Allowed

State Bank of India v. M/S Kesava Travels

DRT28 Apr 2025OA/339/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed the bank's original application for recovery of loan dues. The court held defendants jointly liable despite a defense claiming hypothecated vehicles were sold, attributing non-contradiction of this claim to the bank's failure to advance arguments.

What did the court decide?

Defendants jointly and severally liable to pay Rs.1,03,31,869/- plus future interest, costs, and bank entitled to proceed against assets.

State Bank of India versus M/S Kesava Travels — Contract and Commercial Disputes | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL-II AT HYDERABAD DATED THIS THE TWENTYEIGHTH DAY OF APRIL, 2025 PRESENT: SH. RAMESHWAR KOTHE, B.Com, L.LB. (Hons.), tvt.A. PRESIDING OFFICER

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ORIGINAL APPLICATION NO. 339 OF 2023

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Between:

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state Bank of India SME Branch, R.P. Road Ranigunj Circle Secunderabad Rep by its Chief Manager.

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.......Applicant.

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And

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M/s. Kesava Travels Rep by its Proprietor Mr. A. Kesavulu H.No.2-2-7t32/9/A Tilak Nagar New Nallakunta Hyderabad-500044.

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Mr. A. Kesavulu S/o A. Chandraiah Aged: 42 years Proprietor M/s. Kesava Travels H.No.2-2-7r32/9lA Tilak Nagar, New Nallaku nta H ydera ba d - 500044.

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Mr. Gaajula Nagaraju S/o G. Pedda Kesha nna Aged: 38 years, Proprietor of G. Nagaraju Suppliers H. No. 2-2-t8/27, Ftat No.303 Venkatagiri Residency Amberpet, Hyderabad-13.

...... Defenda nts.

/W-"'b

oa.3391202!

Counsel for the Appllcant Counsel for Defendants

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: Mr. M. Venkat Divakar.

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: 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 The Recovery of Debts & Bankruptcy Act. 1993 for recovery of a total sum of Rs.1,03.31,869/- (Rs.69,05,555/- towards toan account No.38956939532 with interest @11.30olo p.a., Rs.15,42,098/towards loan account No.39769A32992 with interest @9.250lo p.a. and Rs.18,84,216l- towards loan account No.4O274245768 with interest @9.25olo p.a.) jointly and severally from the defendants with penal interest @2olo p.a. from 01.03.2023 till the date of realisation along with costs and for sale of OA schedule movable assets.

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The averments of applicant bank as per the OA, briefly, are that 1"t defendant represented by its proprietor 2nd defendant, availed a term loan of Rs.96,00,000/- for purchase of four Buses agreeing to the terms and conditions of loan agreement dated 27,77.20t9. The said buses were hypothecated against the loan account. The 1st defendant availed two GECL loans of Rs.19,00,000/- each on 31.10.2020 and 06.07.202r respectively. The 3d defendant stood as a guarantor to the loans availed by 1"t defendant and the hypothecation has been extended to the GECL loans also. Defendants executed supplementary agreements from time to time. The defendants became irregular in repayment and were served with a notice dated 72.09.2022 recalling the outstanding dues. The accounts have been classifled as NpA on L3.tO.ZOZZ, followed by demand notice dated 02.01.2023. The total outstanding lying

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tl.-*.16 '^-F'

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oa.33912023

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against all the three accounts works out to Rs.1,03,31,869/_ The OA is filed for recovery of the dues from the defendants.

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Defendants filed written statement. The relevant averments, in brief, are that the applicant bank took the possession of the hypothecated vehicles as back as August 2022 and sold the same for recovery of dues. The sale proceeds of the same are more than enough to meet the outstanding dues. In fact, the authorities of the applicant bank informed that the value of the four buses would be a litue bit more than the outstanding dues and the surplus money would be credited to the loan account. Thus, no amount is outstanding. As such the OA claim is false and baseless. Applicant bank has not mentioned about the disposal of hypothecated vehicles. The rate of interest was fixed by the applicant bank unilaterally. The loans were sanctioned under CGTMSE and Government of India, being a guarantor to the said loans, is a proper and necessary party to this OA. Hence the OA is not maintainable for non-joinder of necessary party. If the sale proceeds of the hypothecated vehicles is not sufficient to meet the applicant bank,s requirements, it can recover the same from the Central Government. Defendants have not received any notice from the applicant bank.

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Applicant bank examined Madhuri Sarala, Chief Manager, as AW-1 and marked 14 documents through them in total as Ex. A.1 to Ex. A.14.

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Defendants examined D2 as DW,1 but no documents filed.

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fur"*

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oA.3!912023

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Right of^{argumentsof bothsidesforfeitedvide docketorder} dated 09.04.2025^{for non-representation' Perused the material} placed on record.

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The^{point that arises for considerationis:-}

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whether the^{APPlicantBank is} entitled for^{the OA claim against} the Defendants^{and the OA} schedule^assets?

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There^{is no denial of availment of loan and defaultin} repayment.^{Defendants contended that the hypothecated} vehicles were^{seized and thereafter put for auction by the} apPlicant bank.^{Accordingto the defendants'the sale proceeds} of the^{hypothecatedvehicleswould meet the requirementof the} respondent^{against outstanding dues Applicant bank has not} disputed this^{statementeither by way of rejoinder or by way} cross examination^{ofDW'1 oradvancing arguments} contradicting^{the said contention'Since the applicant bank has} not chosen^{to advance arguments,the OA claim is allowed} basing on^{the EvidenceAffldavit of AW'1coupled with the} recltals in^{Exs. A.1 to A.14 marked on behalf of the applicant} bank.^{Accordingly,I hold that the defendants1 to 3 are jointly} and severally^{liable to pay the OA claim to the applicantbank} with future^{interest and costs'}

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In the result,^{the present Original Application No'339/2023is} allowed as under:^-

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i) the defendants^{1 to 3 are jointly severally} liable to PaY^{Rs.1,03,31,869/-} ffi'n'n

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oA.33912023

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(Rs.69,05,555/-, Rs.15,42,098/- and Rs.18,84,216l-) to tne applicant bank along with future interest @7.650/o p.a. simple from the date of Application till the date of realization;

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ii) the OA claim is secured by way of hypothecation of vehicles described in the schedule annexed to the OA and the applicant bank is entitled to proceed against the same for recovery of its dues, if not disposed of already;

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iii) the applicant bank is also entitled to proceed against the person and properties of defendants for realization of its dues; and

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iv) the applicant bank is entitled for the costs.

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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 Portal.

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(Dictated to the steno, signed and pronounced by me in the open court on this the 28s day of April, 2025.)

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!!@e

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ESHWAR KOTHE) PRESIDING OFFICER

State Bank of India v. M/S Kesava Travels

Case brief

What is this about?

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State Bank of India v. M/S Kesava Travels

Case brief

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