Allowed

State Bank of India v. M s B Chandrashekharappa and Sons

DRT19 Nov 2025OA/320/2023

Case brief

AI extract

What is this about?

The Tribunal allowed an Original Application filed by State Bank of India under Section 19 of the RDB Act for issuance of a Recovery Certificate. The court found the claim proved by uncontroverted documentary evidence, awarded principal with simple interest for pendente lite and future periods, and directed recovery from the defendants jointly and severally.

What did the court decide?

Issuance of Recovery Certificate for an aggregate sum of Rs. 1,39,18,985/- plus interest at 10% p.a. (simple) to be recovered jointly and severally from the defendants.

State Bank of India versus M s B Chandrashekharappa and Sons — Specific Performance | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL II, BENGALURU

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Dated this 19^th Day of November, 2025

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Present: Sri. T. RAJESH Presiding Officer OA.No.320/2023

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BETWEEN:

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State Bank of India, SARB Branch, 3^rd Floor, Near Old Shivaji Theatre, J. C. Road, Bengaluru, Rep. by its Chief Manager,

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…APPLICANT

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AND:

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M/s. B. Chandrashekharappa & Sons, A proprietary Concern Rep. by its, Proprietor: Shri. Darpan Nandi S/o. Sri. B. C. Mahesh, Office: Next to APMC Yard, Bandipalya, Mysore -570014.

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Sri. Darpan Nandi, S/o. B. C. Mahesh, R/o #44/1 “Shree Ganesh Krupa” Vani Vilasa Road Near Nexa Show Room, Laxmipuram, Mysore -574004.

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Sri. B C Mahesh, S/o. Chandrashekharappa, R/o # 44/1 “Shree Ganesh Krupa” Vani Vilasa Road Near Nexa Show Room, Laxmipuram, Mysore -574004.

...DEFENDANTS

OA 320/2023

Counsel on record/appeared for:

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Applicant : Sri. G. N. Satyamurthy, Defendants : Exparte

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FINAL ORDER

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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 for Rs. 1,39,18,985/- (Rupees one crore thirty-nine lakh eighteen thousand nine hundred and eighty-five only) with further interest thereon and cost from the Defendants.

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It is the case of the Applicant that Defendant No.1 is a proprietary concern, Defendant No.2 is its sole proprietor, and Defendant No.3 has stood as guarantor for the loan facilities sanctioned to Defendant No.1. Defendant No.1 was sanctioned a Cash Credit facility of Rs. 27,00,000/- (Rupees Twenty-seven Lakh only) on 06.03.2007. Subsequently, an enhanced Cash Credit limit of Rs. 13,00,000/- (Rupees Thirteen Lakh only) was sanctioned in favour of Defendant No.1. At the further request of Defendant No.1, the Cash Credit facility was renewed and enhanced to Rs. 40,00,000/- under the LTF Scheme. Thereafter,

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OA 320/2023

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an ad-hoc Cash Credit facility of Rs. 20,00,000/- was also granted to meet the business requirements of Defendant No.1. To secure the initial Cash Credit facility of Rs. 27,00,000/-, Defendant No.2 deposited the title deeds of the Schedule-II property, and the said equitable mortgage was subsequently extended to secure

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the enhanced Cash Credit limit of Rs. 13,00,000/-, thereby providing security for the total Cash Credit facility of Rs. 40,00,000/-.

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Further, at the request of Defendant No.1, the Cash Credit facility of Rs. 40,00,000/- (Rupees Forty Lakh only) was renewed under a Letter of Arrangement dated 26.04.2013. Subsequently, at the continued request of Defendant No.1, the Cash Credit facility was renewed and enhanced from Rs. 40,00,000/- to Rs. 60,00,000/- (Rupees Sixty Lakh only), and thereafter again renewed and enhanced from Rs. 60,00,000/to Rs. 1,00,00,000/- (Rupees One Crore only). Defendant No.1 thereafter approached the Applicant for a Working Capital Term Loan (GECL Scheme) of Rs. 20,70,000/- (Rupees Twenty Lakh Seventy Thousand only) under the Emergency Credit Line Guarantee Scheme to meet its business requirements.

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It is also the case of the Applicant that, in view of the above

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OA 320/2023

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loan, the Defendants executed necessary loan documents in favour of the Applicant bank to secure the loan and also had created mortgage and hypothecation over the schedule properties.

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It is the case of the Applicant that the Defendants, despite availing the credit facility, agreeing with the Terms and Conditions for the loans, failed in complying with the same, resulting in defaults and consequentially turning the loan accounts as Non-Performing Asset (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, taking out the summons, there were no appearance of Defendants. Hence, they were called absent and set ex parte on 25.10.2024.

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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-1 to A-30, got the same marked in evidence.

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Heard the Ld. Counsel for the Applicant and considered

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OA 320/2023

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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 succeeded in proving the OA claim as against the Defendants?

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ii) If so, to what extent?

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Both these issues are gone into and decided together.

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The evidence tendered by the Applicant remains uncontroverted and undisputed. The evidence put forth by the Applicant is found admissible and sufficient to prove the averments made in the OA, and the default committed by the Defendants in repaying the loan amount due. The liability of the Defendants and the loan amount due are also proved by the above documents.

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Hence in view of the above findings this Tribunal comes

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to the conclusion that the OA is liable to be allowed.

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The OA has been filed within the period of limitation.

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There is no capitalization of penal interest. Since the credit

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OA 320/2023

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facility was Cash credit, pendente lite and future interest are awarded at 10.00% per annum (simple). The prayer for interest with monthly rests and for penal interest for the future period is

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hereby declined.

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In the result, OA.No.320/2023, is allowed,

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i) The Applicant is allowed to recover an aggregate sum of Rs. 1,39,18,985/- (Rupees one crore thirty nine lakh eighteen thousand nine hundred and eighty five only) with pendente lite and future interest of 10.00% p.a. (simple) from 26.07.2022 till the realization, from the Defendants jointly and severally after giving credit to all the amounts recovered and received during

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the pendency of the OA if any, and allow the same to be recovered by proceeding against the schedule properties. 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 clear

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the loan amount due from Defendants jointly and severally, then

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the Applicant bank is at liberty to procced against their other

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assets for the recovery of the balance due.

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OA 320/2023

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iii) The applicant bank is allowed cost of the proceedings

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for which Applicant to file cost memo within seven days from the

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date of receipt of the order.

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

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order and transferred to Recovery for execution.

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

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in terms of this final order.

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Communicate a copy of the order to the parties concerned

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

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of DRT (Procedure) Rules, 1993.

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(Dictated to PY directly on the Computer, after its transcription, corrected and pronounced by me

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in the open Court on this the 19^th day of November, 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: Sri. Govind L Ballal, Chief Manager, of Applicant Bank.

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Exhibits on the part of the Applicant:

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Exhibit	Date	Particulars of Documents
Nos.
A1	09.02.2011	Arrangement letter

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OA 320/2023

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A2	09.02.2011	Agreement of loan	cum hypothecation
A3	15.02.2011	Arrangement letter
A4	15.02.2011	Agreement of loan	cum hypothecation
A5	06.03.2007	Letter of confirmin Deeds	g Deposit of Title
A6	08.11.2008	Memorandum of deeds	Deposit of Title
A7	14.02.2011	Memorandum of deeds	Deposit of Title
A8	26.04.2013	Arrangement letter
A9	26.04.2013	Agreement of loan	cum hypothecation
A10	29.03.2014	Arrangement letter
A11	29.03.2014	Agreement of loan	cum hypothecation
A12	28.03.2014	Memorandum of deeds	Deposit of Title
A13	13.04.2015	Arrangement letter
A14	13.04.2015	Agreement of loan	cum hypothecation
A15	13.04.2015	Guarantee agreem	ent
A16	10.04.2015	Memorandum of deeds	Deposit of Title
A17	15.06.2017	Arrangement letter
A18	26.02.2020	Arrangement letter
A19	01.06.2020	Agreement of loan	cum hypothecation
A20	15.06.2017	Revival letter
A21	26.02.2020	Revival letter
A22	01.06.2020	Arrangement letter
A23	01.06.2020	Guarantee agreem	ent
A24	24.11.2004	Gift Deed
A25	20.09.1972	Sale deed
A26	17.03.2022	Legal notice
A27	25.07.2022	Certified accounts	extract
A28	25.07.2022	Certified accounts	extract
A29	25.03.2022	Computer output enquiry	of loan closure
A30	25.03.2022	Computer output enquiry	of loan closure

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OA 320/2023

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Witness Examined for the Defendants: -Nil - List of Documents Exhibited for the Defendants: -Nil -

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Sd/(T. RAJESH)

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PRESIDING OFFICER

State Bank of India v. M s B Chandrashekharappa and Sons

Case brief

What is this about?

What did the court decide?

State Bank of India v. M s B Chandrashekharappa and Sons

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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