Allowed

Union Bank of India v. Hencon Associates

DRT27 Aug 2026OA/2148/2025

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the applicant bank's original application for a Recovery Certificate against the defaulting borrowers for a term loan. The defendants appeared ex parte. The court reduced the interest rate to 12% p.a. and directed the transfer of the certificate for execution against the borrowers and the schedule. Cost of proceedings was also awarded.

What did the court decide?

Issuance of Recovery Certificate for Rs.31,62,000/- with 12% p.a. simple interest; recovery to be effected from defendants jointly/severally and by execution against the schedule.

Union Bank of India versus Hencon Associates — Banking and Recovery | 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

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Presiding Officer

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OA. No.2148/2025

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BETWEEN:

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Union Bank of India RajaRajeshwarinagar Branch No.457/C, Ideal Homes Township, Rajarajeshwari Nagar, Bangalore-560098

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… APPLICANT

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AND:

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M/s. Hencon Associates No.274, 1^st ‘D’ Main road Kengeri Satellite Town, Bangalore – 560060 Rep.by its Partners Mr. Mohan M & Smt. Manasa K L

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Sri. Mohan M S/o. Sri. Mylarappa Aged about 48 years Partner, M/s. Hencon Associates

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Smt. Manasa K L W/o. Sri. Karthik Aged about 42 years Partner, M/s. Hencon Associates

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Defendant No.2 & 3 are also R/at. No.274, 1^st ‘D’ main road, Kengeri Satellite Town, Bangalore – 560060

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...DEFENDANTS

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OA. No.2148/2025

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Counsel on record/appeared for: Applicant : Sri. Rohit R Achar 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.31,62,000/- (Rupees Thirty One Lakh Sixty Two Thousand 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 term loan of Rs.69,84,000/- on 27.11.2019 for their services in the field of civil engineering needs.

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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 hypothecation over the Schedule.

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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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OA. No.2148/2025

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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 18.03.2026.

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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 A12 and got the same marked in evidence.

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Heard the Ld. Counsel for the Applicant and considered

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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

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remains unrebutted as defendants remained exparte. The

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OA. No.2148/2025

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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

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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 facilities were 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 with a reduced interest of 12.00% p.a.(simple).

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In the result, OA.No.2148/2025 stands allowed,

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i) The applicant is allowed to recovery an aggregate

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sum of Rs.31,62,000/- (Rupees Thirty One Lakh Sixty Two Thousand only) with further interest of 12.00% p.a.(simple)

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OA. No.2148/2025

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from the date of filing OA till the realization from the defendants,

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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. The 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

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the amount due and payable to the applicant bank, the defendants jointly, severally and personally and their other 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 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 order and 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

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

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OA. No.2148/2025

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of 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 27^th Day of August 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: Mr. Manjunatha Virbhadra Teli, Manager of the applicant bank.

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Exhibits on the part of the Applicant:

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Sl. No.	Date	Description of Documents	Exhibit Number
1	18.11.2019	Sanction letter	A1
2	27.11.2019	Demand promissory note	A2
3	27.11.2019	Term loan agreement	A3
4	27.11.2019	Guarantee for tem loan agreement	A4
5	27.11.2019	General lien agreement	A5
6	27.11.2019	Letter of continuity	A6
7	27.11.2019	Letter of undertaking	A7
8	27.11.2019	Letter of undertaking	A8
9	27.11.2019	Letter of undertaking	A9
10	03.10.2022	Simple debit balance confirmation letter	A10
11	05.05.2025	Legal notice	A11
12	-	Account extract	A12

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(T. RAJESH) PRESIDING OFFICER

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Sd/-

Union Bank of India v. Hencon Associates

Case brief

What is this about?

What did the court decide?

Union Bank of India v. Hencon Associates

Case brief

What is this about?

What did the court decide?

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