Allowed

Canara Bank v. Anand Prabhakar Khobragade

DRT4 Mar 2025OA/79/2022

Case brief

AI extract

What is this about?

Debt Recovery Tribunal allowed Canara Bank's ex-parte application for recovery of Rs.21,89,886.54 from a defaulting borrower. The Tribunal directed payment of principal plus future simple interest at 8% per annum and authorized the sale of hypothecated assets for recovery.

What did the court decide?

Recovery of Rs.21,89,886.54 with future interest at 8% per annum (simple) and power to sell hypothecated assets.

Canara Bank versus Anand Prabhakar Khobragade — Contract and Commercial Disputes | DRT (2025)

¶1

Presented on: 11.11.2021 Registered on: 05.04.2022 Decided on: 04.03.2025 Duration: Y M D 03 03 23

¶2

IN THE DEBTS RECOVERY TRIBUNAL AT AURANGABAD (Before Dr. J.R. Chauhan Presiding officer) TOTAL CLAIM AMOUNT – Rs.21,89,886.54/- ORIGINAL APPLICATION No.79/2022

¶3

Canara Bank , A Body Corporate constituted under the Banking Companies Acquisition and Transfer of Undertakings Act 1970, having its Head Office at 112 JC Road, Bangalore in the State of Karnataka and one of its branch offices amongst other places at Shendra, Aurangabad through its Power of Attorney Holder Shri. Upendra Vishwakarma.

¶4

… Applicant

¶5

Versus

¶6

Shri Anand Prabhakar Khobragade, Proprietor M/s. Acadevo Enterprises, through its Santosh Wamanrao Kanavate, AtPlot No. B-37 13 Five Star Shendra MIDC Shendra, Aurangabad

¶7

Also at

¶8

R/o : H.No.`5, MIG-B, N-6, Cidco, Aurangabad – 431 001.

¶9

… Defendant

¶10

[SBJ] (OA No.79/2022) Page 1 of 10

¶11

APPEARANCES For the Applicant For Defendant

¶12

Mr. G.A. Rajput - Advocate Ex-parte

¶13

JUDGMENT (Delivered on 04^th March, 2025)

¶14

The Applicant Bank has filed the present application for recovery of the sum of Rs.21,89,886.54/- (Rupees TwentyOne Lacs Eighty-Nine Thousand Eight Hundred EightySix and Paisa Fifty-Four only) together with future interest at the contractual rate from 13.10.2021 till the full realization of the amount due and cost from the defendant. Brief facts of the application are as under :

¶15

The applicant bank is a Banking company constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970, having its Head Office at 112 JC Road, Bangalore in the State of Karnataka and one of its branch offices amongst other places at Shenda, Aurangabad, Maharashtra State. Shri. Upendra Vishwakarma is the authorized signatory of the applicant bank is duly authorized to file suit and other legal

¶16

[SBJ] (OA No.79/2022) Page 2 of 10

¶17

proceedings and to sign and verify pleadings and affidavits relating thereto.

¶18

The defendant is a Proprietor of M/s. Acadevo Enterprises. The defendant was in need of funds for business and as such approached the applicant bank and requested to grant a Cash Credit Facility of Rs.18,00,000/-(Rupees Eighteen Lacs only).

¶19

The applicant bank further submitted that the applicant bank vide its Sanction Letter dated 27.12.2018 sanctioned the Cash Credit facility of Rs.18,00,000/- (Rupees Eighteen Lacs only) to the defendant. The defendant agreed the terms and conditions of the Sanction Letter and in token have signed the same for acceptance of the same.

¶20

In order to secure the aforesaid Cash Credit facility, the defendant signed and executed various necessary loan documents i.e. Letter of Undertaking, Pronote, Cash Credit Agreement, Request for overdraft Facilities on 29.12.2018 in favour of the applicant bank mentioned in Paragraph No. 5 of the O.A. The defendant has also executed Guarantee Covering Letter and Guarantee Agreement to secure the Cash Credit Facility of Rs.18,00,000/- (Rupees Eighteen Lacs

¶21

[SBJ] (OA No.79/2022) Page 3 of 10

¶22

only).

¶23

The applicant bank further contended that due to nonservicing of the interest of defendant, Open Cash Credit Account No.5200710000038 on time, and to save the account of the defendant from slipping to NPA, as per the applicant bank scheme, defendant has been facilitated with FITL (Funded Interest Term Loan) of an amount of Rs.89,626/(Rupees Eighty-Nine Thousand Six Hundred and TwentySix only). The defendant agreed to pay interest as per contractual rate, subject to change as per Reserve Bank of India directives and the Applicant Bank’s norms.

¶24

It is further contended by the applicant bank that after availing the loan facility and utilization thereof, the defendant did not adhere to the terms and conditions of the loan contracts and repay the loan facility as per the schedule of repayment and as such the applicant thereby noticed that the loan account was not maintained regularly and within the limit sanctioned. All the transactions were not routed through the bank. The interest of amount overdue was not paid in the loan accounts. The applicant bank prayed for attachment of the Hypothecation of stocks, receivables, book debts and other movable assets as is disclosed in

¶25

[SBJ] (OA No.79/2022) Page 4 of 10

¶26

Paragraph No. III A of the Original Application.

¶27

After availing the loan facility, the defendant was defaulted in payment of the loan amount as per the terms and conditions mentioned in the Sanction Letter. Therefore, the account of the defendant became irregular. The defendant failed and neglected to comply the documents executed by him in favour of the applicant bank. Hence, the account of the defendant has become Non-Performing Asset on 30.12.2020.

¶28

The officials of the applicant bank were persuading the defendant to advert to and follow the contractual obligations cast on him and have left no stone unturned. The negligence and indifferent attitude of the defendant has rendered the loan account of the defendant inoperative, sticky and stagnant. The defendant has executed the of Debt for on

¶29

Acknowledgement Rs.18,83,780.18/22.02.2021 thereby acknowledging and accepting the amount due and payable by him in the said loan account in favour of the applicant bank and assured and promised to regularize the loan account shortly. Even though he has not materialized any of his promises. Therefore, the applicant bank has decided to terminate the loan facility of the

¶30

[SBJ] (OA No.79/2022) Page 5 of 10

¶31

defendant and has issued a Recall Notice on 01.09.2021

¶32

through its advocate demanding payment.

¶33

The particulars of the Cash credit Loan account and the Covid FITL Loan Account of the defendant is as under:

¶34

CASH CREDIT LOAN ACCOUNT :
Principal amount alongwith costs, Rs.20,91,500.18
charges, expenses and interest
calculated upto 12.10.2021
Total Rs.20,91,500.18
COVID FITL LOAN ACCOUNT :

¶35

Principal amount alongwith costs, Rs.98,386.36
charges, expenses and interest
calculated upto 12.10.2021
Total Rs.98,386.36

¶36

Total amount Rs.21,89,886.54/- (Rupees Twenty-One Lacs Eighty-Nine Thousand Eight Hundred Eighty-Six and Paisa Fifty-Four only).

¶37

The applicant bank submitted that the loan accounts of the defendant maintained by the applicant bank in its ordinary course of business, which is duly certified under the statutory provisions governing it. The applicant bank has charged interest and compounded it at such rates and capitalized at such periodical rests as are permitted by and

¶38

[SBJ] (OA No.79/2022) Page 6 of 10

¶39

do not run counter to the directives of the RBI and has not capitalized penal interest.

¶40

The applicant bank further contended that when the account of the defendant was declared as Non-Performing Asset, the applicant bank issued Legal Notice to the defendant on 01.09.2021 asking him to repay the entire loan amount with interest. Despite notice, the defendant did not repay the loan amount. The applicant bank submits that the cause of action arose on such dates when the defendant to pay off the dues and when the defendant has executed the Acknowledgement of Debt thereby confirming the balance due in the loan account as well as the interest thereon in favour of the applicant bank. Lastly it arose on when the defendant flatly refused to pay the dues in the loan account. The applicant bank also prayed for attachment of the mortgaged / hypothecated property/ies of the defendant as is disclosed in Paragraph No.III A of the Original Application to realize its dues. Hence, this Original Application filed by the applicant bank to recover the dues from the defendant.

¶41

In this matter the defendant failed to appear despite service of summons by hand. Hence, the defendant is proceeded

¶42

[SBJ] (OA No.79/2022) Page 7 of 10

¶43

ex-parte as per Order dated 06^th September, 2023.

¶44

The applicant Bank has filed Claim Affidavit of Evidence (Exhibit-4) of Mr. Upendra Vishwakarma, Authorised Signatory of the applicant bank and has produced on record the original loan documents at Sr. Nos. A-1 to A-11 alongwith List (Exhibit-5), which corroborates the case of the applicant Bank.

¶45

I have heard arguments of the learned Advocate for the applicant bank.

¶46

Since the defendant failed to appear and contest the application, I find no reason to disbelieve evidence of the applicant bank. Therefore, the applicant Bank is entitled for reliefs as claimed.

¶47

The applicant Bank has claimed future interest on the outstanding as claimed at contractual rate @8.7% compounded monthly from 13.10.2021 till the full realization of the amount due under the Original Application. However, considering the facts of the case, I am of the opinion that if future interest is granted @8.% per annum (simple), it would be just and reasonable rate of interest.

¶48

[SBJ] (OA No.79/2022) Page 8 of 10

¶49

18. Hence, I pass the following order.

¶50

ORDER

¶51

(A) Original Application No.79/2022 is allowed with cost.

¶52

(B) Defendant is hereby ordered and directed to pay to the applicant the aggregate sum of Rs.21,89,886.54/(Rupees Twenty-One Lacs Eighty-Nine Thousand Eight Hundred EightySix and Paisa Fifty-Four only) along with future interest @8% per annum (simple) from the date of filing of the original application i.e. 11^th November, 2021 till full payment/realization of the amount mentioned in this operative order.

¶53

(C) The aforesaid adjudicated amount is secured by the Sanction Letter dated 28.12.2018 (Exhibit-A-1), and as per Paragraph No.III A of the Original Application.

¶54

(D) The applicant Bank is entitled to sell the hypothecated Stocks, Receivables, Book Debts and other movable assets to recover its dues.

¶55

(E) Issue Recovery Certificate accordingly.

¶56

[SBJ] (OA No.79/2022) Page 9 of 10

¶57

(F) The Registrar is directed to send the copy of Judgment and Recovery Certificate to the applicant and defendant.

¶58

Pronounced in open Court. Date : 04.03.2025.

¶59

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

¶60

[SBJ] (OA No.79/2022) Page 10 of 10

Canara Bank v. Anand Prabhakar Khobragade

Case brief

What is this about?

What did the court decide?

Canara Bank v. Anand Prabhakar Khobragade

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

Case details

Similar cases

State Bank of India versus Abhay Chandrakant Kulkarni

Bank of India versus M/S Tirupati Veet Udyog

State Bank of India versus Gayabai Bajirao Shinde

Ms Ramchandra Shivdas Agrawal versus The Malkapur Urban Co-Op Bank Ltd.

Bank of Baroda versus Rakesh Rajendra Gandhi

Bank of Maharashtra versus Sukhdev Laxman Waghchore