Allowed

Canara Bank v. HArish Enterprises

DRT25 Jul 2025OA/1540/2022

Case brief

AI extract

What is this about?

In an Original Application filed under Section 19 of the RDB Act, the Bank sought a recovery certificate against defaulting borrowers for business credit facilities. The Tribunal, noting the defendants did not appear, found the Bank proved its claim. It allowed the application but reduced the interest rate to 9%. Recovery is directed jointly and severally.

What did the court decide?

Allowed the Original Application. Directed recovery of Rs. 82,59,425.38 plus 9% simple interest from the date of filing. Recovery Certificate to be issued for joint and several liability of defendants

Canara Bank versus HArish Enterprises — Banking and Recovery | 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 July, 2025

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Present: Sri. T. RAJESH Presiding Officer OA.No.1540/2022

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BETWEEN:

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Canara Bank, Having its Head Office at No. 112, J.C. Road, Bangalore- 560 002, Represented by its Sr.Manager, Mr. Rajesh Kumar, S/o. L.V. Ram, Aged 44 years, J.P. Nagar 2^nd Phase Branch, Bangalore- 560 062.

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…APPLICANT

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AND:

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M/s. Harish Enterprises, Prop: Mr. M.S. Harish Babu, #268, 1^st Floor, 11^th Cross, 20^th Main, J.P. Nagar 2^nd Phase, Bengaluru- 560078.

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Mrs. Vasantha, W/o Mr. Harish Babu, #268, 1^st Floor, 11^th B Cross, 20^th Main, J.P. Nagar 2^nd Phase, Bengaluru- 560078

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...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : Sushree Priya Mohanty Defendants : Exparte

OA 1540/2022

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. 82,59,425.38(Rupees Eighty Two lakh Fifty Nine Thousand Four Hundred and Twenty Five and Paise Thirty 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 defendants availed various credit facilities which are as follows:-

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Over Draft limit of Rs. 22,00,000/- (Rupees Twenty Two Lakh Only) enhanced for working capital of Rs. 50,00,000/-

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Enchancement of working capital limit of Rs. 40 lakhs to Rs 60 lakhs,

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Working Capital term loan of Rs. 10,13,000/- (Rupees Ten lakh Thirteen Thousand) and

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FITL of Rs. 6,49,000/- (Rupees Six Lakh Forty Nine Thousand Only)

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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, guarantee covering letter, MOD in favour of the applicant bank.

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OA 1540/2022

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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 compliance of 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 28.06.2024.

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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-37 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 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

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claim as against the defendants?

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ii) What order are to be passed?

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OA 1540/2022

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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 the credit facilities as stated in the OA, creation of security interest as claimed by the applicant bank and the defaults committed in the accounts. The liability of the defendants and the claim of 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, the Tribunal find both these issues in favour of applicant and hence, this Tribunal is of the view that OA is liable 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 OA claim is arrived at by calculating interest at the agreed rate, this Tribunal is of the view that

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the OA can be allowed with a reduced interest of 9.00% (simple).

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In the result, OA.No.1540/2022, stands allowed,

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OA 1540/2022

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

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Rs. 82,59,425.38(Rupees Eighty Two lakh Fifty Nine Thousand Four

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Hundred and Twenty Five and Paise Thirty Eight Only) with further interest @ 9.00 % p.a.(simple), from the date of filing OA till the realization, from the defendants jointly, severally & personally after giving credit to all the amounts recovered and received during the pendency of the OA and allowed to recover the same by proceeding against the 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 other assets are liable for all such amounts due under the loan accounts.

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iii) The applicant bank is allowed cost of the proceedings which 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, are disposed of with this Final Order.

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OA 1540/2022

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14. Communicate a copy of the order to the parties concerned in

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

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(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 July, 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: Nidhi Srivastava, D/o Girja Shankar, Working Assistant

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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	--	Affidavit
A2	--	List of documents
A3	--	Copy of Deed of Partnership
A4	05.01.2013	Copy of letter of sanction dtd 05012013
A5	05.01.2013	Copy of agreement
A6	05.01.2013	Copy of guarantee agreement
A7	05.01.2013	Copy of guarantee agreement
A8	05.01.2013	Copy of pronote
A9	01.10.2013	Copy sanction letter
A10	--	Copy of undertaking
A11	30.06.2018	Copy of loan application
A12	27.06.2018	Copy letter of renewal
A13	30.06.2018	Copy of letter of sanction
A14	30.06.2018	Copy of request for over draft facility
A15	30.06.2018	Copy of common hypothecation agreement
A16	30.06.2018	Copy of guarantee covering letter

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OA 1540/2022

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A17	30.06.2018	Copy guarantee agree	ment
A18	30.06.2018	Copy of link letter of facility	enh	ancem	ent of	credit
A19	30.06.2018	Copy of Pronote
A20	18.05.2020	Copy of loan applicatio	n
A21	--	Supplemental Commo	n Hyp	othec	ation
A22	--	Copy of Guarantee Co	verin	g lette	r
A23	21.05.2020	Copy Guarantee Agree	men	t
A24	--	Letter of undertaking
A25	--	Copy of Pronote
A26	--	Restructuring of MSME	Acc	ount
A27	--	Copy of processing no	te
A28	--	Copy of Sale deed
A29	25.06.2018	Copy of MOD
A30	10.12.2024	Copy of SARFEASI Not	ice
A31	13.04.2022	Copy of Possession No	tice
A32	04.06.2020	Letter of revival
A33	27.01.2022	Copy of Lawyers Notic	e
A34	--	Account Statement 0492256005807	of	OD	Loan	A/c.
A37	--	Account Statement 0492753000011	of	OD	Loan	A/c.
A38	--	Account Statement 0492746000009	of	OD	Loan	A/c.
A39	--	Account Statement 0492747000005	of	OD	Loan	A/c.

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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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PRESIDING OFFICER

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Sd/- (T. RAJESH)

Canara Bank v. HArish Enterprises

Case brief

What is this about?

What did the court decide?

Canara Bank v. HArish Enterprises

Case brief

What is this about?

What did the court decide?

What the court decided

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