Allowed

Union Bank of India v. Siddappa

DRT30 Jul 2025OA/1616/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the bank's application for recovery of Rs.20,32,630/- and future interest against 11 defendants, including the primary borrower and guarantors, who failed to appear. The court granted future interest at 9% p.a. simple interest instead of the claimed 11.50% due to the high rate and disallowed recovery of hypothecated assets due to vague descriptions in the agreem

What did the court decide?

Order allowing the application, directing respondents to pay Rs.20,32,630/- plus future interest @9% p.a. simple, and issuing a recovery certificate. Disallowed recovery hypothecated assets.

Union Bank of India versus Siddappa — Banking and Recovery | DRT (2025)

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Presented on: 28.08.2022 Registered on: 30.12.2023 Decided on: 30.07.2025 Duration: Y M D 02 11 02

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IN THE DEBTS RECOVERY TRIBUNAL AT PUNE (Before Shri Dilip G Murumkar, Presiding Officer) ORIGINAL APPLICATION No.1616/2023

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Union Bank of India , A Banking company constituted under Banking Companies (Acquisition and Transfer of Undertakings) Act 1980 having its Central Office at Union Bank Bhavan, 239 Vidhan Bhavan Marg, Mumbai – 400 021 and branch amongst other places at – Solapur Main Branch, Kumbhar Ves, Solapur-413 002.

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… Applicant

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Versus

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Mr. Siddappa Mallappa Gujja Age – adult, Occ.:-Agri. & Business, R/at Post Gujjanavar, Tal. Mashal, District Gulbarga-585 217.

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M/s Matoshri Laxmi Sugar Co-Generation Industries Ltd ., having its address at – Satling Nagar, Ruddhewadi, Post Dudhani, Taluka – Akkalkot, District – Solapur – 413 220.

(OA No.1616/2023)

Page 1 of 8

[ANIL]

Mr. Shivraj Siddharam Mhetre

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Age - Adult, Occ: Agri. & Business, R/at Post 21, Near Maruti Mandir, Grampanchayat Office, Chincholi Mai Chincholi (Najik), Solapur-413 220.

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Mrs. Kusum Ganpati Shinde Age adult, Occ: Agri. & Business, R/at Post Dahitane, Tal. Akkalkot, District Solapur – 413 226.

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Mrs. Shobhabai Balabhim Shinde Age adult, Occ: Agri. & Business, R/at House No.3, Dahitane, Tal. Akkalkot, Dist. Solapur–413 226.

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Mr. Gokul Dattatraya Shinde Age adult, Occ: Agri. & Business, R/at 3, Khandare Galli, Dahitane, Tal. Akkalkot, Dist. Solapur-413 226

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Ms. Ganapati Datamay Shinde Age adult, Occ: Agri. & Business, At Post House No.194, Dahitane, Tal.Akkalkot, Dist. Solapur-413 226.

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Ms. Balbhim Dattatray Shinde , Age adult, Occ: Agri. & Business, At Post Dahitane, Tal.Akkalkot, Dist. Solapur-413 226.

(OA No.1616/2023)

Page 2 of 8

[ANIL]

Ms. Dattatraya Balbhim Shinde ,

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Age adult, Occ: Agri. & Business, At Post Dahitane, Tal.Akkalkot, Dist. Solapur-413 226.

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10. Ms. Kapil Balbhim Shinde

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Age adult, Occ: Agri. & Business, At Post Dahitane, Tal.Akkalkot, Dist. Solapur-413 226.

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11 Ms. Bhagwan Dattatraya Shinde ,

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Age Adult, Occ: Agri.& Business, Residing at Post 157 Lucky Chowk, Nandini Complex, Gokul Lottery Market, Muraji Peth, Solapur-413 001.

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APPEARANCES

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… Defendants

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For the Applicant Mrs. Bhakti Rokade i/b Mr. Srinivas Y - Advocate For the Defendants Ex-parte.

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TOTAL CLAIM AMOUNT –Rs.20,32,630/-

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JUDGMENT (Delivered on 30^th July, 2025)

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The Applicant Bank has filed the present application for recovery of Rs.20,32,630/- in respect of Term Loan account together with future interest @11.50% p. a. with monthly rests thereon from the date of filing of suit till repayment/realization of entire dues from defendant Nos.1 to 11.

(OA No.1616/2023)

Page 3 of 8

[ANIL]

Brief facts of the application are as under:

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Defendant No.1 is a borrower and Defendant No.2 is Private Limited Company and Corporate Guarantor to the facilities granted to Defendant No.1 and other members who availed the loan facility under H & T Contractors. Defendant Nos.3 to 11 stands as guarantor in their personal capacity as well as Mortgagor, to Defendant No.1.

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Defendant No.2 had identified arranged and engaged harvesting and transport contractors for harvesting and transportation of sugarcane to whom it had to pay amount for harvesting and transportation activities. Defendant No.2 passed resolution in the Board Meeting dated 16.11.2017 authorizing Defendant No.3 the Managing Director of Defendant No.2 that he should apply and avail term loan limit of Rs.30 Crores from the applicant bank under Harvesting and Transport Contractors Loan Scheme to individual contractors and to which Defendant No.2 as Company shall stands as Guarantor to provide Corporate Guarantee and defendant Nos. 3 to 11 stand as guarantor in their personal capacity.

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The applicant bank sanctioned Term Loan limit of Rs.30 Crores on 16.11.2017 for the purpose of contractors need the advance for making payment for hiring Labour Toly/ Gang for harvesting of the sugarcane and transportation of harvested cane to the Sugar Factory.

(OA No.1616/2023)

Page 4 of 8

[ANIL]

At the instance of Defendant No.2, Defendant No.1 submitted loan application to the applicant bank for Term Loan Facility of Rs.20,16,000/- and applicant bank sanctioned Term Loan Facility of Rs.20,16,000/- to Defendant No.1 as per Consolidated Sanction Letter dated 16.11.2017 in the name of Defendant No.2 for cumulative Term Loan limit of Rs.30 Crores.

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On 22.01.2018, Defendant No.1 signed and executed certain documents in favour of the applicant bank as mentioned in Para No.5.9 of the Original Application.

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Defendant No.2 passed Resolution authorizing Managing Director to execute the default guarantee and loan documents in consideration and in pursuance of said cumulative term loan limit of Rs. 30 Crore granted by the applicant bank and thereby executed Deed of Guarantee on 16.11.2017 for Rs.30 Crores.

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Defendant No.1 has secured the said loan facility by way of Hypothecation of Movable Assets i.e. Vehicle of Tractor and Trailer owned by him, as follows :-

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(i)- Punjab Tractor having its Registration No. KA 32 TA-4615, Engine No.433008SPN15519 &

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Chassis No.WWCN40906049465;

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(ii)- Mahindra Tractor - Registration No.KA 32 TA 6872

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Engine No.NSCA01181 & Chassis No. NSCA01181.

(OA No.1616/2023)

Page 5 of 8

[ANIL]

Thereafter, Defendant No.1 has confirmed and acknowledged vide Debit Balance Confirmation Letter dated 18.01.2021 that debt borrowed by him from the applicant bank is secured by and under various security documents executed by him in favour of the applicant bank.

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The term loan facility sanctioned and disbursed to Defendant No.1 was not operated in a disciplined manner and it was irregular and not satisfactory. Thus, Defendant No.1 has not adhered to repay the outstanding amounts of the said account. Hence, the account has classified as Non-Performing Asset on 08.06.2018 as per the Reserve Bank of India norms.

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Therefore, the applicant Bank issued Legal Notice dated 11.07.2022 through its Advocate Srinivas B. Yelery calling upon the defendants to pay the dues. In spite of issuing Notice, defendants failed to repay the amount due under the Term Loan account.

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Hence, this application is filed.

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Defendants failed to appear despite service of summons. Hence, the application proceeded ex-parte against it vide Order dated 03.02.2025 passed below the Application (Exhibit-01).

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The applicant Bank has filed Claim Affidavit of evidence (Exhibit-6) of Mr. Vineet Kumar Singh, Branch Manager which supports the case of the applicant Bank elucidated in the application.

(OA No.1616/2023)

Page 6 of 8

[ANIL]

The applicant Bank has produced on record the originals/photocopies of loan transaction documents (Sr.Nos.AW-1 to AW-11) which corroborate the case of the applicant Bank.

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I have heard arguments of the learned Advocate for the applicant Bank.

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Since the defendants failed to appear and contest the application, I find no reason to disbelieve the evidence of the applicant Bank. Therefore, the applicant Bank is entitled for reliefs as claimed.

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The applicant bank has claimed relief in respect of hypothecated assets. However, there is no detailed description with respect to the hypothecated assets in hypothecation agreement dated 22.01.2018. Therefore, the relief in terms of hypothecated assets cannot be granted.

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The applicant Bank has claimed future interest @11.50% p.a. with monthly rests for Term Loan account. However, considering facts of the case, I am of the opinion that if future interest is granted @9% (simple), it would be just and reasonable.

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Hence, I pass the following order:-

(OA No.1616/2023)

Page 7 of 8

[ANIL]

ORDER

(A) Original Application No.1616/2023 is allowed with costs.

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(B) Defendant Nos.1 to 11 shall either jointly or severally pay to the applicant Bank towards Term Loan account sum of Rs.20,32,630/- (Rupees Twenty Lakhs Thirty Two Thousand Six Hundred Thirty only) with future interest @9%p.a. (Simple) from the date of filing of Original Application i.e.28.08.2022 till payment/realization of the amount mentioned in this operative order.

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(D) The Registrar is directed to send the copy of Judgment and Recovery Certificate to the applicant Bank and defendants.

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Sd/- (Dilip G Murumkar) Presiding Officer, Debts Recovery Tribunal, Pune.

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Place : Pune Date : 30.07.2025

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(OA No.1616/2023)

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Page 8 of 8

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[ANIL]

Union Bank of India v. Siddappa

Case brief

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Union Bank of India v. Siddappa

Case brief

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