Allowed

Canara Bank v. M/S Teria Machinery Store and Others

DRT10 Feb 2026OA/562/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an Original Application filed by Canara Bank against corporate and individual respondents for recovery of Rs.45.81 lakhs. The bank claimed loans granted under Cash Credit and GECL-FITL facilities were outstanding. The Tribunal fixed interest at 8% p.a. and directed issuance of a Recovery Certificate.

What did the court decide?

Recovery Certificate issued for Rs.45,81,384.58 with simple interest @8% p.a. from the date of filing till realization.

Canara Bank versus M/S Teria Machinery Store and Others — Insurance | DRT (2026)

¶1

DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.562/2024

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 05.04.2024

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DATE OF DECISION: 10.02.2026

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Canara Bank, a body corporate and Nationalized Bank under the provisions of the Banking Companies (Acquisition and Transfer of Undertakings) Act of 1970 with its Head Office at JC Road, Bangalore and amongst other a Branch Office at Sri Muktsar Sahib (Punjab), through its General Attorney Holder and Senior Manager Sh. Rakesh Kumar s/o Sh. Jai Lal.

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……..Applicant

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Versus

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M/s Teria Machinery Store through its Proprietor Smt. Nirmala Rani, having its place of business at Near Railway Crossing, Sri Muktsar Sahib-152026

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Smt. Nirmala Rani W/o Sh. Satpal Teria, C/o M/s Rajan Trading Co., R/o Ram Bhagti Marg, Jalalabdad Railway Crossing, Sri Muktsar Sahib-152026

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Sh. Rajan Teria S/o Sh. Satpal Teria, C/o M/s Teria Machinery Store, R/o Ram Bhagti Marg, Jalalabad Railway Crossing, Sri Muktsar Sahib-152026

¶12

Sh. Anshu Teria S/o Sh. Satpal Teria, R/o H. No. 3039, Kheta Ram Street, Sri Muktsar Sahib-152026

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…….Defendants

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Advocates:

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Argued by Sh. Sumit Batra, Advocate for the applicant (through VC) Defendants already ex-parte vide order dated 14.11.2025

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FINAL ORDER

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Present Original Application was instituted by the applicant under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993, against the defendants for recovery of Rs.45,81,384.58 (Rupees Forty

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2 OA/562/2024 CANARA BANK VS. MESSERS TERIA MACHINERY STORE AND OTHERS

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Five Lacs Eighty One Thousand Three Hundred Eighty Four and Paise Fifty Eight Only). The Original Application has been filed through Sh. Rakesh Kumar, Senior Manager o f the applicant, who is competent to institute the Original Application vide Power of Attorney dated 19.01.2015, which is Annexure A1 to this OA.

¶20

The brief facts of the OA are that the defendant no.1 through its proprietor defendant no. 2 approached the applicant for the grant of Working Capital i.e. Cash Credit Limit of Rs.25.00 Lacs vide loan application dated 29.03.2017, which is Annexures A2 to this OA. Defendant nos. 3 and 4 stood as guarantors. Thereafter, in the year 2020 during COVID-19 situation, the defendant no. 1 through its proprietor approached the applicant for grant of GECL-FITL Loan of Rs.2,18,181.00.

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The applicant sanctioned Cash Credit Limit of Rs.25.00 Lacs vide Sanction letter dated 29.03.2017, which is Annexure A3 to this OA and the terms and conditions were duly accepted by the defendants. Later, in the year 2020 the applicant sanctioned GECL-FITL of Rs.2,18,181.00.

¶22

Defendant no. 1 through its proprietor hypothecated stock and book debts.

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Defendant nos. 3 and 4 mortgaged their immovable property i.e. Land and building measuring 384 Sq. yards situated at Hadbast no. 54, Near Railway Crossing, Jalalabad Road, Sri Muktsar Sahib, Punjab, through equitable mortgage of sale deed no. 2622 dated 08.09.2014 and 2624 dated 08.09.2014. Letter of mortgage dated 29.03.2017, which are Annexure A10 and A11 to this OA.

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However, as per the OA, the above mortgage property has already been auctioned by the applicant and sale proceeds stands adjusted in the account.

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3 OA/562/2024 CANARA BANK VS. MESSERS TERIA MACHINERY STORE AND OTHERS

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Documents executed: D.P Note, Letter of Undertaking, Cash Credit Agreement, Request Overdraft Facilities, Guarantee Agreements all dated 29.03.2017, which are Annexures A4 to A9 to this OA; Acknowledgments of Debts dated 31.10.2019 and 27.05.2022, which are Annexures A12 and A13 to this OA; Demand Notice dated 07.10.2021 u/s 13(2) of SARFAESI Act, which is Annexure A14 to this OA; Statement of Accounts with certificate, which are Annexures A15 and A16 to this OA.

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The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in loan accounts there was a debit of Rs.45,81,384.58 which is recoverable and the defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant requested to accept the application and to issue Recovery Certificate accordingly. 6. The defendants were served notices to appear before this Tribunal but no one appeared on behalf of defendants and they were proceeded ex-parte vide order dated 14.11.2025. 7. In support of the OA, affidavit of Sh. Rakesh Kumar, Senior Manager, Canara Bank has been filed. 8. Heard ex-parte arguments and perused record. 9. It was argued by learned counsel through video conferencing that in view of the documentary evidence brought on record which had gone unrebutted, the applicant had proved its case. From the perusal of all the Annexures A1 to A16 to this OA, it is proved that the defendants approached applicant for availing of the loan facilities which were granted to them and for that they had executed all the relevant documents in favour of the bank. The defendants failed to pay back the loans as per terms and conditions of the agreement between the parties. Subsequently, accounts of the defendants were classified as NPA. From the documentary evidence brought on record, it is proved

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4 OA/562/2024 CANARA BANK VS. MESSERS TERIA MACHINERY STORE AND OTHERS

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that applicant is entitled to recover a sum of Rs.45,81,384.58 (Rupees Forty Five Lacs Eighty One Thousand Three Hundred Eighty Four and Paise Fifty Eight Only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the accounts.

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In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @11.35% in CC Limit and 10.90% in FITL, with monthly rests from 01.03.2024 till the realization.

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The Tribunal is of the considered opinion that sometimes in appropriate cases the prerogative of mercy is the brightest jewel in the crown of the Judge. Keeping in view the facts and circumstances of the instant case including nature of the mortgaged property/hypothecated assets, undertaking of the defendants, quantum of loans and prevalent market rates of interest which have gone drastically downhill in yester years, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @8.00%p.a. in both the loan accounts from the date of filing of the OA till realization of the amount ordered vide this final order. It is ordered accordingly.

¶32

In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.45,81,384.58 (Rupees Forty Five Lacs Eighty One Thousand Three Hundred Eighty Four and Paise Fifty Eight Only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in both the loan account from the date of filing of OA till the date of realization of the amounts. Accordingly, the applicant shall be entitled to recover aforesaid amount from the sale of hypothecated assets of the defendants in execution proceedings if not sold earlier under the provisions of the SARFAESI Act, 2002. If the dues of the applicant still

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5 OA/562/2024 CANARA BANK VS. MESSERS TERIA MACHINERY STORE AND OTHERS

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remain unsatisfied, it shall be entitled to recover the same by attachment and sale of personal assets of the defendants. The applicant is at liberty to enforce the claim through due process of law.

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12. Any other application pending stands disposed of.

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Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 24.02.2026.

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Copy of this order be given dasti to the applicant and be sent to defendants through registered/speed post and this order be also uploaded on the official website of this Tribunal and record be consigned.

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Pronounced by me in the open Tribunal.

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Dated: 10.02.2026.

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(MRIDULESH KUMAR SINGH)

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Presiding Officer, DRT-III, Chandigarh

Canara Bank v. M/S Teria Machinery Store and Others

Case brief

What is this about?

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Canara Bank v. M/S Teria Machinery Store and Others

Case brief

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What did the court decide?

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