Allowed

Canara Bank v. Aditya Enterprises

DRT24 Mar 2026OA/369/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed Canara Bank's application against defaulting borrowers who had failed to repay term loans, overdrafts, emergency credit lines, and FITL facilities. The court directed joint and several repayment of the principal sum with future interest to be fixed at 9% p.a. and recognized the right to sell hypothecated assets.

What did the court decide?

Payment of Rs. 20,49,240/- with future interest at 9% p.a.; sale of hypothecated assets; issuance and delivery of Recovery Certificate.

Canara Bank versus Aditya Enterprises — Contract and Commercial Disputes | DRT (2026)

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Presented on: 08.07.2022 Registered on: 02.09.2022 Decided on: 24.03.2026 Duration: Y M D 03 08 16

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IN THE DEBTS RECOVERY TRIBUNAL AT AURANGABAD (Before Dr. J. R. Chauhan Presiding Officer) ORIGINAL APPLICATION No. 369/2022

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TOTAL CLAIM AMOUNT – Rs. 20,49,240/-

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CANARA BANK,

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A Body Corporate constituted under the Banking companies (Acquisition & Transfer of Undertakings) Act, 1970, having its Head Office at 112 J.C. Road, Bangalore Karnataka State and one of its Branch At A.P.I. Corner, CIDCO, Aurangabad-03, through its Attorney Mr. Ravikumar Krishnaiah D. … Applicant

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Versus

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1. Aditya Enterprises, Through its Proprietor Mr. Rameshwar Nivrutti Kendhale Shop No. 03, Nishingandha – B Apartment, Rana Nagar, Beside 7 Hills Flyover, Jalna Road, Aurangabad

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2. Mr. Rameshwar Nivrutti Kendhale

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Age: 38 years, Occ.: Business, R/o.: Plot No. 22, Madhvkripa, Niranjan Housing Society, Tilak Nagar, A’bad.

…Defendants

(OA No.369/2022)

Page 1 of 9

[AMBADAS]

APPEARANCES

For the Applicant For Defendants

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Mr. Sameer J. Pande -Advocate Ex-parte

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JUDGMENT

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Delivered on 24.03.2026

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The Applicant Bank has filed the present application for the recovery of a sum of Rs. 20,49,240/- (Rupees Twenty Lacs, Forty Nine Thousand, Two Hundred and Forty only), along with future interest from the date of filing of the Original Application, i.e., 08.07.2022, until the date of realization of the entire outstanding dues from the Defendants.

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Brief facts of the application are as under:

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The Applicant Bank states that the Defendant No. 2 being proprietor of defendant No. 1 approached and requested the Applicant Bank for Term loan facility. Upon considering the request and financial needs of the Defendant, the Applicant Bank sanctioned Term loan facility of Rs. 10,00,000/- vide sanction letter dated 15.10.2018 on certain terms and conditions. The

(OA No.369/2022)

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[AMBADAS]

agreed rate of interest for the aforesaid loan was @10.05% p.a. with monthly rests. The Defendants also agreed to pay additional interest @2% by way of liquidated damages in the event of any default in repayment.

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Furthermore, it is submitted that the Defendant No. 2 being proprietor of defendant No. 1 approached the applicant bank and requested to sanction Overdraft loan facility. Upon considering the request and financial needs of the Defendant, the Applicant Bank sanctioned Overdraft loan facility of Rs. 5,00,000/- vide sanction letter dated 23.10.2019 on certain terms and conditions. The agreed rate of interest for the aforesaid loan was @10.00% p.a. with monthly rests. The Defendants also agreed to pay additional interest @2% by way of liquidated damages in the event of any default in repayment.

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Furthermore, it is submitted that the Defendant No. 2 being proprietor of defendant No. 1 approached the applicant bank and

(OA No.369/2022)

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[AMBADAS]

requested to sanction Guaranteed Emergency Credit Line Under Covid-19. Upon considering the request and financial needs of the Defendant, the Applicant Bank sanctioned Guaranteed Emergency Credit Line Under Covid-19 of Rs. 2,97,000/- vide sanction letter dated 23.07.2020 on certain terms and conditions. The agreed rate of interest for the aforesaid loan was @7.50% p.a. with monthly rests. The Defendant also agreed to pay additional interest @2% by way of liquidated damages in the event of any default in repayment.

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The applicant bank further states that the Defendant No. 2 being proprietor of defendant No. 1 again approached the applicant bank and requested to sanction Covid FITL. Upon considering the request and financial needs of the Defendants, the Applicant Bank sanctioned Covid FITL of Rs. 22,517/- under the same scheme on certain terms and conditions. The agreed rate of interest for the aforesaid loan was @8.40% p.a. with monthly rests. The

(OA No.369/2022)

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[AMBADAS]

Defendants also agreed to pay additional interest @2% by way of

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liquidated damages in the event of any default in repayment.

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In order to secure the aforesaid loan facilities, the Defendants executed various loan documents in favour of the Applicant Bank. These included sanction letters, hypothecation agreements, article agreement, demand promissory notes, etc., in favour of the Applicant Bank.

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The Applicant Bank further contends that, in order to secure the aforesaid loan facility, the Defendants executed hypothecation agreements thereby hypothecating stocks, receivables, bookdebts and other movables assets etc., in favor of the applicant bank.

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The applicant bank contended that the defendants have failed to keep their promise and commitments agreed by them with regard to due repayment of the loan amount. The defendants failed to operate the loan account properly and failed to pay the agreed rate of interest as per terms and conditions of the sanction letter.

(OA No.369/2022)

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[AMBADAS]

Thereafter, the applicant bank repeatedly made demand of loan amount and called upon the defendants to pay with the agreed rate of interest thereon, but the defendants failed and neglected to pay the same. The loan account of the defendants became irregular and classified as NPA. Therefore, on 10.12.2021 the applicant bank issued legal notice to the defendants through their advocate. Despite service of Notices, the defendants failed and neglected to repay the outstanding dues of the applicant Bank. Hence, this application is filed.

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The defendants appeared in matter but failed to file written statement. Hence, the right of defendants to file written statement stands closed as per Order dated 03.10.2023.

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The applicant Bank has filed Evidence Affidavit at Exhibit-4 of Mr. Ravindra Krishnaiah D. Chief Manager of the applicant Bank, and has produced on record the original loan transaction documents as Annexure A-1 to A-27 along with list of documents Exh.5 which corroborates the case of the applicant Bank.

(OA No.369/2022)

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[AMBADAS]

I have heard arguments of the learned Advocate for the applicant Bank.

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Since the defendants failed to contest the application, I find no reason to disbelieve the unrebutted evidence of the applicant Bank. Therefore, the applicant Bank is entitled for the reliefs as claimed.

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The applicant Bank has claimed charge over hypothecated properties of the borrowers.

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The applicant Bank has claimed future interest @15% p. a. from the date of filing i.e. 08.07.2022 of this application till realization of the claim amount. However, considering the facts of the case, I am of the opinion that if future interest is granted @ 9% per annum (simple) on outstanding amount, it would be just and reasonable rate of interest.

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ORDER

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(A) Original Application No. 369/2022 is allowed with

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costs.

(OA No.369/2022)

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[AMBADAS]

(B) The defendants shall pay jointly and severally to the applicant Bank a sum of Rs. 20,49,240/- (Rupees Twenty Lacs, Forty Nine Thousand, Two Hundred and Forty only), along with future interest @ 9% per annum (simple) from the date of filing of the O.A. i.e. 08.07.2022 till full payment/realization of the amount mentioned in this operative order.

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(C) The aforesaid adjudicated amount is secured by the hypothecation of stocks, receivables, book-debts and other movables assets vide documents at Annexure A-6, A-12 and A-17 in list of documents Exh. 5.

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(D) The applicant Bank is entitled to sell hypothecated stocks /articles/ goods etc., to recover its dues.

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(E) Issue Recovery Certificate accordingly.

(OA No.369/2022)

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[AMBADAS]

(F) The Registrar is directed to send the copy of the Judgment and Recovery Certificate to the applicant and defendants.

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(G) File be consigned to the record room.

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Sd/-

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Pronounced in open court. Place: Aurangabad Date:.24.03.2026

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(Dr. J. R. Chauhan) Presiding Officer Debts Recovery Tribunal, Aurangabad

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(OA No.369/2022)

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Page 9 of 9

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[AMBADAS]

Canara Bank v. Aditya Enterprises

Case brief

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Canara Bank v. Aditya Enterprises

Case brief

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