Allowed

State Bank of India v. Mahalakshmi Agencies

DRT30 Jan 2026OA/1735/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the Original Application filed by State Bank of India against three individuals and two firms for a debt of approximately Rs. 4.26 crore. The Tribunal issued a Recovery Certificate permitting recovery via sale of schedule properties and personal liability for the balance.

What did the court decide?

Recovery Certificate issued for Rs. 4,26,73,030 with interest at 12% simple per annum; recovery via sale of schedule properties and personal assets allowed.

State Bank of India versus Mahalakshmi Agencies — Insolvency and Bankruptcy | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 30^th Day of January, 2026

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Present: Sri. T. RAJESH Presiding Officer

OA.No.1735/2024

BETWEEN:

State Bank of India

Stressed asset recovery Branch, No. 11/90, 3^rd floor, Near old shivaji theatre JC road, Bengaluru …APPLICANT

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AND:

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M/s. Mahalakshimi Agencies Prop. Mr. MK Uthappa BM road, Kushalnagar Hobli, Somwarpet Taluk, Kodagu District – 571 234

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Mr. M K Uthappa Age 39 years 145/3, 3^rd Block, Bapuji Layout, Behind Axis Bank, Kushalnagar, Kodagu – 571 234

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Also at: #70, Lilly Lane, SLN Eden Garden, Basavanahalli Village, Kushalnagar Hobli, Somwarpet Taluk, Kodagu District – 571 234

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2 OA-1735/2024

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Mrs. Teena Uthappa Major 145/3, 3^rd Block, Bapuji Layout, Behind Axis Bank, Kushalnagar, Kodagu – 571 234

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Also at: #70, Lilly Lane, SLN Eden Garden, Basavanahalli Village, Kushalnagar Hobli, Somwarpet Taluk, Kodagu District – 571 234

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M/s. Mahalakshmi Enterprises Partners MK Uthappa & Mrs. Teena Uthappa Sy. No. 20/1, plot no. 95-part, Industrial Area, Kudlur, Kushalnagar Hobli, Somwarpet Taluk, Kodagu District – 571 234 ...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : P Chithra Nirmala 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 issuance of Recovery Certificate against the defendants for Rs. 4,26,73,030/- (Rupees Four Crores Twenty Six Lakhs Seventy Three Thousand and Thirty Only) with further interest thereon from

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3 OA-1735/2024

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the date of filing the Application till realization.

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It is the case of the applicant that, the defendants are availed the following credit facilities:

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Cash credit of Rs. 1,00,00,000/- (Rupees One Crores only) on 25.10.2007.

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Guaranteed Emergency Credit Line (GECL) of Rs. 50,00,000/(Rupees Fifty Crores Only) on 29.05.2020.

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Common Covid Emergency credit line (CCEL) of Rs. 21,00,000/(Rupees Twenty One Lakhs Only) on 01.06.2020.

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Working Capital Term loan of Rs. 1,50,00,000/- (Rupees One Crore Fifty Lakhs Only) on 29.06.2021.

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Funded Interest term loan of Rs. 22,00,000/- (Rupees Twenty Two Lakhs Only) on 29.06.2021.

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Guaranteed Emergency Credit Line (GECL) of Rs. 25,00,000/(Rupees Twenty Five Lakhs Only) on 24.08.2021.

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Funded Interest term loan (FITL) –Covid of Rs. 10,39,00,000/(Rupees Ten Crore Thirty Nine Lakhs Only) on 30.09.2021.

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It is also the case of the applicant that, in view of the above availed loans, the defendants executed the necessary loan document along with deposit of title deeds.

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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

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4 OA-1735/2024

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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 25.04.2025.

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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 A-1 to A-84 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

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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 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,

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creation of the security interest and the defaults committed in the

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accounts. The liability of the defendants and the claim of the amount

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5 OA-1735/2024

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due are also proved by the above documents. The claim of the

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applicant is well within the limitation.

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Hence in view of the findings arrived herein above, the Tribunal find both these issues 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 are availed for Business purpose and also that the OA claim is arrived at by calculating interest at the agreed rate, this Tribunal of the view that OA can be allowed with a reduced interest of 12.00%(simple).

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In the result, OA.No.1735/2024 stands allowed, i) The applicant is allowed to recover an aggregate sum of Rs. 4,26,73,030/- (Rupees Four Crores Twenty Six Lakhs Seventy Three Thousand and Thirty Only) with further interest @12.00% p.a.(simple) from the date of filing OA till the realization, from the defendants jointly, severally and personally, after giving credit to all the amount recovered and received during the pendency of the OA and allowed the same to be recovered by proceeding against the schedule properties. Properties schedule to the OA be the schedule 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 defendants

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6 OA-1735/2024

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jointly, severally and personally and their assets are liable for balance

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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

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receipt of the order.

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

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and transferred to Recovery for execution.

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v) Interim application pending, if any, stands disposed of in

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terms of this final order.

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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

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the Open Court, this the 30^th Day of January, 2026].

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(T. RAJESH) PRESIDING OFFICER

Sd/-

7 OA-1735/2024

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Mr. Mahesh Kumar C, S/o. Nathamai Chotia, Chief Manager, of Applicant Bank.

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Exhibits on the part of the Applicant:

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Exhibit	Date	Particulars of Documents
Nos.
A1	25.10.2007	Application for Rs. 7.00 lakhs
A2	25.10.2007	Sanction communication letter-credit facilities
A3	25.10.2007	Agreement for advances: form 12
A4	25.10.2007	Agreement for advances: form 8
A5	13.09.2008	Sanction communication letter of Rs. 14.50 lakhs
A6	13.09.2008	Promissory note for Rs. 14.50 lakhs
A7	13.09.2008	Agreement for advances: form 12
A8	13.09.2008	Agreement for advances: form 8
A9	12.09.2008	Memorandum of deposit for creation of mortgage by deposit of title deeds – enhancement from Rs. 7.00 lakhs to Rs. 14.50 lakhs registered as doc. No. SMP-1-00730-2008/09 recorded in CD no. SMPD21
A10	08.06.2010	Sanction communication letter of Rs. 20.00 lakhs
A11	08.06.2010	Promissory note for Rs. 22.00 lakhs
A12	08.06.2010	Agreement for advances: form 12
A13	08.06.2010	Agreement for advances: form 8
A14	27.05.2010	Memorandum of deposit for creation of mortgage by deposit of title deeds for Rs. 20.00 lakhs registered as doc. No. SMP-1-00325-2010/11 and recorded in CD no. SMPD28
A15	14.03.2013	Sanction communication letter

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8 OA-1735/2024

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A16	14.03.2013	Promissory note for Rs. 35.00 lakhs
A17	14.03.2013	Agreement for advances: form 12
A18	14.03.2013	Agreement for advances: form 8
A19	11.03.2013	Memorandum of deposit for creation of mortgage by deposit of title deeds for Rs. 35.00 lakhs registered as doc. No. SMP-1-02412/2012/13 and recorded in CD no. SMPD46
A20	11.01.2014	Letter of arrangement
A21	11.01.2014	Agreement of loan cum hypothecation
A22	11.01.2014	Guarantee agreement of Teena Uthappa
A23	09.01.2014	Memorandum of deposit for creation of mortgage by deposit of title deeds
A24	05.06.2014	Memorandum of deposit for creation of mortgage by deposit of title deeds registered as doc.no. SMP-1-1635/14-15
A25	10.02.2015	Letter of arrangement for Rs. 90.00 lakhs
A26	10.02.2015	Agreement of loan cum hypothecation
A27	10.02.2015	Guarantee agreement of Teena Uthappa
A28	10.02.2015	Memorandum of deposit for creation of mortgage by deposit of title deeds registered as doc.no. SMP-1-02840/14-15 recorded as CD no. SMPD58
A29	21.04.2016	Letter of arrangement for Rs. 90.00 lakhs
A30	21.04.2016	Agreement of loan cum hypothecation
A31	21.04.2016	Guarantee agreement of Teena Uthappa
A32	21.01.2017	Letter of arrangement for cash credit limit of Rs. 1.20 crores
A33	21.01.2017	Agreement of loan cum hypothecation
A34	21.01.2017	Guarantee agreement of Teena Uthappa
A35	21.01.2017	Promissory note for Rs. 1.20 lakhs

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9 OA-1735/2024

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A36	21.01.2017	Demand promissory note delivery letter for Rs. 1.20 crore
A37	21.01.2017	Memorandum of deposit for creation of mortgage by deposit of title deeds for Rs. 1.35 Crores registered as doc. No. SMP-1-03052-2016/17 recorded in CD no. SMPD68
A38	14.06.2018	Letter of arrangement for Rs. 160.00 lakhs
A39	14.06.2018	Supplemental agreement of loan cum hypothecation
A40	14.06.2018	Guarantee agreement of Teena uthappa
A41	14.06.2018	Memorandum of deposit for creation of mortgage by deposit of title deeds for Rs. 175.00 lakhs registered as doc. No. SMP-1-00610-2018/19 recorded in CD no. SMPD77
A42	------	Loan application
A43	02.12.2019	Letter of arrangement for Rs. 250.00 lakhs
A44	02.12.2019	Supplemental agreement of loan cum hypothecation
A45	02.12.2019	Guarantee agreement of Mahalakshmi Enterprises, a partnership firm represented by its partners Shri. M K Uthappa and Smt. Teena Uthappa
A46	03.12.2019	Memorandum of deposit for creation of mortgage by deposit of title deeds registered as doc. No. KUS-1-01569-2019/20 and recorded in CD no. KUSD232
A47	29.05.2020	Preapproved loan facility GECL-offer letter
A48	29.05.2020	Acceptance letter of the 1^stdefendant
A49	01.06.2020	Letter of arrangement for Rs. 50.00 lakhs
A50	01.06.2020	Supplemental agreement of loan cum hypothecation
A51	01.06.2020	Guarantee agreement of Mahalakshimi enterprise
A52	01.06.2020	Link letter – execution of simplified SME documents

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10 OA-1735/2024

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A53	01.06.2020	Letter of arrangement of CCECL
A54	01.06.2020	Supplemental agreement of loan cum hypothecation
A55	01.06.2020	Guarantee agreement of Mahalakshimi Enterprise
A56	01.06.2020	Memorandum confirming the extension of equitable mortgage registered as doc no. KUS-1- 00155/2020-21 recorded in CD no. KUSD337
A57	18.02.2021	Letter of arrangement for renewal of Rs. 321.00 lakhs
A58	18.02.2021	Guarantee agreement of Teena Uthappa
A59	18.02.2021	Guarantee agreement of Mahalakshmi Enterprise
A60	29.06.2021	Arrangement letter for restructuring of Credit facilities granted cash credit of Rs. 100.00, Rs. 22.00 as FITL and Rs. 150.00 as WCTL
A61	29.06.2021	Letter of arrangement for a total limit of Rs. 343.00 lakhs
A62	29.06.2021	Supplemental agreement of loan cum hypothecation
A63	29.06.2021	Supplemental agreement of loan-cum hypothecation
A64	29.06.2021	Guarantee agreement of Teena Uthappa
A65	29.06.2021	Guarantee agreement of Mahalakshmi Enterprise
A66	11.10.2021	Guarantee agreement of Mahalakshmi Enterprise
A67	16.10.2021	Letter of confirmation for extension of mortgage by deposit of title deeds covering enhance limits for a total limit of Rs. 321.00 lakhs
A68	11.10.2021	Memorandum confirming the extension of equitable mortgage registered as doc no. KUS-1- 00953/2021-22 recorded in CD no. KUSD669
A69	06.10.2022	Demand notice issued under Sec. 13(2) of the SARFAESI act
A70	-------	CERSAI report

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11 OA-1735/2024

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A71	-------	Encumbrance certificates for all the properties
A72	29.10.2022	Valuation of properties – item 1 property
A73	28.04.2022	Valuation of properties – item 2
A74	08.12.2020	Valuation of properties – item 3
A75	25.04.2023	Statement of accounts of 64022917583
A76	25.04.2023	Statement of accounts of 39370558259
A77	25.04.2023	Statement of accounts of 39358581148
A78	25.04.2023	Statement of accounts of 40252447941
A79	25.04.2023	Statement of accounts of 40244111068
A80	25.04.2023	Statement of accounts of 40526892857
A81	25.04.2023	Statement of accounts of 39604695578
A82	15.06.2023	Memo of calculation of OA claim
A83	15.06.2023	Statement of claim
A84	15.06.2023	Certificate under bankers book of evidence act

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

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-Nil -

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-Nil -

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Sd/-

State Bank of India v. Mahalakshmi Agencies

Case brief

What is this about?

What did the court decide?

State Bank of India v. Mahalakshmi Agencies

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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Case details

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