Allowed

Canara Bank v. M/s. Modern and General Enterprises

DRT26 Feb 2026OA/102/2024

Case brief

AI extract

What is this about?

The tribunal allowed the bank's original application for recovery of a loan default. It held that business losses due to the pandemic could not absolve the borrower of liability despite a seven-year gap between default and application, directing recovery of principal, interest, and costs.

What did the court decide?

Order to pay Rs.28,27,029/-, future interest at 8.75% p.a., and costs; Recovery Certificate issued.

Canara Bank versus M/s. Modern and General Enterprises — Money Laundering | DRT (2026)

¶1

IN THE DEBTS RECOVERY TRIBUNAL-II AT HYDEMBAD DATED THIS THE 26TH DAY OF FEBRUARY,2026

¶2

PRESENT: SH. RAMESHWAR KOTHE, B.Com, L.LB. (Hons.), M.A. PRESIDING OFFICER

¶3

ORIGINAL APPLICATION NO.1O2 OF 2024.

¶4

Between:

¶5

Canara Bank Banjara Hills Branch-Il Road No.7, Banjara Hills Hyderabad. Rep by its Senior Branch Manager.

¶6

Applica nt.

¶7

And

¶8

M/s. Modern and General Enterprises Represented by its Proprietor Smt. A. Rama Devi W/o Sri Raghavendra Rao.

¶9

Smt. A. Rama Devi W/o Sri Raghavendra Rao Age: 38^years, Occ: Business Proprietor of M/s. Modern And General Enterprises.

¶10

Both are residents at: H. No.24-291L Vimaladevi Nagar Malkajgiri, MedchalMalkajgiri Dist. ..... Defendants.

¶11

Counsel for the Applicant :^{M/s.K. ViswanathaReddy.} Counsel for Defendants :^{Mr. N. Bojjaiah(Ganesh)'}

¶12

:: ORDER::

¶13

The Applicant Bank filed the^{present OA u/s 19 of The Recovery} of Debts & Bankruptcy Act,^{1993 for recovery of a sum of} OY*

¶14

oA.1O2/2024

¶15

Rs.28,27,0291- from defendants and their properties joinuy and severally with further interest @8.7590 per annum with monthly rests from the date of Application till the date of realisation along with costs.

¶16

The averments of applicant bank, as per the OA, briefly, are;

¶17

Defendants have availed cash credit facility of Rs.7,00,000/and term loan of Rs.2,130,000/- for development of General and Kirana Stores vide sanction letters dated 27.04.2017 and 03.05.2017 respecflvely fo owed by WCTL of Rs.3,97,OOO/-on 04.06.2020. Defendants executed necessary loan documents from time to time. The loan amounts were to be repaid with interest @8.70 per annum with monthly rests. The rate of interest was subject to revision. However, deFendants committed default in repayment. Accordingly the account slipped into NPA category as per RBI norms. Applicant bank issued a legal notice dated 17.05.2027 recalling the outstanding dues in toto. However, defendants failed to discharge the liability. As per agreed terms, applicant bank is entiUed to additional interest in case of default in repayment. Hence, this oA.

¶18

Defendants filed written statement. The averments in the written statement, in brief, are:

¶19

Due to Covid Pandemic, defendants, business suffered severe disruption in the supply chain and drastic reduction in the turnover. As the customers failed to repay the value of goods taken on credit, the financial position of the defendants was aggravated further affecting the revenue generation to meet the repayment obligations towards the applicant bank. ()/ /M,*Jr

¶20

oa.1o2l2024

¶21

Accordingly, the situation went out of control with a severe hardship to the defendants. In the light of the above facts and circumstances, defendants pray for dismissal of the OA in the interest of^justice.

¶22

In order to prove its claim, the Applicant Bank examined Nithin K. Pai, Chief lvlanager, as AW-1 and marked 18 documents through him as Ex. A.1to Ex. A.18.

¶23

Despite conditional order, defendants failed to adduce evidence. Accordingly, defendants right of evidence was forfeited vide docket order dated 29.07 .2025.

¶24

Heard learned counsel appearing for the applicant. Defendants' right to advance arguments was forfeited for nonrepresentatlon vide docket order dated 12.02.2026. Perused the material^placed on record.

¶25

Learned counsel for the applicant bank submits that defendants have not disputed availment of credit facilities and subsequent default in repayment albeit due to business losses attributed to Covid Pandemic. In that view of the matter, applicant's claim against the defendants is not under dispute. Accordingly, learned counsel prayed for allowing the OA claim in favour of the applicant bank and against the defendants in the interest of justice.

¶26

B. The point that arises for consideration is:-

¶27

Whether the Applicant Bank is entitled for the QA claim against the Defendants? N*

¶28

oA.to2l2o24

¶29

There is no denial of availment of loan and default in repayment thereafter by the defendants. It is the contention of the defendants that a large number of customers failed to repay the dues due to the prolonged pandemic and it's after effects leaving a continued strain and impact on the financial capacity to generate sufficient revenue to fulfil the contractual obligations of the applicant bank. Losses in business and failure to generate revenue to meet the contractual obligations of a creditor bank can be termed as cause for default but it cannot be urged as a ground for disowning the liability. It is for the borrower to explore avenues or remedial steps to steer through the crisis. Loan was availed in 2017 for business purposes. The Covid Pandemic situation was faced in 2020. Whereas, applicant bank filed the present OAin 2024. There is a clear gap of about 7 years to discharge the liability particularly when the kirana and general business being not a mega project with a long gestation period. However, defendants did not seem to have taken any measures in this direction either with the applicant bank or on business front to improve its financial crisis. Such is the situation, I do not see any valid reason on the part of the defendants to disown the liability. Hence, I hold that defendants are^jointly and severally liable to pay the OA claim to the Applicant Bank with future interest and costs.

¶30

In the result, the present Original Application No.102/2024 is allowed as under: -

¶31

i) the defendants are jointly and severally liable to pay to the applicant bank a sum of

¶32

'Rs.28,27,O29l- along with interest @8.75% ffi"*

¶33

oA.LOzl2024

¶34

per annum simple from the date of application till the date of realization;

¶35

ii) the applicant bank is also entitled to proceed against the person and properties of defendants for realisation of its dues; and

¶36

iii) the applicant bank is entitled for the costs.

¶37

The Applicant Bank is directed to file Cost Memo within 2 weeks from the date of receipt of this Order.

¶38

L2, Issue Recovery Certificate accordingly.

¶39

Communicate a copy of this order to the^parties concerned and upload in official Web Portal.

¶40

(Dictated to the steno, signed and pronounced by me in the oD 26'h day of Februa ry,20261.

¶41

court on this the

¶42

ruK"o-\

¶43

HWAh KoTHE) PRESIDING OFFICER

Canara Bank v. M/s. Modern and General Enterprises

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/s. Modern and General Enterprises

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

Similar cases

Karnataka Bank Ltd. versus M/s Pragati Marbles

State Bank of India versus M/s. Jai Bharath Enterprises

Indian Bank versus M/s. Ganapathi Mobile Marketing

Canara Bank versus Mrs. Nayana Gadangandla

M/S. State Bank of India versus M/s Sri Subrahmanya Jewellers (Borrower)

M/S. State Bank of India versus Mrs. Chenepalli Lakshmi Sujana, (Borrower)