Allowed

Canara Bank v. M/s. Tannu Ventures

DRT31 Jul 2026OA/1620/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the application for issuance of a Recovery Certificate under the RDB Act. It found that the Defendants failed to provide evidence to rebut the bank's claim regarding the overdraft facility and loan documents, rendering their defence unsubstantiated.

What did the court decide?

Recovery Certificate issued for Rs. 41,59,268/- along with interest at 10% p.a. from the date of filing of the OA till realization.

Canara Bank versus M/s. Tannu Ventures — Specific Performance | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL II,

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BENGALURU

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Dated this 31^st Day of July, 2026

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Present: Sri. T. RAJESH Presiding Officer OA.No.1620/2023

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BETWEEN:

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Canara Bank, Basrur Branch, Bank Street, Kundapura Taluk, Udupi District, Basrur -576211, Karnataka Rep. by its Branch Manager,

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…APPLICANT

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AND:

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M/s. Tannu Ventures, Door No.111, 160-B, Manjushri Complex, Ankadakatte, Koteshwara, Kundapura -576222, Rep. by its Proprietor Sri. Rajesh Nayar.

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Sri. Rajesh Nayar, S/o. Sri. Sridhar Nayar, Proprietor of M/s. Tannu Ventures, No. 4/1, Pramila Nilaya, Kodi Road, Hanglur, Kundapura -576217.

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...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : Raghavendra G. K. Defendants : Law Minds

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FINAL ORDER

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The present Original Application in short “OA” has been filed under

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section 19 of Recovery of Debts and Bankruptcy Act 1993 seeking issuance of Recovery Certificate for Rs. 41,59,268/- (Rupees forty-one lakh fiftynine thousand two hundred and sixty-eight only) with further interest

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OA 1620/2023

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thereon and cost from the Defendants.

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It is the case of the Applicant that Defendant No. 1 is a partnership firm represented by Defendant No. 2, who is its partner and authorized representative. The Defendants approached the Applicant for financial assistance and availed an Overdraft facility of Rs. 20,00,000/- (Rupees Twenty Lakh Only) to meet their working capital requirements. Subsequently, at the request of the Defendants and upon their representations, the Applicant renewed and enhanced the said Overdraft facility from Rs. 20,00,000/- (Rupees Twenty Lakh Only) to Rs. 39,50,000/- (Rupees Thirty-Nine Lakh Fifty Thousand Only) to meet their increased working capital requirements, subject to the terms and conditions agreed between the parties.

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It is also the case of the Applicant that, in consideration of the aforesaid loan facility, the Defendants executed the necessary loan documents including pro-note, cash credit agreement, supplemental agreement and created hypothecation over the schedule property in favour of the Applicant Bank as security for the said loan facility.

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It is the case of the Applicant that the Defendants, 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

OA 1620/2023

due in the accounts.

Summons were duly issued to all the Defendants. Defendants entered appearance through their counsel by filing Vakalat and also filed their Written Statement. However, despite being afforded sufficient opportunities, they failed to adduce any evidence in support of their contentions. Consequently, the evidence of Defendants were closed on 22.07.2026.

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The Defendants, in their Written Statement, have not raised any substantial or bona fide defence with respect to the availing of the loan facilities or the execution of the loan documents. The Written Statement consists of vague, evasive, and unsupported denials and fails to specifically traverse the material averments made by the Applicant. The Defendants have merely called upon the Applicant to strictly prove the availing of the loan facility, the enhancement of the overdraft limit, and the execution of the Supplemental Agreement and the Demand Promissory Note, while contending that the Applicant's claim against Defendant No. 1 is not maintainable on the ground that Defendant No. 1 did not utilize the loan proceeds and that the entire overdraft facility is false and therefore the OA is liable to be dismissed.

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The Applicant led evidence through AW-1, who filed his Proof Affidavit reiterating the averments made in the Original Application and produced documents marked as Exhibits A-1 to A-11.

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

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OA 1620/2023

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

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The following issues arise for consideration in the light of pleading and evidence:

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

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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 contentions raised by the Defendants are wholly untenable and are belied by the duly executed loan documents, statements of account, and other contemporaneous records produced by the Applicant, which clearly evidence the sanction, renewal, enhancement, and operation of the overdraft facility. The Defendants have failed to place on record any documentary evidence or other material to substantiate their allegations or rebut the Applicant's case. A plain reading of the Written Statement demonstrates that it does not contain any specific denial of the material averments relating to the sanction, availing, or execution of the credit facilities. Instead, the Defendants have raised vague, bald, and unsupported assertions, including alleged grievances and financial constraints, which are devoid of particulars and do not constitute a valid defence in law to dispute the contractual liability arising out of the duly executed loan documents. Consequently, the Written Statement is devoid of evidentiary support, does not disclose any bona fide or triable issue warranting adjudication, and the defence raised therein is illusory, sham,

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OA 1620/2023

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and moonshine, put forth solely to delay the proceedings and evade the Defendants' lawful liability towards the Applicant Bank.

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The documents marked and proved by the Applicant establish the sanction, disbursement, renewal, and enhancement of the credit facilities, as well as the execution of the relevant security and loan documents by the Defendants. Despite being afforded sufficient opportunity, Defendants failed to adduce any oral or documentary evidence in support of their defence. Consequently, the pleadings raised by them remain unsubstantiated and incapable of displacing the case of the Applicant. Accordingly, the Tribunal finds no merit in the defence raised by Defendants.

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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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The OA has been filed within the prescribed period of limitation and the claim of the Applicant is found to be legally tenable. Taking into consideration the fact that the loan was availed for the business of the Defendants and that the OA claim has been arrived at by calculating interest at the agreed rate, pendente lite and future interest are awarded at the rate of 10.00% per annum (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. 1620/2023, is allowed,

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

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41,59,268/- (Rupees forty-one lakh fifty nine thousand two hundred and sixty eight only) along with pendente lite and future interest of 10.00%

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OA 1620/2023

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p.a. (simple), from the date of filing of the OA till the realization, from the Defendants jointly, severally and personally after giving credit to all the amounts recovered and received during the pendency of the OA if any, and allowed the same to be recovered by proceeding against the defendants personally and their assets including the schedule movable property. Properties 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 for which Applicant to file cost memo within seven days from the date of receipt of

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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, stands disposed of 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)

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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 31^st day of July, 2026).

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Sd/(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: Sri. Amit Kumar Meena, Senior Manager, of Applicant Bank.

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OA 1620/2023

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Exhibits on the part of the Applicant:

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Exhibit Nos.	Date	Particulars of Documents
A1	24.02.2021	Letter of Proprietorship
A2	24.02.2021	Request for overdraft facilities
A3	24.02.2021	Cash Credit Agreement
A4	02.07.2021	Request for Overdraft facilities
A5	02.07.2021	Link Letter in respect of Enhancement of Credit Facility
A6	02.07.2021	Supplemental Agreement
A7	02.07.2021	Pro-note
A8	17.09.2022	Letter of Renewal
A9	09.05.2023	Letter of Revival
A10	01.06.2023	Office copy of Legal Notice
A11	--	Certified statement of account

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Witness Examined for the Defendants: List of Documents Exhibited for the Defendants:

-Nil -

-Nil -

Sd/(T. RAJESH)

PRESIDING OFFICER

Canara Bank v. M/s. Tannu Ventures

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/s. Tannu Ventures

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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