Allowed

State Bank of India v. Mr. Gaajula Nagaraju

DRT24 Sept 2025OA/251/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the debtor recovery application filed by State Bank of India against the defendant. Despite defendant's contention regarding non-joiner of Central Government and calculation discrepancies, the Tribunal held evidence unchallenged and directed liability.

What did the court decide?

Defendant directed to pay total sum of Rs.1,11,20,372/- less sale proceeds, with interest at 9.25% p.a., secured by hypothecated vehicles.

State Bank of India versus Mr. Gaajula Nagaraju — Contract and Commercial Disputes | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL-I] AT HYDERABAD DATED THIS THE TWENTYFOURTH DAY OF SEPTEMBER,²⁰²⁵ PRESENT: SH. RAMESHWAR KOTHE,^{B.COM, L.LB. (HONS.),T4.A.} PRESIDING OFFICER

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ORIGINAL APPLICATION NO. 25T OF ZO23

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Between:

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State Ba nk of India SARI-II Chikkadpally Opp: Sand hya Theatre RTC Cross Roads Hyderabad. Rep by lts Chief Manager.

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.......Applicant.

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And

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Mr. Gaajula Nagaraju S/o G. Pedda Kasha nna Aged: 38^years Proprietor of G. Nagaraj u- Suppliers, H.No.2-2-|a/²⁷ Flat No.203, D.D. Colony Amberpet, Hyderabad-13

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Also at: 2-2-775/4ltS Bathukamma Kunta Bagh Amberpet Hyderabad-l3.

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..... Defenda nt.

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Counsel for the Appllcant :^{Mr. lvl VenkatDivakar.} Counsel for the Defendants :^{M/s. V.M. Krishna Reddy.}

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:: ORDER::

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The Applicant Bank filed^{the present OA u/s 19 of TheRecovery} of Debts & Bankruptcy^{Act, 1993 for recoveryof a total sum of} Rs.1,11,20,372/-^{(Rs.13,03,306i-withfurther interest}

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-..

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oa.251/2023

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@11.55o/o p.a.t A/c No. 37842031017, Rs.72,33,475/_ with further interest @16.650/o p.a., A/c No.38110424g54; Rs.61,38,479l- with further interest @11.80o/o p.a., A/c No. 3975A172700 ) Rs,L3,7Z,44B/ - with further interest @9.25olo p.a., A/c No. 39820470850; and Rs.11,32,664l_ with further interest @9.25olo p.a., Alc No. 40665910889) from the defendant with monthly rests and penal interest @2o/o p.a., frcm 76.77.2022 till the date of realisation and sale of OA schedule assets.

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The averments of applicant bank as per the OA, briefly, are; defendant availed various types of loans for purchase of vehicles and working capital requirements from time to time between 2018 and 23.12.202t agreeing to the terms and conditions stipulated in the respective loan agreements, hypothecation agreements, supplemental agreements as required from time to time. Due to irregular repayment of loan amounts, the accounts have become NpA on 05.05.2022. Despite serving demand notice dated 05.07.2022 and seizure notice dated 26.07.2022, defendant faited to discharge the liability. Hence the present OA.

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Defendants l and 2 filed written statement denying the averments in paras 5.2, 5.3, S.4 and 5.10 in respect of availment of Term Loan of Rs.2,50,OOO/, Term Loan of Rs.25,00,000/- on 23.07.zOtA, Rs.39,86,oOO/ on 10.12.2018, Rs.1,14,00,000/- (Rs.61,OO,OOO/-, 76,OO,OOO/, 1O,OO,OOO/, 16,00,000/- and 11,OO,OOO/-) on 23.72.2027, white admitting the averments in paras 5.5, 5.6, 5.9 pertaining to availment of Term Loan and cash credit tota ing to Rs.99,oo,ooo/-(Term Loan-I of Rs.21,00,000/- Term Loan_II of Rs.68,Oq,OO0/_. Cash (cry'*"

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oa.2sLl2023

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Credit of Rs.10,00,000/-) on 19.02.2020, Rs.84,00,000/(Rs.62,00,000/-, 16,00,000/-) on 23.Ll.2020. Defendant denied execution of^{personal guarantees} dated 19.02.2020, 23.LL.2020, hypothecation agreement dated 23.12.2021 and acknowledgement of liability/revival letters dated 23.12.2027 and 31.03.2022. The defendants have not received any notice and were never lrregular in repayment of loans. All the subject loans were sanctioned under the Central Government Scheme of EB- lY EM E-TL-Sta ndup India/CGSSI Scheme. As such^the Government of India is a^proper and necessary^party to the OA. Accordingly, the Central Government being the^guarantor, being not made as^party, the^{presentproceedings} are^not maintainable and liable to be dismissed on the^ground of^non- joiner of proper and necessary party. The ENIIS paid by the defendants have not been shown by the^appllcant bank.^The rate of interest applied to the loan accounts is^excessiveand contrary to RBI^guidelines. The^calculation of^alleged outstanding loan amount after^{NPA is} incorrect'^{An amount of} Rs.8,00,000/- realised by way of sale of^{vehicle bearing} registration No. TS 11 UC¹¹⁵² through^{publicauction has not} deducted from the outstanding^{loan amount. Therefore, the} applicant bank has not^{come to the Court with cleanhands.} With these submisslons, defendants^{prayed for dismissal of the} OA with exemplary^costs.

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In order to^prove its^case, the^{Applicant Bank examinedJ'} Rama Rao, Chief^{Manager as AW-1 and marked 21 documents} through him as^Exs.A.1 to^{Ex. A.21.}

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In order to substantlate^{theirdefence, Defendantqxamined} himself examined as^{DW.1 but rnu.n"ono} oo.rr"ntffito'J

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oA.25Ll2023

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Heard learned counsel for applicant bank. Learned counset for the defendant prayed that orders may be passed based on records. Perused the material placed on record.

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Learned counsel appearing for the applicant bank would submit that the defendant availed loans for purchase of commercial vehicles from time to time. However, defendant has started avoiding repayment deliberately and intentionally, forcing the applicant to initiate recovery steps. With these submissions, learned counsel prayed for allowing the OA in the interest of justice.

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8, According to the defendant the EMIS paid by him are not shown by the applicant bank. The applicant bank imposed excess rate of interest in contravention of RBI guidelines. Applicant bank suppressed the fact of putting of the vehicles bearing registration TS 11 UC t752, 7035, 7036 and 7037 for sale through auction sale notices and amounts realised through the said auctions have not been deducted from the from the loan accou nts.

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The point that arises for consideration is:_

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Whether the Appticant Bank is enti ed for the OA ctaim against the Defendant and the OA schedute assets?

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Applicant bank extended financial assistance to the defendant for purchase of commercial vehicles and against the hypothecation of said vehicles. While admitting some loans, defendant denied availment of some other loans. Despite

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:nt ,,' ..,\.^'

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oa.2sLl2023

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contending so, defendants^have not^{confronted AW.1 towards} the disputed loans. Defendants^{contendedthat three of OA} schedule vehicles bearing Nos. TS^{11 UC 7035, TS 11 UC 7036} and TS 11 UC7O37 have been^{put to auction on 09.03.2023.In} support of his contention, defendant^{placedon record a copyof} letter dated 16.02.2023 issued by applicant^addressedto defendant, vide 1A.2634/2024.^copy of^{1A.2634/2024hasbeen} duly served on the^counsel for^{the applicant bank.IA.2634|} 2024 has been allowed by this^{Tribunal on 09.12.2024.It is the} contention of the defendant that the applicant^{bank has not} adjusted the sale^proceeds of the said^{vehiclestowardsthe loan} account. Applicant bank has^not disputed^{the abovefacts.} Under such facts and^{circumstances,the EvidenceAffidavit of} AW.1 coupled with the recitals in^Exs. A.1 to^{A.21 marked on} behalf of the Applicant Bank,^{remainunchallenged and un-} rebutted. Hence, I^hold that^{Defendant is liable to pay theOA} claim to the Applicant Bank^{with futureinterest and costs.}

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In the result, the^{present Original Applicatlon No.25112023is} allowed as under:^-

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i) the defendant is liable to^{pay to the applicant} bank a total sum of^{RS.L,L1,20,372/-} (Rs.13,03,306/-, Rs.72,33,4751 -, Rs.61,38,479/^-, Rs.!3,12,448 I - and^Rs.1 1,32,664/-),^{less sale} proceeds of hyPothecated vehicles, if any, along with interest @9.25olo^{per annum} simple from the date of^{applicationtill the} date of realization;

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ii) the OA claim is secured^{bY waYof} hypothecation of^vehictes d"rffi3r."

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oA.zstl2023

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schedules annexed to the OA and the applicant bank is entitled to proceed against the same, if not already disposed of, for realisation of its dues;

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iii) applicant bank is also entitled to proceed against the person and properties of defendant for realization of its dues; and iv) the applicant bank is entiHed for the costs.

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L2. The Applicant Bank is directed to file Cost Memo within 2 weeks from the date of receipt of this Order.

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Issue Recovery Certificate accordingly.

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Communicate a copy of this order to the parties concerned and upload in Web Site.

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(Dictated to the steno, signed and pronounced by me in the open court on this the 24th day of September, 2025.)

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k("ru'1 ESHWAR KOTHE) PRESIDING OFFICER

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,*,

State Bank of India v. Mr. Gaajula Nagaraju

Case brief

What is this about?

What did the court decide?

State Bank of India v. Mr. Gaajula Nagaraju

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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