Allowed

Canara Bank v. M/S Rahul Textiles

DRT2 Sept 2026OA/339/2025

Case brief

AI extract

What is this about?

The tribunal allowed the applicant bank's recovery application against defendants liable for loans and OD. The bank claimed Rs. 1.73 crores. Defendants raised defenses regarding blank signatures and limitation, which were rejected. The order granted recovery of principal, interest, and costs.

What did the court decide?

Defendants to pay Rs. 1,73,43,667.15 Ps with future interest @ 18% p.a.; Applicant entitled to proceed against mortgaged and hypothecated properties and personal assets.

Canara Bank versus M/S Rahul Textiles — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY^{TRIBUNAL.IAT HYDERABAD}

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DATED THrS THE 2ND^{DAY OF SEPTEMBER,2026}

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PRESENT: SRI GUMMADI^{GOPICHAND,PRESIDING OFFICER}

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OA.No.339 of 2025

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Between:

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Canara Bank, Hanumakonda I branch, Warangal, Telangana^State Represented bY^{its ChiefManager}

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Applicant

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VERSUS

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M/s. Rahul Textiles,

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Represented bY^{its ProPrietor,}

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Smt Enjamuri^Aruna,

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occ: business,^{Plot no.B,}

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Sy. No. t79Ll^t,Textile Park,

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Madikonda,^KaziPet,

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Warangal - 506^142.

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Smt Enjamuri^Aruna,

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w/o UPender,^{aged about 49 Years,}

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R/o H.no.2-89,^Sangem,

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Warangal,^TS -^{506 330.}

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Defendants

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Counsel^{for the Parties:}

For the APP|icant

Defendants

Orders^reserveo

Sri P. Naga^{Durga Prasad}

Sri V. Ravinder

24.08.2026

0 2.09.²⁰²⁶

Uptoaded^{in website on '':}

02.09.2026

{i; o?sEP

(oA. No.339/202s)

ORDER

The Appricant Bank fired the present oA against Defendants for recovery of a total sum of Rs.1,73,43,667.15ps (Rupees One crore seventy three Lakhs Forty three Thousand six Hundred Sixty Seven and paise Fifteen only) (i.e., OD of Rs.21,15,678.61ps + term loan of Rs.1,44,1o,165.24ps + GEL of Rs.1,85,926.24ps + GECL 1.0 of Rs.6,31,897.O6ps ) with future interest @ 1g% p.a with monthry rests from date of apprication ti' the date of rearization and in defaurt for sare of hypothecated movables and mortgaged property as mentioned in the schedule to oA.

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As per the averments in the application, the Applicant Bank states that the defendant No.1 which is a proprietorship firm represented by its proprietor/ defendant no.2 availed term loan facility for a sum of Rs.92.50 lakhs, OD / OCC facility of Rs.7.50 lakhs, GECL rimit of Rs.4'75 rakhs and GECL 1.0 rimit of Rs.6.50 rakhs and agreed to repay arong with interest. The defendants hypothecated the machinery as mentioned in schedule to OA and executed supplementary hypothecation and personar guarantee in favour of Ao1tic1rtt.Q9nk. The defendants mortgaged the schedute property and execuitbd:necessary documents in favour of applicant bank. It is 1slPflitt€'d^{bvi!!e nppticant bank that the Defendants} avaired the said loan facilities a.nd failed to keep up the repayment schedule, as such

'./

(oA. No.339/202s)

the account was classiFied as NPA. Inspite of demands made by Applicant the defendants have not regularized the account, so the Applicant bank issued demand notice dated 28.11.2023, but the defendants did not come forward to repay the same. The total claim oF Applicant against defendants is of Rs.1,73,43t667.Lsps^(Rupees One Crore Seventy three Lakhs Forty three Thousand Six Hundred Sixty Seven and paise Fifteen only)^(i.e., OD of Rs.21,15,678.61ps + term loan of Rs.1,44,10,165.24ps^{+ GEL} of Rs.1,85,926.24ps + GECL 1.O of^{Rs.6,31,897.06Ps} )^with future interest @ 18o/o^p.a with^{monthly rests from date of application} till the date of realisation. Hence^{the OA.}

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The Defendants filed written^{statementadmitting that theyavailed} various loan facilities from the^{Applicantbank. The contentionof the} defendants is that at^the time^{of sanction of loan, the applicantbank} obtained signatures of^{defendants on various blank papers and they} are misused by the^{applicant bank.The further contentionof the} defendants is that^{even though there is no requirement of obtaining} collateral security, the^{applicant bank obtained equitable mortgage of} .,:,'schedule^{pioperty-and that the claim of the applicant bankis barred} j.J .;.,^j ii'i.^{by limitation.Henceprayedfor dismissalof OA'}

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{'^,, $? 1 3. .I have perused the documents^placed on^record. al

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(oA. No.339/202s)

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Heard the arguments.

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Mr. Jakka Nagaraju, Chief Manager / AW.1 is examined on behalf of the Applicant. Exhibits A.1 to A.25 are marked through AW.1. Defendant No.2 examined herself as DW.1 but no documents are exhibited by her.

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Now, the points that arise for consideration are:

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i) Whether the Applicant Bank has proved its claim as made in OA against the defendants ?

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ii) To what relief ?

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Point No.i):

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On behalf of the applicant bank, Shri J. Nagaraju, Chief Manager who is examined as AW.1 deposed crearry about the riabirity of the defendants and also about the execution of various documents filed by the appricant bank. AW.1 is not cross examined by the defendants. so the evidence of AW.1 is not chailenged by the defendants. so the evidence of AW.1 stood unrebutted by the defendants. Even though

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'defendant no.2 e>iamined herserf as DW.1, his evidence is no way ,l

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.:r

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/i'.."-.:^{' helpful'to the defendantsfor establishingthe contentions raisedby the}

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!.:.'. defendants.

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u '. A perusal of the documents exhibited by the Applicant bank

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.- l.^{makesgtear that} ail the rerevant documents are executed by the 'I !; q

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(OA.No.339/2025)

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defendants in the normal course of transaction. So the contention of the defendants that the applicant bank obtained their signatures on blank documents is not tenable. The contention of defendants that there is no necessity of obtaining collateral security by the applicant is also not tenable as no material is placed by the defendants for establishing that for various loan facilities availed by the deFendants, collateral security is not required. The other contention of defendants is that the claim made by Applicant bank in OA is barred by limitation. But in view of the fact that defendants executed acknowledgement letter by acknowledging their liability and as the said documents are executed within 3 years from the date of filing of OA, the claim of the applicant bank is within time. Considering all the circumstances, I am of opinion that the defense taken by the defendants is not tenable. Hence the applicant bank is entitled to claim the OA amount from defendants.

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Point No.ii)

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In the result, the present Original application is allowed with costs as under:

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The Defendants are jointly and severally liable to pay to Applicant Bank a total sum of Rs.1,73,43,667.15ps (Rupees One Crore Seventy three Lakhs Forty three Thousand Six Hundred Sixty Seven and paise Fifteen only) (i.e., OD of Rs.21,15,678.61ps + term loan of Rs.1,44.10,165,24ps + GEL of Rs.1,85,926.24ps + GECL 1.O

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(oA.No.339/202s)

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of Rs.6,31,897.06ps ) with future interest @ 18olo^p.a from date of application till the date of realization ;

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The applicant bank is entitled to^proceed against the mortgaged property and hypothecated movables as mentioned in the schedule to OA towards realization of the debt due.

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The Applicant bank is also entitled to^proceed against the^person and properties of defendant No.2 and properties of defendant no.1 towards realization of the debt due.

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The Applicant Bank is entitled to the costs of the OA.

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The Applicant shall file a cost memo within two weeks from the date of receipt of order.

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Issue Recovery certificate accordingly.

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Communicate a copy of the order to the parties concerned.

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6ri'ttre 1.1., transcribed by her, corrected, signed and pronounced by me in the open court on
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(G. GOPTCHAND)
) PRESIDING OFFICER
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Canara Bank v. M/S Rahul Textiles

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/S Rahul Textiles

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

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Case details

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