Allowed

Canara Bank v. Mr Narayana Reddy M

DRT19 Jun 2025OA/1051/2023

Case brief

AI extract

What is this about?

Canara Bank filed an Original Application under RDB Act for a recovery certificate against borrowers and a corporate guarantor due to loan defaults. The defendants did not appear. The Tribunal found the evidence uncontroverted and allowed the OA, issuing a recovery certificate for the principal, interest, and costs, permitting recovery from the defendants and schedule properties.

What did the court decide?

Recovery Certificate granted for Rs. 3,63,41,515.50 plus further interest at 10.75% p.a. from the date of filing till realization, covering principal, interest, and petition costs.

Canara Bank versus Mr Narayana Reddy M — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL II, BENGALURU

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Dated this 19^th Day of June, 2025

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Present: Sri. T. RAJESH Presiding Officer OA.No.1051/2023

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BETWEEN:

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Canara Bank

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Asset Recovery Management Branch-1, Spence Tower, 86 MG Road, Bangalore-560001

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…APPLICANT

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AND:

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Sri. Narayana Reddy M S/o. Muni Reddy R/at Sy.No.192/1, Munireddy Industrial Estate, III Phase Hosur Main Road, Bommasandra Industrial Area, Bommasandra Attibele Hobli, Anekal Taluk, Bangalore-560099

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Sri. Satisha N S/o. Narayana Reddy R/at Sy.No.192/1, Munireddy Industrial Estate, III Phase Hosur Main Road, Bommasandra Industrial Area, Bommasandra Attibele Hobli, Anekal Taluk, Bangalore-560099

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Adithya Auto Engineering PVT Ltd. A company incorporated under the Companies Act, 1956 Having its registered Office at Sy.No.192/1,

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OA 1051/2023

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Munireddy Industrial Area Near Gokuldas, III Phase, Bommasandra Industrial Area, Bommasandra Attibele Hobli, Bangalore ...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : VS Associates Defendants : Exparte

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FINAL ORDER

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The present Original Application in short (OA) has been filed under section 19 of Recovery of Debts and Bankruptcy Act 1993 seeking issuance of Recovery Certificate for Rs.3,63,41,515.50(Rupees three crore sixty three lakhs forty one thousand five hundred fifteen and paisa fifty only) with further interest thereon from the date of filing the Application till realization from the Defendants.

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It is the case of the applicant that the defendant No.1 & 2 are borrowers and Defendant No.3 is the corporate guarantor firm. Further, Defendant Nos.1 & 2 availed the Term Loan credit facilities of Rs.5,00,00,000/-(Rupees five crores only) from the applicant bank.

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It is also the case of the applicant that, in view of the above

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OA 1051/2023

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amount financed, the defendants executed necessary loan documents along with Term loan agreement, memorandum of deposit, affidavit cum undertaking and title deed in favor of the applicant bank.

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It is further contended that, the defendants despite availing the credit facility, agreeing to service the loan account promptly and regularly, failed in complying the same, resulting in defaults in repayment and consequentially turning the loan accounts as NPA.

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In the above circumstances, the applicant approached this Tribunal by filing this OA seeking issuance of Recovery Certificate for the amount due in the account.

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Despite, service of summons on the defendant, he failed to appear, resulting the defendants being set exparte on 08.01.2024.

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The applicant had let in evidence through AW-1, who filed Proof Affidavit reiterating the contentions taken in the OA and also produced Exhibits A-3 to A-10 and got the same marked in evidence.

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Heard the Ld. Counsel for the Applicant and considered

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OA 1051/2023

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the contentions as taken in the OA in the light of documentary evidence and the proof affidavit.

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The following issues arise for consideration in this matter:

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i) Whether the applicant had succeeded in proving the OA claim as against the defendants?

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ii) What order are to be passed?

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Both these issues are gone into and decided together.

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The case put forth by the applicant in the Application remains unrebutted as defendants remained exparte. The evidence tendered by the applicant remains uncontroverted and undisputed. The evidences put forth by the applicant were found admissible and are sufficient to prove availment of credit facilities as stated in the OA, creation of mortgage as claimed by the applicant bank and the defaults committed in the accounts. The liability of the defendants and the claim as the amount due is also proved by the above documents. The claim of the applicant is well within the limitation.

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Hence in view of the finding arrived herein above, this

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OA 1051/2023

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Tribunal find both these issues in favour of applicant and hence

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this Tribunal is of the view that OA is liable to be allowed.

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12. Taking into consideration the facts that the credit facilities

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are availed by defendants for Term loan, this Tribunal in view of the rate of interest as claimed need not be reduced. However, as the OA claim is arrived at by calculating interest at the agreed rate and also by applying default interest, the prayer for monthly rest and future penal interest are declined.

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13. In the result, OA.No.1051/2023, stands allowed,

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i) The applicant is allowed to recovery an aggregate

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sum of Rs.3,63,41,515.50/- (Rupees three crore sixty three

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lakhs forty one thousand five hundred fifteen and paisa fifty only) with further interest @ 10.75% p.a. (Simple)

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from the date of filing OA till the realization, from the defendants 1 and 2 personally and also from 3^rd defendant after giving credit

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to all the amount recovered and received during the pendency

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of the OA and allowed the same to be recovered by proceedings

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against the schedule property. Properties schedule to the OA be the schedule to the recovery certificate.

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OA 1051/2023

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(ii) If the sale proceeds are not sufficient, the defendant

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personally and the other assets of all the defendants are liable

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to be proceeded against for the balance amount.

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iii) The applicant bank is allowed cost of the proceedings

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which applicant to file cost memo within 7 days from the date of

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receipt of the order.

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iv) The Recovery Certificate to be drawn in terms of this

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order and transferred to Recovery for execution.

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v) Interim application pending, if any, stands disposed of

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in terms of this final order.

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Communicate a copy of the order to the parties concerned

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in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

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[Dictated to the Stenographer (JV), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 19^th day of June, 2025].

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Sd/ (T. RAJESH)

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PRESIDING OFFICER

OA 1051/2023

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Smt. Y Remija, Senior Manager, of Applicant Bank.

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Exhibits on the part of the Applicant:

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Exhibit Nos.	Date	Particulars of Documents
A1	--	Applicant Evidence
A2	--	List of Documents.
A3	17.03.2017 27.03.2017	Loan application and Sanction letter
A4	28.03.2017	Term Loan Agreement
A5	28.03.2017	Memorandum of deposit of title deeds
A6	28.03.2017	Affidavit cum undertaking
A7	22.03.2017	Lease agreement
A8	28.03.2017	Tripartite Agreement
A9	31.08.2021	Demand notice
A10		True Extract of statement of accounts pertaining to the defendant’s loan account No.2408606000007

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Witness Examined for the Defendant: -Nil - List of Documents Exhibited for the Defendant: -Nil -

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Sd/ (T. RAJESH) PRESIDING OFFICER

Canara Bank v. Mr Narayana Reddy M

Case brief

What is this about?

What did the court decide?

Canara Bank v. Mr Narayana Reddy M

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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Case details

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