Allowed

State Bank of India v. Alok Kumar

DRT30 Jun 2026OA/419/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the applicant bank's petition for a recovery certificate of Rs.52,68,323/- against the first defendant borrower and the schedule property. The court rejected the claim against the builder, ruling that the builder had no liability as the sale deed was not prevented by the builder's fault.

What did the court decide?

Recovery Certificate drawn for Rs.52,68,323/ plus interest against the borrower and the schedule property; claim against the builder rejected.

State Bank of India versus Alok Kumar — Contract and Commercial Disputes | DRT (2026)

¶1

IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

¶2

Dated this 30^th Day of June, 2026

¶3

Present: Sri. T. RAJESH Presiding Officer

¶4

OA. No.419/2022

¶5

BETWEEN:

¶6

State Bank of India Having inter-alia RACPC Koramangala Branch, At No.12, 3^rd Floor, 7^th Main, 3^rd Block Koramangala, Bengaluru-560034 Rep. by its Chief Manager Mr. Jagadish A Badiger

¶7

… APPLICANT

¶8

AND:

¶9

Mr. Alok Kumar Aged 31 years S/o. Deepak Kumar Resident of: Flat No.301, Sri Lorven Classic, S R Layout, 4^th Cross, Wintunnel Road, Murugesh Palya, Bengaluru – 560017

¶10

M/s. Sobha Limited Regd. Off: Sarjapur-Marthahalli ORR, Devarabeesanahalli, Bellandur, Bengaluru-560103 ...DEFENDANTS

¶11

Counsel on record/appeared for:

¶12

Applicant : Sri. R N S P Achanta Defendant No.1 : Exparte Defendant No.2 : Chidambara G S

OA. No.419/2022

:FINAL ORDER:

The present Original Application in short (OA) has been filed under section 19 of Recovery of Debts and Bankruptcy Act 1993 for seeking issuance of Recovery Certificate against the defendants for Rs.52,68,323/- (Rupees Fifty Two Lakh Sixty Eight Thousand Three Hundred and Twenty Three only) claim to be due from the 1^st defendant in respect of housing loan of Rs.59,00,000/- availed for the purchase of 2 BHK Flat from the 2^nd defendant which is constructed in the schedule property, along with the proportionate share in common areas with one car parking space with UDS of 424.44 Sq.ft.

¶17

It is stated that, against total value of the Flat is Rs.74,70,523/- and the loan for Rs.59,00,000/- was sanctioned, as the applicant had agreed terms and condition therein and upon execution of necessary loan documents stipulating that, the credit sanction has to be release tot eh 2^nd defendant. It is agreed that, the 1^st defendant by virtue of the loan agreement had agreed to pay back the amount in EMI of Rs.46,711/- being calculated with interest @8.65% p.a. (Float rate). It is also stated by the applicant that, though the 1^st defendant that, though the 1^st defendant had paid EMI till 05.09.2021, the subsequent payments were defaulted.

¶18

OA. No.419/2022

¶19

¶20

It is also the case of the 1^st defendant that, the 1^st defendant had not approached the 2^nd defendant for getting the sale deed registered in his name and 2^nd defendant had agreed to refund the advance amount after deducting the cancellation charges. The applicant contends that the 2^nd defendant under indemnity by virtue of the Tripartite Agreement and since the amount remained unpaid, even after the account has been declared as a NPA on 03.02.2022 and this OA is filed seeking recovery of the amount due in the account.

¶21

Summons was taken out and as 1^st defendant failed to enter appearance, he was set exparte on 16.10.2024. The 2^nd defendant filed their written statement contending that, the 2^nd defendant is not having any loan account with the applicant bank. The case of the applicant as to the so claimed indemnity also denied by the defendant. It is also pointed out that, the agreement is only between the borrower namely the 1^st defendant and the applicant bank only as the 1^st defendant failed to come forward for execution and registration of sale deed in respect of the apartment the sale count not go through. It is also the case of the 2^nd defendant that, the 2^nd defendant also fulfilled the obligation under the Tripartite Agreement by completing the construction of the Apartment unit and handed over the possession of the apartment to the 1^st

OA. No.419/2022

defendant.

It is also pointed out that, only the 1^st defendant failed to come forward for execution and registration of sale deed, though the 2^nd defendant was all through reading for the execution of the same, there cannot be any liability to the 2^nd defendant. The 2^nd defendant also put forth a contention that, there is no privity of contract between the 2^nd defendant and the applicant bank.

¶26

The 2^nd defendant also pointed out that, wife of the 1^st defendant filed a Criminal Miscellaneous petition under the protection Women from domestic violation Act and the Chief Judicial Magistrate had passed a protection order. By virtue of the order of the employer of the 1^st defendant have to pay the EMI and the 2^nd defendant had been receiving the EMI along with written statement, the following documents produced:

¶27

i. Completion Certificate dated 18.01.2019

¶28

ii. Reply dated 09.02.2022

¶29

iii. Email dated 05.02.2022

¶30

iv. PCJM order dated 29.4.2022

¶31

The applicant had filed the Proof Affidavit reiterating the contentions taken in the OA and also produced Exhibits A1 to A44 and got the same marked in evidence. The 2^nd defendant, Authorised signatory had filed an affidavit in conformity with the

¶32

OA. No.419/2022

¶33

pleadings taken in the written statement.

¶34

Heard the counsel for the applicant bank as well as 2^nd

¶35

defendant and perused the available records.

¶36

The following issues arise for consideration in this matter:

¶37

i) Whether the applicant had succeeded in proving the OA

¶38

claim as against the defendants?

¶39

ii) Whether the applicant is entitled to get any order as against the 2^nd defendant?

¶40

iii) What order are to be passed?

¶41

Both these issues are gone into and decided together.

¶42

The case of the applicant that, the 1^st defendant availed the

¶43

housing loan as stated in the OA is proved by production of arrangement letter marked as Ex.A1 and Memorandum of loan agreement for housing loan, Ex.A2 the undertaken given by the 1^st defendant that, they will create a mortgage after getting the document executed is evidenced by Ex.A3 and A4. The agreement for sale got executed by the 1^st defendant from the 2^nd defendant is also produced as Ex.A7. the statement of account as produced by the applicant evidences that the amount as claimed in OA is disbursed in the account and also that there are consecutive

¶44

OA. No.419/2022

¶45

¶46

defendants in the account, resulting the amount as claimed int eh OA is outstanding in the amount. The 1^st defendant remained exparte. Even the contested defendant namely the 2^nd defendant

¶47

is not disputing the sanctioning of the housing loan for the purchase of apartment situated in the schedule A and the only contention put forth by the 2^nd defendant in that, they are not liable to pay an amount to the bank, as there is no agreement for the same. In order to ascertain as to whether any liability can be imposed upon the 2^nd defendant, a reference as to Ex.A6 is the Tripartite Agreement executed between the defendants and the applicant bank is necessary, the clause 2 of the said agreement stipulates that “ the borrower hereby expressly agrees that in the event of default on either repayment of the loan or any other default by the borrower, SBI shall be entitled to request the Builder

¶48

to cancel the booking ad return the amounts received by the Builder and the Borrower agrees and acknowledges that any such request by SBI and payment made by the Builder under this clause to SBI shall be binding upon the Borrower” . Hence going by this, it is clear that, it is obligatory on the part of the 2^nd defendant to refund the amount in case the applicant demands for cancellation

¶49

OA. No.419/2022

¶50

¶51

of booking. However, this fact has to be moved in the light of specific contention of the 2^nd defendant that, they were all through ready and willing to execute the deed. the 2^nd defendant does not

¶52

have any case as to want of payment of sale consideration as it is admitted the case of the 2^nd defendant that they are ready and willing to execute the sale deed in favour of the 1^st defendant. Ex.A6 produced from the applicant which stood admitted by the defendant clearly requires the 2^nd defendant to refund the amount, which itself can be treated as a requirement for cancellation of the agreement for sale. Having received the cancellation of agreement for sale. The Annexure A6(a), the 2^nd defendant has not taken any steps to get the sale agreement cancelled and refund the amount. It is also stated by the 2^nd defendant that, the possession of the flat is already given to the 1^st defendant which in turn makes the cancellation of the sale agreement impossible. Be that, situation the light of the fact proceeds against the apartment wherein the entire sale consideration is paid by the 1^st defendant is intact. However, taking view of the fact that, the possession of the completed flat is already handed over to the 1^st defendant, the 2^nd defendant cannot be put to any liability in

¶53

OA. No.419/2022

¶54

¶55

respect of the transaction as by passage of time, the cancellation of agreement for sale is made impossible, as admittedly the completion certificate is obtained in the year 18.01.2019 and the

¶56

1^st defendant was put in possession.

¶57

The documents produced by the applicant are well admissible in evidence and are sufficient to prove the case of the applicant as to the sanctioning of the housing loan and disbursement of the same and also the defaults committed in the account. The claim of the applicant is well within the limitation and there is no capitalization of penal interest.

¶58

In view of the discussion as held above, this Tribunal is of the view that, the claim as put forth in the OA is to be allowed and same is to be permitted by proceeding against defendant No.1 and schedule property.

¶59

Taking view of the fact that, the 1^st defendant committed default in getting the sale deed executed and created mortgage, the claim of the applicant bank as sought for is allowed.

¶60

In the result, OA.No.419/2022 stands allowed,

¶61

i) The applicant is allowed to recovery an aggregate sum

¶62

of Rs.52,68,323/- (Rupees Fifty Two Lakh Sixty Eight Thousand

¶63

OA. No.419/2022

¶64

¶65

Three Hundred and Twenty Three only) with further interest of 7.05% p.a.(simple) from the date of filing OA till the realization

¶66

from the defendant No.1, after giving credit to all the amounts recovered and received during the pendency of the OA and allowed the same to be recovered by proceeding against defendant No.1 personally and also by proceeding against the schedule property. The schedule property to the OA be the schedule property to the Recovery Certificate. The claim against the defendant No.2 stands rejected.

¶67

ii) If the sale proceeds are not found sufficient to cover the amount due and payable to the applicant bank, the defendant No.1 personally and his other assets are liable for all such amounts due under the loan account.

¶68

iii) The applicant bank is allowed cost of the proceeding

¶69

which applicant to file cost memo within 7 days from the date of receipt of the order.

¶70

iv) The Recovery Certificate to be drawn in terms of this

¶71

order and transferred to Recovery for execution.

¶72

OA. No.419/2022

¶73

¶74

v) Interim Application pending, if any, stands disposed of

¶75

with this Final Order.

¶76

14. Communicate a copy of the order to the parties concerned

¶77

in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

¶78

[Dictated to the Stenographer (PR), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 30^th Day of June 2026].

¶79

Sd/(T. RAJESH) PRESIDING OFFICER

¶80

ANNEXURES

¶81

WITNESSES EXAMINED FOR THE APPLICANT BANK:

¶82

AW-1: Sri. Jayalakshmi M, Chief Manager of the applicant bank.

¶83

Exhibits on the part of the Applicant:

¶84

Sl. No.	Description of Documents	Exhibit Number
	Copy of arrangement letter dated 07.07.2017 subject to certain terms and conditions is
1	issued by applicant’s RACPC- Koramangala,	A1
	Bangalore and the same is acknowledged by
	defendant No.1, with application etc.,
2	Copy of memorandum of loan agreement dated 10.07.2017 for housing loan	A2

¶85

OA. No.419/2022

¶86

¶87

	Copy of agreement to mortgage dated
3	10.07.2017 executed by defendant No.1 over proposed purchase of flat described as schedule property form defendant No.2	A3
4	Copy of deed of undertaking dated 10.07.2017	A4
5	Copy of agreement executed by defendant No2 in favour of defendant No.1 dated 02.06.2017	A5
6	Copy of Tripartite Agreement dated 13.07.2017	A6
7	Copy of statements of account duly certified under the Bankers’ Book Evidence Act	A7

¶88

Sd/-

¶89

(T. RAJESH) PRESIDING OFFICER

State Bank of India v. Alok Kumar

Case brief

What is this about?

What did the court decide?

State Bank of India v. Alok Kumar

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

Bank of Baroda versus M/s Anugya Enterprises

Bank of Baroda (Vijaya Bank) versus M/s Maa Sharde Agritech

Bank of Baroda versus M/s Balajee Coal Depot

Manoj Kumar Sharma versus Punjab National Bank

Sri Ram Bhagat Sharma versus Icici Bank Limited

Icici Bank Limited versus M/S Niraj Marble and Tiles and Ors.