Partly allowed

M/s Axis Bank Ltd. v. M/s Akr Constructions Limited

DRT26 Dec 2025OA/447/2022

Case brief

AI extract

What is this about?

In an original application under the Recovery of Debts Act for recovery of loan dues, the Debts Recovery Tribunal dismissed the claim against the 6th defendant who contested the genuineness of his signature on guarantee and mortgage documents as forged. The claim against other defendants was allowed as unchallenged. The bank was denied costs.

What did the court decide?

OA claim partially allowed; Defendants 1 to 5 liable for dues secured by OA Schedule-B properties; OA claim against 6th defendant and OA Schedule-A property dismissed.

M/s Axis Bank Ltd. versus M/s Akr Constructions Limited — Cheque Dishonour | DRT (2025)

¶1

IN THE DEBTS RECOVERY TRIBUNAL.II^{AT HYDERABAD} DATED THIS THE 26th DAY OF DECEMBER,²⁰²⁵

¶2

PRESENT: SH. RAMESHWAR KOTHE,^{B.COM, L.LB. (HONS.),IVI.A'} PRESIDING OFFICER

¶3

ORIGINAL APPLICATION^{NO,447OF 2lJ22}

¶4

lY/s Axis Ba nk Ltd Corporate Ban king Branch At 1't floor, G.Pulla Reddy Building, 6-3-879 /8, Greenlands Begumpet Road, Hyderabad, Telangana, Represented by its Genera^I Power of attorney holder

¶5

....Applica nt

¶6

Versus

¶7

M/s AKR Constructions Llmited Rep. by its Managing Director Shri A Krishna Reddy S/o Shri Sunder Raml Reddy Age: 67^yrs, Occ: Business PIot # 8-2-684113, 1st Floor, Bhavani Nagar Colony, Ka nakadurg Temple lane, Road No. 12,^{Banjarahills,} Hyderabad-500034

¶8

Shri A Krishna Reddy^{(ManagingDirector)} S/o Shri Sunder Rami Reddy Age:67 yrs, Occ: Business Plot No 8-2-684114, 1st Floor, 6Mvani Nagar Colony, Kanakadurg Temple Lane, Road No. 12, Banjara Hills, Hyderabad-34

¶9

Shri A Sashi Kumar Reddy (Whole time Dlrector) S/o Shri A Krishna Reddy Age: 43 yrs, Occ: Business Plot No 8-2-684114, 1st Floor, Bhavani Nagar Colony, Ka nakadurg Temple la ne, road No. 12. Baniara Hills, nyderabad-34' /fug-^;. /(./'$" l-"'

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oA.44712022

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Smt. Indira Reddy^(Director) W/o Shri A Krishna Reddy Age: 62^yrs, Occ: Buslness Plot No 8-2-684lJ4,^{1st Floor,} Bhavani Nagar Colony, Kanakadurg Temple Lane, Road No. 12, Banjara^Hills, Hyderabad-34

¶12

q Smt. Sujana^Reddy D/o Shri G Sudershan^ReddY Age: 38^yrs, Occ:^Business Plot No 8-2-684lJ4,^{1st Floor} Bhavani Naga r Colony, Kanakad u rg TemPle^Lane, Road No. 12, Banjarahills, Hydera bad-34

¶13

Shri G Sudershan^Reddy S/o Shri G Rami^Reddy Age: 67^yrs, Occ:^Business Plot No 1-25, Bairamalguda, Sarror Nagar,^HYderabad-35

¶14

ING Vyasya Bank^Ltd Rep by its Branch^Head 8-2-720/76/t/8,^{Road No 2,} Ashok Hi Tech Chambers, Banjarahills Hyderabad⁵⁰⁰⁰³⁴

¶15

Barclays^Bank Rep By its Branch^head PLC 601/603, Ceejay^House, Shivasaga r Estate, Dr Annie Besant^Road Worli, Mumbai 40018

¶16

Bank of Baroda Masa b Tank Rep By its Branch^Head 8-2-631, RMK^{Plaza, 1st Floor,} Road No 1 and 12^Junction Banjarahills,^{Hyderabad 500034} M

¶17

.... Defendants

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oa.44712022

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Cou nsel for the Applicant : lvls. D. Sangeetha Jaiswal

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Counsel for the Defenda^nt No.6: Mr. B. Damodar Reddy

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Defendant Nos.1 to 5 and 7 to 9:^{Ex parte.}

¶22

:: ORDER ::

¶23

The Applicant Bank filed the^presentOA u/s^{19 of The Recovery} of Debts & Bankruptcy Act, 1993^{for recovery of a total sumof} Rs.7,35,99,704.7 5^ps from defendants 1 to 6^{jointly and severally} towards account No.03004130000 02776^{with interest} @14.75olo^p.a. including 2o/o^penal interest with^{monthly rests from14.06.2022tlll the} date of realisation and in default,^{for sale of O A. Scheduleproperties'}

¶24

The averments of applicant bank as^per the^{OA, briefly,are that} 1't defendant company represented by its^{14anagingDlrector-2nd} defendants and other Directors-defendants^{avalled cash credit facillty} of Rs.5,00,00,000/- and bank^{guarantee limit} of^{Rs.20,00,00,000/-} vide sanction ietter dated 19.08.2008.^{Defendantno.2 to 6 stood as} guarantors for loan and executed^guarantee agreements.^{The limits} are also secured by way of mortgage of^{OA scheduleimmovable} properties belonging to defendants 5 and 6. On the request of defendants the CC loan facility of^Rs. 5^{Crore and BG limit of Rs. 25} Crore were renewed on 19.04.20i0.^{SubsequentlyCC limit was} renewed to Rs. 5 Crore and BG^{limit of Rs. 19.03 Crore on 24.72.2071.} Later on the defendants again requested for^{renewal of} the^{CC loan of} Rs. 5 Crore and BG limit of^Rs. 14,30,00,000/-^{on 23.08.2018.The} renewed limits are secured by^{personal guarantees} and^{extension of} mortgages. However the defendants failed to maintain^{the loan} account due to which their account was classified^{as NPA on} 29.09.20t9 after whlch applicant bank^{proceededvyltj tneSARFESI}

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^ot

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proceedings. Applicant issued^{legal noticedated 08 12'2020} demanding repayment of^{Rs.5,66,35,282.75ps. As the defendants} failed to clear the outstanding^{dues, the present OA ls filed.}

¶28

Summons served on^{defendant no.7 to 9 and set ex parte as} called absent and^{no representationvide docket order dated} 28.06.2023. The^{right of filling writtenstatement of defendantno 1 to} 5 was forfeited^{despite ample of opportunity belng provided}

¶29

The defendant no. 6 filed^{writtenstatement denying the entire} averments of the^{OA and claim againsthim. The submissions, briefly,} are that the loan^{transaction and execution of loan documents are not} within the knowledge of him.^{The signatures on the documents are} forged. The defendant^{confirms himbeingthe sole proprietorof M/s} Sal Ram Carriers-BPCL outlet^{as well as M/s Sai Ram Carriers and} availing a credit^{facility of Rs.1OO.O0Lakhsvide a sanctionletter dated} 05.12.2006 from the^{Dilsukh Nagar Brach of applicant bankby} creatlng mortgage over^{OA 'A' scheduleproperty herein. Theabove} said application was extended^{to credit facilities to M/s Sai Ram} Carriers on 16,04.2008.^{Defendant No.6avers creating equitable} mortgage over^{ApplicationA Schedule property solely as security for} his own credit facilities^{from Axis Bank, Dilsukhnagar Branch and limlts} restructured/enhanced/renewed^{thereafter.The account of M/s Sai} Ram Carriers-BPCL^{Outlet was closedon 04.L2.2o17 whereas account} of M/s Sairam was^{closedon 27.72.2017and the bank videletters} dated 28.03.2018^{confirmed the said closureof accounts.After a lot of} pursuance and letters, the Bank^{endorsed to CBD,Hyderabadfor} release of documents. He^{learnt from his daughter6th defendant about} filing of OA No.447/2022^{whereinbank falsely arrayed him as} guarantor for Defendant No.1 via forged^{guarantee deed,declaration-} cum-mortgage extension,^{and counter-signedsrqctlonletters'} /.M.'.*s (,

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oa.44712022

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Defendant categorically denles execution, alleges^{fabricated signatures} with inconsistencies. Hence it is^{prayed for forensic examination of} disputed documents vis-d-vis admitted^{slgnatures, dismissalof OA} against him with costs, and direction^{for return of originaltitle deeds}

¶32

The Applicant Bank^examined G.^{Lingamurthy, AssistantVice} President as AW-1 and marked^{26 documents through him as Ex. A.1} to Ex.A.26.

¶33

The defendant no.1 to 5 right of adducing evidence^{was forFelted} vide docket order dated 15.03.2024 as^{they failed to adduce evidence} even after afFording sufficient opportunity.

¶34

To substantiate his case, the 6th defendant^{G SudershanReddy} examined himself as DW-1 and^marked 10^{documentsas Ex. D.1 to} Ex. D. 10.

¶35

Heard both learned counsel for the applicant bank^{and defendant} no.6. Perused the written arguments filed for defendant^{no.6 and the} material brought on record.

¶36

Learned counsel for the applicant bank contended that the^1st defendant company represented by its^{ManagingDirector} and^other dlrectors i.e., defendants 2 to 6, availed cash credit and^{BG facilities} vide sanction letter dated 19.08.2008 by executing loan documents, personal guarantee agreements and security documents in respect of OA schedule immovable^properties ln the name of defendants^{5 and 6.} The limits are also secured by 1't charge over current assets of^the company except Chokkarao Godavari Lift Irrigation Project Phase-II,ⁿ pari passu basis with Barclays Bank and Bank of Baroda vide ceding letter dated 26.05.2011. The securities have been extended as and when the loan facillties got renewed/revised. The cash.credit facility is (N.o'-

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oa.44712022

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to be repaid together with contractual rate of interest and BG facility is chargeable with commission. However, defendants failed to maintain the account as per agreed terms and accordingly account became NpA on 29.09.2019. They also failed to take steps to upgrade the account and consequent thereto Securitization proceedings had to be initiated by issuing demand notice. Subsequent to legal notice dated 15.11.2020 1st defendant deposited Rs.9 lakhs. Learned counsel further contended that 1st defendant represented by its authorized person deposited the titled deeds 15495/2006 of SRO, Chikkadpalty and sale certificate dated 29.11.1980 issued by learned Addl. Chief Judge Court, Secunderabad and defendants 5 and 6 executed Declaration-Cum-Confirmation Deed for creation/extension of mortgage. Defendants acknowledged the debt on 04.10.2016, 03.07.2077 and 29.08.2018. With the above contentions, learned counsel would submit that the claim of the applicant bank is amply proved by Exs.1 to A.26 marked through AW-1 and accordingly OA may be allowed with costs.

¶39

Per contra, learned counsel for the 6th defendant would submlt that 6th defendant never stood as guarantor for the subject loan of this OA nor did he mortgage OA schedule-A property herein as security for the loan of 1st defendant. In fact, 6th defendant is the sole proprietor of I4ls Sai Ram Carriers-BPCL outlet, he created mortgage over the same in respect of loan of Rs.100 lakhs availed by M/s Sai Ram CarriersBPCL outlet and extended the mortgage to secure loan of Rs.150 lakhs availed by M/s Sai Ram Carrlers from the Dilsukhnagar Branch of the applicant bank on 06.12.2006 and 16.04.2008. Subsequent loans were rescheduled, 6th defendant confirmed declaration cum confirmation for extension of mortgage dated 09.06.2010 to the tune of Rs.200 lakhs. Thereafter the credit facilities were renewed from time to time till 2016. Despite closure of both the loan accounts on 04.7.20t7/

¶40

ffi*b

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2f .!2.2077, as confirmed by the^{applicant bank on 28.03.2018,the} applicant did not release^{the documents. After a lot of correspondence} and persuasion/ request was forwarded to^{CBD for releaseof} documents and 6th defendant^{is still awaitingthe title deeds. Whileso,} 6th defendant through^his daughter-5th^{defendant,got to know about} filing of OA by the applicant bank^{and inclusionof their properties in} the OA schedule. Learned^{counselfurther submittedthat the6th} defendant has nothing to^{do with the loan transactionof 1't defendant} and the alleged^guarantee deed dated^{19.08.2008, DeclarationCum} Confirmation for Extension of Mortgage^{dated 20.08.2008and} acceptance of terms and conditions^{of sanction letters are created with} forgery of signatures, the appllcant bank^{without returning the} documents fraudulently used the same^{to the loan account of 1st} defendant. The signatures of^{6th defendant are not tallyingin all the} documents and signatures are not found in sanction^lettersdated 04.O7.2Of6, 07.O4.2017 and 23.08.2018^{and acknowledgement of} debt letters dated 74.70.2076, 03.O7.2077,^{03.07.2017and} 29.08.2018. The signatures in sanction letter dated^09.08.2008 (Ex.A.1), Deed of Guarantee dated 19.08.2008^{(Ex.A.3), Declaration} cum Confirmation for the^Extension of^{Mortgage dated 20.08.2008} (Ex.A.11) and sanction letter dated 24.f2.2077^(Ex.D.10) are not^of 6th defendant and with naked eye it could be seen^{in the admitted} signatures that the letter'S' was written in^{isolation to other letters} with a stroke underneath whereas in disputed^{signatures sameis} missing. Learned counsel further contended that^{though the applicant} filed renewal letter dated 24 -72.2024, being aware that^{it was forged} the same was not marked as Exhibit.^{The6th defendantgot it marked} as Ex.D.10 in secondary evidence. The signatures of^{6th defendantare} not found in Exs.A.15, A.76, A.l7 and A.18 renewal^{letters and} signature appearing on Ex.D.10 is entirely different^{from admitted} signature on Exs.A.1, A.3 and A.11.

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//-4*t"

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oa.44712022

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Learned counsel further^{referred to Exs.D.7, D.8 and D.9} whereby 6th defendant requested the^{applicantbank to release the} documents and manager of the^{applicant bank endorsedto CBD for} release of documents, but in vain.^{In the Declaratlon CumDeed of} Confirmation for the Extension of^{Mortgage dated 09.06.2010} executed by the 6th defendant in^{respect of loans of lv'l/sSairam} Carriers there is no mention of^{extension of mortgagefor the loan} hence it is^proved that the^{6th defendantdid not createany mortgage} to secure the loan availed by^the 1't^{defendant.With these} submissions, learned^counsel sought^{for dismissalof the OAclaim} against 6th defendant and OA^{schedule-Aproperty.}

¶46

The^point that arises^{for consideration is:-}

¶47

Whether the Applicant Bank^{is entitledfor the OA claim} against all the Defendants and OA^mortgaged properties as prayed?

¶48

The^present claim is made against^{defendants1 to 6 and no} claim is made against defendants^{7 to 9 banks' The ApplicantBank} examined AW-1, marked^{Exs.A-1 to A-26 which includesanction} letters, renewal documents, certified account^{statements,demand} notice, mortgage documents ln^{respectof loan availedby the1st} defendant. As stated^{supra, defendants1to 5 remainedabsent; their} right to file written statement and^{evidence had been forfeited.Under} such circumstances, the claim of^{the applicant bank remains} unchallenged and un-rebutted^{against defendants 1to5 and OA} schedule-B^property.

¶49

The 6th defendant^is seriously^{contestingthe case.He examined} himself as DW-1 and marked^{10 documents which include sanction} letters, renewal letter in^respect of^{loansavailed by 6th defendantfor}

¶50

oA.44712022

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M/s Sairam Carriers-BPCL Outlet and lvl/s Sairam Carriers, correspondence with applicant bank wlth regard to release of title deeds consequent upon closure of these two loan accounts. The only serious contest in the present OA is by the 6th defendant specifically denying the execution of the Deed of Guarantee dated 19.08.2008, Declaration-cu m-Confirmation Deed for Extension of N4ortgage dated 20.08.2008 and other renewal documents relied upon by the Applicant Bank, alleging that his signatures therein are forged. At the outset, it is clarified that while this Tribunal does not exercise criminal jurisdiction nor adjudicate upon criminal liability arising out of alleged forgery or fabrication, it is empowered to examine such pleas incidentally to determine whether the Applicant Bank has discharged its burden of proving due execution of the loan, guarantee and security documents relied upon for recovery.

¶52

It ls pertinent to note that the 6th defendant had earlier filed IA No.445/2075 seeking forensic examination of the disputed signatures. This Tribunal, vide order dated 11.09.2025 dismissed the said IA, lrfer alia, on the ground that even the admitted signatures of 6th defendant available on record were not consistent with each other and^that except making correspondence for return of documents^{no action was} taken for forgery. While dismissing the said^application, this^Tribunal did not undertake any adjudication on criminal^{forgery nor initiateany} action against the applicant bank, as such matters^{fall beyondits} jurisdiction. However, the dismissal ol IA No.445/2025, being interlocutory in nature, does not operate as res iudicata^{and does not} preclude this Tribunal from independently assessing, in the^present OA, whether the Applicant Bank has^proved due execution of^the documents relied upon for recovery as^far 6th defendant^{ls concerned.}

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Ov-L4+"

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oa.447 /2022

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The fact^{not denied by the applicantbank is that the 6th} defendant^{had independently availed loans from another branch of the} applicant bank,^{in the name of l"l/s Sai Ram Carriers-BPCL Outlet and} M/s Sai Ram Carriers,^{whichstood closed on 04'72'2077and} 21.L2.20I7 respectively,^{as evidencedby Exs D'7 to D'9' The} correspondence^{placedon record further shows that despiteclosureof} the sald loan^{accounts,the original title deedswere not returned and} the matter^{was forwarded to CBD, Hyderabadvide Ex'D9 for release} of documents but^{the samewere not returned to the 6th defendant'} There is no response^{by the applicant bank on this contention'}

¶56

The 6th defendant^{speciflcally deniesexecution of Exs A'1, A 3} and A.11^{which are sanction letter dated 09.08'2008,Ex A'3 deed of} guarantee dated 19.08.2008^{and Ex.A.11declaration cum confirmation} for extension of^{mortgage respectively; and that his signatureswere} forged. He further^{placed on recordexhibits for comparison of his} signatures with disputed^{ones. In such case of denial, the applicant} bank was required to^{prove execution of the alleged guarantee and} mortgage documents by^{acceptablelegalevidence. However, the} applicant bank failed to^{examineany attesting witnessto the Deed of} Guarantee or Declaration-cum-Confirmation^{Deed. Also, the applicant} bank did not any steps to disprove^{the forgery by rebuttlngthe} evidence of 6ih defendant.^{Further, signatures of Defendant No.6are} conspicuously absent^{in several renewal letters and acknowledgements} of debt relied upon by the^{applicant bank, for which no satisfactory} explanation has been^{oFfered. Mere production of documents,when} execution is specifically denied,^{does not dischargethe burdenof the} a^pplicant bank-

¶57

On a cumulative assessment^{of the evidenceof both the parties,} this Tribunat finds that the^{Appticant Bank has r"Lo ,offioiy,}

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¶60

Defendant No.6 stood as^guarantor for the^{loan availed by Defendant} No.1 or that OA Schedule 'A'^property belonging to^{Defendant No.6} was validly mortgaged to secure the said loan. The defence^of Defendant No.6, that his^property was mortqaged only^{for his} independent loan facilities which stood discharged,^{is rendered} proba ble.

¶61

In view of the above observations, it is^{concludedthat the} applicant bank has failed to^prove its claim against^{Defendant No.6} and OA Schedule 'A'^{property, whereas} its claim against^Defendants No.1 to 5 remains^proved.

¶62

In the result, the^present Original Application^No.447 /2022^is partly allowed as under: -

¶63

i) The Defendants 1 to 5 are^jointly and^{severallyliable} to pay to the applicant bank a total sum^of Rs.7,35,99,704.75 ps under loan account no. 0300413000002776 with interest @^{12.75o/o p.a.} simple from the date of application till the date of realization;

¶64

ii) the OA claim is secured by way of mortgage of OA Schedule-B immovable and the applicant bank^ls entitled to^proceed against the same to^realiseits debU

¶65

iii)the applicant bank is also entitled to^proceed against the person and^properties of defendants 1 to 5^for realization of its dues;

¶66

iv)The oA claim against the 6th defendant and oA schedule-A immovable^property, is dismissed.

¶67

v) No claim sought against defendants 7 to no order against them.

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vi)the appllcant bank is entitled for the^costs.

¶71

The Applicant Bank is directed to file^{Cost lvlemo within 2 weeks} from the date of receipt of this Order.

¶72

lssue Recovery Certificate accordingly.

¶73

Communicate a copy of this order to the^{parties concernedand} upload in official website.

¶74

(Typed to my dictation by the Steno, correctedt signed and^pronounced by me in the open court on this the 26th day^{of December,2025.)}

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ESHWAR KOTHE) PRESIDING OFFICER

M/s Axis Bank Ltd. v. M/s Akr Constructions Limited

Case brief

What is this about?

What did the court decide?

M/s Axis Bank Ltd. v. M/s Akr Constructions Limited

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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