Allowed

Kotak Mahindra Bank Limited v. M/s. Gayathri Digital Shoppy

DRT16 Jul 2026OA/439/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the Applicant Bank's Original Application for recovery of dues totaling Rs. 48.88 lakhs with future interest and costs against three Defendants. The court held that while Defendants raised defences regarding blank documents and notice issuance, they failed to substantiate these pleas with evidence, rendering the resulting debt decree in favor of the bank.

What did the court decide?

Directed repayment of Rs. 48,88,562.90 with future interest at 10% p.a. simple, costs, and permission to proceed against mortgaged properties and Defendant personalties.

Kotak Mahindra Bank Limited versus M/s. Gayathri Digital Shoppy — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL.II^{AT HYDERABAD} DATED THIS THE 16T8 DAY OF JULY,²⁰²⁶

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PRESENT: SH. RAMESHWAR^{KOTHE,B.Com. L.LB. (Hons.), f4.A.} PRESIDING OFFICER

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Original Application No: 439 OF 2024

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Kotak Mahindra Bank Limited, Having its registered office at 27 BKC, C 27 G Block, Bandra Kurla Complex, Bandra^(E), Mumbai-400051 and a branch Office at Agri Finance Division, Jewel Pawani Tower, 3rd Floor, 6-3-1709 / L/P /302, Raj Bhavan Road, Hyderabad- 500082, Somajiguda, Represented through its Authorized Signatory Versus

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.....Applicant

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M/s. Gayathri Digital ShoPPy Rep. by Sri V. Madhava Reddy D. No. 15-627, 628, Cellar & Ground Floors. Raju Road, Ananthapu r - PIN-515001, Andhra Pradesh.

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Sri V. Madhava Reddy S/o Sri _V. Chenna^Reddy Aged: 50; R/o: D. No. 6-2-494-6-1, Ramnaqar, Ananthapur^{- PIN-515001,} Andhra Pradesh.

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Smt U. Sunitha Wo^{Sri V. Madha Reddy} Aged:45; R/o: D. No. 6-2-494-6-1, Ramnagar, Ananthapur^- PIN-515001, Andhra Pradesh ,/ ,/X^{tvn^.,r?.$} ... Defenda nts (-J/ 'x\s

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OA No.43912024

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Counsel for the Applicant Counsel for Defendants

: Ms.D. Bala

: Mr. V. Ravinder

:: ORDER::

The Applicant Bank filed the present OA for the recovery of a sum of Rs. 48,88,562.90 ps as on 08.08.2024 from the Defendants^jointly and severally with future interest @ 10.950/o p.a. for term loan account and @ 12.35o/o p.a. for OD loan Account with monthly rests from 09.08.20?4 till the date of realisation along with costs, and in default, sale of OA mortgaged properties.

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The averments of the Applicant Bank, as stated in the OA, in brief, are that the 1st defendant being the proprietary concern along with 2nd and 3rd defendant being the guarantor availed credit facility of Rs. 45 Lakhs in June 2018 and secured the loan via execution of deed of hypothecation and sale deed dated 20.70.2024 in favour of the Applicant Bank. However, the defendants defaulted in repayment due to which account was classified as NPA on 30.07.2024 and on account of continued default applicant bank issued a loan recall notice dated 09.08.2024. Still defendants failed to regularise the account as such, the applicant is constrained to approach this tribunal for recovery of its dues.

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Defendant No. 2 filed written statement which has been adopted the 1't and 3d defendants. At the outset, they denied all allegations as not specifically admitted and challenged the authority of the bank official who instituted the proceedings, contending that no authorization letter had been furnished. He alleged that the bank had obtained the defendants' signatures on blank papers and documents at the time of sanctioning the loan, representing the same as a procedural requirement, and subsequently misused those signed blank documents /Vw*1,, ,y / / /l -.--.1 Llz^{'-r\N '}

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oA No.439/2024

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to create and forge^papers in its favour. The^Defendant admitted^that Defendant No. t had availed an Overdraft Loan and a Term^Loan of¹⁴⁵ lakhs each from the applicant bank, but asserted that the borrowers^had been making regular repayments without default and that the^bankhad wrongly initiated recovery^proceedings desplte such^{payments. He} disputed the bank's claimed amount of t48,88,562.90^{as on 08.08.2024,} describing it as imaginary and unsupported by^{proper evidence.} Defendant No. 2 specifically denied execution of several loan^related documents, includinq^guarantee deeds, master facility^agreements, hypothecation deeds, memoranda of entry, demand^{promissorynotes} and take delivery letters, alleging that any such documents^{relied upon} by the bank were the result of misuse of blank signed^papers'While admitting execution of sanction letters relating to^renewal of the^loan facilities dated 07.10.2019 and 23.03.2023, the Defendant^denied execution of the Take Delivery Letter to Demand^{Promissory Note dated} 04.11.2019. He challenged classification of the loan account^{as a NPA on} 30.07.2024, alleging that the bank acted contrary to^{applicableRBI} guidelines despite receiving regular payments from the borrowers. The Defendant further alleged suppression of material facts by the^bank, contending that the statement of account filed with the^Original Application was incomplete and selectively^produced to^{conceal payments} made by the borrowers. Another significant defence^{raised was} that^the alleged loan recall notice dated 09.08.2024^{was never served upon the} defendants. According to Defendant No. 2, the^postal tracking^reports indicated that the notices were returned undelivered,^{demonstrating} non-compliance with mandatory procedural requirements^{prior to} initiation of recovery^proceedings under the^Recovery of^Debtsand Bankruptcy Act, 1993. Hence, Defendan!.Brayed for^{dismissalof the OA} (ry'{1'* in its entirety.

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OA No.43912024

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In order to prove its case, Applicant Bank examined by Mr. Ramesh Kumar, Deputy Vice President Legal as AW-1 and marked 16 documents through them as Exhibits A-1 to A-16.

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Defendants right of adducing evidence was forfeited vide docket order dated t7,02.2026, after affording sufficient opportunities.

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Learned Counsel for the Applicant Bank reported no oral arguments. Heard Learned Counsel for the Defendants. Perused the written arguments filed by the applicant bank and also perused the material brought on record.

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Learned Counsel for the applicant during the course of arguments reiterated the contents of the application and placed reliance upon Exs.A1 to Exs.A-16 marked through applicant evidence (AW-1) as proof of claim of the bank and submitted that the applicant bank is entitled for recovery oF the outstanding amount together with future interest and costs and invoking the mortgage deed. Learned counsel further contended that this change was deliberately suppressed from the financier, amounting to deceitful conduct and lack of bona fides. To substantiate this contention reliance placed upon the decisions in 5.p. Chengalvaraya Naidu v. lagannath and A.V.^papayya Sastry v. Government of Andhra Pradesh, wherein the Supreme Court held that fraud vitiates all judicial proceedings. Reliance has also been placed on K.D. Sharma v. Steel Authority of India Ltd. and Dalip Singh v. State of Uttar Pradesh for the proposition that a litigant must come with clean hands and that suppression of material facts disentifles a party from equitable relief. The Applicant further submits that the defences advanced in the written statement-such as the allegations of execution of blank documents, denial of liability and plea of limitation-are vague, unsupported and bereft of evidentiary backing. Reliance is placed on ',1W'-..1 Ui,/.'\$t"'

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oA No.43912024

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union of India v. Ibrahim llddin^{fot the proposition that pleadlngs} unsupported by evidence^{carry no evidentiary value and on Andhra Bank} v. P. Venkata Rao for the^view that^{mere allegations regardingexecution} of blank documents, without^{supporting proof,do not constitute a valid} defence. The Bank submits^{that the defendantshave adducedno} evidence to substantiate their assertions and that^{theirdefencesought to} be rejected.

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The polnt that arises for consideration^is:-

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Whether the Applicant Bank is entitled^{for the OA claim} against the Defendants and^{OA moftgaged propefties?}

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It is observed that the^{Defendants, except for makingbald} statements in the written^{statementthat they did not availthe said loan,} signed on blank and^printed documents,^{that no charge wascreated} against the OA Schedule Property,^{that the NPA classificationwas} wrongful, and that there was^{non-issuanceof noticesetc., they failed to} substantiate their^pleas either by^{markingany relevantevidenceor by} confronting the witness of the^{ApplicantBank by way of cross-} examination to disprove the^veracity of^{ExhibitsA-1 to A-16 It is settled} law that mere statements^{without sufficient evidence are of no avail, On} the other hand, the Applicant^{produceddocumentsand markedthem} through AW-1 as^proof of its^{claim'Under such circumstances,the} evidence affidavit of AW-1, coupled^{withthe recitals in ExhibitsA-1 to A-} 16, remains unchallenged^{and un-rebutted.Hence,I hold that Defendant} Nos. 1 to 3 are^jointly and^{severally liable to pay to the ApplicantBank} the claim made in the^{OA with future interest and costs.}

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In the result, the^present original 4pplicatlon^{No.439l2024is} alowed as under: - /M-^ +U L-12 {g^s '

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OA No.439/?024

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(i) The Defendant Nos. 1 to 3 are jointly and severally liable to pay to the Applicant Bank a sum of Rs. 48,88,562.90 ps with future interest rate of 10o/o per annum simple from the date of application till the date of realization;

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( ii) the OA claim is secured by way of mortgage of properties, as described under Column No.3A of the OA and applicant bank is entitled to proceed against the same for realisation of dues;

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