Allowed

Canara Bank v. M/s Datta Engineering

DRT28 Aug 2025OA/344/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application filed by Canara Bank for recovery of dues amounting to Rs. 37,92,427/- from a sole proprietorship firm and its proprietor who were in default on term loans and overdraft facilities. The tribunal proceeded ex-parte due to the defendants' absence.

What did the court decide?

Joint and several payment of Rs. 37,92,427/- plus future interest at 9% p.a. simple; enforcement of mortgage and hypothecation; issue of Recovery Certificate.

Canara Bank versus M/s Datta Engineering — Contract and Commercial Disputes | DRT (2025)

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Presented on: 24.05.2023 Registered on: 15.05.2024 Decided on: 28.08.2025 Duration: Y M D 02 03 04

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IN THE DEBTS RECOVERY TRIBUNAL AT AURANGABAD (Before Dr. J. R. Chauhan Presiding Officer) ORIGINAL APPLICATION No. 344/2024

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TOTAL CLAIM AMOUNT – Rs. 37,92,427/-

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CANARA BANK, SME Branch, Aurangabad

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Banking Company incorporated under the Banking

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companies (Acquisition & Transfer of Undertaking)

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Act, 1970. Having its Head Office at-Naveen Complex, 14, M G Road, Bangalore, Karnataka560001, And having one of its Branches at-Canara

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Bank, SME Branch, Plot No. 1, Marathwada Building,

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Near Gurunanak Petrol Pump, Opp. Saint Francis School, Jalna Road, Aurangabad-431001. Through its Chief Manager and Power of Attorney Holder Jitendra Kumar Pandey

… Applicant

(OA No.344/2024)

Page 1 of 12

[AMBADAS]

Versus

M/s Datta Engineering, (a sole proprietorship firm through its proprietor Mr. Vilas Sahebrao Kolhe)

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Mr. Vilas Sahebrao Kolhe (a sole proprietor of M/s Datta Engineering)

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Both the defendants resideds atPlot No. 152, Galli No. 10, Pundlik Nagar, Garkheda, Tq. And Dist. Aurangabad-131009.

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…Defendants

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APPEARANCES For the Applicant For Defendants

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Mr. P.N. Kapadia -Advocate Ex-parte

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JUDGMENT

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Delivered on 28.08.2025

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The Applicant Bank has filed the present application for the recovery of a sum of Rs. 37,92,427/- (Rupees Thirty Seven Lacs Ninety Two Thousand, Four Hundred and Twenty Seven only), along with further interest from the date of filing of the Original Application, i.e., 24.05.2023, until the date of realization of the

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entire outstanding dues from the Defendants.

(OA No.344/2024)

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[AMBADAS]

Brief facts of the application are as under:

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The Applicant Bank respectfully submits that the Defendant No. 1 is a sole proprietorship concern, and Defendant No. 2 is the sole proprietor of Defendant No. 1. The Defendant No. 1, through its sole proprietor, approached the Applicant Bank and requested for financial assistance in the form of a Term Loan and Overdraft (OCC) Facility.

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Considering the financial requirements and creditworthiness of the Defendants, the Applicant Bank sanctioned a Term Loan of Rs. 7,50,000/- and an OCC Facility of Rs. 10,00,000/-, vide sanction letter dated 01.01.2014, on specific terms and conditions mutually agreed upon. The said facilities carried interest at the rate of 11.45% per annum with monthly rests. The Defendants also agreed to pay additional interest by way of liquidated damages in the event of default in repayment.

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Subsequently, the Defendants sought further financial assistance

(OA No.344/2024)

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[AMBADAS]

in the form of a fresh Term Loan and enhancement of the OCC

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Facility. Upon due consideration, the Applicant Bank sanctioned a fresh Term Loan of Rs. 25,00,000/- and enhanced the OCC limit

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from Rs. 10,00,000/- to Rs. 15,00,000/-, vide sanction letter dated 03.11.2017. The Term Loan carried interest at the rate of

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10.45% per annum with monthly rests, and the OCC limit was to

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be repaid with interest at the rate of 9.60% per annum. The Defendants also agreed to pay an additional interest of 2% per

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annum by way of liquidated damages in case of default.

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Thereafter, the OCC limit of Rs. 15,00,000/- was renewed from time to time as under:

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Vide sanction letter dated 06.06.2018, the OCC limit was renewed up to 04.05.2019, at an interest rate of 10.35% per annum;

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Vide sanction letter dated 16.05.2019, the OCC limit was renewed (details as per the said letter);

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Vide sanction letter dated 24.07.2020, the OCC limit of Rs. 15,00,000/- was renewed up to 23.07.2021, at an interest rate of 8.90% per annum.

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During the COVID-19 pandemic, the Defendants submitted a

(OA No.344/2024)

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[AMBADAS]

restructuring request dated 18.06.2021, seeking restructuring of

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the existing credit facilities and extension of additional credit. Upon due consideration, the Applicant Bank acceded to the

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request and extended the following additional credit facilities:

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Working Capital Term Loan (WCTL) of Rs. 9,00,000/-; Funded Interest Term Loan (FITL) of Rs. 22,090.20/-; Another Funded Interest Term Loan (FITL) of Rs. 1,00,000/-. The above facilities were sanctioned on mutually agreed terms

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and conditions and availed by the Defendants.

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Particulars of Amount Outstanding Under the Loan Account:

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A/c No. 391626100023 (OCC)

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Sr.	Particulars	Amount in Rs.
No.
a)	Principal amount outstanding as on 31.03.2023	Rs. 6,74,753
b)	Un-applied interest till 31.03.2023.	Rs. 9,478/-
	Total	Rs. 6,84,231/-

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A/c No. 3916766000202 (MSME TL)

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Sr.	Particulars	Amount in Rs.
No.
a)	Principal amount outstanding as on 31.03.2023	Rs. 18,99,241.23

(OA No.344/2024)

Page 5 of 12

[AMBADAS]

b)	Un-applied interest till 31.03.2023.	Rs. 7,379.60/-
	Total	Rs. 19,06,621/-

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A/c No. 3916753000017 (WCDL)

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Sr.	Particulars	Amount in Rs.
No.
a)	Principal amount outstanding as on 31.03.2023	Rs. 1,49,439.28
b)	Un-applied interest till 31.03.2023.	Rs. 493.74/-
	Total	Rs. 1,49,933/-

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A/c No. 3916746000008 (WCTL)

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Sr.	Particulars	Amount in Rs.
No.
a)	Principal amount outstanding as on 31.03.2023	Rs. 9,18,651.94
b)	Un-applied interest till 31.03.2023.	Rs. 2,881/-
	Total	Rs. 9,21,533/-

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A/c No. 3916747000009 (FITL)

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Sr.	Particulars	Amount in Rs.
No.
a)	Principal amount outstanding as on 31.03.2023	Rs. 19,480.51
b)	Un-applied interest till 31.03.2023.	Rs. 66/-
	Total	Rs19,547/-

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A/c No. 3916747000010 (FITL)

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Sr.	Particulars	Amount in Rs.
No.
a)	Principal amount outstanding as on 31.03.2023	Rs. 1,10,202.31
b)	Un-applied interest till 31.03.2023.	Rs. 3,59.45/-

(OA No.344/2024)

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[AMBADAS]

	Total	Rs 1,10,562/-
Total amount outstanding due and		Rs. 37,92,427/-
payable by the defendants to the applicant as on 31.03.2023.

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In order to secure the aforesaid loan facilities, the Defendants

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executed various loan documents in favour of the Applicant Bank. These included sanction letters, deed of hypothecations, demand promissory notes, letters of renewal, letters of undertaking; equitable mortgages vide e-filing Nos. 1426 on 24.12.2013 & ARB3-2153/2017 on 02.11.2017 in favour of the

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applicant bank.

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The Applicant Bank further contends that, in order to secure the aforesaid loan facilities sanctioned to them, the Defendants created charge over their immovable property vide e-filing Nos.

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1426 on 24.12.2013 & ARB3-2153/2017 on 02.11.2017 in favour of the applicant bank. The mortgage was created in

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respect of the following property –

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Plot No. 73, area admeasuring 176 Sq.Mtr., situated in land Gut No. 67, at Wadgaon Kolhati, Waluj MIDC, Dist. Aurangabad (M.S.) which is bounded as under

(OA No.344/2024)

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[AMBADAS]

East :- 7.50 Mtr. Wide road, West :- Plot No. 72, North:- Plot No. 74, South: - Land belonging to BKT Company.

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The applicant bank further states that in order to secure the loan, the defendants also executed deed of Hypothecation, thereby hypothecating machineries purchased using loan amount.

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The applicant bank contended that the defendants have failed to keep their promise and commitments agreed by them with regard to due repayment of the loan amount. The defendants failed to operate the loan account properly and failed to pay the agreed rate of interest as per terms and conditions of the sanction letter. Thereafter, the applicant bank repeatedly made demand of loan amount and called upon the defendants to pay with the agreed rate of interest thereon, but the defendants failed and neglected to pay the same. The loan account of the defendants became irregular and classified as NPA on 16.10.2022. Therefore on 21.10.2022 the applicant bank issued legal Notice to the defendants. The defendants failed and neglected to repay the outstanding dues of the applicant Bank.

(OA No.344/2024)

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[AMBADAS]

Hence, this application is filed.

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The defendants failed to appear in matter though they served through Court Commissioner. Hence, the defendants were proceeded ex-parte as per Order dated 13.08.2025.

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The applicant Bank has filed Claim Affidavit of evidence at Exhibit-4 of Mr. Jitendra Kumar Pandey, Chief Manager of the applicant Bank, and has produced on record the original loan transaction documents as Exh. AW-1/1 to AW-1/25 along with list of documents Exh.5 which corroborates 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 to file the written statement and did not contest the application, I find no reason to disbelieve the unrebutted evidence of the applicant Bank. Therefore, the applicant Bank is entitled for the reliefs as claimed.

(OA No.344/2024)

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[AMBADAS]

The applicant Bank has claimed charge over immovable property of the borrowers which is mortgaged in favour of the applicant bank.

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The applicant Bank has claimed future interest @11.45% per annum on both the loans from the date of filing i.e. 24.05.2023 of this application till realization of the claim amount. However, considering the facts of the case, I am of the opinion that if future interest is granted @ 9% per annum (simple), it would be just and reasonable rate of interest.

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ORDER

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(A) Original Application No.344/2024 is allowed with

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costs.

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(B) The defendants shall jointly and severally pay to the applicant Bank a sum of Rs. 37,92,427/- (Rupees Thirty Seven Lacs, Ninety Two Thousand, Four Hundred and Twenty Seven only), along with future interest @ 9% per annum (simple) from the date of

(OA No.344/2024)

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[AMBADAS]

filing of the Original Application i.e. 24.05.2023 till full payment/realization of the amount mentioned in this operative order.

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(C) The aforesaid adjudicated amount is secured by the mortgage of the following immovable properties vide documents at Exh. AW-1/4 & AW-1/11 in the list of documents at Exh. 5.

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All that piece and parcel of the Plot No. 73, area admeasuring 176.500 Sq.Mtr., situated in land Gut No. 67, at Wadgaon Kolhati, Waluj MIDC, Dist. Aurangabad (M.S.) which is bounded as under

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East :- 7.50 Mtr. Wide road, West :- Plot No. 72, North:- Plot No. 74, South: - Land belonging to BKT Company.

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(D) The applicant Bank is entitled to sell the mortgaged immovable property and hypothecated machineries/ articles/goods, etc., to recover its dues.

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(E) Issue Recovery Certificate accordingly.

(OA No.344/2024)

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[AMBADAS]

(F) The Registrar is directed to send the copy of the

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Judgment and Recovery Certificate to the applicant and defendants.

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(G) File be consigned to the record room.

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Sd/-

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Pronounced in open court. Place: Aurangabad Date:.28.08.2025

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(Dr. J. R. Chauhan) Presiding Officer Debts Recovery Tribunal, Aurangabad

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(OA No.344/2024)

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Page 12 of 12

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[AMBADAS]

Canara Bank v. M/s Datta Engineering

Case brief

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Canara Bank v. M/s Datta Engineering

Case brief

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