Allowed

Bank of India v. Shudh Kems Products India

DRT31 Jul 2026OA/1696/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed bank's application to draw a recovery certificate against partners of a partnership firm for outstanding credit facility dues, noting the claim was unopposed and evidence was uncontroverted.

What did the court decide?

Recovery Certificate issued for aggregate sum of Rs.48,56,044.85/- plus interest, recoverable from defendants jointly and severally.

Bank of India versus Shudh Kems Products India — Company and Corporate | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 31^st Day of July 2026

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Present: Sri. T. RAJESH Presiding Officer

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OA. No.1696/2023

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BETWEEN:

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Bank of India Scout Camp Road, 3^rd Ward, Near Railway Station, Apparel Park Area, Doddaballapur-561203. … APPLICANT

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AND:

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M/s.Shudh Kems Products India

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Partnership Firm,

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Represented by its Partners, No.18,2^nd Cross, Vaishnavi Heritage,

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Krishnappa Layout, R.M.V. 2^nd Stage, Bangalore-560094.

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Also at:

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M/s.Shudh Kems Products India Partnership Firm, Represented by its Partners, Shed No.3 & 4, Plot No.37, 38 & 39 Apparel Park, Phase-I Doddaballapur Industrial Area, Kasaba Hobli, Doddaballapur Taluk, Bengaluru Rural District-561203.

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2 OA No.1696/2023

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Mr. S.Nagaraja S/o.Subramani Partner M/s.Shudh Kems Products India No.18, 2^nd Floor, 2^nd Cross, Krishnappa Layout, R.M.V. 2^nd Stage, Bangalore North Bangalore-560094.

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Mr.Sakthi Yudith N S/o. Nagaraja S Partner, M/s.Shudh Kems Products India No.18, 2^nd Floor, 2^nd Cross, Krishnappa Layout, R.M.V. 2^nd Stage, Bangalore North Bangalore-560094

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...DEFENDANTS

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Counsel on record/appeared for:

Applicant Defendant

: Mr.Kiran Mirajakar

: Exparte

: FINAL ORDER:

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.48,56,044.85/- (Rupees Forty-Eight Lakhs Fifty-Six Thousand FortyFour and Paisa Eight Five Only) with further interest thereon from the date of filing the Application till realization from the Defendants.

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3 OA No.1696/2023

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The 1^st Defendant is partnership Firm represented by its Partners the Defendant Nos.2 and 3 availed Cash Credit Facility Rs.6,65,000/- (Rupees Six Lakh Sixty-Five Thousand Only) Term Loan -1.

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The 1^st Defendant is partnership Firm represented by its Partners the Defendant Nos.2 and 3 availed Cash Credit Facility Rs.12,48,000/(Rupees Twelve Lakhs Forty-Eight Thousand Only) for purpose of Working Capital.

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The 1^st Defendant represented by its partners Nos.2 and 3 availed for enhancement from Rs.6,65,000/- (Rupees Six Lakh Sixty-Five Thousand only) to Rs.20,00,000/- (Rupees Twenty Lakhs Only) of Credit Facility.

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The 1^st Defendant represented by its partners availed Rs. 3,62,000/(Rupees Three Lakh Sixty-Two Thousand Only) under Star Guaranteed Emergency Credit Line (Star GECL) during the Covid-19.

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The 1^st Defendant represented by its partners Nos.2 and 3 availed Rs.2,24,000/- (Rupees Two Lakh Twenty-Four Thousand Only) as Funded Interest Term Loan (FITL) Facility.

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It is also the case of the applicant that, in view of the above financed credit facility, the defendants executed necessary loan documents. Apart from the creation of security interest by way of Demand Promissory Note, hypothecation over the Schedule movable properties.

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4 OA No.1696/2023

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It is further contended that, despite availing the credit facility, 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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Despite, service of summons on the defendants, they failed to appear, resulting the defendants being set exparte on 31.10.2025.

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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 A43 and got the same marked in evidence.

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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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5 OA No.1696/2023

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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 facility 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 issues raised in this manner, this Tribunal is of the view that OA is liable to be allowed.

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Taking into consideration the facts that the credit facility was availed for business purpose and also that OA claim is arrived at by calculating interest at the agreed rate, this Tribunal in view of the OA can be allowed as prayed in OA with the simple interest.

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In the result, OA.No.1696/2023 stands allowed.

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i) The applicant is allowed to recovery an aggregate sum

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of Rs.48,56,044.85/- (Rupees Forty-Eight Lakhs Fifty-Six Thousand Forty-Four and Paisa Eight Five Only) in following manner:

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6 OA No.1696/2023

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a) The Defendants jointly and severally to pay a sum of Rs.7,64,241.29 (Rupees Seven Lakh Sixty-Four Thousand Two Hundred and Forty-One and Paisa Twenty-Nine Only) with further interest @ 11.50% p.a (simple) availed by 1^st Defendant as on 16.08.2023 till the date of realization due under Term Loan.

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b) The Defendants jointly and severally to pay a sum of Rs.30,131,64,97 (Rupees Thirty Lakhs One Hundred Thirty-One Sixty Four and Paisa Ninety Seven Only) with further interest @ 8.85% p.a (simple) availed by 1^st Defendant as on 16.08.2023 till the date of realization due under Cash Credit Facility.

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c) The Defendants jointly and severally to pay a sum of Rs.6,84,184,41 (Rupees Six Lakh Eighty-Four Thousand One Hundred and Eighty-Four and Paisa Forty-One Only) with further interest @ 7.50% p.a (simple) availed by 1^st Defendant as on 16.08.2023 till the date of realization due under Star GECL.

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d) The Defendants jointly and severally to pay a sum of Rs.3,94,454.18 (Rupees Three Lakhs Ninety Four Thousand Four Hundred Fifty Four and Paisa Eighteen Only) presently interest @ 6.85% p.a (simple) availed by 1st Defendant as on 16.08.2023 till the date of realization due under FITL Facility, from the defendants, 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

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7 OA No.1696/2023

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schedule movable properties. The schedule movable properties to the OA be the schedule movable properties to the Recovery Certificate.

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

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amount due and payable to the applicant bank, the respective defendants and their other assets are liable for all such amounts due in loan accounts.

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iii) The applicant bank is allowed cost of the proceeding which

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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 order and

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transferred to Recovery for execution.

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v) Interim Application pending, if any, stands disposed of with 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) Rules, 1993.

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[Dictated to the Stenographer (GS), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 31^st Day of July 2026].

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Sd/(T. RAJESH) PRESIDING OFFICER

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8 OA No.1696/2023

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Smt.Keerthana Priya.N, Branch 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.	Application Form for Micro & Small Enterprises (MSEs)dated 20.10.2018	A1
2.	Borrower Profiles both dated 20.10.2018	A2 & A3
3.	Acknowledgement and Acceptance Letter dated 17.01.2019	A4
4.	Agreement in Form L-516 dated 23.01.2019	A5
5.	Agreement in Form L516 dated 23.01.2019	A6
6.	Hypothecation Cum Loan Agreement (Plant and Machinery,Stocks and Book Debts dated 23.01.2019	A7
7.	Hypothecation Cum Loan Agreement (Plant and Machinery,Stocks and Book Debts dated 23.01.2019	A8
8.	Agreement dated 23.01.2019	A9
9.	Format for MCLR Agreement -New Loans dated 23.01.2019	A10
10.	Format for MCLR Agreement-New Loans dated 23.01.2019	A11
11.	On Demand Promissory Note dated 23.01.2019	A12
12.	On Demand Promissory Note dated 23.01.2019	A13
13.	Loan Bearer Letter in Form of L-435 dated 23.01.2019	A14
14.	Loan Bearer Letter in Form of L-435 dated 23.01.2019	A15
15.	Draft declaration to be obtained from the Borrower dated 23.01.2019	A16
16.	Draft declaration to be obtained from the Borrower dated 23.01.2019	A17
17.	Sanction Letter dated 24.01.2020	A18

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9 OA No.1696/2023

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18.	Agreements in Form L-516 dated 20.03.2020	A19
19.	Hypothecation Cum Loan Agreement (Plant and Machinery, Stocks and Book Debts dated 20.03.2020	A20
20.	RBLR (Repo Based Lending Rate Agreement dated 20.03.2020	A21
21.	On Demand Promissory Note dated 20.03.2020	A22
22.	Loan Bearer Letter in Form of L-435 dated 20.03.2020	A23
23.	Pre-Approved Loan under Star Guaranteed Emergency Credit Line (Star GECL) dated 01.07.2020	A24
24.	Sanction Letter dated 23.07.2020	A25
25.	Supplemental Loan Cum Hypothecation Agreement dated 23.07.2020	A26
26.	On Demand Promissory Note dated 23.07.2020	A27
27.	Installment Letter in Form of L-440 dated 23.07.2020	A28
28.	Agreement in Form L-516 dated 31.03.2021	A29
29.	Loan Agreement dated 31.03.2021	A30
30.	Supplemental Hypothecation Agreement To secure Additional Cash Credit/ Demand Loan/ Overdraft / Term Loan / Other Credit Facilitydated 31.03.2021	A31
31.	RBLR (Repo Based Lending Rate) Agreement dated 31.03.2021	A32
32.	On Demand Promissory Note dated 31.03.2021	A33
33.	Loan Bearer Letter in Form of L-435 dated 31.03.2021	A34
34.	Installment Letter in Form of L-440 dated 31.03.2021	A35
35.	Acknowledgement of Debt / Securities in L-444C dated 20.03.2023	A36
36.	Acknowledgement of Debt / Securities in L-444C dated 16.03.2023	A37
37.	Acknowledgement of Debt / Securities in L-444C dated 16.03.2023	A38
38.	Acknowledgement of Debt / Securities in L-444C dated 16.03.2023	A39

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10 OA No.1696/2023

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39.	Reall Notice dated 15.03.2023	A40
40.	Postal Receipts	A41
41.	Returned RPAD cover	A42
	Statement of Accounts along with Certificate under
42.	section 2A Bank (b) and 2A (c) of the Banker’s Books of Evidence Act 1891(as amended)	A43

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Sd/(T. RAJESH) PRESIDING OFFICER

Bank of India v. Shudh Kems Products India

Case brief

What is this about?

What did the court decide?

Bank of India v. Shudh Kems Products India

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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