Allowed

Canara Bank v. Sri Sainath Textiles

DRT2 Sept 2026OA/405/2025

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the Applicant Bank's original application for recovery of Rs. 2.22 Crores. The Tribunal rejected the Defendant's defenses regarding signatures on blank papers, lack of collateral, and limitation, finding the claim genuine and within time.

What did the court decide?

Defendant to pay total sum of Rs. 2,22,50,260.96 with interest; hypothecated property to be sold; recovery certificate issued.

Canara Bank versus Sri Sainath Textiles — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL-I AT HYDERABAD

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DATED THIS THE 2ND DAY OF SEPTEMBER, 2026

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PRESENTI SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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OA.No.4O5 ot 2O25

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Between:

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Canara Bank, Branch office at Main branch, B-4-4, Krishna colony, Station road, Warangal- 506 002. Represented by its Manager

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Applicant

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VERSUS

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M/s. Sri Sainath Textiles, A proprieta ry concern of Sri Nalla Keshavulu, represented by Its Proprietor, Sri Nalla Keshavulu, s/o Narayana, aged major, #plot no.48, survey no.t79lll, Textile park, Madikonda, Kazipet, Warangal - 506 142.

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And also at:

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Sri Nalla Keshavulu, S/o Narayana, aged major, Proprietor of M/s. Sri Sainath Textiles, R/o H.No. 101, Nellikuduru, Mahabubabad district, Telangana - 506 368.

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Defendant

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Sri B. Ravindra Reddy Sri V. Ravinder 2s.08.2026

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(oA. No.a0sl202s)

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Pronouncedon	02.09.2026
Uploaded inwebsiteon	02.09.2026

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ORDER

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The Applicant Bank filed the^present OA against Defendant for recovery of a total sum of Rs.2,22,5O,26O.96ps^(Rupees Two^Crores Twenty Two Lakhs Fifty Thousand Two Hundred Sixty and^paise Ninety Six only )i.e.,

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a) A sum of Rs.1,61,07 ,498.29ps under term loan with interest @ 10.35% p.a from 04.09.2025 till the date of realization ;

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b) A sum of Rs.6,16,977.07ps under GECL 1.0 loan account with interest @ 10.00o/o p.a from 04.09.2025 till the date of realization;

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c) A sum of Rs.24,48,259.61ps under GECL 1.0 Extn with interest @ 8.85o/o^p.a from 04.09.2025 tlll the date of realization ;

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d) A sum of Rs.30,77,525.99ps under OCC account with interest @ 8.85o/o^p.a from 04.09.2025 till the date of realization ; and in default for sale of hypothecated movables and mortgaged

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property as mentioned in the schedule to OA.

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A E 5 qp er the averments in the application, the Applicant Bank t,.

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sEates that the defendant No.1 which is a proprietorship firm

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2 6'p-iesenteO byiits proprietor availed term loan facility for a sum of Rs.92.50 lakhS, GECL-1.0 limit of Rs.B.50 lakhs, GECL-1.0 Extn limit )

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(OA.No.405/202s)

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of Rs.20.00 lakhs and OCC limit oF Rs.22.50 lakhs and agreed to repay along with interest. The defendant hypothecated the machinery as mentioned in schedule to OA and executed supplementary hypothecation and personal guarantee in favour of Applicant bank. The defendant mortgaged the schedule property and executed necessary documents in favour of applicant bank. It is submitted by the Applicant bank that the Defendant availed the said loan facilities and failed to keep up the repayment schedule, as such the account was classified as NPA on 31.10.2023. Inspite of demands made by Applicant the defendant has not regularized the account, so the Applicant bank issued demand notice dated 06.tL.2023, but the defendant did not come forward to repay the same. The total claim of Applicant against defendant is of Rs.2,2Z,SO,260.96ps (Rupees Two Crores Twenty Two Lakhs Fifty Thousand Two Hundred Sixty and paise Ninety Six only ) (term loan+ working capital + GECL-I.O and GECL 1.0 Extn and OCC loan accounts) with future interest @ 10.35olo p.a, @ 10.00%p.a and @8.85% p.a respectively from 04.09.2025 till the date of realization. Hence the OA.

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-.1>'-"- J[e-Q9fendant^t . filed written statement admitting that they availed s'1.^' various loan facilities from the Applicant bank. The contention of the il,. defendant is that at the time of sanction of loan, the applicant bank ' obtained signatures of defendant on various blank papers and they are misused by the applicant bank. The further contention of the

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(OA. No.405/202s)

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defendant is that even though there^{is no requirement of obtaining} collateral security, the applicant bank obtained^{equitable mortgage of} schedule property and that the claim of the applicant^{bank is barred} by limitation. Hence^prayed for dismissal^{of OA.}

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I have^perused the documents^{placedon record.}

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Heard the arguments.

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Mrs. V. Anusha, Branch Manager /^{AW.1 is examined on behalf of the} Applicant. Exhibits A.1 to A.37 are marked through AW.1,^Defendant No.2 examined himself as DW.1 but^no documents^{are exhibitedby} him.

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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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,4]: .,i:.

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r: 6.^.i Qn,,behalf^{of ih'6 applicant bank, Mrs.V. Anusha, Branch Manager who} ti is exam.ined.as AW.1 deposed clearly about the liability of^the ,65:pnd , :l also about the execution of^{various documents filed by}

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(OA.No.405/202s)

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the applicant bank. AW.1 is not cross examined by the defendant. So the evidence of AW.1 is not challenged by the defendants. So the evidence of AW.1 stood unrebutted by the defendants. Even though defendant no.2 examined himself as DW.1, his evidence is no way helpful to the defendant for establishing the contentions raised by the defendants.

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A perusal of the documents exhibited by the Applicant bank makes clear that all the relevant documents are executed by the defendant in the normal course of transaction. So the contention of the defendant that the applicant bank obtained their signatures on blank documents is not tenable. The contention of defendant that there is no necessity of obtaining collateral security by the applicant is also not tenable as no material is placed by the defendant for establishing that for various loan facilities availed by the defendant, collateral security is not required. The other contention of defendant is that the claim made by Applicant bank in OA is barred by limitation. But in view of the fact that defendant 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 --.:i;iffgiiriion^{that the defense taken by the defendant is not tenable.} :'+. ,: .. ,ii.;.-.: , |^.'. lHence the tii:plicant bank is entitled to claim the OA amount from : defendant.

(OA.No.40sl202s)

Point No.ii)

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

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The Defendant is liable to^pay to Applicant Bank a total sum of Rs.2,22,5O,260.96ps (Rupees Two Crores Twenty Two Lakhs Fifty Thousand Two Hundred Sixty and paise Ninety Six only )i.e.,

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a)A sum of Rs.1,61,07,498.29ps under term loan with interest @ 10.35olo p.a from 04.09.2025 till the date of realization ;

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b) A sum of Rs.6,16,977.07ps under GECL 1.0 loan account^with interest @ 10.00o/o p.a from 04.09.2025 till the date of realization;

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c) A sum of Rs.24,48,259.61ps under GECL 1,0 Extn with interest @ 8.85o/o^p.a from 04.09.2025 till^{the date} of^realization ;

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d)A sum of Rs.30,77,525.99ps under OCC account with interest @ 8.85o/o p.a from 04.09.2025 till the date of realization ;

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the hypothecated

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in the schedule to

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is also entitled to proceed against the person and 8r towards realization of the debt due.

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(oA. No.40sl202s)

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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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(Dictated 60 the P.A., transcribed by her, corrected, signed and pronounced by me in the open court on this the 2"' day of Sept, 2026)

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sdl_

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,.j,.

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(G. GOPTCHAND) PRESIDING OFFICER

Canara Bank v. Sri Sainath Textiles

Case brief

What is this about?

What did the court decide?

Canara Bank v. Sri Sainath Textiles

Case brief

What is this about?

What did the court decide?

What the court decided

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