Allowed

Canara Bank v. Sri Mahalakshmi Constructions

DRT31 Oct 2025OA/1233/2024

Case brief

AI extract

What is this about?

The Tribunal considered a Recovery Application filed by Canara Bank for recovery of nearly Rs. 11.62 crore from defendants involved in defaulted working capital loans. Finding the defendants in default and their evidence absent, the Tribunal allowed the application, issuing a Recovery Certificate with reduced interest at 11% simple.

What did the court decide?

Recovery Certificate issued allowing recovery of Rs. 11.62,40,646.78 plus interest at 11% simple p.a. from defendants jointly and severally; execution against scheduled property allowed.

Canara Bank versus Sri Mahalakshmi Constructions — Company and Corporate | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 31^st Day of October, 2025

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Present: Sri. T. RAJESH Presiding Officer

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OA.No.1233/2024

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BETWEEN:

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Canara Bank, One of its Branch offices at Jayanagar 4^th T Block, No. 364, 16^th Main, 4^th T Block, Jayanagar, Bangalore- 560 041, represented by its agent and Chief Manager Sri K N Ramakrishna, S/o K.S. Narayana Murthy, Aged about 55 years.

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…APPLICANT

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AND:

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M/s. Sri Mahalakshmi Constructions, No. 240, Sree Sai Lakshmi Nivas, 1^st Main Road, 7^th Cross, Lakhsmi Layout, Behind Arakere MICO Layout, Off: Bannerghatta Road, Bangalore- 560076, Represented by its partners- defendants No. 2 & 3.

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Sri. Sandeep P, S/o Pattabiraman C, Aged about 42 years, No. 240, Sree Sai Lakshmi Layout, Behind Arakere MICO Layout, Off: Bannerghatta Road, Bengaluru- 560076.

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Smt. Saptha A P, D/o A.N. Purushothama (Ravi), W/o Shashivarun Reddy Y.R, Aged about 33 years, No. 15/A T.P. Kailasam Road, 3^rd Cross, BTS layout, Arakere, Off: Bannerghatta Road, Bengaluru- 560076.

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OA 1233/2024

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Sri. Pattabiraman C, S/o Late L. Chinnappa Reddy, Aged about 68 years, No. 240, Sree Sai Lakshmi Nivas, 1^st Mian Road, 7^th Cross, Lakshmi Layout, Behind Arakere MICO Layout, Off: Bannerghatta Road, Bangaluru- 560076.

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...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : K. Shashidhar Parlathaya 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. 11,62,40,646.78 (Rupees Eleven Crore Sixty Two Lakh Forty Thousand Six Hundred Forty Six and Paise Seventy Eight Only) with further interest thereon from the date of filing the Application till realization.

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It is the case of the applicant that, the defendant No.1 represented by its partners defendant No. 2 & 3, on the guarantee of defendant No.4 availed working capital by way of OD/ OCC limit of Rs. 6,50,00,000/(Rupees Six Crore Fifty lakh Only), Bank guarantee letter of Rs. 3,50,00,000/- (Rupees Three Crore Fifty Lakh Only), guaranteed emergency credit line (GECL) of Rs. 1,84,00,000/- (Rupees One Crore Eighty Four lakh Only).

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OA 1233/2024

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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 common hypothecation agreement and simple mortgage deed.

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It is further contended that, despite availing the credit facilities, agreeing to service the loan account promptly and regularly, the defendant 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 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 defendants, they failed to appear, resulting the defendants being set exparte on 05.12.2024.

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The applicant 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-103 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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OA 1233/2024

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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 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 the security interest and the defaults committed in the accounts. The liability of the 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 11.00% (simple).

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In the result, OA.No.1233/2024, stands allowed,

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

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OA 1233/2024

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11,62,40,646.78 (Rupees Eleven Crore Sixty Two Lakh Forty Thousand

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Six Hundred Forty Six and Paise Seventy Eight Only) with further interest @11.00 % p.a.(simple) from the date of filing OA till the realization, from the defendants 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 proceeding against schedule property. Properties schedule to the OA be the schedule to the recovery certificate.

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ii) If the sale proceeds are not found sufficient to cover the

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amount due and payable to the applicant bank, the defendants jointly, severally & personally and their assets are liable for respective amounts due under the respective loan accounts.

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iii) 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 order.

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iv) The Recovery Certificate to be drawn in terms of this order and transferred to Recovery for execution.

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v) 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)

OA 1233/2024

Rules, 1993.

[Dictated to the Stenographer (AJ), transcribed by her, corrected and signed and pronounced by me in the

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Open Court, this the 31^st 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: Jayawant Shankarrao Phule S/o Shankarrao Dhondiba Phule, Chief 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	23.11.2020	Loan application
A2	01.01.2021	Sanction
A3	06.01.2021	Partnership letter
A4	06.01.2021	Common hypothecation agreement ex the defendant No.1	ecute	d by
A5	06.01.2021	Pronote
A6	06.01.2021	Request for overdraft facilities
A7	06.01.2021	Guarantee covering letter executed defendant No.2	by	the
A8	06.01.2021	Guarantee agreement executed defendant No.2	by	the
A9	06.01.2021	Guarantee covering letter executed defendant No.3	by	the
A10	06.01.2021	Guarantee agreement executed defendant No.3	by	the
A11	06.01.2021	Guarantee covering letter executed defendant No.4	by	the
A12	06.01.2021	Guarantee agreement executed defendant No.4	by	the
A13	04.01.2021	Memorandum of deposit of title deeds by the defendant No.3	exec	uted

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OA 1233/2024

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A14	04.01.2021	Memorandum of deposit of title deeds exec by the defendant No.4	uted
A15	20.01.2021	Sanction convey
A16	01.02.2021	Supplemental common hypothec agreement executed by the defendant No.	ation 1
A17	01.02.2021	Counter indemnity executed by the defen No.1	dant
A18	02.02.2021	Bank guarantee BG No. 375GOP21033500	2
A19	02.02.2021	Bank guarantee BG No. 375GOP21033500	3
A20	04.08.2021	Bank guarantee BG No. 375GOP21033500	1
A21	22.07.2021	Bank guarantee BG No. 375GOP21033500	1
A22	01.02.2021	Request letter for issue/ extending guarantee cum letter of pledge	the
A23	01.02.2021	Request letter for issue/ extending guarantee cum letter of pledge	the
A24	04.08.2021	Request letter for issue/ extending guarantee cum letter of pledge	the
A25	01.02.2021	Guarantee covering letter executed by defendant No.2	the
A26	01.02.2021	Guarantee agreement executed by defendant No.2	the
A27	01.02.2021	Guarantee covering letter executed by defendant No.3	the
A28	01.02.2021	Guarantee agreement executed by defendant No.3	the
A29	01.02.2021	Guarantee covering letter executed by defendant No.4	the
A30	01.02.2021	Guarantee agreement executed by defendant No.4	the
A31	2701.2021	Supplemental Memorandum of deposit of deeds executed by the defendant No.3	title
A32	29.01.2021	Supplemental Memorandum of deposit of deeds executed by the defendant No.4	title
A33	29.01.2021	Memorandum of deposit of title deeds exec by the defendant No.2	uted
A34	06.11.2021	Loan applicant
A35	15.11.2021	Sanction memorandum
A36	15.11.2021	Supplemental common Hypothec agreement executed by the defendant No.	ation 1
A37	15.11.2021	Offer letter (Appendix-I)
A38	--	Request cum undertaking for disburseme loan	nt of
A39	15.11.2021	Letter of undertaking re: loans/ advances
A40	12.11.2021	Supplemental Memorandum of deposit of deeds executed by the defendant No.3	title

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OA 1233/2024

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A41	03.12.2021	Supplemental Memorandum of deposit of title deeds executed by the defendant No.2
A42	03.122021	Supplemental Memorandum of deposit of title deeds executed by the defendant No.4
A43	11.01.2022	Letter extension of period of guarantee
A44	07.02.2023	Letter extension of period of guarantee
A45	31.07.2023	Letter extension of period of guarantee
A46	11.01.2022	Letter extension of period of guarantee
A47	07.02.2023	Letter extension of period of guarantee
A48	31.07.2023	Letter extension of period of guarantee
A49	03.08.2022	Letter extension of period of guarantee
A50	07.02.2023	Letter extension of period of guarantee
A51	31.07.2023	Letter extension of period of guarantee
A52	06.01.2023	Request Letter extension of Bank of guarantee
A53	30.01.2023	Request Letter extension of Bank of guarantee
A54	31.07.2023	Application for extension of bank guarantee
A55	31.07.2023	Application for extension of bank guarantee
A56	31.07.2023	Application for extension of bank guarantee
A57	03.08.2022	Extension of bank guarantee
A58	18.01.2023	Extension of bank guarantee
A59	15.03.2023	Sanction memorandum
A60	15.03.2023	Letter of renewal
A61	15.03.2023	Letter to be obtained from the borrower/ guarantor whose limit is getting renewed
A62	15.03.2023	Letter of revival
A63	16.10.2023	Letter addressed by the NSIC ltd., to the applicant bank
A64	16.10.2023	Email communications sent to the defendants
A65	31.10.2023	Mail communications
A66	31.10.2023	Letter invoking the bank guarantee issued by the NSIC ltd., to the applicant bank
A67	31.10.2023	Letter addressed by the applicant bank to the defendants
A68	--	Postal acknowledgement card
A69	--	Postal acknowledgement card
A70	--	Postal acknowledgement card
A71	--	Postal acknowledgement card
A72	02.11.2023	Letter addressed by the applicant bank to the defendants
A73	--	Postal acknowledgement card
A74	--	Postal acknowledgement card

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OA 1233/2024

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A75	--	Postal acknowledgement card
A76	--	Postal acknowledgement card
A77	05.01.2024	Letter invoking the bank guarantee issued by the NSIC Ltd., to the applicant bank
A78	12.01.2024 & 17.01.2024	Email Communications sent to the defendants
A79	16.01.2024	Letter addressed by the applicant bank to the defendants
A80	17.01.2024	Letter addressed by the applicant bank to the defendants
A81	--	Postal receipts
A82	--	Postal acknowledgement card
A83	--	Postal acknowledgement card
A84	--	Postal tracking
A85	--	Postal tracking
A86	30.12.2023	Notice U/s 13(2) of Sarfeasi Act issued to the defendants
A87	--	Postal receipts
A88	--	Postal acknowledgement card
A89	--	Postal acknowledgement card
A90	--	Postal acknowledgement card
A91	--	Postal acknowledgement card
A92	--	Postal acknowledgement card
A93	08.02.2024	Legal notice
A94	--	Postal receipts
A95	--	Postal acknowledgement card
A96	--	Postal acknowledgement card
A97	--	Postal acknowledgement card
A98	--	Postal acknowledgement card
A99	--	Postal acknowledgement card
A100	15.02.2021	Reply to the legal notice issued by the defendant No.1
A101	--	Statement of account No. 0471261001156
A102	--	Statement of account No. 170001990434
A103	--	Consolidated statement of total amount due

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OA 1233/2024

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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

Canara Bank v. Sri Mahalakshmi Constructions

Case brief

What is this about?

What did the court decide?

Canara Bank v. Sri Mahalakshmi Constructions

Case brief

What is this about?

What did the court decide?

What the court decided

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