Allowed

Union Bank of India v. Ravichand

DRT30 Jun 2026OA/1344/2024

Case brief

AI extract

What is this about?

This Tribunal allowed the Applicant Bank's application for a Recovery Certificate against a borrower who defaulted on a housing loan. The court held that disputes regarding project completion between the borrower and the builder are independent and do not affect the borrower's contractual liability to repay the bank.

What did the court decide?

Issued Recovery Certificate for Rs. 63,40,000 plus interest at 8% p.a. simple and cost of proceedings.

Union Bank of India versus Ravichand — Contract and Commercial Disputes | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL II,

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BENGALURU

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Dated this 30^th Day of June, 2026

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Present: Sri. T. RAJESH

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Presiding Officer OA.No. 1344/2024

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BETWEEN:

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Union Bank of India, Asset Recovery Branch, No. 2/3, Raja Building, N. R. Road, Bangalore -560002.

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…APPLICANT

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AND:

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Sri. PVNP Ravichand, S/o. Sri. Raghava Rao Pula, R/at No. A3, Flat No. 431, Palm Grooves Apartments, Near Marasur Gate, Anekal Roadum Bangalore -562106.

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...DEFENDANT

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Counsel on record/appeared for:

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Applicant : Rohit R Achar Defendant : Lex Scripta Advocates

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FINAL ORDER

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The present Original Application in short “OA” has been filed under section 19 of Recovery of Debts and Bankruptcy Act 1993 seeking issuance of Recovery Certificate for Rs. 63,40,000/- (Rupees sixty-three lakh forty thousand only) with further interest thereon and cost from the Defendant.

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It is the case of the Applicant that the Defendant availed a Housing Loan of Rs. 61,41,907/- (Rupees sixty-one lakh forty-one thousand nine hundred and seven Only) for purchase of an apartment. The Defendant agreed to repay the said loan amount together with interest and other

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OA 1344/2024

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applicable charges in accordance with the terms and conditions of the loan agreement executed between the parties.

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It is also the case of the Applicant that, in consideration of the aforesaid loan facilities, the Defendant executed the necessary loan documents including Demand promissory note and housing loan agreement in favour of the Applicant and created mortgage over the Schedule Property to secure the credit facilities.

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Despite availing the credit facility, agreeing with the Terms and Conditions for the loans, failed in complying with the same, resulting in defaults and consequentially turning the loan accounts as Non-Performing Asset (NPA).

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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 accounts.

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Summons were duly issued to the Defendants. Pursuant thereto, the Defendants appeared through their counsel, filed their written statement, and led evidence in support of their defence.

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In the Written Statement, the Defendant contends that Shri K. P. Vishwanath, Shri K. P. Harinath, Shri P. Devender Reddy and Shri Bhaskar Muralidhara, being the builders/developers/landowners of the residential project "Garden Residency", represented themselves as the absolute owners of the project. They incorporated M/s. Jyeshta Buildcon Pvt. Ltd., registered the project with RERA, Karnataka, under the name "IT Estate",

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OA 1344/2024

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and advertised the apartments for sale. Relying on the said representations, the Defendant booked a flat for a total consideration of Rs. 71,25,000/- and paid Rs. 14,50,000/- as advance. It is further contended that the builders, in collusion with the Applicant Bank, facilitated sanction of a housing loan of Rs. 61,41,907/- and an additional loan of Rs. 5,00,000/- for interiors, pursuant to which a Sale Deed dated 30.03.2021 was executed in favour of the Defendant and, on the same day, the Defendant executed a Memorandum of Deposit of Title Deeds in favour of the Applicant Bank. The Defendant further contends that after paying EMIs amounting to Rs. 13,28,152/-, he sought cancellation of the Sale Deed as the builders failed to complete the construction and hand over possession of the schedule flat despite receiving the entire sale consideration, and therefore disputes the Applicant Bank's claim.

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The Defendant further contends that he filed a complaint before the RERA Authority seeking appropriate action against the builders and cancellation of the Sale Deed. It is further contended that the Applicant was aware that the project was incomplete, yet, in collusion with the builders, sanctioned the loan without complying with the applicable RBI rules and regulations.

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The Applicant examined AW-1, who filed his proof affidavit reiterating the averments made in the Original Application and produced Exhibits A-1 to A-6, which were marked in evidence. The Defendant examined DW-1, who filed his proof affidavit and produced the title document, which was marked as Exhibit D-1.

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OA 1344/2024

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Heard for both side and considered the contentions as taken in the

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OA in the light of documentary evidence and the proof affidavits.

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The following issues arise for consideration in the light of pleading

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and evidence:

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i) Whether the applicant succeeded in proving the OA claim as against the Defendant?

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ii) If so, to what extent?

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Both these issues are gone into and decided together.

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The aforesaid contentions of the Defendant do not absolve him of his contractual liability towards the Applicant Bank. The documentary evidence produced by the Applicant, particularly the loan documents and the Statement of Account, clearly establishes that the loan facilities were sanctioned at the Defendant's request and the loan amount was duly disbursed in terms of the loan transaction. The Defendant has admittedly executed the loan documents, including the Memorandum of Deposit of Title Deeds, and has not produced any cogent evidence to substantiate the allegations of collusion between the Applicant Bank and the builders or any violation of the RBI guidelines. The disputes relating to the non-completion of the project, cancellation of the Sale Deed, and the proceedings initiated before the RERA Authority are matters between the Defendant and the builders, which are independent of the loan transaction and do not affect the Applicant Bank's right to recover the outstanding dues in accordance with the terms of the loan agreement.

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OA 1344/2024

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The evidence adduced by the Applicant remains unrebutted and is, therefore, deemed to be proved. The Applicant has produced the loan documents and Statement of Account, marked as Exhibits A-1 to A-6, which satisfactorily establish the sanction and disbursement of the loan facilities, execution of the security documents by the Defendant, and the outstanding liability. The Defendant has produced only the Sale Deed, marked as Exhibit D-1, which does not disprove the Applicant's claim. The documents produced by the Applicant are admissible and sufficient to substantiate the claim made in the OA. The OA has been filed within the prescribed period of limitation, and there is no capitalization of penal interest. Accordingly, the Applicant has successfully established the Defendant's liability.

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Hence in view of the above findings this Tribunal comes to the conclusion that the OA is liable to be allowed.

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Taking into consideration the fact that the loan is availed by the Defendant is housing loan and also the fact that OA claim is arrived at by calculating interest at the agreed rate, pendente lite and future interest is awarded @ 8.00% (Simple). The prayer for interest with monthly rests and for penal interest for the future period is hereby declined.

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In the result, OA.No.1344/2024, is allowed,

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i) The Applicant is allowed to recover an aggregate sum of

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Rs.63,40,000/- (Rupees sixty-three lakh forty thousand only) along with pendente lite and future interest of 8.00% p.a. (simple), from the date of

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OA 1344/2024

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filing of the OA till the realization, from the Defendant personally after

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giving credit to all the amounts recovered and received during the pendency of the OA if any, and allow the same to be recovered by proceeding against the schedule properties. Properties schedule to the OA be the schedule to the Recovery Certificate.

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ii) If the sale proceeds are found insufficient to clear the loan amount due from the Defendant personally then the Applicant Bank shall be at liberty to proceed against Defendant and their other assets for

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recovery of the balance amount due.

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iii) The Applicant bank is allowed cost of the proceedings for which

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Applicant to file cost memo within seven days from the date of receipt of the order.

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iv) The Recovery Certificate to be drawn in terms of this order and

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transferred to Recovery for execution.

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v) Interim application pending, if any, stands disposed of in terms

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of this final order.

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Communicate a copy of the order to the parties concerned in terms

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of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure)

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Rules, 1993.

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(Dictated to PY directly on the Computer, after its transcription, corrected and pronounced by me in the open Court on this the 30th day of June, 2026).

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Sd/(T. RAJESH) PRESIDING OFFICER

OA 1344/2024

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: S. K. Vasantha Kumar S K, Chief Manager, of Applicant Bank.

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Exhibits on the part of the Applicant:

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Exhibit Nos.	Date	Particulars of Documents
A1	10.03.2021	Sanction letter
A2	26.03.2021	Demand promissory note
A3	26.03.2021	Housing loan agreement
A4	30.03.2021	Regd. Memorandum of Deposit of Title Deed
A5	20.01.2024	Securitization Notice
A6	--	Account extract

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Witness Examined for the Defendant:

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-Nil-

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List of Documents Exhibited for the Defendant: -Nil-

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Sd/-

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(T. RAJESH) PRESIDING OFFICER

Union Bank of India v. Ravichand

Case brief

What is this about?

What did the court decide?

Union Bank of India v. Ravichand

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

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Case details

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