Allowed

Canara Bank v. Srn Industries

DRT13 Oct 2025OA/811/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the recovery petition filed by Canara Bank for issuance of a Recovery Certificate against SRN Industries and its guarantor for outstanding loans and interest at 9% simple interest during the pendency of the application.

What did the court decide?

Issuance of Recovery Certificate for Rs. 78,12,247.43 with 9% p.a. simple interest recoverable from defendants jointly, severally and personally.

Canara Bank versus Srn Industries — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 13^th Day of October, 2025

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Present: Sri. T. RAJESH Presiding Officer

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OA.No.811/2023

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BETWEEN:

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Canara Bank, Jayalakshmipuram Branch, Having its branch at No. 6, Temple street, Jayalakshmipuram, Mysore 570012. Represented by its Chief manager, Mrs. Usha K K W/o Srinivas M.

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…APPLICANT

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AND:

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SRN Industries, Represented by its Proprietor, Sri. Venkatesh R. S/o Rajegowda, Aged about 34 years. Office at Plot No. 92, Hebbal Industrial Estate, Mysore- 570016, Also at, Chowkahalli Village, Kalenahalli Post, K.R. Nagara Taluk, Mysore District- 571 602.

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Savithramma, W/o Ramegowda, Aged about 52 years, R/at Chowkahalli, Kalenahalli Post, K.R. Nagar Taluk, Mysore District- 571602. ...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : Prakasha Hedge K Defendants : Exparte

OA 811/2023

FINAL ORDER

The present Original Application in short (OA) has been filed under section 19 of Recovery of Debts and Bankruptcy Act 1993 for seeking issuance of Recovery Certificate for Rs. 78,12,247.43 (Rupees Seventy Eight lakh Twelve Thousand Two Hundred Forty Seven and Paise Forty Three Only) with further interest thereon from the date of filing the Application till realization from the Defendants. The 1^st defendant is a proprietorship concern represented by its proprietor Venkatesh R. The 2^nd defendant is the guarantor.

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It is the case of the applicant that the defendant No.1 as borrower and defendant No.2 as guarantor availed MSME term loan of Rs. 42,00,000/- (Rupees Forty Two Lakh Only) and another Rs. 8,00,000/(Rupees Eight Lakh Only) and defendant No.1 as borrower availed GECL term loan of Rs. 5,54,000/- (Rupees Five Lakh Fifty Four Thousand Only) and GECL term loan of Rs. 11,00,000/- (Rupees Eleven Lakh Only).

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It is also the case of the applicant that, in view of the above amount financed, the defendants executed necessary loan documents along with agreement cum deed of hypothecation, guarantee agreement, cash credit agreement and letter of revival.

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It is further contended that, the defendants despite availing the credit facility, agreeing to service the loan account promptly and regularly, failed in compliance of the same, resulting in defaults in repayment and consequentially turning the loan accounts as NPA.

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OA 811/2023

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In the above circumstances, the applicant approached this Tribunal by filing this OA seeking issuance of Recovery Certificate for the amount due in the account.

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Despite, service of summons on the defendants, they failed to appear, resulting the defendants being set exparte on 21.10.2024.

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The applicant had let in evidence through AW-1, who filed Proof Affidavit reiterating the contentions taken in the OA and also produced Exhibits A-3 to A-29 and got the same marked in evidence.

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Heard the Ld. Counsel for the Applicant and considered the contentions as taken in the OA in the light of documentary evidence and the proof affidavit.

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The following issues arise for consideration in this matter:

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i) Whether the applicant had succeeded in proving the OA claim

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as against the defendants?

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ii) What order are to be passed?

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Both these issues are gone into and decided together.

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The case put forth by the applicant in the Application remains

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unrebutted as defendants remained exparte. The evidence tendered by the applicant remains uncontroverted and undisputed. The evidences put forth by the applicant were found admissible and are sufficient to prove

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OA 811/2023

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the availment of credit facilities as stated in the OA, creation of

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hypothecation as claimed by the applicant bank and the defaults committed in the accounts. The liability of the defendants and the claim as the amount due are also proved by the above documents. The claim of the applicant is well within the limitation.

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Hence in view of the findings arrived herein above, this Tribunal

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find both these issues in favour of applicant and hence this Tribunal is of

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the view that OA is liable to be allowed.

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Taking into consideration the facts that the credit facilities are

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availed for Business purpose and also that OA claim is arrived at by calculating interest at the agreed rate, this Tribunal is of the view that the

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OA can be allowed with a reduced interest of 9.00% (simple).

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In the result, OA.No.811/2023, stands allowed,

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i) The applicant is allowed to recovery an aggregate sum of Rs.

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78,12,247.43 (Rupees Seventy Eight lakh Twelve Thousand Two Hundred

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Forty Seven and Paise Forty Three Only) with further interest @ 9.00%

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p.a. (Simple), which consists of:-

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a) Rs. 54,10,119.90 (Rupees Fifty Four Lakh Ten Thousand One Hundred

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Nineteen and Paise Ninety Only) from the date of filing OA till the

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OA 811/2023

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realization, from the defendants Nos. 1 & 2 jointly, severally & personally

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after giving credit to all the amount recovered and received during the pendency of the OA and allowed the same to be recovered by proceedings against the defendants Nos. 1 & 2 jointly, severally and personally and also proceeding against their assets including hypothecated movables. b) Rs. 6,60,616.00 (Rupees Six Lakh Sixty Thousand Six Hundred and Sixteen Only) from the date of filing OA till the realization, from the defendants Nos. 1 & 2 jointly, severally & personally after giving credit to all the amount recovered and received during the pendency of the OA and allowed the same to be recovered by proceedings against the defendants

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Nos. 1 & 2 jointly, severally and personally and also proceeding against their assets including hypothecated movables.

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c) Rs. 11,43,922.53 (Rupees Eleven Lakh Forty Three Thousand Nine Hundred Twenty Two and Paise Fifty Three Only) from the date of filing OA till the realization, from the defendant No. 1 personally after giving credit to all the amount recovered and received during the pendency of the OA and allowed the same to be recovered by proceedings against the defendant No. 1 personally and also proceeding against their assets including hypothecated movables.

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d) Rs. 5,97,589.00 (Rupees Five Lakh Ninety Seven Thousand Five Hundred Eighty Nine Only) from the date of filing OA till the realization,

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OA 811/2023

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from the defendant No. 1 personally after giving credit to all the amount

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recovered and received during the pendency of the OA and allowed the same to be recovered by proceedings against the defendant No. 1 personally and also proceeding against their assets including hypothecated movables.

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Schedule to the OA be the schedule to the recovery certificate.

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ii) The applicant bank is allowed cost of the proceedings which

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applicant to file cost memo within 7 days from the date of receipt of the order.

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iii) The Recovery Certificate to be drawn in terms of this order and transferred to Recovery for execution.

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iv) Interim application pending, if any, are disposed of with this Final Order.

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Communicate a copy of the order to the parties concerned in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

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[Dictated to the Stenographer (AJ), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 13^th day of October, 2025].

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Sd/-

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(T. RAJESH)

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PRESIDING OFFICER

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Elsy K K W/o Sunny K C, Chief Manager, of Applicant Bank.

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OA 811/2023

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Exhibits on the part of the Applicant:

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Exhibit Nos.	Particulars of Documents
A1	Affidavit evidence
A2	List of documents
A3	Loan application dated 24.09.2018
A4	Sanction letter dated 06.10.2018
A5	Agreement cum deed of hypothecation dated 06.10.2018
A6	Guarantee agreement dated 06.10.2018
A7	Loan application dated 23.11.2018
A8	Sanction letter dated 23.11.2018
A9	Pronote dated 27.11.2018
A10	Cash credit agreement dated 27.11.2018
A11	Letter of revival dated 10.12.2019
A12	Letter of revival dated 10.06.2021
A13	Guarantee agreement dated 27.11.2018
A14	Loan application dated 12.06.2020
A15	Sanction letter dated 2.06.2020
A16	Agreement cum deed of hypothecation dated 15.06.2020
A17	Undertaking letter from borrower/s dated 15.06.2020
A18	Offer letter for guaranteed emergency credit line dated 15.06.2020
A19	Loan application dated 28.06.2021
A20	Sanction letter dated 28.06.2021
A21	Supplemental common hypothecation agreement dated 28.06.2021
A22	Undertaking letter from borrower/s dated 28.06.2021
A23	Offer letter for guaranteed emergency credit lie dated 28.06.2021
A24	Statement of account No. 0566768000205
A25	Statement of account No. 0566261010814
A26	Statement of account No. 0566755000060
A27	Statement of account No. 0566717000040
A28	Legal notice dated 29.12.2022
A29	Postal receipts and acknowledgement
Witne	ss Examined for the Defendants: -Nil -
List o	f Documents Exhibited for the Defendants: -Nil -

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Sd/- (T. RAJESH) PRESIDING OFFICER

Canara Bank v. Srn Industries

Case brief

What is this about?

What did the court decide?

Canara Bank v. Srn Industries

Case brief

What is this about?

What did the court decide?

What the court decided

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