Allowed

Canara Bank v. Ms Ess Multi Foods Private Limited

DRT24 Jul 2026OA/1658/2024

Case brief

AI extract

What is this about?

Tribunal allowed the banking company's application for recovery certificate against borrowers who defaulted on regulated loans, confirming admissible evidence of debt, security, and defaults while reducing interest rates.

What did the court decide?

Recovery certificate to be issued for Rs.4,34,65,015.40 plus 8% p.a. simple interest from filing date against respondents jointly and severally, including proceeds from schedule property.

Canara Bank versus Ms Ess Multi Foods Private… — Contract and Commercial Disputes | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 24^th Day of July, 2026

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Present: Sri. T. RAJESH

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Presiding Officer

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OA. No.1658/2024

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BETWEEN:

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Canara Bank (Erstwhile Syndicate Bank) Doddakallasandra Branch, No.42, Kanakapura Main Road, Venkata Reddy Layout, Doddakallasandra, Bengaluru – 560062 Rep. by its Manager Sri. Prakash T

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… APPLICANT

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AND:

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M/s. ESS Multi Foods Pvt. Ltd., Having its registered office at Sy.No.24/3, Site No.11 & 12, Hosahalli, Near Shobha Forest View Apartments, Thakagattapura Post, Bangalore-560062 Rep. by its Directors: Sri. Nagaraj Shetty Smt. Rahamath Unnisa

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Sri. Nagaraj Shetty S/o. Sri. Govind Shetty Aged about 48 years Residing at No.39, Aashraya 8^th Cross, New Bank Colony, Konanakunte, Bangalore – 560062

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Smt. Rahamath Unnisa W/o. Sri. Aslam Pasha Aged about 36 years

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OA. No.1658/2024

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Residing at No.30/0, Aashiyana, I Main, MKS Layout, 1^st Stage, Doddakallasandra, Bangalore-560062

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...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : Sri. T Yugandhar Defendants : Exparte

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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 for seeking issuance of Recovery Certificate against the defendants for Rs.4,34,65,015.40 (Rupees Four Crore Thirty Four Lakhs Sixty Five Thousand Fifteen and Forty Paisa only) with further interest thereon from the date of filing the Application till realization from the Defendants.

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It is the case of the applicant that, the defendants availed Mortgage loan of Rs.54,50,000/- on 24.04.2017; OD facility of Rs.3,00,00,000/- on 29.12.2017, which was restructured on 27.09.2019; Overdraft facility limit of Rs.1,90,00,000/- on 27.03.2018, which was restructured on 27.09.2019 and Guaranteed Emergency Credit Line (GECL) facility of Rs.68,00,000/- on 19.09.2020 during the Covid-19.

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OA. No.1658/2024

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It is also the case of the applicant that, in view of the above financed credit facilities, the defendants executed necessary loan documents. Apart from the creation of security interest by way of mortgage over the Schedule property.

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It is further contended that, despite availing the credit facilities, agreeing to service the loan amount promptly and regularly, the defendants failed in complying the same, resulting in default in repayment and consequentially turning the loan account as 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 account.

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Summons were issued to the Defendants, and the Defendant No.1 entered appearance through counsel by filing vakalat after placing them exparte. Defendant No.1 filed I.A. No.3655/2025 seeking recall and setting aside of the ex parte order dated 04.08.2025, the I.A. stood dismissed for non-representation.

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The applicant had let in evidence through AW-1, who filed Proof Affidavit reiterating the contentions taken in the OA and also produced Exhibits A1 to A30 and got the same marked in evidence.

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OA. No.1658/2024

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Heard the Ld. Counsel for the Applicant and considered the contentions as taken in the OA in the light of documentary evidence and proof affidavit.

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The following issues arise for consideration in this matter:

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

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ii) What order are to be passed?

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Both these issues are gone into and decided together.

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The case put forth by the applicant in the Application remains unrebutted as defendants remained exparte. The evidence tendered by the applicant remains uncontroverted and undisputed. The evidences put forth by the applicant were found admissible and are sufficient to prove availment of credit facilities as stated in the OA, creation of security interest as claimed by the applicant bank and the defaults committed in the account. The liability of the defendants and the claim of the amount due are also proved by the above documents. The claim of the applicant is well within the limitation.

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Hence in view of the above findings which cover both the

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issues raised in this manner, this Tribunal is of the view that OA is

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OA. No.1658/2024

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liable to be allowed.

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Taking into consideration the facts that the credit facilities

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were availed for housing purpose and business purpose, also that OA claim is arrived at by calculating interest at the agreed rate, this Tribunal in view of the OA can be allowed with a reduced interest of 9.00% p.a.(simple).

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In the result, OA.No.1658/2024 stands allowed,

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i) The applicant is allowed to recovery an aggregate sum of Rs.4,34,65,015.40 (Rupees Four Crore Thirty Four Lakhs Sixty Five Thousand Fifteen and Forty Paisa only) with further interest of 8.00% p.a.(simple) from the date of filing OA till the realization from the defendants, after giving credit to all the amounts recovered and received during the pendency of the OA and allowed the same to be recovered by proceeding against defendants jointly, severally and personally and also by proceeding against the schedule property. The schedule property to the OA be the schedule property to the Recovery Certificate.

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ii) If the sale proceeds are not found sufficient to cover

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the amount due and payable to the applicant bank, the defendants jointly, severally and defendant Nos. 2 and 3 personally and their

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OA. No.1658/2024

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other assets are liable for all such amounts due under the loan

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accounts.

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iii) The applicant bank is allowed cost of the proceeding

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which applicant to file cost memo within 7 days from the date of receipt of the order.

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

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order and transferred to Recovery for execution.

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v) Interim Application pending, if any, stands disposed of

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with this Final Order.

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Communicate a copy of the order to the parties concerned

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in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of

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DRT (Procedure) Rules, 1993.

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[Dictated to the Stenographer (PR), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 24^th Day of July 2026].

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(T. RAJESH) PRESIDING OFFICER

OA. No.1658/2024

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Sri. Saravana Kumar V, Senior Manager of the applicant bank.

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Exhibits on the part of the Applicant:

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Sl. No.	Description of Documents	Exhibit Number
1	Certificate of incorporation of the defendant No.1 issued by the Government of India, Ministry of Corporate Affairs, Registrar of Companies, Bangalore on 22.03.2016	A1
2	Loan application form dated 28.03.2017	A2
3	Sanction memorandum dated 24.04.2017	A3
4	General agreement dated 24.04.2017	A4
5	Mortgage deed dated 24.04.2017	A5
6	Request for overdraft facility dated 29.12.2017	A6
7	Demand promissory note dated 29.12.2017	A7
8	Common hypothecation agreement dated 29.12.2017	A8
9	Guarantee agreement dated 29.12.2017	A9
10	Guarantee agreement dated 29.12.2017	A10
11	Mortgage deed dated 30.12.2017	A11
12	Rectification deed dated 05.01.2018	A12
13	Article of Agreement dated 27.09.2019	A13
14	Common hypothecation agreement dated 27.03.2018	A14
15	Guarantee agreement dated 27.03.2018	A15
16	Guarantee agreement dated 27.03.2018	A16
17	Mortgage deed dated 23.03.2018	A17
18	Mortgage deed dated 27.03.2018	A18
19	Article of agreement dated 27.09.2019	A19

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OA. No.1658/2024

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20	Agreement cum Deed of Hypothecation dated 19.09.2020	A20
21	Pronote dated 23.10.2020	A21
22	Mortgage deed dated 24.09.2020	A22
23	Mortgage deed dated 24.09.2020	A23
24	Office copy of het said notice dated 02.11.2022	A24
25	Postal receipts (3 Nos)	A25
26	Returned RPAD cover dated 04.11.2022	A26
	Statement of account of the loan account
27	No.04929830000013 from 01.01.2000 to 17.11.2022	A27
	Statement of account of the loan account
28	No.04929830000312 from 01.01.200 to 17.11.2022	A28
	Statement of account of the loan account
29	No.04929830000215 from 01.01.2000 to 17.11.2022	A29
30	Statement of account of the loan account No.04929830000224 from 01.01.2000 to 17.11.2022	A30

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Canara Bank v. Ms Ess Multi Foods Private Limited

Case brief

What is this about?

What did the court decide?

Canara Bank v. Ms Ess Multi Foods Private Limited

Case brief

What is this about?

What did the court decide?

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