Allowed

State Bank of India v. M/S. Godavari Polymers Private Limited

DRT20 May 2026OA/331/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the Applicant Bank's claim for recovery of around Rs. 51.99 crores against the borrower and personal guarantors, reducing the future interest rate to 9% p.a., and directed the issuance of a recovery certificate.

What did the court decide?

Defendants ordered to pay Rs. 51.99 crores (net of partial payment) with future interest @9% p.a. from 20.09.2023; deemed recovery certificate issued.

State Bank of India versus M/S. Godavari Polymers… — Contract and Commercial Disputes | DRT (2026)

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IN THE DEBTS RTCOVERYTRIBUNAL-I AT HYDERABAD DATED THIS THE 2OTH DAY OF MAY, 2026

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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OA.No.331 ot 2023

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Between :

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State Bank of India, Stressed Assets Management Branch, (Secunderabad - 04106) D.No.5-9-76, 2nd floor, Opp SBI, Amaravathi LHO, Chapel road, Gunfoundry, Hyderabad - 500 001. Represented by its Manager

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Applicant

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VERSUS

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M/s. Godavari Polymers Private Limited, Represented by Managing Director, Cheekoti Venkateshwar Rao, 315, Minerva complex, S.D. Road, Secunderabad, TS - 500 003.

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Mr. Cheekoti Venkateshwar Rao, S/o Cheekoti Janardhan rao, H.No.3-6-731, Street no.12, Himayathnagar, Hyderabad - 500 029.

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Mr. Cheekoti Ramesh Kumar, s/o Cheekoti Janardhan Rao, H. No.3-6-73 1, street no. 12, Himayathnagar, Hyderabad - 29.

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Mr. Chekhilla Rajendra Kumar, S/o Chekhilla Chandrasekhar, H.No.2-12-23122/9A, Durga Bai Deshmukh colony, Bagh Amberpet, Amberpet, Hyderabad - 500 013.

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20 rAY2m

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(oA.No.331/2023)

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q M/s. ICICI Bank Ltd, Plot no.74 & 75, Vinayak nagar, Gachibowli, Hyderabad dist, Hyderabad, TS - 500 032. Defendants Counsel for the Parties: For the Applicant Mrs. Tarangini Pisipati Defendants no.1 to 3 Mr. T. Vijay Kumar Defendant no.4 Sri V. Sethu Madhava Rao Orders reserved on 08.0s.2026 Pronounced on 20.05.2026 Uploaded in website on 2t.05.2026

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Defendants

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ORDER

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The Applicant Bank filed the^{present OA against DefendantsNo.1to 4} for recovery of a total sum of Rs.51,99,12,OOf31-^{(RupeesFifty One} Crores Ninety Nine Lakhs Twelve Thousand and^{Eight only)with} future interest @17.25o/o^p.a with^{penal interest} @^{2% p.a from} the date of realization and in default^{for sale of}

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:smortg$d Or6Fdlhes as mentioned in the schedule "locations no.1 to

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.,; , j\

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i.t glbgtt -- iii E Fstr we ;)l t,,[,,t The ayeT{f,nents made in the OA^{in brief are as follows:} t$#ffi-ry,1 is a companv incorporated under the companies

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ft:956'--acting^{through its ManagingDirector Sri Cheekoti}

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Venkateshwara Rao. Defendant no.5^is a^{privatebankingentity and a} proforma party in this OA. Defendants no. 2 to 4 stood as^personal

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(oA.N0.33U2023)

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guarantors for the repayment of the loan availed by defendant no.1. Defendant no.1 availed financial services since 2006 facilitated by Applicant bank by securing the collaterals furnished by defendant no.1 and also the collaterals furnished by the guarantors in addition to the personal guarantee issued by the defendants no.2 to 4. In the year 2019, the defendant no.l availed loan from defendant no.5 i.e., ICICI bank which is a Private banking entity which in turn entered into a consortium agreement with the Applicant bank. In 2019, the defendant no.1 approached this consortium of banks specifically the Koti-SBI commercial branch of Applicant bank which is also the lead bank in consortium banks along with ICICI bank for working capital which includes financial services in the form of cash credit, term loan, rupee term loan (working capital) letter of credit, bank^guarantee and derivatives with appropriate maximum limits of drawing^power to defendant no.1. Defendant no.1 had expressed interest to create additional charge on the current assets and all fixed assets belonging to defendant no.1 in favour of defendant no.5 on a^pari-passu basis and issue of No objection for the same vide Letter GPPL/HO/007/201819. The Applicant bank sanctioned various types of credit facilities to defendant no.1 and to thEffi:qetions of loans, the defendants^no.2 . o ",.".r,"a ,r"6ffi':N.stood as suarantors both in personal capacity 'and a mortga their assets to which Memorandum o[ {eoo&t0ofl ['1,[4""G re also executed. The defendants u"",,

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(oA.No.331 /2023)

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Facility	Limit	Outstanding	Irregularity
	(inCrores)	(InCrores)	(InCrores)
CC	24.5	37.2L	t2.71
LC	20.00	2.23	0.00
BG	14.00	2.24	0.00
GECL	10.68	t0.76	0.08
TOTAL	69.18	52.44	t2.79

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It is submitted by the Applicant bank that the Defendant No.1 having availed the said loan facility failed to keep up the repayment schedule, as such the account was classified as NPA on 22.05.2023 and the Applicant bank issued demand notice and legal notice dated 31.10.2023. Inspite of demands made by Applicant the defendants have not regularized the account, and did not come forward to repay the same. The total claim of Applicant against defendants No.1to 4 is Rs.5l,99,L2,OOB{ - (Rupees Fifty One Crores Ninety Nine Lakhs

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d and Eight only) with future interest @17.25o/o wjfh'' pe rest @ 2o/o p.d from 20.09.2023 till the date of ?"ai+Syon ,"t1l,ne oA . A;l 2. ri"renoant-.{;S-b",:i" to 3 fited written statement and denied the aVermentstttmade in the OA. It is contended that the consortium agreement between the applicant and defendant no.5/ ICICI bank is concerned, the loan availed by defendant no.l from defendant no.5 is

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(OA. No.331/2023)

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completely repaid and no objection is issued by defendant no.5. The defendants No.1 to 4 denied the allegation in committing default in repayment of liability. It is contended that due to unforeseen circumstances faced by defendantsNo.l to 4 and due to recession in business, the defendants were not able to regularise the account by paying the substantial amounts for a brief period of time. It is contended that the defendant no.1 made substantial payment to Applicant bank by way of monetization of land and building and the applicant bank permitted the defendant no.1 to sell the land and building belonging to defendant no.1 at Cherlapally. Defendant no.1 entered into sale agreement dated 03.02.2024 with M/s. Ramesh Krishna Engineering Pvt Ltd for a sum of Rs.17.00 cores but Rs.15.00 cores was deposited by the purchaser of the property. Finally after negotiations, the bank released the property documents upon payment of Rs.27,17,00,000/-. The defendant no.l also made certain payments and the total amount paid after filing of OA is Rs.30,33,00,000/-. Hence the OA is liable to be dismissed.

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Defendant no.4 filed written statement and denied the averments made in OA. It is submitted that defendant no.4 stood as ape r for repayment of loan availed by defendant n0.1. defendant no.1 Company was doing well till 6' M.o and Covid-ii9 and nonpayment of bills by Governments -fr.,S .fi,nJ4.[$lt'[,frp ,.ttn^{and Andhra pradesh, the defendant no.1} 5 '--.---,"-o*-$!wf//

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(OA. No.331/2023 )

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company went to temporary liquidity crunch.^{It is submitted that} pursuant to the approval given by the Applicant to release the^personal guarantee of defendant no.4, the defendant no.1 remitted^Rs.2.00 crores as detailed in its letter dated 07.06.2024.^{The defendantno.1} also paid a sum of Rs.2.20 Crores for^{release of plot no.415, phase I,} ECIL, Cherlapally village, Ghatkesar^{mandaland the defendant no'1} also paid Rs.26,88,345/- on 18.06.2024. ll^{is submitted that this} defendant was^{personalguarantor} and offered^{his propertyas a} security to the loan availed by defendant no.1.^{It is submitted that} Applicant bank obtained signatures of defendants^{on various blank and} printed forms. Hence the OA is liable to be dismissed.

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During the course of trial on behalf of^{Applicant Bank, AW'1 is} examined and exhibited the documents as^{Ex.A.1 to A.74.} Defendant no.4, examined himself as^{DW.1 and no documentsare} exhibited by the contesting defendants.^{The Applicant bank filed a part} satisfaction memo stating that a sum of^{Rs.27.17 Croreswas}

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Defendants.

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ments placed on record.
0 it|t
@e

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Now, the points that arise for consideration are:

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(oA. No.331/2023)

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i) Whether the Applicant Bank has proved its claim as made in OA against the defendants No.1 to 4 ?

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ii) To what relief ?

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Point No.i):

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B. During the course of trial, on behalf of applicant bank AW.1 is examined and exhibited documents Ex.A.1 to A.74. Even though AW.1 was cross examined by the counsel for defendant No.4, nothing is elicited in the cross examination to disprove his testimony.^Even though the defendants have taken several^pleas that the applicant bank did not follow the RBI^guidelines and that the^defendants obtained blank documents, failed to^{place any substantialproof to that} effect. Moreover, a^perusal of the documents exhibited^{by the} Applicant bank makes clear that all the^{relevantdocumentsare} executed by the defendants No.1 to 4^{in the normal course of} transaction. The defendants very^{vaguely contended that particulars} made in the OA are not correct. But as^{per the statementof accounts,} the defendants are liable to^pay the^{OA claim. Considering all the} circumstances, I hold that the^{Applicant bank is entitled to claim OA} amount against defendants^{no.1 to 4. The counselfor defendants no'1} to 3 relied upon the Judgemenlof^{Hon'bleDMT, Kolkatain Appeal} No.116 of in the Hon'ble DRAT after considering the^law II.] laid,.,d'3^ryn Orr-$" Ut*,.trrreme Court^{in C.K. Sasankanhas} categoiically n:efld tnat *gtrlii o"t".rining^{the rate of interest,the} relevant economic factors such as

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(OA.No.331/2023)

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inflation, prevailing market conditions and bank lending / deposit rates. Hence the defendants^prayed for reduction of interest^{rate from} 17.25o/o to 9olo p.a. So considering all the circumstances, I am of^the opinion that subsequent interest can be^granted @ 9olo^p.a. So^this point is answered accordingly.

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Point No.ii)

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In the result, the present Original application is allowed with costs as u nd er:

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The Defendants No.1 to 4 are jointly and severally liable to pay the Applicant Bank a total sum Rs.51,99,12,OO|E|- (Rupees Fifty One Crores Ninety Nine Lakhs Twelve Thousand and Eight only) with future interest @9% p.a from 20.09.2023 till the date of realization LESS a sum of Rs.27.17 Crores received towards part satisfaction.

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the Applicant Bank is entitled to proceed against the hypothecated movables and mortgaged properties as mentioned in the schedule to OA towards realization of the debt due.

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11.. T+ bank is also entitled to proceed against the person and . ',r;"proOe$.,1;r,^, nt No.2 to 4 and properties of defendant no.1 the debt due.

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k is entitled to the costs of the OA.

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(oA.No.331 12023lr

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The Applicant shall file a cost memo within two weeks from the date

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of receipt of order.

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L4. Issue Recovery certificate accordingly.

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Communicate a copy of the order to the parties concerned.

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(Dictated to the P.A., transcribed by her, corrected, signed and pronounced by me in the open court on this the 20th day of May,2026)

sd/ -

(G. GOPTCHAND)

PRESIDING OFFICER

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State Bank of India v. M/S. Godavari Polymers Private Limited

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/S. Godavari Polymers Private Limited

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

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