Allowed

Canara Bank v. Surbhup Services Pvt. Ltd.

DRT30 Jun 2026OA/254/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the Original Application filed under the RDB Act for issuing a Recovery Certificate. It awarded the claim amount with reduced interest at 12% p.a., directing execution against the defendants' assets.

What did the court decide?

Recovery Certificate to be drawn for Rs. 1,07,67,500/- with 12% p.a. simple interest; execution against assets.

Canara Bank versus Surbhup Services Pvt. Ltd. — Company and Corporate | DRT (2026)

¶1

IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

¶2

Dated this 30^th Day of June, 2026

¶3

Present: Sri. T. RAJESH

¶4

Presiding Officer

¶5

OA. No.254/2022

¶6

BETWEEN:

¶7

Canara Bank BTM Layout Branch-I No.28/29, 18^th Main, 7^th Cross, BTM 2^nd Stage, Bangalore-560076 Rep. by its Chief Manager

¶8

… APPLICANT

¶9

AND:

¶10

M/s. Surbhup Services Pvt. Ltd., No.40/3, J C Industrial Area Yelchenahalli, Kanakapura Road, Bangalore-560062 Rep. by its Directors Mr. Pradeep Kumar T Mrs. Shruthi A P

¶11

Mr. Pradeep Kumar T S/o. Sri. Thimmaiah Aged about 40 years Director, M/s. Surbhup Services Pvt. Ltd., No.530, 16^th Main Road, 15^th Cross, Near Chandana School, D Group Layout Bangalore-560091

¶12

Mrs. Shruthi A P W/o. Mr. Pradeep Kumar T Aged about 36 years Director, M/s. Surbhup Services Pvt. Ltd., No.530, 16^th Main Road,

¶13

OA. No.254/2022

¶14

¶15

15^th Cross, Near Chandana School, D Group Layout, Bangalore-560091

¶16

...DEFENDANTS

¶17

Counsel on record/appeared for:

¶18

Applicant : Sri. Rohit R Achar Defendants : Sri. M A Rajendra

¶19

:FINAL ORDER:

¶20

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.1,07,67,500/- (Rupees One Crore Seven Lakh Sixty Seven Thousand and Five Hundred only) claim to be due in respect of OD facility for Rs.40,00,000/- and GECL facility of Rs.17,00,000/-.

¶21

It is stated that, the OD facility was availed for the period of 12 months by mortgaging the security over the hypothecated schedule assets purchased using the loan proceeds. It is also the case of the applicant that, the defendant Nos. 2 and 3 stood as guarantors and executed guarantee covering letter in favour of the applicant bank. It is further case of the applicant that, the OD facility has been enhanced from time to time and on due execution documents in lieu of the same for which also the defendant No.1 and 2 stood as guarantors for the credit facility availed. It is also case of the applicant that a GECL Facility was also availed in the year 2020 wherein also hypothecation over the movables are

¶22

OA. No.254/2022

¶23

¶24

created, apart from the 2^nd and 3^rd defendant standing as guarantors.

¶25

It is further contended by the applicant that, despite availing the facility agreeing to service the account promptly, the defendant failed in doing so, resulting the account fell in default and the account has been classified as NPA and this OA is being filed for recovering the amount due in the loan account.

¶26

The defendants filed their written statement contending that the applicant is not entitled to proceed against the residential properties. It is also pointed out that, no mortgage is created in respect of any properties and the amount claimed by the applicant is not a debt. the defendants also contending that, there is no capitalization of penal interest and classification of account as NPA is not in order. Another contention taken is that, Covid-19 disaster package has not been extended to the defendants. It is also the case of the defendant that, the amount as claimed in the OA is exorbitant being calculated with interest as not agreed by the defendants.

¶27

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 A44 and got the same marked in evidence. The defendants filed their defense evidence reiterating the

¶28

OA. No.254/2022

¶29

¶30

contention taken in the written statement and got marked as D1 and D2.

¶31

Heard the Ld. Counsel for the Applicant as well as the defendants and perused the records.

¶32

The following issues arise for consideration in this matter:

¶33

i) Whether the applicant had succeeded in proving the OA

¶34

claim as against the defendants?

¶35

ii) What order are to be passed?

¶36

Both these issues are gone into and decided together.

¶37

It is to be noted that, the bank though had filed their proof

¶38

affidavit producing the documents evidencing the execution of loan

¶39

documents in lieu of security for the credit facility including the guarantee agreement, no refutal of the same coming up even in the written statement filed by the defendants. The defendants

¶40

have filed their written statement pointing out as to the right of the bank to proceed against in immovable properties, which are not even subject matter of this OA. It is to be noted that, even in

¶41

the pleadings of the OA, the applicant is not putting forth any contention as to creation of any mortgage or any properties. The

¶42

loan documents produced by the applicant are prompt and

¶43

OA. No.254/2022

¶44

¶45

admissible in evidence as the execution of the same is not denied. Even though, the defendants filed the written statement no specific denial much less any denial is put forth therein refuting the contentions or no effort is made even to refute the pleadings as made in the OA.

¶46

The claim of the applicant is well within the limitation. The cash credit agreement produced at Ex.A4 evidences the disbursement of the credit facility and A18 evidences the enhancement to the said facility, the guarantee executed and were produced as A6, A8, A14, A16, A23, A25, A32 and A36 evidences the liability of the defendant Nos.2 and 3 being the guarantor for the repayment of the facility. The hypothecation agreement as produced by the applicant, evidences that the hypothecation over the movables were created, the revival letters produced by the applicant as A38, A39, A40 and A41 evidences that the claim of the applicant is well within the limitation, Ex.43 and A44 the account statement evidences the disbursement of the facilities in question and amount as claimed in the OA is outstanding and there is no capitalization of penal interest.

¶47

Taking view of the fact that, the credit facilities availed for

¶48

OA. No.254/2022

¶49

¶50

business purpose, this Tribunal though generally not inclined to interfere with the rate of interest is awarding interest at reduced

¶51

rate, taking note of the fact that, the 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).

¶52

In the result, OA.No.254/2022 stands allowed,

¶53

i) The applicant is allowed to recovery an aggregate sum of Rs.1,07,67,500/- (Rupees One Crore Seven Lakh Sixty Seven Thousand and Five Hundred only) with further interest of 12.00% p.a.(simple) from the date of filing OA till the realization from the defendants, after giving credit to all the amounts recovered and received during the pendency of the OA.

¶54

ii) In the event of failure of the defendant to pay the

¶55

aforesaid amount, the bank is at liberty to proceed against the defendants jointly, severally, personally and their other assets are liable for all such amounts due under the loan account.

¶56

iii) The applicant bank is allowed cost of the proceeding

¶57

which applicant to file cost memo within 7 days from the date of receipt of the order.

¶58

OA. No.254/2022

¶59

¶60

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

¶61

order and transferred to Recovery for execution.

¶62

v) Interim Application pending, if any, stands disposed of

¶63

with this Final Order.

¶64

Communicate a copy of the order to the parties concerned

¶65

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

¶66

DRT (Procedure) Rules, 1993.

¶67

[Dictated to the Stenographer (PR), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 30^th Day of June 2026].

¶68

Sd/(T. RAJESH) PRESIDING OFFICER

¶69

ANNEXURES

¶70

WITNESSES EXAMINED FOR THE APPLICANT BANK:

¶71

AW-1: Sri. Naba Kishore Behera, Chief Manager of the applicant bank.

¶72

Exhibits on the part of the Applicant:

¶73

Description of Documents	Date	Exhibit
Sanction Letter	09-05-2018	EX. A – 1
Request for OD	10-05-2018	EX. A – 2
On Demand Pro Note	10-05-2018	EX. A – 3
Cash Credit Agreement	10-05-2018	EX. A – 4
Guarantee Covering Letter	10-05-2018	EX. A – 5

¶74

OA. No.254/2022

¶75

¶76

Guarantee Agreement	10-05-2018	EX. A – 6
Guarantee Covering Letter	10-05-2018	EX. A – 7
Guarantee Agreement	10-05-2018	EX. A – 8
Letter of Undertaking	10-05-2018	EX. A – 9
Request for OD	22-11-2018	EX. A – 10
On Demand Pro Note	22-11-2018	EX. A – 11
Common Hypothecation Agreement	22-11-2018	EX. A – 12
Guarantee Covering Letter	22-11-2018	EX. A – 13
Guarantee Agreement	22-11-2018	EX. A – 14
Guarantee Covering Letter	22-11-2018	EX. A – 15
Guarantee Agreement	22-11-2018	EX. A – 16
Letter of Undertaking	22-11-2018	EX. A – 17
Link Letter Re: Enhancement	22-11-2018	EX. A – 18
Request for OD	14-06-2019	EX. A – 19
On Demand Pro Note	14-06-2019	EX. A – 20
Supplemental Common Hypothecation Agreement	14-06-2019	EX. A – 21
Guarantee Covering Letter	14-06-2019	EX. A – 22
Guarantee Agreement	14-06-2019	EX. A – 23
Guarantee Covering Letter	14-06-2019	EX. A – 24
Guarantee Agreement	14-06-2019	EX. A – 25
Link Letter Re: Enhancement	14-06-2019	EX. A – 26
Board Resolution	15-06-2020	EX. A – 27
Offer Letter	19-06-2020	EX. A – 28
Loan Application	19-06-2020	EX. A – 29
Sanction Memorandum	19-06-2020	EX. A – 30

¶77

OA. No.254/2022

¶78

¶79

On Demand Pro Note	19-06-2020	EX. A – 31
Supplemental Common Hypothecation Agreement	19-06-2020	EX. A – 32
Guarantee Covering Letter	19-06-2020	EX. A – 33
Guarantee Agreement	19-06-2020	EX. A – 34
Guarantee Covering Letter	19-06-2020	EX. A – 35
Guarantee Agreement	19-06-2020	EX. A – 36
Letter of Undertaking	19-06-2020	EX. A – 37
Letter of Renewal	22-11-2018	EX. A – 38
Letter of Revival	22-11-2018	EX. A – 39
Letter of Renewal	14-06-2020	EX. A – 40
Letter of Revival	19-06-2020	EX. A – 41
Legal Notice	31-01-2022	EX. A – 42
Account Extract (OD)		EX. A – 43
Account Extract (GECL)		EX. A – 44

¶80

Sd/-

¶81

(T. RAJESH) PRESIDING OFFICER

Canara Bank v. Surbhup Services Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Canara Bank v. Surbhup Services Pvt. Ltd.

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

Coram

Case details

Similar cases

Bank of Baroda versus M/s Anugya Enterprises

Bank of Baroda (Vijaya Bank) versus M/s Maa Sharde Agritech

Bank of Baroda versus M/s Balajee Coal Depot

Manoj Kumar Sharma versus Punjab National Bank

Sri Ram Bhagat Sharma versus Icici Bank Limited

Icici Bank Limited versus M/S Niraj Marble and Tiles and Ors.