Allowed

Saraswat Cooperative Bank Limited v. Ms Smn Herbs Private Limited

DRT28 Oct 2025OA/118/2023

Case brief

AI extract

What is this about?

This Debt Recovery Tribunal allowed the bank's original application for a recovery certificate. The tribunal found the defendants liable for the outstanding loan amount and granted recovery with reduced interest.

What did the court decide?

Recovery Certificate granted for Rs. 42,36,674/- linked to the OA schedule, enforceable against the company and director jointly and severally, with interest at 12% p.a. simple.

Saraswat Cooperative Bank Limited versus Ms Smn… — Contract and Commercial Disputes | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 28^th Day of October, 2025

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Present: Sri. T. RAJESH Presiding Officer

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OA.No.118/2023

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BETWEEN:

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Saraswat Co-operative Bank Limited, Jayanagar Branch, No. 45/14, 33^rd Cross, Jayanagar 4^th , “T” Block, Bengaluru 560 041, Represented by its, Branch manager, Smt. Rashmi Hegde, W/o Sri Kiran Bhat, Aged about 35 years.

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…APPLICANT

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AND:

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M/s. SMN Herbs Private Limited, Represented by its Director, S.G. Nikhil, Late S.M. Ganesh, (Since dead, represented by his Legal Heir and Son S.G. Nikhil, who is already on record As 2^nd defendant).

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Regd. Office: No. 943, 5^th Cross, KIADB Industrial Area, Autonagar, Kanbargi Layout, Belgaum 590 016

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S.G. Nikhil, S/o Late S.M. Ganesh, Aged about 33 years. Flat No. B-2, Sharavathi Premia, No. 65, 7^th Cross, 3^rd “B” Main, Someshwaranagar, Near Ayappa Temple,

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OA 118/2023

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Yelahanka New Town, GKVK Post, Bengaluru- 560 065.

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...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : V N Shivananda 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 against the defendants for Rs. 42,36,674/- (Rupees Forty Two Lakh Thirty Six Thousand Six Hundred Seventy Four Only) with further interest thereon from the date of filing the Application till realization.

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The director of the 1^st defendant in deceased and defendant No.1 is the legal heir. It is the case of the applicant that the deceased director of 1^st defendant and 2^nd defendant availed cash credit limit of Rs. 45 lakhs and term loan of Rs. 16 lakhs.

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It is also the case of the applicant that, in view of the above availed loans, the defendants executed necessary loan documents along with letter of guarantee and agreement of hypothecation.

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

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In the above circumstances, the applicant approached this Tribunal

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OA 118/2023

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by filing this OA seeking issuance of Recovery Certificate for the balance amount due in the account.

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Despite, service of summons on the defendants, they failed to appear, resulting the defendants being set exparte on 04.11.2024

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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-1 to A-18 and got the same marked in evidence.

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Heard the Ld. Counsel for the Applicant and considered the contentions as taken in the OA in the light of documentary evidence and 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

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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

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unrebutted as defendants remained exparte. The evidence tendered by the applicant remains uncontroverted and undisputed. The evidences put

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forth by the applicant were found admissible and are sufficient to prove

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availment of credit facilities as stated in the OA, creation of hypothecation

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OA 118/2023

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and the defaults committed in the accounts. The liability of the

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defendants and the claim of the amount due are 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 findings arrived herein above, the Tribunal

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find both these issues in favour of applicant and hence, this Tribunal is of the view that OA is to be allowed.

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Taking into consideration the facts that the credit facilities are

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availed for Business purpose and also that the OA claim is arrived at by calculating interest at the agreed rate, this Tribunal in view of the OA can be allowed with a reduced interest of 12.00% (simple).

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In the result, OA.No.118/2023, stands allowed,

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i) The applicant is allowed to recovery an aggregate sum of Rs.

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42,36,674/- (Rupees Forty Two Lakh Thirty Six Thousand Six Hundred Seventy Four Only) with further interest @12.00 % p.a.(simple) from the date of filing OA till the realization, from the defendants No.1 (Company) and defendant No.2 jointly, severally & personally, after giving credit to all the amount recovered and received during the pendency of the OA and allowed the same to be recovered by proceedings against the defendants Nos. 1 (Company) and defendant No.2 jointly, severally & personally and

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also proceeding against their assets including the hypothecated schedule.

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OA 118/2023

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Schedule to the OA be the schedule to the recovery certificate.

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ii) The applicant bank is allowed cost of the proceedings which

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

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order.

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iii) The Recovery Certificate to be drawn in terms of this order and

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transferred to Recovery for execution.

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iv) Interim application pending, if any, stands disposed of in terms of this final order.

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Communicate a copy of the order to the parties concerned in terms

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of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure)

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Rules, 1993.

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[Dictated to the Stenographer (AJ), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 28^th Day of October, 2025].

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Sd/- (T. RAJESH)

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PRESIDING OFFICER

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Manjunath M S/o Late Hanumanthappa, Deputy Manager, of Applicant Bank.

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Exhibits on the part of the Applicant:

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Exhibit	Date	List of documents
Nos.
A1	30.09.2020	Sanction letter
A2	01.10.2020	Board resolution

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OA 118/2023

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A3	17.10.2020	Demand promissory note for Rs. 45,00,000/-
A4	17.10.2020	Letter of lien & set off
A5	15.10.2020	Letter of continuing security
A6	15.10.2020	Letter of guarantee
A7	15.10.2020	Agreement of hypothecation of movable property
A8	15.10.2020	Agreement of hypothecation of book debts
A9	15.10.2020	Irrevocable power of attorney
A10	17.10.2020	Demand promissory note for Rs. 16,00,000/-
A11	15.10.2020	Letter of lien & set off
A12	15.10.2020	Letter of guarantee
A13	15.10.2020	Agreement of hypothecation of movable property
A14	15.10.2020	Irrevocable power of attorney
A15	04.02.2022	Recall notice
A16	--	3 postal acknowledgements
A17	04.11.2022	Statement of account pertaining to cash credit loan account
A18	04.11.2022	Statement of account pertaining to term loan account with abstract and certificates.

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Witness Examined for the Defendants: List of Documents Exhibited for the Defendants:

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-Nil -

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-Nil -

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Sd/- (T. RAJESH) PRESIDING OFFICER

Saraswat Cooperative Bank Limited v. Ms Smn Herbs Private Limited

Case brief

What is this about?

What did the court decide?

Saraswat Cooperative Bank Limited v. Ms Smn Herbs Private Limited

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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