Allowed

Union Bank of India v. M/S. Hindustan Springs

DRT21 Aug 2025OA/364/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the bank's recovery application against a proprietary firm and its proprietor and guarantor. The court held the claim unchallengeable as the guarantor denied execution of the deed but failed to adduce evidence or cross-examine the bank witness to dispute the documents.

What did the court decide?

Defendants declared jointly and severally liable to pay Rs.76,28,730.13 with interest; bank entitled to proceed against mortgaged property and defendants' person/properties for realization.

Union Bank of India versus M/S. Hindustan Springs — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY^{TRIBUNAL.II AT HYDERABAD} DATED THIS THE^{TWENTYFIRSTDAY OF AUGUST,2025}

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PRESENT: SH. RAMESHWAR^{KOTHE,B,COM, L.LB. (HONS.), M.A.}

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PRESIDING OFFICER

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ORIGINAL APPLICATION^NO. 364^{OF ZO22}

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Between:

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Union Bank of India Manikonda Branch R.R. District Rep by its Manager.

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.......Applicant.

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And

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M/s. Hindustan Springs Proprietary Firm Prop: Mrs. K. Rajyalakshmi 5-66, Doolapally Jeedimatla Phase^V Hyderabad-500 014.

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Smt. K. Rajya Lakshmi Prop: M/s. Hindustan SPrings Wo^{K. Seenaiah,Age:52} Years 5-66, Doolapally, Jeedimatla^PhaseV Hyderabad-500 014.

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Also at:

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H. No. 4-32-r24L/3/7 Plot No.7, Phase-z Alwyn Colony, Kukatpally Hyderabad-500072.

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K. Seenaiah, S/o K. Vengaiah Major, H. No. 4-32-1241/3/7 Plot No.7, Phase-2 Alwyn Colony, Kukatpally ..... Defenda nts. Hyderabad^- 5000 7r. ,ay^*r, / /y'^',>-r- l).,

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oa.354/2022

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Counsel for the Applicant : Mr. P. Balaji. Defendants 1 and 2 :Exparte. Counsel for Defendant No.3 : Mr. S. Sreekanth.

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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 sum of Rs.76,28,730.t3ps from defendants 1 to 3 joinHy and severa y with future interest 6113.29o7o per annum with monthly rests frcm 07.05.2022 till the date of realisation and sale of OA schedule property.

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The averments of applicant bank as per the OA, briefly, are defendant No.1 Firm was having a secured over draft facility with the applicant bank. During the year 2019, defendant No.1 got the said facitity enhanced to Rs.64,OO,OOO/_ by executing requisite loan documents. The earlier overdraft facility was secured by way of OA schedule property as also hypothecation of goods and receivable. Defendant extended the earlier security to the enhanced limits and executed registered document bearing No.3299 of 2O7g on 77.04.20tg. Defendants were sanctioned Working Capital Term Loan of Rs.12.60 lakhs during Covid.19 pandemic. However, defendants committed various irregularities in the operation of the loan account resulting in classification of loan account as NpA on 31.03.2021 and securitisation proceedings vide demand notice u/s 13(2) dated 09.04.2021. Since the defendants have not cleared the dues, present OA is filed under the RDDB Act. Av*9 /1./ 15. |',/

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oA.36412022

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Defendants 1 and 2 were set exparte vide docket order dated 23.06.2023.

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Defendant No.3 filed written statement. The contentions raised in the written statement, in brief, are due to liquidity crunch on account of unfavourable market conditions of their business, they could not repay the loan amount as agreed. The applicant bank charged a higher rate of interest to which defendants never agreed. Defendant No.3 denies of executing the guarantee agreement. The OA is barred by limitation as the date of execution of guarantee was 18.04.2019 and the OA is filed on 31.05.2022 i.e., after expiry of three years. Hence applicant bank is not entitled to any relief against defendant No.3. Applicant has not invoked the guarantee before filing the present OA against defendant No.3. The statement of account does not reflect any outstanding amount as claimed by the applicant bank in the relief portion of the OA. OA claim is not supported by any document.

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In order to prove its case, the Applicant Bank examined Y. Sumanth, lvla nager as AW-1 and marked 12 documents through him as Exs. A.1 to Ex. A.12.

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In order to substantiate his defence, Defendant No.3 examined himself as DW.1 but marked no documents.

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Learned counsel for applicant bank^prayed that orders may be passed based on records. Contesting defendant's right to advance arguments forfeited vide docket order dated 70.07.2025 for non-representation. Perused. tl,le material placed on record. /?*tY''$f" (/

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oA,36412022

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The point that arises for consideration ls:-

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Whether the Applicant Bank is entitled for the OA claim against the Defendants 1 to 3 and the OA schedule property?

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Applicant bank filed the present OA for recovery of Rs.76,28,730.13Ps jointly and severally from the defendants 1 to 3, with defendant No.1 borrower, represented by defendant No.2 Proprietrix and defendant No.3 guarantor. Applicant bank has exhibited 12 documents in support of its claim against the defendants. As stated supra, the principal borrower i.e., defendant No.2 representing defendant No.1 did not choose to pursue the case by remaining exparte. Whereas, defendant No.3 being the guarantor filed written statement. While denying execution of guarantee deed on one hand, he raised the issues of limitatlon, charging of higher rate of interest by applicant bank, correctness of OA claim on the other hand. However, defendant No.3 did not choose to place any material in support of his contention with respect to the discrepancy in the OA claim or any specific incidence of higher rate of interest being charged to the loan account. Similarly, defendant No.3 did not challenge the signatures appearing on Ex.A.g Guarantee Agreement by cross examination of AW.1. It is important to note that defendant No.3 is none other than the husband of defendant No.2 Propritriex of defendant No.1 concern. As stated supra, despite denying execution of guarantee deed and correctness of OA claim, defendant No.3 did not choose to place on record any evidence in support of his contentions nor did he cross examine AW.1 disputing the veracity of documents marked on behalf of the applicant bank. It is- a settled legal ,$V,"*v\ L/'l')"-

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oa,36412022

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position that any amount of pleadings without supporting material evidence is of no avail. In view of the foregoing facts and circumstances, the Evidence Affidavit of AW.1 coupled with the recitals in Exs. A.1 to A.12 marked on behalf of the Applicant Bank remain unchallenged and unrebutted. Accordingly, Applicant Bank is able to prove its claim against the Defendants 1 to 3. Hence, I hold that Defendants 1 to 3 are jointly and severally liabte to pay the OA claim to the Applicant Bank with future interest and costs.

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In the result, the present Original Apptication No.364/2022 is allowed as under: -

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i) the defendants 1 to 3 are joinuy and severally liable to pay to the applicant bank a sum of Rs.76,28,730.13Ps along with interest @11.45yo 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 mortgage of property described in the schedule annexed to the OA and the applicant bank is entitled to proceed against the same for realisation of its dues;

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iii) 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. Mn*>b (-/ :)

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0.A.36412022

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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 Site.

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(Dictated to the steno, signed and pronounced by me in the open court on this the 21't day of August, 2025.1

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PRESIDING OFFICER

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Union Bank of India v. M/S. Hindustan Springs

Case brief

What is this about?

What did the court decide?

Union Bank of India v. M/S. Hindustan Springs

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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