Allowed

Canara Bank v. M/S. Laxmi Textiles

DRT7 Aug 2026OA/467/2025

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed an original application filed by Canara Bank for recovery of approximately Rs. 1,99,34,705.60 including interest from M/s. Laxmi Textiles and Smt. Bellam Laxmi. The court rejected defenses regarding blank papers, necessity of collateral security, and limitation.

What did the court decide?

Defendants directed to jointly and severally pay total recovered sum of Rs. 1,99,34,705.60 with future interest; Recovery certificate issued to Applicant Bank to proceed with realization.

Canara Bank versus M/S. Laxmi Textiles — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERYTRIBUNAL-I AT HYDERABAD

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DATED THIS THE 7TH DAY OF AUGUST, 2026

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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OA.No.467 ot 2O2S

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Between :

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Canara Bank, Hanumakonda branch, Plot No.A-2l1, Ground floor, Main road, Balasamudram Ekasila park, Hanumakonda, Telangana State.

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Represented by its Chief Manager

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Applicant

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VERSUS

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M/s. Laxmi Textiles, A proprietorship firm, Represented by its^proprietor Smt Bellam Laxmi,

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Plot no.291, Sy.No. 1791,Textile park, Madikonda, Kazipet,

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Warangal - 506 L42.

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Smt Bellam Laxmi, w/o Srinivas, aged about 44 years,

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occ: business, R/o H.No.3-AB/L2,

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saidapur, Ghanpur, Karimnagar- 5OS 472. Defendants

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Counsel for the Parties:

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For the Applicant '' Rama Rao
Defendants Ravinder
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Orders reserved on ' 07 31 7.2026
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Pronounced on .2026
Uploaded in website'on .08.2026

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(oA.No.457l202s)

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ORDER

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The Applicant^{Bank filed the present OA against Defendants for} recovery of a^{total sum ofRs'1,99,34,7O5'6Ops(RupeesOne} CroreNinetyNinelakhsThirtyFourThousandSevenHundred Five and Paise^{SixtY onlY) i'e',}

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a) A sum^{of Rs.19,17,342.81psfor OD limit with future interest@} 9.55o/o^p'a from^24.07 '2025^{till the date of realization;}

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b)AsumofRs.l,50,6l,352,2opsfortermloanWithfutureinterest @^{10.40olo p.a from 24.07.2025till the date of realization;}

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c) A sum of^{Rs.5,66,961'87psfor GECL limit with future interest} @^{7.9OYo p.a from 24'07} '2025^{till the date of realization;}

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d) A sum of^{Rs.23,89,0 48'76ps for GECL Extension limit with future} from 24.07.2025^{till the date of}

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interest @7.50o/o P.a realization;

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andindefaultforsaleofhypothecatedmovablesandmortgaged property as mentioned^{in the schedule to OA'}

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As^per the averments^{in the application' the ApplicantBank} states that^{the defendantNo.1 which is a proprietorship firm}

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,z:'.-representedbyitsproprietor/defendantno'2availedtermloanfacility .

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'^- ,':ir ' .

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.'r^{,':.,"1 . r} Surnof Rs.g2.50^{lakhs,oDfacilityofRs.7.50lakhs, andletterof}

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credit for aisum^{of Rs'28,03,000/- on O4'12'2OIB'GECLlimit of} . .^ ,i

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I Rs.8.50 lakhs,ind^{GECL1'O extension of Rs'20'00 lakhsand agreed} with interest.^{The defendantshypothecatedthe}

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(oA.No.467l202s)

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schedule to^{OA and executed} machinery as^mentionedin supplementary^{hypothecation and personalguarantee in favour of} Applicant bank.^{The defendants mortgagedthe schedule property} and executed^{necessarydocuments in favour of applicant bank' It is} SubmittedbytheApplicantbankthattheDefendantsavailedthesaid loan facilities^{and failed to keep up the repayment schedule, as such} the account^{was classified as NPA' Inspite of demands madeby} Applicant the^{defendants have not regularizedthe account' so the} Applicant bank^{issued demand noticedated 06'71'2023' but the} defendants did^{not comeforwardto repay the same' The total claim} of Applicant^{against defendants is of Rs'1,99,34,7O5'6Ops(Rupees} One Crore^{Ninety Nine lakhs Thirty Four ThousandSeven} Hundred Five^{and paise Sixty only) with interest@ 9'55Yo p'a'} @10.40oloP.a^{and @7'50% p,a respectivelyfrom24'07'2025 till the} date of realization.^{Hence the OA'}

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The Defendants^{filed writtenstatement admitting that theyavailed} various loan^{facilities from the Applicantbank' The contention of the} defendantsisthatatthetimeofsanctionofloan'theapplicantbank res of defendants^{on various blank papers and they}

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are niisused applicant bank.^{The further contentionof the} defendants^{is thatEventhough there is no requirement of obtaining} applicant^{bank obtained equitable mortgage of}

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(oA.No.467l202s)

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schedule^{propertyand that the claimof the applicant bank is barred} by limitation.^{Hence prayedfor dismissalof OA'}

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3, I have^{perusedthe documents placedon record'}

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Heard the arguments.

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Mr. L Nagaraju,^{Chief Manager / AW'1 is examinedon behalf of the} Applicant. Exhibits^{A.1 to A.36 are marked through AW'1' Defendant} No.2 examined herself^{as DW.1 but no documentsare exhibited by} her.

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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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Point No.i):

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On behalf^{of the applicant bank, Shri J' Nagaraju, Chief Manager who} .""r,41-eia as AW.1^{deposedclearly about the liability of the} r'.nl i{; also about the^{execution of various documentsfiled by}

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1s+"tieignc AW,1 is not^{crossexaminedby the defendants'}

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,,^{',tni,3'n{F3n'} So the f AW.1 is not^{challenged by the defendants'So the} evidence .1 stood unrebutted^{by the defendants'Even though}

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(oA.No.467l202s)

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defendant^{no.2 examined herself as DW.1, her evidenceis no way} helpful to^{the defendantsfor establishingthe contentionsraised by the} defendants.

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A perusal of^{the documents exhibitedby the Applicant bank} makes clear^{that all the relevant documents are executedby the} defendants^{in the normalcourseof transaction'So the contention of} the defendants^{that the applicant bank obtained their signatures on} blankdocumentsisnottenable.Thecontentionofdefendantsthat there is^{no necessity of obtaining collateralsecurity by the applicant} is also not^{tenableas no materialis placed by the defendants for} establishingthatforvariousloanfacilitiesavailedbythedefendants' collateralsecurityisnotrequired.Theothercontentionofdefendants is thatthe^{claim madeby Applicant bank in OA is barred by limitation'} But in view^{of the fact that defendants executedacknowledgement} letter by acknowledging^{their liabilityand as the said documents are} executed^{within3 years from the date of filing of oA, the claim of the} applicant^{bank is within time' Consideringall the circumstances'I am} of opinion^{that the defense taken by the defendantsis not tenable'} Hence the^{applicant bank is entitledto claim the OA amount from} defendants'

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r- ,:-.:^'-:'

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K^or:,,,1',1,, . 4'"""Uo.iiin;." , application^{is allowed with costs as} i.,a.^{grTthpd",t#1,the present original} ,]',f'. .r unoer: ;:^i! 'rl".l'\ """"" -r$.s"r/ ''"' ',:.:!SP

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(oA.No.467l202s)

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TheDefendantsarejointlyandseverallyliabletopaytoApplicantBank a total sum of^{Rs.L,99,34,7o5.60ps (Rupees One Crore Ninety} Nine lakhs Thirty^{Four Thousand Seven HundredFive and paise} Sixty only)^i.e.,

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a) A sum of^{Rs.19,17,342.81psfor OD limit with futureinterest@} 9.55o/o^p.a from^{24.07.2025till the date of realization;}

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b)A sum of^{Rs.1,50,61,352'20psfor term loan with futureinterest} @^{10.40olo p.a from 24.07.2025till the date of realization;}

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c)AsumofRs.5,66,961'BTpsforGECLlimitwithfutureinterest@ 7.90o/o^p.a from^{24.07.2025till the date of realization;}

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d) A sum of Rs.23,89,048.76ps^{for GECL Extension limit with} future interest @7.500/o^{p.a from 24'07'2025till the date of} realization;

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The applicant^{bank is entitled to proceedagainst the hypothecated} movablesandmortgagedpropertyasmentionedinthescheduleto OA towards^{realization of the debt due'}

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The APplicant^{bank is also entitledto proceed againstthe person and}

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]croDertiesofdefendantNo'2andpropertiesofdefendantno'ltowards

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K"reiun^tion^{of the debtdue.}

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:
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li * 11[ thfiJnepli$anr Bank is entifled to rhe costs of the OA.
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(oA.No.467l202s)

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L2. The Applicant shall file a cost memo within two weeks from the date of receipt of order.

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Issue Recovery certiflcate accordingly.

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L4. Communicate a copy of the order to the parties concerned.

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(Dictated to the P.A., transcribed by her, corrected, signed and pronounced by me in the open court on this the 7th day of Aug, 2026)

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sdl(G. GOPTCHAND) PRESIDING OFFICER TRUE^I Ut,ei" ,i:l,u

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Canara Bank v. M/S. Laxmi Textiles

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/S. Laxmi Textiles

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Parties & counsel

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