Allowed

City Union Bank Limited v. Universal Trading Corp

DRT15 Dec 2025OA/1653/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an original application for a recovery certificate against defendants who defaulted on bank credit facilities and guarantees. The court adjusted the interest rate to 9% simple.

What did the court decide?

Recovery certificate for Rs. 3,07,86,829 with interest at 9% p.a. simple until realization, recoverable against all assets of defendants jointly and severally.

City Union Bank Limited versus Universal Trading… — Contract and Commercial Disputes | DRT (2025)

¶1

IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

¶2

Dated this 15^th Day of December, 2025

¶3

Present: Sri. T. RAJESH

¶4

Presiding Officer

¶5

OA. No.1653/2023

¶6

BETWEEN:

¶7

City Union Bank Kormangala Branch, No.92, Z Square, Ground Floor, Jyothi Nivas college Road, Industrial layout, 5^th Block, Kormangala, Bengaluru-560034 Rep. by its Branch Manager Sri. T S Ravishankar

¶8

… APPLICANT

¶9

AND:

¶10

Universal Trading Corp Rep. by its Proprietor Sri. Suraj Ramakrishnan #100, 1^st Floor, 21^st Main Road, Bangalore – 560070 Also at: #862/67, 6^th Cross, BSK I Stage, 2^nd Block, Bangalore – 560050

¶11

Sri. Suraj Ramakrishnan S/o. V. Ramakrishnan, R/at: #1333, 1st Floor, 27^th Cross, 27^th Main, Banashankari 2^nd Stage, Bangalore – 560070

¶12

Smt. Anuradha Ramakrishnan W/o. Suraj Ramakrishnan R/at: #1333, 1^st Floor, 27^th Cross, 27^th Main, Banashankari 2^nd Stage, Bangalore – 560070

¶13

OA. No.1653/2023

¶14

¶15

Sri. R. Chandrashekar R/at: No.1380/F1, “Bharatwaja” 5^th B Cross, 9^th Main Road, Srinivasanagar, Banashankari 1^st Stage, Bangalore – 560050

¶16

Sri. Prem Kumar R/at: No.03, 8^th Cross, Manjunath Nagar, Raghuvanahalli, Kanakapura Main Road, Bangalore-560062

¶17

...DEFENDANTS

¶18

Counsel on record/appeared for: Applicant : Smt. Malini Vinay Defendants : Exparte

¶19

:FINAL ORDER:

¶20

The present Original Application in short (OA) has been filed under section 19 of Recovery of Debts and Bankruptcy Act 1993 for seeking issuance of Recovery Certificate against the defendants for Rs.3,07,86,829/- (Rupees Three Crore Seven Lakhs Eighty Six Thousand Eight Hundred and Twenty Nine only) with further interest thereon from the date of filing the Application till realization from the Defendants.

¶21

It is the case of the applicant that, the defendants availed the following credit facilities:

¶22

i. Secured OD limit of Rs.20 lakhs in 2010, later enhanced to Rs.2.75 Crores on 10.11.2017

¶23

ii. ECLGS facility of Rs.70,55,000/- on 16.06.2020

¶24

OA. No.1653/2023

¶25

¶26

iii. OSL special of Rs.78 lakhs on 05.10.2021

¶27

It is also the case of the applicant that, in view of the above financed credit facilities, the defendants executed necessary loan documents.

¶28

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 account as NPA.

¶29

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.

¶30

Despite, service of summons on the defendants, they failed to appear, resulting the defendants being set exparte on 10.12.2024.

¶31

The applicant had let in evidence through AW-1, who filed their Proof Affidavit reiterating the contentions taken in the OA and also produced Exhibits A1 to A32 and got the same marked in evidence.

¶32

OA. No.1653/2023

¶33

¶34

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.

¶35

The following issues arise for consideration in this matter: i) Whether the applicant had succeeded in proving the OA claim as against the defendants?

¶36

ii) What order are to be passed?

¶37

Both these issues are gone into and decided together.

¶38

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, as to the execution of loan documents as claimed by the applicant bank and the defaults committed in the accounts. The liability of the defendant and the claim of the amount due are also proved by the above documents. The claim of the applicant is well within the limitation.

¶39

Hence in view of the above finding which cover both the issues raised in this manner, this Tribunal is of the view that OA is to be allowed.

¶40

OA. No.1653/2023

¶41

¶42

Taking into consideration the facts that the credit facilities were availed for business purpose and also that 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 9.00% (simple).

¶43

In the result, OA.No.1653/2023 stands allowed,

¶44

i) The applicant is allowed to recovery an aggregate sum of Rs.3,07,86,829/- (Rupees Three Crore Seven Lakhs Eighty Six Thousand Eight Hundred and Twenty Nine only) with further interest of 9.00% p.a.(simple) from the date of filing OA till the realization from defendants, 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 and personally and their other assets of the defendants, including the schedule ‘A & B’ properties are liable for all such amounts due under the loan account. The schedule ‘A & B’ properties to the OA be the schedule ‘A & B’ properties to the Recovery Certificate.

¶45

ii) If the sale proceeds are not found sufficient to cover the amount due and payable to the applicant bank, the defendants jointly, severally and personally and their other assets are liable for all such amounts due under the loan accounts.

¶46

OA. No.1653/2023

¶47

¶48

iii) The applicant bank is allowed cost of the proceeding

¶49

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

¶50

iv) The Recovery Certificate to be drawn in terms of this

¶51

order and transferred to Recovery for execution.

¶52

v) Interim Application pending, if any, stands disposed of

¶53

with this Final Order.

¶54

Communicate a copy of the order to the parties concerned in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

¶55

[Dictated to the Stenographer (PR), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 15^th Day of December 2025].

¶56

Sd/(T. RAJESH) PRESIDING OFFICER

¶57

ANNEXURES

¶58

WITNESSES EXAMINED FOR THE APPLICANT BANK:

¶59

AW-1: T S Ravishankar, Manager of the applicant bank.

¶60

Exhibits on the part of the Applicant:

¶61

Annexure	Date	Particulars
A1	25.10.2010	Hypothecation Agreement for Book Debts
A2	07.01.2013	Supplemental agreement of loan cum hypothecation
A3	31.07.2014	Supplemental Agreement of Loan Cum Hypothecation

¶62

OA. No.1653/2023

¶63

A4	18.05.2015	Supplemental Agreement of Loan Cum Hypothecation
A5	10.11.2017	Pro-note
A6	05.02.2019	Sanction memorandum
A7	26.03.2019	Letter of continuity
A8	26.03.2019	Guarantee agreement
A9	26.03.2019	Guarantee agreement
A10	26.03.2019	Letter to be executed by borrower/sand guarantors for disclosure of information of CIBIL
A11	17.05.2019	Registered letter of confirmation for extension of mortgage
A12 & A13	22.05.2020	Letter of revival along with confirmation of balance
A14	16.06.2020	Sanction letter
A15	06.07.2020	Letter of confirmation for extension of mortgage
A16	07.07.2020	Pronote
A17	07.07.2020	Guarantee agreement
A18	07.07.2020	Guarantee agreement
A19	07.07.2020	Guarantee agreement
A20	07.07.2020	Application cum undertakingfor loan
A21	07.07.2020	Consent letter
A22	05.10.2021	Application cum undertaking
A23	05.10.2021	Sanction letter
A24	05.10.2021	Pro-note
A25	05.10.2021	Guarantee agreement
A26	05.10.2021	Guarantee agreement
A27	05.10.2021	Letter from 4^thdefendant for extension of mortgage of B schedule property to this loan
A28 & A29	10.11.2022	Legal notice and acknowledgment
A31 to A32	-	Statement of accounts

¶64

Sd/- (T. RAJESH) PRESIDING OFFICER

City Union Bank Limited v. Universal Trading Corp

Case brief

What is this about?

What did the court decide?

City Union Bank Limited v. Universal Trading Corp

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

Coram

Case details

Similar cases

Punjab National Bank versus Jyoti

State Bank of India versus Ajay Arya

Idbi Bank versus Munir Ahmed Shaikh

Ms Haridarshan Singh versus Canara Bank

Basudeb Saha versus Central Bank of India

Canara Bank versus Ms Dhanya Enterprises