Allowed

State Bank of India v. M/s. Jai Bharath Enterprises

DRT25 Feb 2026OA/256/2025

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the applicant bank's original application filed under Section 19 of the RDBA. The Tribunal held that defendants who failed to appear or adduce evidence to rebut the applicant's case remain jointly and severally liable to pay the claimed sum, interest, and costs.

What did the court decide?

Defendants directed to pay Rs.4,20,47,921/- along with future interest and costs; OA schedule assets declared as security for recovery.

State Bank of India versus M/s. Jai Bharath Enterprises — Insolvency and Bankruptcy | DRT (2026)

¶1

IN THE DEBTS RECOVERY^{TRIBUNAL-II AT HYDERABAD} DATED THIS THE^{25TH DAY OF FEBRUARY,2026}

¶2

PRESENT: SH. RAMESHWAR^{KOTHE, B.Com, L.LB. (Hons'),M'A'} PRESIDING OFFICER

¶3

ORIGINAL APPLICATION^{NO. 256 OF 2025}

¶4

Between:

¶5

State Bank of India SME, Yellareddyguda^Branch H. No. B-3-961/B^{First Floor} Srinagar Colony Hyderabad- 500073.

¶6

Applicant.

¶7

And

¶8

M/s. lai Bharath^EnterPrises A partnershiP^{Firm,rePresented} bY its Managing^Partner Plot No.8,^{Block No'37} Auto Nagar,^{VanasthaliPuram} Hyderabad-⁵⁰⁰⁰⁷⁰ Telangana '

¶9

Also at:

¶10

Plot No.10,^{Block No'39} 1tt Floor,^{Auto Nagar} TSIIC,^HaYathnagar HYderabad-500070'

¶11

Illuri^Leneena D/o Chandra^{Sekhar ReddY} Aoe: Maior,^H'No'9-36/37 PiajaY^{Gulmohar,Kuntloor} . . Huyutnnugut,^{KV RangaReddY} Telangana^{-505 505'}

¶12

Smt.^{Manne Shobha} - W/o^{Manne Mallesham} Aqe:^{Major, H'No'5-129} :P- CotonY,^Patancheruvu HYderabad-502319^'

O%o'

oA.2s6l2025

Narra Anuradha D/o Venkata Krtshna Rao Age: Major, H.No.9_36/37 Prajay Gulmohar, Kunuoor Ha,yathnagar, KV Ranga Reddy telangana _505 S05. ..... Defendants. Counsel for the Applicant : M/s. Alluri Krishnam Raju Counsel for Defendants 1, 2 & 4 : 1,4r. Ravi Kumar Maroju. Defendant No.3 : Exparte.

¶17

:: ORDER::

¶18

The Applicant Bank Rled the present OA u/s 19 of The Recovery of Debts & Bankruptcy Act, 1993 for recovery of a sum of Rs.4,20,47,A21/ - from defendants 1 to 4 joinuy and severa y with future interest @170lo per annum with monthly rests plus 2o/o penal interest from 25.03.2025 till the date of realisation along with costs and sale of OA A & B schedule assets.

¶19

¶20

The averments of applicant bank as per the OA, briefly, are defendant No.1 partnersh bein g its pa rtners, "rr,,"r'. :"tff .:JI ill *::t: :::: :ll Inland Letter of Credit ol f Rs 50 lakh to meet their business requirements vide refter arrangement dated 07'02'2023. Defendants 2 to 4 "rof loan documents including guarantee agreements. rn'ut""o cash credit limit is secured by way or oA A-schedure nypotn,e current assets of defendant No.1 firm anO Oa g_sctreOt3cated propertv belonsins to derendant No 3 vide ou,"o 07.02.2023. Defendant No.1 failed to adhere to 'o";':-':T::"ole ,n" terms and conditions of credit arrangements in repaying t1". amount, resultins in its crassirication ", ;;;'";', i"-": bY "'6&thereafter

¶21

{

¶22

oa.256l2O2s

¶23

SARFAESI^{proceedings.Defendantsfailed to clear the dues} despite receipt of notices.^Hence,the Present^OA.

¶24

Defendant No.3^{was set expartefor non-representationdespite} summons vide docket^{order dated 09.04'2025'}

¶25

Defendants l, 2 and 4 filed written^{statement. The averments} of defendants 7, 2 and 4 as^per the wrltten^{statement,in brief,} a re:

¶26

Applicant bank^{renewedthe cash creditfacility, but it did not do} so ln case of inland^{letter of creditfacllities,causing hurdlesin} the^{progress of the businessDefendantsdeny violation of} terms and^{conditions of loan agreement' Applicantissued notice} u/s 13(2)^{of the SARFAESIAct without any prior intimationover} breach of^{terms, if any. The default in payment hasnever} exceeded 84^{days at any point of time as againstthe} mandatory^{limitof 9O days'Therefore'the classification of loan} account^{as NPA is highly irregular and againstRBI circular' The} legal notice^{dated 11'03 2025 is silent on NPA classification'} However,^{the demand noticeu/s 13(2)issuedon the very next} day i.e.,^{12.03.2025 notifies account beingclassifiedas NPA'} The amounts^{claimedin both the notices differ suqgestingthat} the statement^{of account relied on by the applicantbank is} incorrect.^{The applicantclassifiedthe account as NPA hastily} without^{extendingthe benefits under the Framework for revival} and^{rehabilitationof MSME units notified by the Government/} RBI. Applicant^{has intentionatlyundervaluedthe existing} Securedassetswhileseekingattachmentoffreshproperty already^{undermortgage with India Bulls The applicantbank} charged^{interest@17vo p'a aoainstth-e agreedrate of interest}

¶27

oA..256/2025

¶28

of 11.65010. The OA claim is t:;"t.]i,:::,1t:l of nterest ano contrary i::jltH, ;:; guidelines. As such, the statement of account is unreliable, lacks transparency and does not reflect the correct state of afFairs. The alleged cause of action has been invented for the purpose of the OA claim_ Therefore, applicant bank is not entiued to any relief much less to the relief for future interest and penal interest. Hence, defendants pray for dismissal of OA.

¶29

In order to prove its claim, the Applicant Bank examined S. Prathik yadav, Manager, as AW-1 and marked g documents through him as Ex. A.1 to Ex. A.8.

¶30

¶31

The defendants, right of adducing evidence was forfeited For non-representation vide docket order dated 70.12.2025.

¶32

Heard learned counsel appearing for the applicant. Contesting defendants, right to advance arguments was forfeited for nonrepresentation vide docket r dated 04'02'2026' Perused the materiar praced on ,.".oro]'o"t

¶33

Learned counsel for the appli( written statemen, r"n,; :J;: Hl':; j:::;::::ffi I: failed to follow it up either by way of producing credible evidence in support of violati( of specific rule' computations showing the *"o or"r,r, "ron interest allegedlv charged bv the bank "r o, *, * :::t examination of the AW.1 to disprove the .on,,, or;"::tt relied on by the applicant bank The recatl notice uro ,1lo'tt nature issued with specific or.:t't" '/t^{13(2) are different} in attributed over the . ;;:J:'." J:"'.::?,:" J:,;:,T"j: (ry$L

¶34

oA,2s612025

¶35

¶36

notices. With these^submissions, learned counsel^{prayed for} allowing the OA^{claim in the interest} of^justice.

¶37

The^point that arises^{for consideration is:-}

¶38

Whether the Applicant^{Bank is entitled} for the OA claim against^the Defendants and the OA^{A &B} schedule assets?

¶39

The contentions of^{the contesting defendants range fromNPA} classification^{vis-a-visMSMEScheme to rate of interest charged} to the loan account.^{However, defendantsdid not choose to} place on record any materlal substantiating^{each and every such} contention so raised^{in their pleadings.The chief grievanceof'} the defendants is^{that applicantbank has not extended} Government and/or^{RBI guidelines notified for 14SMEsfor the} purpose of revival and rehabilitation^{of the defendantNo 1 firm'} Despite contending^{so, defendants have not placed any material} on record of their^{taking up this issue at any point of time} before bringing^{said grievanceto the notlce of this Tribunal vide} written statement.^{In such a situation,defendantscannot hold} the applicant bank^{responsible to run their business The onus} to run the borrower^{company cannotbe shiftedto the borrower} bank. However,^{in the absence of any substantivematerial} evidence, mere bald^{statementsneed no considerationAs} stated supra,^{defendantsdid not choose to adduce evidencein} support of their^{contentions or to cross examlne the AW 1 to} disprove the authenticity^{and correctness of the contentsin} Exhibits A.1 to^{A.8 produced by the applicantbank Under such} circumstances,^{the Evidence AfFldavit of AW 1 coupled with the} recitals in Exs.^{A.1 to A.8 markedon behalfof the applicant} /fufin,/,<\ata / / / -/"vr' (v

¶40

oA.2s6l2O2s

¶41

bank remains unchallenged and unrebutted. Hence, I hold that defendants are joinfly and severally liable to pay the OA claim to the Applicant Bank with future interest and costs.

¶42

In the result, the present Original Application No.256/2025 is allowed as under: -

¶43

i) tne defendants are joinfly and severally liable to pay t9 ^!he applicant OanI a sum of Rs.4,20,47,g2L/_ along^- *itn interest @11.650lo pe.r annum sim-pte from tne date of application till the date of^{'realizition;}

¶44

ii) the OA clajm is secured by way of mortgage/ hypothecation of assets'oeitri-Oea in the schedules A & B annexeO to G on and the applicant b-ank is entitled to proceed against the same for recovery of its OJOU

¶45

iii) the applicant bank is also entifled to proceed against thg person and piop".tiu, of defendants for realisation of itsiJes; anO

¶46

v) the applicant bank is entiUed for the costs.

¶47

L2, The Applicant Bank is directed to file Cost Memo within 2 weeks from the date of receipt of this Order.

¶48

Issue Recovery Certificate accordingly.

¶49

communicate a copy of this order to the parties concerned and upload in Web Site.

¶50

(Dictated to the steno, signed and pronounced by me in the open court on this the 25"' day of Februa ry,20261.

¶51

OY** (RAI(ESHWAR KOTHE) PRESIDING OFFICER

State Bank of India v. M/s. Jai Bharath Enterprises

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/s. Jai Bharath Enterprises

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

Indian Bank versus M/s. Ganapathi Mobile Marketing

Smt Akula VIijay Bhaskar and Another versus Bank of Maharashtra

Hdfc Bank Ltd. versus M/s. Global Impех

Karnataka Bank Ltd. versus M/s Pragati Marbles

Canara Bank versus M/s. Modern and General Enterprises

Canara Bank versus Mrs. Nayana Gadangandla