Allowed

State Bank of India v. Sri Gayatri Pharma

DRT24 Jul 2026OA/1795/2024

Case brief

AI extract

What is this about?

The Tribunal allowed the Original Application filed by the State Bank of India for issuance of a Recovery Certificate against a partnership firm and its individual guarantors owing Rs. 22.49 lakhs, awarding interest at 8% p.a. and ordering execution against joint and several liabilities.

What did the court decide?

Recovery Certificate issued for Rs. 22,49,740 with 8% p.a. interest joint and several against defendants.

State Bank of India versus Sri Gayatri Pharma — 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 Presiding Officer

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OA. No.1795/2024

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BETWEEN:

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State Bank of India Stress Asset Recovery Branch, No.11/90, 3^rd Floor, Near Old Shivaji Theatre, J.C. Road, Bengaluru-560002.

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…APPLICANT

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AND:

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Sri.Gayathri Pharma Pharmaceutical Distributors, C.H.No.113,3^rd Cross, L.L. Road, Shimoga-577201 Rep by its Authorized Partner, Mr.Jayarama.B.A

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Mr. Jayarama B.A S/o. B.N. Anath Bhat, Partner: Sree Gayathri Pharma, R/at: Radhakrishna Krupa, 4^th Cross, Ravindra Nagar, Shimoga-577201.

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Mr.Ananthamurthy.B.J S/o.Jayarama.B.A Partner:Sree Gayathri Pharma, R/at:Radhakrishna Krupa, 4^th Cross, Ravindra Nagar, Shimoga-577201.

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...DEFENDANTS

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2 OA No.1795/2024

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Counsel on record/appeared for:

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Applicant : Sri. B.Prasanna Kumar 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.22,49,740/(Rupees Twenty-Two Lakhs Forty-Nine Thousand Seven Hundred and Forty Only) with further interest thereon from the date of filing the Application till realization from the Defendants.

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The Defendant No.1 Sree Gayathri Pharmacies a partnership firm represented by its authorized partner i.e Defendant No.2 and another partner is the Defendant No.3 who is the son of the Defendant No.2. The Defendants availed Cash Credit Loan of Rs.15 Lakhs for the purpose of business development of the 1^st Defendant firm under the ASME segment. The defendants executed necessary loan documents. The Defendants No.2 and 3 also stood as a personal guarantee by executing Guarantee agreement.

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The Defendants No.1,2 & 3 herein again availed grant of Cash Credit Loan. The Applicant Bank renewed and enhanced of the Cash Credit Loan working capital for a sum of Rs.20,00,000/- (Rupees Twenty Lakhs only) from 15 Lakhs, for purpose of running and setting up of pharmaceutical

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3 OA No.1795/2024

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distributorship etc., on the partnership premises. The Defendants No.2 & 3 executed a guarantee agreement.

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The Defendants Nos.1,2 and 3 availed GECL loan of Rs.2,99,000/(Rupees Two Lakhs Ninety-Nine Thousand Only) for the purpose of working capital term loan under Guaranteed Emergency Credit line. The Defendants No.2 and 3 are the personal guarantor.

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The Defendants No.1,2 & 3 has also hypothecated against the schedule movables by execution composite Hypothecation Deed in lieu of security for the above 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.

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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 02.04.2026.

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4 OA No.1795/2024

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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 A16 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

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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 facility as stated in the OA, creation of security interest

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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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5 OA No.1795/2024

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Hence in view of the above findings which cover both the issues

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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 Development Loan and also that OA claim is arrived at by calculating interest at the agreed rate, this Tribunal in view of the

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OA can be allowed with a reduced interest of 8.00% p.a.(simple).

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In the result, OA.No.1795/2024 stands allowed,

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i) The applicant is allowed to recover an aggregate to pay jointly

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and severally a sum of Rs.22,49,740/- (Rupees Twenty-Two Lakhs Forty-

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Nine Thousand Seven Hundred and Forty Only) in Renewed Cash Credit

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Loan and GECL loan with further interest of 8.00% p.a.(simple) from the date of filing OA till the realization from the defendants, after giving credit

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to all the amounts recovered and received during the pendency of the OA if any.

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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

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jointly, severally and their other assets are liable for all such amounts due

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in respective loan accounts.

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6 OA No.1795/2024

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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

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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)

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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 24^th Day of July 2026].

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Sd/(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: Sri. H.P.Paramesh, Chief 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.	A copy of the arrangement letter dated 28.12.2018	A1
2.	A copy of the agreement of loan cum Hypothecation dated 28.12.2018	A2

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7 OA No.1795/2024

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3.	A copy of the guarantee agreement dated 28.12.2018	A3
4.	A copy of the letter of Arrangement dated 05.01.2022	A4
5.	A copy of the Hypothecation agreement dated 05.01.2022	A5
6.	A copy of the guarantee agreement dated 05.01.2022	A6
7.	A copy of the loan application	A7
8.	A copy of the letter of arrangement dated 05.06.2020	A8
9.	A copy of agreement of loan cum hypothecation dated 05.06.2020	A9
10.	A copy of the Guarantee agreement dated 05.06.2020	A10
11.	A copy of the revival letter dated 05.01.2022	A11
12.	A copy of the legal notice dated 02.02.2024	A12
13.	A copy of the Acknowledgements & Postal receipts	A13 & A14
14.	A copy of the statement of Cash Credit loan account No.64000245423	A15
15.	A copy of the statement of GECL loan account No.39382195585.	A16

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Sd/-

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(T. RAJESH) PRESIDING OFFICER

State Bank of India v. Sri Gayatri Pharma

Case brief

What is this about?

What did the court decide?

State Bank of India v. Sri Gayatri Pharma

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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