Partly allowed

Union Bank of India v. Rachappa

DRT7 May 2026OA/1628/2023

Case brief

AI extract

What is this about?

In an ex-parte recovery application, the Tribunal allowed the claim against the borrower and corporate guarantor who executed complete guarantee deeds, while dismissing the application against two defendants whose signatures were missing from the secondary guarantee deed. The claim for future interest was reduced from 11.50% to 9%.

What did the court decide?

Recovery of Rs.20,32,617 plus future interest @9% per annum allowed against Defendants 1, 2, and 4–10; application dismissed against Defendants 3 and 11.

Union Bank of India versus Rachappa — Money Laundering | DRT (2026)

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Presented on .. 28.08.2022 Registered on .. 30.12.2023 Decided on .. 07.05.2026 Duration .. Y—M—D 03--08--09

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IN THE DEBTS RECOVERY TRIBUNAL AT PUNE (Before Shri Dilip G. Murumkar, Presiding Officer) ORIGINAL APPLICATION No. 1628/2023.

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Union Bank of India,

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A body corporate constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970, having its head office at 239, Vidhan Bhavan Marg, Nariman Point, Mumbai – 400 021 and Branch Office at Kumbhar Ves, Solapur 413 002.

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… Applicant

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Versus

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1 Mr. Rachappa Girimallappa Kumbar, Age Adult, Occ. Agri. & Business, R/at – At Post Battaraga Dhangapur, Tal. Aland, District Gulbarga 585213.

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2 M/s. Matoshri Laxmi Sugar Cogeneration Industries Ltd.,

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A private limited company duly incorporated and registered under the provisions of the Companies Act, 1956 and having its registered office at Satling Nagar, At Ruddhewadi, Post Dudhani, Taluka Akkalkot, District Solapur 413 220.

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Sanap ( OA No. 1628/2023 ) 1 of 7

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3 Mr. Shivraj Siddharam Mhetre, Age – Adult, Occ. - Agri. & Business, At Post : 21 Near Maruti Mandir, Grampanchayat Office, Chincholi Mai, Chincholi (Najik), Solapur 413220

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4 Mrs. Kusum Ganpati Shinde, Age – Adult, Occ. - Agri. & Business, At Post Dahitane, Taluka Akkalkot, District Solapur 413 226.

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5 Mrs. Shobhabai Balabhim Shinde, Age – Adult, Occ. - Agri. & Business, At Post House No.3, Dahitane, Taluka Akkalkot, District Solapur 413 226.

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6 Mr. Gokul Dattatray Shinde, Age – Adult, Occ. - Agri. & Business, At Post – 3, Khandare Galli, Dahitane, Tal.Akkalkot, District Solapur 413226.

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7 Ms. Ganapati Datamay Shinde, Age – Adult, Occ. - Agri. & Business, At Post - House No. 194, Dahitane, Tal.Akkalkot, District Solapur 413226.

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8 Ms. Balbhim Dattatray Shinde, Age – Adult, Occ. - Agri. & Business, At Post – Dahitane, Taluka Akkalkot, District Solapur 413 226.

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9 Ms. Dattatray Balbhim Shinde, Age – Adult, Occ. - Agri. & Business, At Post – Dahitane, Taluka Akkalkot, District Solapur 413 226.

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Sanap ( OA No. 1628/2023 ) 2 of 7

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10 Ms. Kapil Balbhim Shinde, Age – Adult, Occ. - Agri. & Business, At Post – Dahitane, Taluka Akkalkot, District Solapur 413 226.

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11 Ms. Bhagwan Dattatray Shinde, Age – Adult, Occ. - Agri. & Business, At Post – 157, Lucky Chowk, Nandini Complex, Gokul Lottery Market, Murarji Peth, Solapur 413 001. … Defendants

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Appearances :- For Applicant Advocate Srinivas Y. For Defendants Ex parte.

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Total Claim Amount – Rs.20,32,617/-

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JUDGMENT

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( Delivered on 07^th May, 2026 )

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The Applicant Bank has filed the present application for recovery of the sum of Rs.20,32,617/- together with future interest @11.50% per annum from the date of Application till realization of the entire dues from the defendants.

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Brief facts of the application are as under :-

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Defendant No.1 is a borrower. Defendant No.2 is a Corporate Guarantor and defendant Nos. 3 to 11 are guarantors as well as mortgagors to the Term Loan facility granted to defendant No.1.

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Sanap ( OA No. 1628/2023 ) 3 of 7

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As per the application of defendant No.2 through defendant No.3-the Managing Director of defendant No.2, the applicant Bank sanctioned the aggregate/ cumulative Term loan facility of Rs.30,00,00,000/- to defendant No.2 on 16.11.2017.

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Thereafter, as per the loan application of defendant No.1, the applicant Bank sanctioned Term Loan facility of Rs.21,16,000/- on 16.11.2017 to defendant No.1 at the instance of defendant No.2.

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In order to secure the aforesaid loan facility, the defendants have executed necessary loan and security documents on 25.01.2018 in favour of the applicant Bank. Further, defendant No.1 has also executed Debit Balance Confirmation Letter on 18.01.2021 and thereby confirmed the balance outstanding in loan account.

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The applicant Bank contended that the defendants committed defaults in payment of installments and failed to regularize the accounts. Hence, on 08.06.2018, the applicant Bank has classified the account of the defendants as Non-Performing Asset in accordance with guidelines of Reserve Bank of India. Therefore, on 11.07.2022, the applicant Bank issued Recall Notice to the defendants. Despite service of Notice, the defendants

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Sanap ( OA No. 1628/2023 ) 4 of 7

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failed and neglected to pay the outstanding dues of the applicant Bank.

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Hence, this application is filed.

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The defendants failed to appear despite service of summons. Hence, the application proceeded ex-parte against the defendants as per Order dated 04.11.2025 passed below Application (Exhibit-1).

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The applicant Bank has filed Claim Affidavit of evidence (Exhibit-6) of Mr. Vineet Kumar Singh, Branch Manager and Principal Officer of the applicant Bank, and has produced on record the original loan transaction documents at Sr. Nos. AW1-1 to AW1-11 along with list (Exhibit 10), which corroborates the case of the applicant Bank.

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I have heard arguments of the learned Advocate for the applicant Bank.

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Since the defendants failed to appear and contest the application, I find no reason to disbelieve evidence of the applicant Bank.

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At this juncture, it is to be noted here that, according to the applicant Bank itself, defendant Nos. 2 to 11 stood guarantors for the repayment of loan availed by defendant No.1. Accordingly, the applicant Bank has

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Sanap ( OA No. 1628/2023 ) 5 of 7

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produced guarantee deeds executed by defendant No.2 and another guarantee deed executed by defendant Nos.3 to 11. However, it is pertinent to note that second guarantee deed bears signatures of only seven guarantors. The applicant has filed pursis (Exhibit 11) stating that the signatures are of defendant Nos. 4 to 10. Therefore, the applicant Bank is entitled for the reliefs as claimed only against defendant Nos.1, 2 and 4 to 10 and the Original Application is liable to be dismissed against defendant Nos. 3 and 11.

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The applicant Bank has claimed relief in respect of hypothecated assets. However, there is no detailed description with respect to the hypothecated assets in hypothecation agreement, therefore, the relief in terms of hypothecated assets cannot be granted.

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The applicant Bank has claimed future interest @11.50%

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per annum. However, considering the facts of the case, I am of the opinion that if future interest is granted @9% per annum (simple), it would be just and reasonable rate of interest.

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Hence, I pass the following order.

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O R D E R

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A} Original Application No. 1628/2023 is allowed with

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costs against defendant Nos.1, 2 and 4 to 10.

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B} Defendant Nos. 1, 2 and 4 to 10 either jointly or severally shall pay to the applicant Bank the sum of Rs.20,32,617/- (Rupees Twenty Lakh Thirty Two Thousand Six Hundred Seventeen only) along with future interest @9% per annum from the date of filing of the Original Application i.e. 28.08.2022 till full payment/realization of the amount mentioned in this operative order.

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C} Original Application No. 1628/2023 is dismissed against defendant Nos. 3 and 11.

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D} Issue Recovery Certificate.

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E} The Registrar is directed to send the copy of Judgment and Recovery Certificate to the applicant and defendants.

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Sd/( Dilip G. Murumkar ) Place : Pune Presiding Officer Date : 07.05.2026 Debts Recovery Tribunal, Pune.

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Sanap ( OA No. 1628/2023 ) 7 of 7

Union Bank of India v. Rachappa

Case brief

What is this about?

What did the court decide?

Union Bank of India v. Rachappa

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

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Statutes considered

Parties & counsel

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