Allowed

Union Bank of India v. Sme OneSource Strategies Pvt. Ltd.

DRT25 Sept 2025OA/1245/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the application for a Recovery Certificate against defendants, finding the claim for Rs. 67.77 lakhs and interest well-proved, admissible, and within limitation despite defendants appearing ex parte.

What did the court decide?

Recovery Certificate issued for Rs. 67,77,420.79 plus interest at 11% p.a. (simple) from the date of filing OA till realization from defendants jointly, severally & personally.

Union Bank of India versus Sme OneSource… — 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 25^th Day of September, 2025

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Present: Sri. T. RAJESH Presiding Officer

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OA.No.1245/2023

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BETWEEN:

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Union Bank of India, One of its Branch at, Union Bank of India, Asset recovery Branch, No. 2/3, Raja Building, NR Road, Bengaluru- 560001, Represented by its Chief Manager and Authorised officer.

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…APPLICANT

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AND:

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SME Onesource Strategies Pvt Ltd, Represented by its directors, Sri. Gopalachar Nagaraj, Smt. Nagaraj Latha, #40, 11^th Cross, 2^nd Main, Prashanth Nagar, Bengaluru- 560057.

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And also at

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#205, 3^rd Floor, 3^rd Stage, 3^rd Block, 5^th Main, Basaveshwaranagar- 560079.

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And also at

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#2271, 37^th Cross, 2^nd Block, 11^th Main, Rajajinagar- 560010 2. Sri. Gopalachar Nagaraj, S/o. Srinivasachar Gopalachar, Aged about 59 years. DOB 01.01.1972, Director of SME Onesource Strategies Pvt ltd, #40, 11^th Cross, 2^nd Main, Prashanth Nagar, Bengaluru- 560057.

OA 1245/2023

And also at,

#205, 3^rd Floor, 3^rd Stage, 3^rd Block, 5^th Main, Basaveshwaranagar- 560079.

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And also at

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#2271, 37^th Cross, 2^nd Block, 11^th Main, Rajajinagar- 560010 And also at

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#501, 5^th Floor, Architha Daffodil, 17^th Cross, Rajarajeshwari Nagar, Bengaluru- 560098.

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Smt. Nagaraj Latha, W/o Goplaachar Nagaraj Director of SME Onesource Strategies Pvt ltd, #40, 11^th Cross, 2^nd Main, Prashanth Nagar, Bengaluru- 560057.

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And also at,

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#205, 3^rd Floor, 3^rd Stage, 3^rd Block, 5^th Main, Basaveshwaranagar- 560079.

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And also at

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#2271, 37^th Cross, 2^nd Block, 11^th Main, Rajajinagar- 560010

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And also at

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#501, 5^th Floor, Architha Daffodil, 17^th Cross, Rajarajeshwari Nagar, Bengaluru- 560098.

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Smt. Navya Shree D.V, Director operations, No. 205, 3^rd Floor, 5^th Main, 3^rd stage, 3^rd block, Basaveshwara Nagar, Bengaluru- 560079. ...DEFENDANTS

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Counsel on record/appeared for: Applicant : Prabhu Rao CB Defendants : Exparte

OA 1245/2023

FINAL ORDER

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. 67,77,420.79 (Rupees Sixty Seven Lakh Seventy Seven Thousand Four Hundred Twenty and paise Seventy Nine only) with further interest thereon from the date of filing the Application till realization.

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The 1^st defendant is a company represented by its directors defendants Nos. 2 & 3. Defendants Nos. 2 to 4 are the guarantors.

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It is the case of the applicant that, the defendant No.1 availed the following loans from the applicant bank:-

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Term loan of Rs. 12,00,000/- (Rupees Twelve Lakh Only),

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Cash credit of Rs. 40,00,000/- (Rupees Forty lakh Only).

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

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It is further contended that, despite availing the credit facilities, agreeing to service the loan amount 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 1245/2023

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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 30.01.2025.

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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-28 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 unrebutted as defendant 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 1245/2023

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

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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.1245/2023, stands allowed,

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

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67,77,420.79 (Rupees Sixty Seven Lakh Seventy Seven Thousand Four Hundred Twenty and paise Seventy Nine 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 the defendants jointly, severally & personally and their assets including the hypothecated

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

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OA 1245/2023

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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 order.

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

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iv) Interim application pending, if any, stands disposed of in terms

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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) 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 25^th day of September, 2025].

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Sd/-

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(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: S. K. Vasanth Kumar S/o Karuppaiah, Chief Manager, of Applicant Bank.

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Exhibits on the part of the Applicant:

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Exhibit Nos.	Particulars of Documents
A1	True Copy of the loan application dated 05.02.2015
A2	True Copy of sanction dated 09.03.2015
A3	True Copy of letter of continuity dated 06.03.2015
A4	True Copy of letter of undertaking not to alienate hypothecated goods dated 06.03.2015

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OA 1245/2023

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A5	True Copy of letter of undertaking from borrowers (CIBIL)
A6	True Copy of demand promissory note dated 06.03.2015
A7	True Copy of agreement on rate of interest dated 04.03.2015
A8	True Copy of term loan agreement dated 06.03.2015
A9	True Copy of hypothecation of agreement of books debts dated 06.03.2015
A10	True Copy of letter obtained from director dated 6.03.2015
A11	True Copy of letter of guarantee dated 06.03.2015
A12	True Copy of renewal of sanction dated 22.06.2018
A13	True Copy of letter of continuity dated 28.11.2018
A14	True Copy of letter of undertaking dated 28.11.2018
A15	True Copy of demand promissory note dated 28.11.2018
A16	True Copy of letter of undertaking dated 28.11.2018
A17	True Copy of hypothecation agreement dated 28.11.2018
A18	True Copy of term loan agreement dated 28.11.2018
A19	True Copy of interest agreement dated 28.11.2018
A20	True Copy of simple debit balance dated 21.05.2018
A21	True Copy of letter obtained from directors dated 28.11.2018
A22	True Copy of letter of guarantee dated 28.11.2018
A23	True Copy of debit balance confirmation dated 0.02.2021
A24	Legal notice dated 05.04.2023
A25	postal receipts
A26	unserved covers
A27	account statement pertaining to the term loan
A28	Account statement pertaining to cash credit account as per running and dummy ledger A/w certificate as per bankers bankers book evidence Act

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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

Union Bank of India v. Sme OneSource Strategies Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Union Bank of India v. Sme OneSource Strategies Pvt. Ltd.

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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