Allowed

Canara Bank v. M/S Arth Construction

DRT24 Feb 2026OA/448/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the Bank’s application for recovery of an overdraft loan of approximately Rs. 32.76 lakhs secured by a mortgaged property. The Court rejected the guarantor’s defense of blank signature and granted future interest at 9% p.a., directing the sale of mortgaged assets if dues remain unpaid.

What did the court decide?

Respondents to pay Rs. 32,75,726/ along with future interest at 9% p.a.; property in Annexure A-7 to A-9 secured; Recovery Certificate issued.

Canara Bank versus M/S Arth Construction — Contract and Commercial Disputes | DRT (2026)

¶1

Presented on: 14.09.2022 Registered on: 01.11.2022 Decided on: 24.02.2026 Duration: Y M D 03 05 10

¶2

IN THE DEBTS RECOVERY TRIBUNAL AT AURANGABAD (Before Dr. J. R. Chauhan Presiding Officer) ORIGINAL APPLICATION No. 448/2022

¶3

TOTAL CLAIM AMOUNT – Rs. 32,75,726/-

¶4

CANARA BANK,

¶5

A Body Corporate constituted under the Banking

¶6

companies (Acquisition & Transfer of Undertakings)

¶7

Act, 1970, having its Head Office at 112 J.C. Road,

¶8

Bangalore Karnataka State and one of its Branch At

¶9

A.P.I. Corner, Cidco, Aurangabad-03, through its

¶10

Authorized Manager Bhalchandra M. Jawale. … Applicant

¶11

Versus

¶12

1. M/s. Arth Construction, Through its Proprietor Ankit Manoj Singh, Shop No. 1 and 2, Cosmo Plaza, Opp. Baba Petrol Pump, Aurangabad 431001.

¶13

2. Ankit Manoj Singh, Proprietor of M/s. Arth Constructions Age: 33 years, Occ.: Business,

¶14

[ N. Jahagirdar ] (OA No.448/2022) Page 1 of 10

¶15

R/o.: Bungalow No. 21, Satara Parisar, Kasliwar Marvel West, Near MIT College, Aurangabad 431001.

¶16

3. Mrs. Raganikumari Manjeet Pandey, Age: 30 years, Occ.: Business, R/o.: Plot No. 50, Dhanlaxmi Apartment, Nandavan Colony, Aurangabad 431001.

¶17

…Defendants

¶18

APPEARANCES

¶19

For the Applicant Mr. Sameer J. Pande, Advocate For Defendant Nos.1 and 2 Ex-parte For Defendant No.3 Mr. Tushar Daware, Advocate along with Mr. P.S. Gaikwad, Advocate

¶20

JUDGMENT

¶21

(Delivered on 24.02.2026)

¶22

The Applicant Bank has filed the present application for the recovery of a sum of Rs. 32,75,726/- (Rupees Thirty Two Lacs, Seventy Five Thousand, Seven Hundred and Twenty Six only), along with future interest from the date of filing of the Original Application, i.e., 14.09.2022, until the date of realization of the entire outstanding dues from the Defendants.

¶23

[ N. Jahagirdar ] (OA No.448/2022) Page 2 of 10

¶24

Brief facts of the application are as under:

¶25

The Applicant Bank states that the Defendant No. 1 & 2 approached and requested the Applicant Bank for Overdraft facility. Upon considering the request and financial needs of the Defendants, the Applicant Bank sanctioned Overdraft facility of Rs. 20,00,000/- vide sanction letter dated 03.12.2018 on certain terms and conditions. The agreed rate of interest for the aforesaid loan was @10.55% 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.

¶26

¶27

In order to secure the aforesaid loan facility, the Defendants executed various loan documents in favour of the Applicant Bank. These included sanction letter, hypothecation agreement, registered mortgage deed dated 29.11.2018 and letter of undertaking, demand promissory note, etc. Additionally defendant No. 3 stood as guarantor for defendant No. 1 & 2 executed deed of guarantee dated 03.12.2018 in favour of the

¶28

[ N. Jahagirdar ] (OA No.448/2022) Page 3 of 10

¶29

Applicant Bank.

¶30

The Applicant Bank further contends that, in order to secure the aforesaid loan facility, the Defendants executed mortgage deed dated 29.11.2018 in favor of the applicant bank. The mortgage

¶31

was created in respect of the following property:

¶32

All that piece and parcel of Shop No. 3, admeasuring 24.85 Sq. Meter on Ground Floor, Gat No. 140, Sakshi Nagari, At Post Tisgaon, Tal. And Dist. Aurangabad, which is bounded as under: East: 15 meter wide road, West: Parking, North: Shop No. 2, South: Shop No. 4.

¶33

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. 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

¶34

[ N. Jahagirdar ] (OA No.448/2022) Page 4 of 10

¶35

failed and neglected to pay the same. The loan account of the defendants became irregular and classified as NPA. Therefore, on 24.08.2022 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.

¶36

The defendant Nos.1 and 2 failed to appear in matter though they were served through paper publication. Hence, the defendants were proceeded ex-parte as per Order dated 25.04.2025.

¶37

The defendant No.3 filed Written Statement (Exhibit-13), alleging therein that the claim of the applicant for Rs.32,75,726/along with interest is not correct. The applicant bank has not filed any document to rebut the allegations. The answering defendant never approached the applicant bank with a request to grant financial assistance to defendant No.1. The documents relied upon by the applicant bank are not admissible and no equitable mortgage was created in favour of the bank. The

¶38

[ N. Jahagirdar ] (OA No.448/2022) Page 5 of 10

¶39

documents annexed by the applicant bank are blank when the bank had obtained signature of the answering defendant and it seems that the said documents were later on filled up by the bank as per their whims and fancies. The defendant No.3 denied all the documents of loan. It is further alleged that by misrepresenting the fact to the answering defendant, the applicant bank got mortgaged the suit property. The answering defendant has disputed the alleged demand notice dated 24.08.2022. The defendant No.3 denied other allegations of the application and further took legal pleas regarding jurisdiction, cause of action and limitation and dismissal of the application with heavy cost was prayed for.

¶40

¶41

The applicant Bank has filed Evidence Affidavit of evidence at Exhibit-4 of Mr. Bhalchandra Muktaram Jawale, Branch Manager of the applicant Bank, and has produced on record the original loan transaction documents as Annexure A-1 to A-22 along with list of documents Exh.5 which corroborates the case of the applicant Bank.

¶42

[ N. Jahagirdar ] (OA No.448/2022) Page 6 of 10

¶43

I have heard arguments of the learned Advocate for the applicant Bank and the learned counsel for defendant No.3 and gone through the entire material on record. My findings along with reasons are as under.

¶44

The defendant Nos.1 and 2 / borrowers have not contested the present application as they did not appear despite service and even they have failed to file any written statement. The defendant No.3 has denied the execution of documents as well as creation of equitable mortgage in favour of the applicant bank. The applicant bank has produced on record the sworn affidavit (Exhibit-4) of the Branch Manager of the applicant bank as well as original loan documents as Annexure-A-1 to Annexure-A-22 as per list of documents (Exhibit-5). Defendant No.3 has not denied his signature on the documents, but claimed that some of his signatures were obtained on blank documents. Merely by taking plea in the written statement does not prove the allegations in absence of reliable evidence as the defendant No.3 has not produced any documentary evidence or some other

¶45

[ N. Jahagirdar ] (OA No.448/2022) Page 7 of 10

¶46

evidence in support of the allegations of the written statement.

¶47

The defendant Nos.1 and 2 are borrowers and they have been proceeded exparte, meaning thereby that they never disputed the fact of raising of the loan and execution of the documents in favour of the applicant bank. Therefore, it is established by evidence of the applicant bank that the defendants raised a loan from the applicant bank as Over Draft (O.D.) facility of Rs.20,00,000/- (Rupees Twenty Lacs) vide sanction letter dated 03.12.2018 and in order to secure the loan, a registered Mortgage-Deed dated 29.11.2018 was executed in favour of the applicant bank, mortgaging the immovable property as referred in para 4 of this judgment. Since, this is a mortgage suit, the limitation period is 12 years from the date the amount accrued became due and hence, the application of the applicant bank is within limitation and this Tribunal has jurisdiction to deal with the application. Thus, the applicant bank has succeeded in proving its case against all the defendants.

¶48

The applicant Bank has claimed charge over immovable

¶49

[ N. Jahagirdar ] (OA No.448/2022) Page 8 of 10

¶50

property of the borrower which is mortgaged in favour of the applicant bank.

¶51

The applicant Bank has claimed future interest @15% p. a. from the date of filing i.e. 14.09.2022 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), it would be just and reasonable rate of interest.

¶52

ORDER

¶53

(A) Original Application No. 448/2022 is allowed with

¶54

costs.

¶55

(B) The defendants shall pay jointly and severally to the applicant Bank a sum of Rs. 32,75,726/- (Rupees Thirty Two Lacs, Seventy Five Thousand, Seven Hundred and Twenty Six only), along with future interest @ 9% per annum (simple) from the date of filing of the O.A. i.e. 14.09.2022 till full payment/realization of the amount

¶56

mentioned in this operative order.

¶57

[ N. Jahagirdar ] (OA No.448/2022) Page 9 of 10

¶58

(C) The aforesaid adjudicated amount is secured by the mortgage of the following vide document at Annexure A-7 to A-9 in list of documents Exh. 5.

¶59

¶60

(D) The applicant Bank is entitled to sell the mortgaged immovable property and hypothecated articles/goods etc., to recover its dues.

¶61

(E) Issue Recovery Certificate accordingly.

¶62

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

¶63

(G)

¶64

(G) File be consigned to the record room.

¶65

Pronounced in open court. Place: Aurangabad Date:.24.02.2026

¶66

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

¶67

[ N. Jahagirdar ] (OA No.448/2022) Page 10 of 10

¶68

[ N. Jahagirdar ] (OA No.448/2022) Page 11 of 10

Canara Bank v. M/S Arth Construction

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/S Arth Construction

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

Case details

Similar cases

Idbi Bank versus Mina W/o Satyaprem Mehta

Canara Bank versus Priyanka Dipak Sarode

State Bank of India versus Ms M.S. Industries

Bank of Baroda versus M/S Smk Global Security Solutions Pvt. Ltd.

State Bank of India versus Vishal Bhagwan Gaikwad

Ms Mavin Switchgears and Control Pvt. Ltd. versus State Bank of India