Allowed

Union Bank of India v. Venkatadri Naidu Nallaeatla

DRT5 May 2026OA/110/2023

Case brief

AI extract

What is this about?

In this original application under Section 19 of the Recovery of Debts & Bankruptcy Act, 1993, the Debts Recovery Tribunal allowed the bank's claim for recovery of dues despite the borrowers alleging conspiracy with a third-party guarantor, holding the borrowers as jointly and severally liable.

What did the court decide?

Directing joint and several liability of defendants to pay Rs.29,33,742 along with future interest at 10.25% per annum, costs, and permission to enforce against mortgaged property.

Union Bank of India versus Venkatadri Naidu Nallaeatla — Money Laundering | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL-II AT HYDERABAD

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DATED THIS THE OsTH DAY OF MAY, 2026

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

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ORIGINAL APPLICATION NO. 110 OF 2023

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Between:

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Union Bank of India Tirupati Main Tirupati, Chittoor Rep by its l,lanager.

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.... ...Applica nt.

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And

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Venkatadri Naidu Nallaeatla Major, H. No. 70-2-4U 2ndFloor,KKStreet

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Opp: Sridevi Complex Tirupathi-517 501 Chittoor Dist.

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Also at:

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H. No. 4-24, Maruthinagar Bandi Vandlavooru Madhavaram

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Yada mari Mandal chittoor Dist. 517 501.

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Smt. Leelavathi Nallaeatla Wo Sri^{N. venkatadriNaidu}

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H. No. 70-2-427 , 2nd Floor K K Street, Opp: Sridevi Complex Tirupathi 517 501, Chittor Dist.

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Also at:

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H. No. 4-24, Maruthinagar Ba ndi Va ndlavooru lvladhavaram Yadamari N4andal Chittoor Dist. 5!7 "'' "",u^Y6,.''o507. /)l !lt*,

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oA.l l0/2023

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Y. Nagendra Babu S/o late Satyanarayana Major, H.No. t0-t24 Plot No.71, Newpet Chandragiri, Tirupati Chitoor Dist.

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...., Defendants.

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Counsel for the Applicant : Mr. P. Balaji. 'Counsel for Def. 1 & 2 : Mr. V. Venkata Mayur.

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Defendant No.3 : Exparte.

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:: oRDER::

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The Applicant Bank filed the present OA u/s 19 of The Recovery of Debts & Bankruptcy Act, 1993 for recovery of a sum of Rs.29,33,742/- from the defendants 1 to 3 joinfly and severally with future interest @10.25olo per annum with monthly rests from 01.11.2022 till the date of realisation along with costs and sale of OA schedule property.

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The averments of the OA, in brief, are; defendants 1 and 2 availed housing loan of Rs.27,00,000/- in June 2012. The loan is secured by OA schedule property. Defendant No.3 stood as

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personal guarantor for the due repayment of the loan.

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Defendants I and 2 executed housing loan agreement, MODT and defendant No.3 executed deed of guarantee. Due to various irregularities in the payment of loan amount, the account was classified as NpA, followed by SARFAESI proceedings. The defendants committed wilful default in the repayment of the loan amount. Hence, this OA.

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Defendants No. 1 and 2 filed written statement. The averments of the written statement in brief, are that the defendant No.3 builder obtained the roan in the name of the defendants with the understanding that the loan would be re24l by him. The ,)*i'r, ,J,/ nv" ,

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oA.l t0/2023

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defendant No.3 conspired with bank olficials in granting the loan in the name of defendants 1 and 2. Further, the defendant No.3 was in the possession and enjoyment of the mortgaged property since inception and the EMIS were paid by him till 31.03.2019. Applicant bank issued notices of sale against the secured asset on 16.02.2023 and 05.07.2023 respectively. Therefore, the OA is liable to be dismissed.

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Defendant No.3 was set exparte vide docket order dated 27.03.2024 as called absent and there being no representation.

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In order to prove its claim, the Applicant Bank examined M. Ravindra, Manager as AW-1 and marked 6 documents through him as Ex. A.1to Ex. 4.6.

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In support of their defence, defendants 1 and 2 examined Nallagatla Venkatadri Naidu, defendant No.1 as DW.1 and marked 3 documents through him as Exhibits 8.1 to 8.3.

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Heard learned counsel appearing for the applicant bank and learned counsel appearing for the defendants 1 and 2. perused the material placed on record.

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B. Learned counsel appearing for the applicant bank, while reiterating the averments in the OA, prayed for allowing the OA claim against defendants 1 and 2 and the mortgaged property in the interest of^justice.

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Learned counsel appearing for the defendants 1 and 2 prays for dismissal of OA on the ground of conspiracy between the bank oFficials and defendant No.3 builder in using the defendants as a proxy for the purpose of obtainin _loan from applicant bank and thereaft er committino o.tuu,r. . 7 7)$(tV* ,J' LO-

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oA.l t 0/2023

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The point that arises for consideration is:-

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Whether the Applicant Bank is entitled for the OA claim against the Defendants 1 to 3 and against the OA schedule^property?

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The contesting defendants tried to build up a case of^conspiracy between bank officials and defendant No.3 in sanctioning^the loan in the name of defendants 1 and 2. According^to defendants, the loan amount was utilised by the^{3'd defendant} builder who is enjoying the^possession of the subject^property since inception. Apparently, defendants 1 and 2 have not taken up this issue either with the defendant No.3 or with bank officials at any point time before. If that be the case of the defendants I and 2, the remedy lies elsewhere. Therefore, this plea cannot be a ground to disown the liability. Further, the availment of loan is not in dispute.

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L2, In view of the foregoing facts and circumstances, the Evidence Affidavit of AW.1 coupled with the recitals in the documents viz., Exs. A.1 to 4.6 marked on behalf of the Applicant Bank, remains un-rebutted and unchallenged. Hence, I hold that defendants 1 to 3 are jointly and severally liable to pay the OA claim to the Applicant Bank with future interest and costs.

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In the result, the present Original Application No.110/2023 is allowed as under: -

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i) defendants 1 to 3 are jointly and severally liable to pay to the Applicant Bank a sum of Rs.29,33,742l- along with interest @10.25olo @.,

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oA.110D023 per annum simple from the date oF application till the date of realization;

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ii) the OA claim is secure of OA schedr," r;;r;;'#'rfl:;J,::: bank is entiued to proceed against the same for recovery of its debt;

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iii) applicant bank is entiUed to proceed against the person and properties of defendants 1 to 3 for realization oF its dues; and

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iv) the applicant bank is entifled for the costs.

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L4' The Appricant Bank is directed to fire cost Memo within 2 weeks from the date of receipt of this Order.

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Issue Recovery Certificate accordingly,

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

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(Dictated to the steno, signed and pronounced by me in the open court on this the 05th day of May, 2026.) @'"*

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(RAMESPTWAR KOTHE) PRESIDING OFFICER

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Union Bank of India v. Venkatadri Naidu Nallaeatla

Case brief

What is this about?

What did the court decide?

Union Bank of India v. Venkatadri Naidu Nallaeatla

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

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