Allowed

State Bank of India v. Ms Swaad Industries

DRT27 Aug 2026OA/1711/2024

Case brief

AI extract

What is this about?

The Tribunal allowed the Original Application filed by State Bank of India against the defendants (partners including legal heirs). It issued a Recovery Certificate for the due amount, allowing interest at 6% p.a. and permitting recovery against inherited estate and schedule property.

What did the court decide?

Issued Recovery Certificate for Rs. 3,45,32,517/- with interest at 6% p.a. against defendants 2 & 3 to the extent of their inheritance and schedule property.

State Bank of India versus Ms Swaad Industries — 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 27^th Day of August, 2026

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Present: Sri. T. RAJESH Presiding Officer

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OA.No.1711/2024

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BETWEEN:

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State Bank of India Branch office at: JC Road, Bangalore – 560 002

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Represented by its Chief Manager Mrs. Daya S Naik …APPLICANT

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AND:

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M/s. Swaad Industries A partnership firm, R/at; #No. 6A, A EPIP, Industrial area, Ganjimutt, Mangalore – 574 144

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Mr. Rahul Pai (Partner 1) S/o. late Mr. Chandrakant Thimmappa Pai Aged about 42 years R/at; #No. 2-18-1578, “Rahul”, Dr. C Mathias Road, 4^th Corss, Near Baliga Stores, Kodialbail Village, Bejai, Mangalore – 575 004

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Mr. Aparna C Pai (Partner 2) W/o. late Mr. Chandrakant Thimmappa Pai Aged about 70 years R/at; #No. 2-18-1578, “Rahul”, Dr. C Mathias Road, 4^th Corss, Near Baliga Stores Kodialbail Village, Bejai, Mangalore – 575 004

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Mr. Namisha R Pai (Partner 3) W/o. Mr. Rahul Pai Aged about 35 years

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OA-1711/2024

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R/at; #No. 2-18-1578, “Rahul”, Dr. C Mathias Road, 4^th Corss, Near Baliga Stores Kodialbail Village, Bejai, Mangalore – 575 00 ...DEFENDANTS

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Counsel on record/appeared for: Applicant : R & J Associates Defendants : Ex parte

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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 for issuance of Recovery Certificate against the defendants for Rs 3,45,32,517/- (Rupees Three Cores Forty-Five Lakhs ThirtyTwo Thousand Five Hundred and Seventeen Only) with further interest thereon from the date of filing the Application till realization.

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It is the case of the applicant that, the defendant nos. 2 & 3 are

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the legal heirs of the deceased borrower. The Late borrower Mr. Chandrakanth T Pai are availed the following credit facilities:

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Cash Credit of Rs. 70,00,000/- (Rupees Seventy Lakhs Only).

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Term loan of Rs. 2,25,00,000/- (Rupees Two Crore Twenty-Five Lakhs Only).

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GECL of Rs. 61,00,000/- (Rupees Sixty-One Lakhs Only).

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Term loan of Rs. 13,00,000/- (Rupees Thirteen Lakhs Only).

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GECL 10% of Rs. 30,00,000/- (Rupees Thirty Lakhs Only).

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The deceased borrower executed necessary loan documents in

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OA-1711/2024

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favour of the applicant bank as security for the due repayment of the loan, interest, cost and charges. The defendants had also executed deposit of title deeds dated 27.03.2018.

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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 accounts 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 ex parte on 28.01.2025. The applicant bank has not mentioned the LRs of deceased borrower Mr. Chandrakanth T Pai.

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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 A-1 to A-58 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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he following issues arise for consideration in this matter:

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i) Whether the applicant had succeeded in proving the OA

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claim as against the defendants?

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OA-1711/2024

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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 ex parte. 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 the security interest and the defaults committed in the accounts. The liability of the defendants and the claim of the amount due are also proved by the above document. The claim of the applicant is well within the limitation.

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Hence in view of the findings arrived herein above, the Tribunal

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find both these issues are in favour of applicant and hence, this Tribunal is of the view that OA is to be allowed.

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Taking into consideration the facts that the credit facilities is

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availed for Business purpose and also that the OA claim is arrived at by calculating interest at the agreed rate, this Tribunal is the view

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that the OA can be allowed with a reduced interest of 12.00% (simple).

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In the result, OA.No.1711/2024 stands allowed,

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The applicant is allowed to recover an aggregate sum of Rs.

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OA-1711/2024

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3,45,32,517/- (Rupees Three Cores Forty-Five Lakhs Thirty-Two Thousand Five Hundred and Seventeen Only) with further interest @6.00 % p.a.(simple) from the date of filing OA till the realization, from the defendants no. 2 & 3, to the extent of their inheritance of any estate form the deceased borrower Mr. Chandrakanth L pai, after giving credit to all the amounts recovered and received during the pendency of the OA allowed the same to be recovered 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 sufficient to clean the liability defendants no. 2 & 3 are liable to the extent of estate, they inherited from deceased Mr. Chandrakanth L Pai, the defendants jointly, severally and personally and their assets are liable for all such amounts due under the loan accounts.

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iii) The applicant bank is allowed cost of the proceedings

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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 order and transferred to Recovery for execution.

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v) Interim application pending, if any, stands disposed of in terms of this final order.

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OA-1711/2024

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14. Communicate a copy of the order to the parties concerned in

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

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(Procedure) Rules, 1993.

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[Dictated to the Stenographer (HS), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 27^th Day of August, 2026].

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Sd/-

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(T. RAJESH) PRESIDING OFFICER

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1 Mr. Govind Laxman Ballal, S/o Laxman, Chief Manager, of Applicant Bank.

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Exhibits on the part of the Applicant:

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Exhib its	Date	Particulars
A1	06.12.2016	Deed of partnership
A2	05.02.2021	Deed of reconstitution of partnership
A3	23.11.2017	Loan application form
A4	28.03.2018	Letter of arrangement
A5	27.03.2018	Memorandum relating to deposit of title deeds
A6	28.03.2018	Agreement of loan cum hypothecation
A7	28.03.2018	Guarantee agreement
A8	28.03.2018	ISDA master agreement
A9	28.03.2018	Undertaking/declarations
A10	16.04.2019	Revival letter
A11	16.04.2019	Letter of arrangement
A12	24.10.2019	Revival letter
A13	24.10.2019	Letter of arrangement

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OA-1711/2024

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A14	24.10.2019	Guarantee agreement
A15	24.10.2019	Supplemental loan cum hypothecation
A16	24.10.2019	ISDA master agreement
A17	24.10.2019	Undertaking/declarations
A18	24.10.2019	Memorandum for recording extension of mortgage by deposit of title deeds covering enhanced limits and/or creation of equitable mortgage on additional properties for existing limits and enhanced limits and additions facilities
A19	08.04.2020	Revival letter
A20	08.04.2020	Letter of arrangement
A21	08.04.2020	Supplemental loan cum hypothecation
A22	08.04.2020	Guarantee agreement
A23	08.04.2020	Undertaking/declarations
A24	01.06.2020	Revival letter
A25	01.06.2020	Letter of arrangement
A26	01.06.2020	Guarantee agreement
A27	01.06.2020	Supplemental loan cum hypothecation
A28	01.06.2020	Undertaking/declarations
A29	01.06.2020	Declaration cum under taking executed by defendant no.3
A30	01.06.2020	Declaration cum undertaking
A31	04.06.2020	Memorandum for recording extension of mortgage by deposit of title deeds covering enhanced limits and/or creation of equitable mortgage on additional properties for existing limits and enhanced limits and additions facilities
A32	19.04.2021	Guarantee agreement
A33	20.04.2021	Revival letter
A34	20.04.2021	Letter of arrangement
A35	20.04.2021	Undertaking/declarations
A36	25.06.2021	Continuing letter for mortgage
A37	29.06.2021	Sanction letter
A38	29.06.2021	Draft of undertaking to be furnished by the borrower/guarantor
A39	29.06.2021	Letter from incoming partner (Loan agreement)
A40	29.06.2021	Revival letter
A41	---------	Agreement letter
A42	02.07.2021	Guarantee agreement

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OA-1711/2024

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A43	02.07.2021	Supplemental loan cum hypothecation
A44	02.07.2021	Undertaking/declarations
A45	29.06.2021	Declaration cum undertaking
A46	05.07.2021	Declaration cum under taking executed by defendant no.3
A47	06.08.2021	Memorandum for recording extension of mortgage by deposit of title deeds covering enhanced limits and/or creation of equitable mortgage on additional properties for existing limits and enhanced limits and additions facilities
A48	30.04.2022	Letter of arrangement
A49	30.04.2022	Guarantee agreement
A50	30.04.2022	Undertaking/declarations
A51	17.05.2023	Letter of arrangement
A52	05.01.2024	Demand notice along acknowledgement due and returned postal cover
A53	---------	Statement of a/c no. 37947300299
A54	---------	Statement of a/c no. 37627210957
A55	---------	Statement of a/c no. 39366161930
A56	---------	Statement of a/c no. 39501502719
A57	---------	Statement of a/c no. 40268025148
A58	---------	Banker’s certificate

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Witness Examined for the Defendants:

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-Nil

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List of Documents Exhibited for the Defendants: -Nil -

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Sd/-

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(T. RAJESH) PRESIDING OFFICER

State Bank of India v. Ms Swaad Industries

Case brief

What is this about?

What did the court decide?

State Bank of India v. Ms Swaad Industries

Case brief

What is this about?

What did the court decide?

What the court decided

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