Allowed

Canara Bank v. M. a. Salim

DRT18 Sept 2025TA/296/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an application by Canara Bank seeking recovery certificate for approximately Rs. 17.09 crores due from multiple defendants under various loan accounts including housing, OD, and restructuring loans, directing recovery with interest.

What did the court decide?

Recovery Certificate issued for aggregate sum of Rs. 17.09 crores with interest as per loan agreements; defendants jointly and severally liable; cost of proceedings awarded to applicant.

Canara Bank versus M. a. Salim — Contract and Commercial Disputes | DRT (2025)

¶1

BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 18^th day of September, 2025

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PRESENT: SHRI SHARANG DHAR UPADHYAY PRESIDING OFFICER

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TA No.296 of 2022

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(Originally filed before DRT-I, Chennai as OA No.302 of 2022 and thereafter

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transferred to this Tribunal and renumbered as TA No.296 of 2022)

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Canara Bank

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Saligrahamam Branch No.9/1A, Kumaran Colony Main Road Vadapalani, Chennai – 600 026 Represented by its Chief Manager R. Jayalakshmi …Applicant

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Versus

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M.A. Salim

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Proprietor of M/s Civil Engineering Enterprises No.45, K.K. Salai, Kaveri Rangan Nagar Saligramam, Chennai – 600 093

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Also at

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No.22, K.K. Salai, Kaveri Rangan Nagar Saligraman, Chennai – 600 093

¶14

M/s Civil Engineering Enterprises Rep. by its Proprietor, M.A. salim No.45, K.K. Salai, Kaveri Rangan Nagar Saligramam, Chennai – 600 093

¶15

Mrs. Abusa Salim W/o M.A. Salim No.45, K.K. Salai, Kaveri Rangan Nagar Saligramam, Chennai – 600 093

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Also at Upasana Koonthaloor Post Chirayinkil, Thiruvananthapuram Kerala – 695 304

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Mrs. Viji Salim W/o M.A. Salim No.45, K.K. Salai, Kaveri Rangan Nagar Saligramam, Chennai – 600 093 …Defendants

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Counsels on Record / Appeared

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Counsel for Applicant Bank: M/s N.G. Durairajan & Meenaguru B Defendants ex-parte on 11.05.2023

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FINAL ORDER

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This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 against the defendants’seeking issuance of a Recovery Certificate for recovery of an aggregate sum of Rs.17,09,78,796.80p comprising of:

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(a) A sum of Rs.99,35,327.94p with further interest at the rate of 7.55% per annum with monthly rests plus 2% penal interest being the amount due under Housing Loan Account No.2648619001425;

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(b) A sum of Rs.14,48,39,265.10p with further interest at the rate of 14.25% per annum with monthly rests plus 2% penal interest being the amount due under the OD Loan Account No.2648261000015;

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(c) A sum of Rs.2,45,444.52p with further interest at the rate of 14.25% per annum with monthly rests plus 2% penal interest being the amount due under DPN Loan Account No.2648741001330;

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(d) A sum of Rs.34,11,732.91p with further interest at the rate of 8.3% per annum with monthly rests plus 2% penal interest being the amount due under Vehicle Loan Account No.2648603001301;

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(e) A sum of Rs.38,82,373.69p together with further interest at the rate of 17.2% per annum with monthly rests plus 2% penal interest being the amount due under FITL I Loan Account No.2648746000002;

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(f) A sum of Rs.30,46,529.04p together with further interest at the rate of 14.35% per annum with monthly rests plus 2% penal interest being the amount due under FITL II Loan Account No.2648746000003;

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(g) A sum of Rs.56,18,123.63p together with further interest at the rate of 14.25% per annum with monthly rests plus 2% penal interest being the amount due under FITL III Loan Account No.2648746000006;

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The subject matter of the case is the various credit facilities availed by the defendants from the Applicant Bank.

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3. Housing Loan

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(a) The 1^st Defendant approached the Applicant for grant of Housing Loan and considering the said request the applicant sanctioned Housing Loan of Rs.1 crore vide sanction dated 20.09.2016 of Rs.1.00 Crores, repayable in 120 months, with EMI of Rs.1,35,215/-, against the equitable mortgage of the property more fully described as Item-I of the schedule to

¶34

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the OA. The 3^rd Defendant stood as co-obligant for the Housing loan sanctioned to the 1^st Defendant.

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(b) The 1^st and 3^rd defendant executed Housing Loan Agreement on 26.09.2016. The 1^st defendant executed Memorandum of Deposit of Title Deeds on 30.12.2016, registered as Doc. No.1690/2016 with an intention to create equitable mortgage over item No.1 of property, more fully described in the schedule to the OA.

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4. SOD Limit

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(a) The 2^nd Defendant a Proprietorship firm represented by the 1^st defendant approached the Applicant Bank for a grant of SOD Limit and the applicant considering the said request vide sanction dated 24.08.2017 sanctioned a sum of Rs.9.50 crore for its business purposes towards working capital.

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(b) The 2^nd defendant executed various loan and security documents on 01.09.2017. The defendants 1, 3 and 4 executed guarantee agreements on 1.9.2017 thereby guaranteeing repayment of the credit facility availed by the 2^nd defendant under SOD Loan Account.

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(c) The 1^st defendant extended the equitable mortgage created earlier to secure the SOD Limit of Rs.9.50 crores availed by the 2^nd defendant by executing the Memorandum of Deposit of Title deeds on 25.09.2017

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registered as Doc. No.1094/2017 and 1095/2017 in respect of Item No.1 and Item No.2 more fully described in the schedule to the OA.

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(d) The 4^th Defendant also created equitable mortgage over the property more fully described in Item No.3 to the OA schedule by executing Memorandum of Deposit of Title deeds dated 13.10.2017, Registered as Doc. No.6643/2017.

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5. DPN Loan

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The applicant considering the request of the 1^st defendant sanctioned a DPN Loan of Rs.3 lakhs vide sanction dated 27.02.2018 and the 1^st defendant executed documents on 27.02.2018 viz., Pronote and Take delivery letter to DPN.

¶46

6. Vehicle Loan

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(a) The 1^st defendant approached the applicant bank for grant of vehicle loan for purchase of Mercedes Benz GLA 200D 2017 and considering the said request the applicant sanctioned “Canara Vehicle Loan” of Rs.31,53,000/- vide its sanction dated 23.02.2018.

¶48

(b) The 1^st defendant executed Canmobile Loan Agreement and particulars of the vehicle on 8.3.2018 and also deposited the registration certificate of the vehicle bearing Regn. No.TN-10 BC-0760.

¶49

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7. FITL Limit – I, II and III

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(a) At the request of the 2^nd defendant, the SOD Limit of Rs.9.50 crores was restructured vide sanction dated 30.03.2019 as FITL-I limit of Rs.26.84 lakhs; FITL-II Limit of Rs.23 lakhs and FITL-III Limit of Rs.47 lakhs.

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(b) The 1^st defendant executed loan and security documents in respect of the FITL-I Limit, FITL-II Limit and FITL-III limits on 30.3.2019, 30.03.2019 and 04.09.2019 respectively.

¶53

The 1^st defendant executed acknowledgement of debt and security on 04.09.2019 in respect of Housing Loan Limit, on 05.01.2021 in respect of Vehicle Loan and on 20.01.2021 in respect of DPN Loan. Similarly, the 4^th defendant executed acknowledgement of debt and security on 04.09.2019 in respect of SOD Limit.

¶54

The defendants failed to comply with the terms and conditions of sanction and defaulted in repayments. Despite repeated demands by the applicant to the defendants for regularization of the loan, the defendants did not come forward to clear the outstanding dues and hence the applicant bank classified the loan account as NPA on 09.01.2020.

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As no payment was forthcoming from the defendants, the applicant invoked the provisions of SARFAESI Act and issued the demand notice on

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28.01.2020. The 2^nd defendant vide letter dated 16.02.2021 requested for grant of One Time Settlement, which was rejected by the applicant bank by its letter dated 18.02.2021.

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Despite the requests of the applicant bank and issuance of demand notice under Section 13(2) of the SARFAESI Act, the defendants did not come forward to clear the outstanding dues; hence this OA is filed by the applicant for recovery of its dues.

¶59

Summons was taken out to the defendants 1 to 4 and the same were served. As there was no representation on behalf of the defendants continuously and on 11.05.2023 the defendants were called absent and placed ex-parte on that day. Applicant Bank filed Proof Affidavit along with 48 documents, which were marked as Ex. A-1 to A-48 on 23.02.2024, however, Ex. A-18, A-30 to A-40, A-43 and A-47 were subject to proof and relevancy being photocopies. The Ld. Counsel for Applicant Bank made his submissions on 20.08.2025 and thereafter the matter stood till this date for passing final orders.

¶60

The following issues arise for consideration in the matter: -

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(a) Whether the applicant had succeeded in proving the liability of the defendants?

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(b) What order as to cost of the proceedings need be passed?

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These issues are considered together.

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Heard the Ld. Counsel for the applicant, perused the OA averments and the record placed before the Tribunal.

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The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-48 along with the proof affidavit. The documents produced in evidence are all found admissible. The proof affidavit of the applicant bank remained unchallenged and unrebutted. Therefore, on careful consideration of proof affidavit along with exhibits filed on behalf of the applicant bank, besides the material placed before the Tribunal, the Tribunal is satisfied that the applicant bank has successfully proved the OA claim against the defendants. Further, the statement of accounts in respect of the loan account produced and certified under the Banker’s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendant. It is clear from the statement of accounts that penal interest is not capitalized.

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In view of the foregoing, it is clearly evident that the application filed by the applicant bank is well within the period of limitation and this Tribunal possesses the territorial and pecuniary jurisdiction to entertain this OA.

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In view of the fact that the loan facilities availed by the defendants are primarily for business purpose, purchase of vehicle and house and in view of the fact that due to the defaults committed by the defendants the SOD Limit was restructured into FITL-I, II & III Loan and in view of the fact that even thereafter the defendants did not come forward to clear the dues, this Tribunal is of the view that no interference is called for in the interest rates claimed by the applicant bank, however, the prayer for award of penal interest is rejected.

¶70

In view of the afore mentioned discussions, the only conclusion this Tribunal can draw is that the applicant had clearly proved the disbursement of the loan, which the applicant is entitled to realize. Hence, OA is disposed off in the following manner: -

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(a) TA No.296 of 2022 stands allowed.

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(b) Applicant is permitted to realize an aggregate sum of Rs.17,09,78,796.80p together with interest as mentioned in the following manner from the date of filing of the application till the date of realization in full, from the defendants jointly and severally after deducting all the amounts received / realized by them during the pendency of OA and also by selling the schedule mentioned properties and other assets of the defendants:

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(i) A sum of Rs.99,35,327.94p with further interest at the rate of 7.55% per annum with monthly rests being the amount due under Hosing Loan Account No.2648619001425;

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(ii) A sum of Rs.14,48,39,265.10p with further interest at the rate of 14.25% per annum with monthly rests being the amount due under the OD Loan Account No.2648261000015;

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(iii) A sum of Rs.2,45,444.52p with further interest at the rate of 14.25% per annum with monthly rests being the amount due under DPN Loan Account No.2648741001330;

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(iv) A sum of Rs.34,11,732.91p with further interest at the rate of 8.3% per annum with monthly rests being the amount due under Vehicle Loan Account No.2648603001301;

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(v) A sum of Rs.38,82,373.69p together with further interest at the rate of 17.2% per annum with monthly rests being the amount due under FITL I Loan Account No.2648746000002;

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(vi) A sum of Rs.30,46,529.04p together with further interest at the rate of 14.35% per annum with monthly rests being the amount due under FITL II Loan Account No.2648746000003;

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(vii) A sum of Rs.56,18,123.63p together with further interest at the rate of 14.25% per annum with monthly rests being the amount due under FITL III Loan Account No.2648746000006;

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(c) If sale proceeds are not found sufficient to cover the amount allowed to be recovered, the defendants 1, 3 and 4 are personally liable for all such amounts due as ordered above.

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(d) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 15 days from the date of receipt of the copy of the order.

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(e) The Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of 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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Sd/(SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

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(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 18^th day of September, 2025)

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EXHIBITS MARKED BY APPLICANT BANK

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S.	Date	Description of Documents	Exhibit
No.			Nos.
1.	20.09.2016	Sanction Memorandum given by the applicant to	A-1
		the 1^stDefendant

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2.	26.09.2016	Housing Loan Agreement executed by 1^st Defendant & 3^rdDefendant	A-2
3.	24.08.2017	Sanction Memorandum given by the Applicant to the 2^ndDefendant	A-3
4.	01.09.2017	Letter of Proprietorship	A-4
5.	01.09.2017	Pronote for Rs.9,50,00,000/-	A-5
6.	01.09.2017	Common Hypothecation Letter executed by the 2^ndDefendant	A-6
7.	01.09.2017	Guarantee Covering Letter executed by the 1^st Defendant	A-7
8.	01.09.2017	Guarantee Agreement executed by the 1^st Defendant	A-8
9.	01.09.2017	Guarantee Covering Letter executed by the 3^rd Defendant	A-9
10.	01.09.2017	Guarantee Agreement executed by the 3^rd Defendant	A-10
11.	01.09.2017	Guarantee Covering Letter executed by the 3^rd Defendant	A-11
12.	01.09.2017	Guarantee Agreement executed by the 4^th Defendant	A-12
13.	27.02.2018	Personal Loan Application cum Sanction to 1^st Defendant	A-13
14.	27.02.2018	Take Delivery Letter to DPN	A-14
15.	27.02.2018	Pronote	A-15
16.	23.02.2018	Sanction Memorandum issued by Applicant to 1^st Defendant	A-16
17.	27.02.2018	Canmobile Loan Agreement	A-17

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18.	07.03.2018	RC Book for Vehicle No.TN10DC0760	A-18
19.	08.03.2018	Particulars of vehicle executed by the 1^st Defendant	A-19
20.	30.03.2019	Sanction Memorandum issued by Applicant to 2^ndDefendant for one-time Restructuring	A-20
21.	30.03.2019	Draft Letter of Undertaking – FITL - I	A-21
22.	30.03.2019	Debt Restructuring Agreement	A-22
23.	30.03.2019	Debtor-Creditor Agreement	A-23
24.	30.03.2019	Draft Letter of Undertaking – FITL – II	A-24
25.	30.03.2019	Debt Restructuring Agreement	A-25
26.	30.03.2019	Debtor Creditor Agreement	A-26
27.	04.09.2019	Draft Letter of Undertaking – FITL –III	A-27
28.	04.09.2019	Debt Restructuring Agreement	A-28
29.	04.09.2019	Debtor Creditor Agreement	A-29
30.	30.12.2016	Memorandum of Deposit of Title Deeds executed by 1^stDefendant	A-30
31.	25.09.2017	Memorandum of Deposit of Title Deeds executed by 1^stDefendant	A-31
32.	25.09.2017	Memorandum of Deposit of Title Deeds executed by 1^stDefendant	A-32
33.	30.08.2016	Agreement for Construction of an independent house	A-33
34.	17.10.2016	Sale Deed Document No.1427/2016 standing the name of 1^stDefendant	A-34
35.	17.10.2016	Sale Deed Document No.1428/2016 standing in the name of 1^stDefendant	A-35

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36.	17.10.2016	Sale Deed Document No.1429/2016 standing in the name of 1^stDefendant	A-36
37.	28.05.2017	Sale Deed Document No.638/2017 standing in the name of 1^stDefendant	A-37
38.	28.05.2017	Sale Deed Document No.639/2017 standing in the name of 1^stDefendant	A-38
39.	13.10.2017	Memorandum of Deposit of Title Deeds executed by the 5^thDefendant	A-39
40.	23.03.1994	Settlement Deed Document No.4443/1994 standing in the name of 5^thDefendant	A-40
41.	04.09.2019	Acknowledgement of Debt and Security Housing Loan of Rs.1,00,00,000/-	A-41
42.	04.09.2019	Acknowledgement of Debt and Security for overdraft limit of Rs.9,50,00,000/--	A-42
43.	28.01.2020	Demand Notice issued by the Applicant Bank to all the Defendants	A-43
44.	05.01.2021	Acknowledgement of Debt and Security for Vehicle Loan	A-44
45.	20.01.2021	Acknowledgement of Debt and Security for DPN Loan	A-45
46.	16.02.2021	OTS request letter given by the 2^ndDefendant	A-46
47.	18.02.2021	Reply given by the Applicant to the 2^nd Defendant	A-47
48.		Statement of Accounts	A-48

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Sd/(SHARANG DHAR UPADHYAY) PRESIDING OFFICER

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DRT-II, CHENNAI

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DESCRIPTION OF PROPERTY

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Item No.1:

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(A) Property in the name of 1^st defendant, covered vide Doc No 1427/2016

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All that piece and parcel of Land and building measuring about Acre 0.04 Cents (House site) comprised in S.No 573, Town Survet No H/5/8,situated at Ootacamund Town and bounded on the

¶103

North by : 16 feet wide road. South by : Part of R.S No.H/5/8

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East by : Part of R.S No.H/5/8 belonging to vendor and proposed to be conveyed to purchaser.

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West by : Part of R.S No.H/5/8

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and within the Registration district of Nilgiris and registration Sub-District of Ootacamund.

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Measuring: North to South (Eastern side) – 50 Sq. ft.; North to South (Western side) – 48 sq. ft; East to West (Northern side) – 35.3/4 sq. ft.; East to West (Southern side) – 35.3/4 Sq. ft.

¶108

(B) Property in the name of 1^st defendant, covered vide Doc No 1428/2016

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All that piece and parcel of Land and building measuring about Acre 0.04 Cents (House Site ) comprised in S No.573, Town Survey No.H/5/8, Situated at Ootacamund Town and bounded on the

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North by : Part of R.S No.H/5/8

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South by: Part of R.S No.H/5/8

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East by : 16 Feet road

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West by: Part of R.S No.H/5/8

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and within the Registration district of Nilgiris and registration Sub-District of Ootacamund.

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Measuring – North to South (Eastern side) – 25.50 sq. ft; North to South (Western side) – 25 sq. ft.; East to West (Both sides) – 69.25 Sq. ft.

¶117

(C) Property in the name of 1^st defendant, covered vide Doc No 1429/2016

¶118

All that piece and parcel of Land and building measuring about Acre 0.04 Cents (House site) comprised in S.No.573,Town Survey No.H/5/8,situated at Ootacamund town and bounded on the

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North by : Part of R.S No.572/1

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South by :Part of R.S No H/5/8 belonging to the purchaser

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East by : 16 Feet road

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West by: Part of R.S No H/5/8 belonging to the purchaser

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and within the Registration district of Nilgiris and registration Sub-District of Ootacamund.

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Measuring – North to South (Eastern side) – 25.50 sq. ft; North to South (Western side) – 25 sq. ft.; East to West (Both sides) – 69.25 Sq. ft.

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Item No.2:

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(A) Property in the name of 1^st defendant, covered vide Doc No 638/2012

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All that piece and parcel of Land and building measuring about Acre 0.05 Cents comprised in R.S.No.574,town Survey No.H/5/8, Situated at Ramakrishnapuram (R.K Puram), Ootacamund town and bounded on the

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North by : Municipal path

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South by : Part of R.S No H/5/8, belonging to K A MohideenBasha

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East by : Municipal path

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West by: Part of R.SNo.H-5/8

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Measuring: North to South (both sides0 – 10.03 meters; East to West (North) – 27.04meters; East to West (South) – 18 meters

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(B) Property in the name of 1^st defendant, covered vide Doc No 639/2012

¶135

All that piece and parcel of Land and building measuring about Acre 0.04 Cents comprised in R.S.No.574,town Survey No.H/5/8,bearing D No 319 at Ramakrishnapuram (R.K Puram), Ootacamund town and bounded on the

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North by : Part of T.S NO.H-5/8 belonging to M A Salim

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South by : Part of R.S No H/5/8

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East by : Municipal path

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West by: Part of R.SNo.H-5/8

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and within the Registration district of Nilgiris and registration Sub-District of Ootacamund.

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Measuring – North to South (Eastern side) – 14.00 meters; North to South (Western side) – 15.02 meters.; East to West (Northern side) – 18.00 meters; East to West (Southern side) – 7.00 meters.

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Item No.3

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Property covered in the name of 4^th defendant, covered vide Doc.No. 4443/1994

¶144

All that piece and parcel of Land and Building bearing Plot No.45 Part, Kalaignar Karunanithi Main Road, Kaveri Rangan Nagar, Saligramam, Chennai-600093, comprised in Survey No.136/1, situated at No.110,

¶145

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Saligramam Village, Egmore-Nungambakkam Taluk,Chennai Disrict measuring a extent of 3200 sq.ft. being bounded on the

¶147

North by : 40 ft road South by : Plot No.56 & 57 part East by : Plot No.46 and West by : Plot No.45 part

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In all admeasuring an extent of 3200 sq.ft. of land and situated within the Registration District of Chennai South and Sub -Registration District of Virugambaakkam.

¶149

Measuring: East to West (both sides) – 40 feet; North to South (both sides) – 60 feet.

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Item No.4: (Movable)

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Hypothecation of Mercedes Benz Car GLA-200D 2017, Registration No.TN10-BC0760,

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Engine No.:65193034323692, Chassis No.:WDC1569086L007820

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Sd/(SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

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Canara Bank v. M. a. Salim

Case brief

What is this about?

What did the court decide?

Canara Bank v. M. a. Salim

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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