^{560 O58} Through its Senior^{Branch lvlanager} Mr. K.R. Umesh

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.' APPLICANT

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AND:

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Mr.Balaraj L. S/o Mr. Lakshmaiah^B. Proprietor of M/s^{Balu Enterprises} No.35/55, 1st cross Nagasandra, YeshwanthaPura BENGALURU - 560^O22

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Also At:

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No.6, Basalikatte, Bhadravathi Taluk Aralihalli, Shimoga Karnataka - 577 233.

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.. DEFENDANT

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Counsels on record/aoDeared^lor: Applicant : VS Associates Defendant i Ex Parte

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FINAL ORDER

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The^present OA has^{been filed by the ApplicantBank} under Section 19 of^{the Recoveryof Debts and Bankruptcy}

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oA.No.198/2022

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Act, 1993,^{seeking recovery of money of Rs'27'08'116'29} (Rupees Twenty-seven^{lakhs eight thousandone hundred} sixteen and^{paisetwenty-nine only ) togetherwith costs'} interest,^etc.

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The case^{of the Applicant Bank is that' the defendant} carrying^{businessin the name and styleof M/sBalu Enterprises} as a Proprietary^{concern and he had approachedthe Applicant} Bank for^{various credit facilities such as; 1)Occ(OverdraftCash} Credit^{of RS.3,OO,OOO/-to meet Working Capital requirements of} Defendant^{and 2)Term loan of Rs'22'74'OOO/-towardspurchase} of machineries^{at the totalproject costof Rs 30'32'000/-} '^3)FITL of Rs.2,36,ooo/-^{and 4)AnotherTermLoan of Rs 5'00'000/-'} Accordingly,^{the Applicant Bank has sanctioned the abovesaid} loans in^{favour of the defendant which are as follows:}

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Fresh^{OCC (Overdraft Cash Credit of Rs 3'00'000/-} sanctioned^{on 04.06.2019'}

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2)Term Loan^{to meet Working Capital of R1'22'74'O0O/- on} 04.06.2019.

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Loan^{Facility under Guaranteed EmergencyCredit Line by} way of Working^{Capital TermLoan for a sum of Rs'5'00'000/-} sanctioned^{on 06 07.2O2Ofor the purposeof building up current} asses and/or^{meeting operationalliabilities and /or start the}

OA.No.198/2022

business etc. ,

4)Funded Interest Term Loan of Rs.2,36,000/- sanctioned on 20.03.2021.

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Further, on the letter Dated 23.03.2021 of the Defendant, the Applicant renewed the OCC limit of Rs.3,00,000/- by him towards working capital needs coupled with revived term loan^of Rs.22,74,OOO/-.

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In order to secure the loans, the Defendant has executed various documents such as; Letter dated 14.06.2079^regarding carrying business in the name and style of M/s Baku^Enterprises, Sanction Letter, ash Credit Agreement, Demand Promissory Notes, Deed of Hypothecation regarding Machinery, Undertaking regarding Loans/Advances, Letter regarding^{pre-approvedloan} facility under GECL by way of Working Capital, Undated Letter of Undertaking, Agreement Cum Deed of Hypothecated^Agreement, Letter of Renewal and Letter of Revival, Debtor-Creditor Agreement and Debt Restructuring Agreement etc.

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The Applicant Bank has further submitted that, the Defendant has agreed to repay the above loans with variable rate of interests, as applicable from time to time as^per the directions of the Head Office/Central Office of the Applicant Bank and^penal interest in case of default and keep the accounts regular by

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OA.No.198/2022

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when due^{to the satisfactionof the} paying installments^{as and} in the^{OA bY the APplicant Bank'} Applicant^{Bank, as detailed}

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Further,^{the Applicant submitsthat' the Defendanthas} utillraC^{thc 'Yhcla s'ncticncd} 'mount^{und'r the} 'bcvo saiC facilities^{and after making partpayment} '^{the defendanthas failed} and neglected^{to maintalnand keepthe account regular and in} accordance^{with the terms and conditionscontained in the} sanction^{letters.Further'the Applicant submits that' the} defendant^{has failed and/orneglectedto repaythe aforesaid} financial^{assistancegrantedto him and the Account has become} NPA when^{the loan installments due together withinterest have} notbeenpaidasagreedThereafter'theApplicantBankthrough its Advocate^{issued Noticedaled22'Og '2027 demanding the} Defendant^{to repay the outstandingliabitity' Evenafterissuance} of Demand^{Notice, the Defendanthasneglected to discharge their} contractual^{obligation on Applicant'}

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In the^{light of thesefactors' it is} contended^{bY the} pay a total sum^of Applicant^{Bank that the Defendantis liable to} Rs.27,08,116.29^{(Rupees Twenty-sevenlakhs} eight thousand^one hundred^{sixteen and paise twenty-nineonly )'}

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After filing^{this OA,Summons weresent and served to the}

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OA.No.198/2022

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Defendant through RPAD. When the Defendant was called out, none represented and hence^placed ex^parte.

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To prove the case of the Applicant Bank, its Senior lvanager -Sri K.R. Umesh has filed his affldavit by way of evidence and the same was considered as evidence of AW.1 and marked at Ex.Al and list of documents came to be marked at Ex.A2 and 20 documents came to be marked at Ex.A3 to A22.

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No evldence on behalf of the Defendant.

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Arguments of Learned Counsel for the Plaintiff/ Applicant Bank heard and^perused the records of the case.

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11, Following^points arise for my consideration:

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Whether Plaintiff/Applicant Bank^proves its case as contended in the^{plainvapplication?}

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What Order?

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For the following reasons, I answer the above-referred

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points in the following manner:

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REASONS

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The Senior l4anager of the Applicant Bank came to be examined as AW.1. His affldavit by way of evidence reiterated the facts^pleaded in the^plaint and his affidavit is also corroborated by

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oA.No.198/2022

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theabove-referredEx.A3toA22whichclearlyestablishthecaseof the Applicant^{Bank to allow the present OA' Added to this' the} Defendant has^{remained absent and hence placed ex parte'} Therefore, it^is to^{be construed that the Defendant has admitted} the entire case^{pleaded by the ApplicantBankin the presentOA'}

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Therefore,^{for these reasons,presentOA is to be allowed} with costs as sought^{by the Applicant Bank'}

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ORDER

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Present OA stands allowed^{as prayedfor with interestand} costs.

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In the event^{of failure of the Defendantto pay the said OA} amount, the^{Applicant Bank is at liberty to sell the ScheduleJA"} hypothecated^{propertiesas mentionedin the main application of} the OA in accordance^{with law as sought by the Applicant Bank in} the OA.

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In spite of sale of^{the Schedule-"A"hypothecated properties} as mentioned^{in the main application of the OA, if the OA amount} is not fully realised, then^{the ApplicantBank is at liberty to} proceed against the^person and other^{property of the Defendantas} required under law and^{alsoas advised.}

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Applicant Bank shall file^{latest Memo of Calculationof OA} amount together^{with interest,costs etc., to be paid by Defendant}

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OA.No.798/2022

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duly taking into account the^amount/s, if^{any, paid by the} Defendant and/or amount realised^{by sale of assets, etc., during} the intervening^period after filing^{the OA, to enable the officeto} prepare Recovery Certificate for the amount to be^paid by^the Defendant to the Applicant^Bank.

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Office is directed to^{issue Recovery Ceftificate as soughtby} the Applicant Bank in the^{OA and do the needful as required under} the law forthwith.

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The Office is directed to issue,^{as far as possible, free copy of}

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this order to the^{partiesconcerned.}

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(Oictated ' to the Stenographer, after its transcription^{and necessarycorrections, signed and} pronounced by me in the Open Court on this^{the 18th day of D\ember,2023)}

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Y (hti+ Ali) Presiding Officer DRT-I, Bengaluru

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ANNEXURES Witness Examine AW-1 : Sri K.R. Umesh The Senior Manager of the^Applicant Bank Ex.A-1 : Affidavit of AW-1 Ex.A-2 : List of Docu ments Ex.A-3 to A-22 : 20 documents

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Witness Examined for the^Defendant:

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Nil -

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Nil-

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ii'"o' Ari) Presiding Officer DRT-I, Bengaluru

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Canara Bank v. Balaraj

Case brief

What is this about?

What did the court decide?

Canara Bank v. Balaraj

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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Case details

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