Allowed

Canara Bank v. M/S Shree Gurudatta Industries

DRT28 Aug 2025OA/345/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed the bank's application for recovery of outstanding loan dues of Rs. 43,75,651 along with future interest from a sole proprietorship firm and its proprietor who failed to appear in the proceedings.

What did the court decide?

Defendants directed to jointly and severally pay Rs. 43,75,651 with future interest at 10% and 7% simple per annum; Recovery Certificate to be issued.

Canara Bank versus M/S Shree Gurudatta Industries — Contract and Commercial Disputes | DRT (2025)

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Presented on: 26.05.2023 Registered on: 15.05.2024 Decided on: 28.08.2025 Duration: Y M D 02 03 00

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IN THE DEBTS RECOVERY TRIBUNAL AT AURANGABAD (Before Dr. J. R. Chauhan Presiding Officer) ORIGINAL APPLICATION No.345/2024

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TOTAL CLAIM AMOUNT – Rs. 43,75,651/-

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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.345/2024)

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[AMBADAS]

Versus

M/s Shree Guradatta Industries, (a sole proprietorship firm through its proprietor Mr. Ramananand Premsingh Chavan)

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Mr. Ramananand Premsingh Chavan (a sole proprietor of M/s Shree Gurudatta Industries)

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Both the defendants carry on business atPlot No. K83/2, Waluj MIDC, Aurangabad-431136.

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…Defendants

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APPEARANCES

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For the Applicant Mr. P.N. Kapadia -Advocate For Defendants Ex-parte

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JUDGMENT 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. 43,75,651/- (Rupees Forty Three Lacs, Seventy Five Thousand, Six Hundred and Fifty one only), along with future interest from the date of filing of the Original Application, i.e., 26.05.2023, until the date of realization of the

(OA No.345/2024)

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[AMBADAS]

entire outstanding dues from the Defendants.

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Brief facts of the application are as under:

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The Applicant Bank states that the Defendant No. 1 is the sole proprietorship firm. Whereas, the defendant No. 2 is the sole proprietor of defendant No.1. The defendant No. 1 through its sole proprietor had approached and requested the Applicant Bank for a Overdraft Facility & Term loan facility. Upon considering the request and financial needs of the Defendants, the Applicant Bank sanctioned a Overdraft Facility of Rs. 30,00,000/- and Term loan Facility of Rs. 7,50,000/- Lacs, vide sanction letter dated 27.09.2019 on certain terms and conditions. The agreed rate of interest for aforesaid loan facilities was @ 10.30% per annum with monthly rests. The Defendants also agreed to pay additional interest by way of liquidated damages in the event of any default in repayment.

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The applicant bank further states that the defendant No. 1 again

(OA No.345/2024)

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[AMBADAS]

approached to the applicant bank to sanction a Working Capital

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term loan (WCTL). Upon considering the request and financial needs of the Defendants, the Applicant Bank sanctioned a Working Capital term loan (WCTL) of Rs. 6,00,000/- vide sanction letter dated 22.10.2020 on certain terms and conditions. The agreed rate of interest for aforesaid loan was @ 7.50% per annum with monthly rests. The Defendant also agreed to pay additional penal interest of 2% by way of liquidated damages in the event of any default in repayment.

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In order to secure the aforesaid loan facilities, the Defendant executed various loan documents in favour of the Applicant Bank. These included sanction letters, hypothecation agreements, demand promissory notes, letter of undertaking etc in favour of the applicant bank.

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The Applicant Bank further contends that, in order to secure the

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aforesaid loan facilities, the Defendants created a first charge on

(OA No.345/2024)

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[AMBADAS]

hypothecated machineries, book debts etc.

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The applicant bank contended that the defendants have failed to

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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 09.11.2022. The defendants failed and neglected to repay the outstanding dues of the applicant Bank. Hence, this application is filed.

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The defendants failed to appear in matter though they were 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

(OA No.345/2024)

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[AMBADAS]

Exhibit-4 of 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-1/18 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.

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The applicant Bank has claimed charge over hypothecated properties of the borrowers.

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The applicant Bank has claimed future interest @10.30% per annum on OCC & Term loan facility and @7.50% p. a. on WCTL with monthly rests from the date of filing i.e. 26.05.2023 of this

(OA No.345/2024)

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[AMBADAS]

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 @ 10% per annum (simple) on OCC & term loan and @ 7% per annum (simple) on WCTL, it would be just and reasonable rate of interest.

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ORDER

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(A) Original Application No.345/2024 is allowed with costs.

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(B) The defendants shall jointly and severally pay to the applicant Bank a sum of Rs. 43,75,651/- (Rupees Forty Three Lacs Seventy Five Thousand Six Hundred and Fifty one only), along with future interest @ 10% per annum (simple) on OCC & term loan and @ 7% per annum (simple) on WCTL from the date of filing of the Original Application i.e. 26.05.2023 till full payment/realization of the amount mentioned in this operative order.

(OA No.345/2024)

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[AMBADAS]

(C) The aforesaid adjudicated amount is secured by the hypothecation of machineries and other movable assets vide deed of hypothecations Exhibit AW-1/7 & AW-1/12 in the list of documents Exh. 5

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(D) The applicant Bank is entitled to sell the hypothecated, machinery, instruments and other moveable assets, etc., to recover its dues.

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(E) Issue Recovery Certificate accordingly.

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(F) The Registrar is directed to send the copy of the 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. (Dr. J. R. Chauhan) Place: Aurangabad Presiding Officer Date:.28.08.2025 Debts Recovery Tribunal, Aurangabad

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(OA No.345/2024)

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[AMBADAS]

Canara Bank v. M/S Shree Gurudatta Industries

Case brief

What is this about?

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Canara Bank v. M/S Shree Gurudatta Industries

Case brief

What is this about?

What did the court decide?

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