Allowed

Canara Bank v. M/S S P Decoration through Prop. Suhas Shivram Desai

DRT20 Apr 2026OA/580/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed Canara Bank's application to recover ₹29.44 lakh including principal, interest, and costs from M/S S.P. Decoration, which failed to respond, directing payment of the adjudicated amount via Recovery Certificate.

What did the court decide?

Defendant directed to pay aggregate sum of ₹29,44,970.78/- with interest at 12% per annum; Recovery Certificate to be issued; right to proceed against hypothecated properties if redemption fails.

Canara Bank versus M/S S P Decoration through… — Contract and Commercial Disputes | DRT (2026)

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ORIGINAL APPLICATION NO.580 OF 2022

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DEBTS RECOVERY TRIBUNAL No.2, MUMBAI

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PRESIDING OFFICER: HARISH KUMAR KAUSHIK

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ORIGINAL APPLICATION NO.580 OF 2022

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Date of Institution: 11.06.2019 Date of Decision: 20.04.2026

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TOTAL CLAIM AMOUNT :

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₹ 29,44,970.78/-

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CANARA BANK,

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Mahim Branch, a Body Corporate constituted under The Banking Companies (Acquisition and Transfer of Undertakings) Act V of 1970, having its head office at 112, Jayachamarajendra Road, Bangalore-560 002 in the State of Karnataka and amongst various other branches having branch office at "Plot no 431 Senapati Bapat Marg, Drawn Co-op. Housing Society, Opp., Rly Stn, Mahim, Mumbai-400016 through its Manager, Mr. Binod Kumar

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… Applicant

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Versus

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M/S. S.P. DECORATION, Through its Proprietor Mr. Suhas Shivram Desai having its address at A1-224, 2^nd floor, Shah & Nahar Industrial Estate, S.J. Marg, Lower Parel, Mumbai-400 013.

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Also at

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103, Jayambe Industrial Estate,

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…Defendant

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Page 1 of 11

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ORIGINAL APPLICATION NO.580 OF 2022

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A-2, 1^st Floor, Pimplas, Bhiwandi.

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Also at

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3, D'Luna Apartment, L.J. Cross Road No. 1, Mahim-400 016. …Defendant

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APPEARANCES For the Applicant : Mr Mihir Karia i/b Ms Vaishali Bhilare- Advocate

For Defendants

: None

J U D G M E N T

(1) This is an application under Section 19(1) of the Recovery of the Debts due to Banks and Financial Institutions Act, 1993 renamed as Recovery of the Debt and Bankruptcy Act, 1993 (for short, ‘the 1993 Act’) to recover aggregate sum of ₹29,44,970.78/- (Rupees Twenty-Nine Lakhs Forty-Four Thousand Nine Hundred Seventy and paisa Seventy-Eight Only) under OCC/ODBD Facility bearing account no.0131261011714 wherein a sum of ₹20,24,666/- (Rupees Twenty Lakhs Twenty-Four Thousand Six Hundred Sixty-Six Only) plus unapplied interest of ₹7,45,844.90/- (Rupees Seven Lakhs Forty-Five Thousand Eight Hundred Forty-Four and paisa Ninety Only) with different rates of interest per annum compounded with monthly rest (from 01.07.2017 to 10.06.2019) and penal interest of 95,511.88/- (Rupees Ninety-Five₹

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Page 2 of 11

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ORIGINAL APPLICATION NO.580 OF 2022

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Thousand Five Hundred Eleven and paisa EightyEight Only) @ 2% per annum (from 01.07.2017 to 10.06.2019) plus a sum of ₹78,948.00/- (Rupees Seventy-Eight Thousand Nine Hundred FortyEight Only) towards costs, charges, which includes Insurance charges, late stock statement charges, godown inspection charges, CGTMSE fee etc. thereon from the date of presentation of the Original Application i.e. 11.06.2019 till payment/realization and to enforce the hypothecated securities.

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The details of the claim amount are as under:-

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Sr	Nature of Facility	O/s. amount
No
1	Open Cash Credit Facility bearing no.0131261011714 (being the book liability as on 30.06.2017)	20,24,666.00/- ₹
2	Unapplied interest @ different rates of Interest compounded at monthly rest from 01.07.2017 to 10.06.2019.	7,45,844.9/- ₹
3	Penal Interest @ 2% per annum simple from 01.07.2017 to 10.06.2019	95,511.88/- ₹
4	Other costs, charges which includes Insurance charges, late stock statement charges, godown inspection charges, CGTMSE fee etc.	78,948.00/- ₹
	Total Amount	29,44,970.78/- ₹

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(2) It is undisputed fact in the matter that the Defendant no.1 was duly served with the summons vide order-sheet dated 07.01.2025. Despite service, the defendant did not enter its appearance and therefore, it was set ex-parte on

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Page 3 of 11

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ORIGINAL APPLICATION NO.580 OF 2022

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26.02.2026.

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(3) Defendant no.1, through its proprietor Mr Suhas Shivram Desai is the principal borrower who approached the Applicant Bank and sought financial assistance by way of OCC/ODBD Facility. Pursuant to the loan application vide Application Form for loans to Micro and Small Enterprises (MSE’s) dated 19.11.2013 made by defendants, the Applicant sanctioned the loan vide Sanction Letter dated 27.11.2013 in sum of ₹20,00,000/- (Rupees Twenty Lakhs Only) and sub-limit of Book-debts for a sum of 2,00,000/-₹ (Rupees Two Lakhs Only) payable with interest at the rate of 11.45% per annum compounded monthly. Further, on the request made by the defendant, the Applicant further renewed the said loan vide Sanction Letter dated 20.02.2015 for a sum of 20,00,000/- (Rupees Twenty Lakhs Only)₹ and sub-limit of Book-debts for a sum of ₹5,00,000/- (Rupees Five Lakhs Only) payable with interest at the rate of 11.70% per annum compounded monthly (Base rate + 1.50%). Lastly, on 26.08.2016, a sum of ₹20,00,000/- (Rupees Twenty Lakhs Only) with a sub-limit of ₹2,00,000/- with interest @ 9.40 per annum (Linked to MCLR) compounded monthly. The said loan is covered under CGTMSE Scheme.

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The details of the Sanction amount are as under: -

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Page 4 of 11

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ORIGINAL APPLICATION NO.580 OF 2022

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Sr	D a t e of	Am o u n t	R O I	Se c u r i t	y
N o	Sa n c ti o n
1	27 .1 1 .2 01 3	₹20 ,0 0 ,0 00 / - (S u b- li m i t = 2, 00 , 00 ₹ 0/ - )	@ 11 .4 5 % p er a n n u m co m p o u n de d m o nt h l y	Hy po t h e St o ck s de bt s.	c a t i o n a n d	o f B oo k -
	T ot a l Am o u n t	₹ 20 , 0 0 , 0 0 0 / -	-	-
2	20 .0 2 .2 01 5	₹20 ,0 0 ,0 00 / - (S u b- li m i t = 5, 00 , 00 ₹ 0/ - )	@ 11 .7 0 % p er a n n u m co m p o u n de d m o nt h l y	Hy po t h e St o ck s de bt s.	c a t i o n a n d	o f B oo k -
	T ot a l Am o u n t	₹ 20 , 0 0 , 0 0 0 / -	-	-
3	26 .0 8 .2 01 6	₹20 ,0 0 ,0 00 / - (S u b- li m i t = 2, 00 , 00 ₹ 0/ - )	@ 9. 40 pe r a n n u m co m p o u n de d m o nt h l y (L i n k e d MC L R )	Hy po t h e St o ck s de bt s.	c a t i o n a n d	o f B oo k -
	T ot a l Am o u n t	₹ 20 , 0 0 , 0 0 0 / -	-	-

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(4) On the dates given below, defendant signed and executed the loan and security documents as set out in paragraph nos. 3 to 10 of the Original Application. Defendants hypothecated Primary security of Stocks and Book-debts to secure the loan.

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The details of the documents executed by the Defendant under Sanction Letter dated 27.11.2013 are as under: -

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(a) Application Form for loans to Micro and Small Enterprises (MSE’s) dated 19.11.2013;

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(b) Sanction Letter (Ref. No.CAN/MATW/SPD/2013/SPS) dated

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27.11.2023;

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(d) Cash Credit Agreement dated 30.11.2013;

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Page 5 of 11

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ORIGINAL APPLICATION NO.580 OF 2022

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(e) Request for overdraft facilities dated 30.11.2013;

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(f) Pronote dated 30.11.2013;

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(g) Letter of Undertaking re: Loans/Advances dated 30.11.2013;

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(h) Guarantee Covering Letter dated 30.11.2013;

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(i) Guarantee Agreement dated 30.11.2013.

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The details of the documents executed by the Defendant under Sanction Letter dated

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20.02.2015 are as under: -

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(a) Sanction Letter (Ref. No.CAN/MATW/SPD/2015/SPS) dated 20.02.2015;

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(b) Letter of Renewal dated 20.02.2015;

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The details of the documents executed by the Defendant under Sanction Letter dated 26.08.2016 are as under: -

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(a) Application form for loans to micro and small enterprises (MSEs) dated 26.08.2016;

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(b) Sanction Letter (Ref.

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No.MATW/SPD/2016/HCA) dated 26.08.2016;

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(d) Letter of Renewal dated 26.08.2016;

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Page 6 of 11

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ORIGINAL APPLICATION NO.580 OF 2022

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(e) Acknowledgement of debt and security dated 10.10.2016.

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(5) After availing the loan, defendants did not adhere to the financial discipline and committed default in payment of instalments and repayment of the loan and accordingly the accounts of the borrowers were declared as Non-Performing Assets (N.P.A.) on 30.06.2017 as per RBI Guidelines. Therefore, on 07.07.2017, the applicant, called upon defendants to liquidate the outstanding in the sum of 20,37,346/- plus interest from₹ 01.07.2017 and other charges. Thereafter, vide Advocates letter dated 02.08.2018, the Applicant called to pay a sum of ₹24,71,465.00/- (Rupees Twenty-Four Lakhs Seventy-One Thousand Four Hundred Sixty-Five Only) in OCC/BD Facility with further interest thereon from 01.07.2018 till payment and/or realization within 8 days from receipt of this notice. Despite notice, defendant nos. 1 and 2 failed and neglected to pay.

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(6) As on 11.06.2019, there was owing, due and payable by defendants to the applicant the aggregate sum of aggregate sum of ₹29,44,970.78/- (Rupees Twenty-Nine Lakhs Forty-Four Thousand Nine Hundred Seventy and paisa Seventy-Eight Only) under OCC/ODBD Facility bearing account no.0131261011714 wherein a sum of

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Page 7 of 11

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ORIGINAL APPLICATION NO.580 OF 2022

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₹20,24,666/- (Rupees Twenty Lakhs Twenty-Four Thousand Six Hundred Sixty-Six Only) plus unapplied interest of ₹7,45,844.90/- (Rupees Seven Lakhs Forty-Five Thousand Eight Hundred Forty-Four and paisa Ninety Only) with different rates of interest per annum compounded with monthly rest (from 01.07.2017 to 10.06.2019) and penal interest of 95,511.88/- (Rupees Ninety-Five₹ Thousand Five Hundred Eleven and paisa EightyEight Only) @ 2% per annum (from 01.07.2017 to 10.06.2019) plus a sum of ₹78,948.00/- (Rupees Seventy-Eight Thousand Nine Hundred FortyEight Only) towards costs, charges, which includes Insurance charges, late stock statement charges, godown inspection charges, CGTMSE fee etc. thereon. The applicant has maintained the loan ledger extract and the entries posted therein are made in the usual and ordinary course of the banking business.

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(7) Since, defendant failed and neglected to make the payment, the applicant was left with no other alternate but to file the Original Application which was presented on 11.06.2019.

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(8) The applicant has filed affidavit (exhibit-6) in lieu of examination in chief of Ms Jayanti Thangraj, Manager and Constituted Attorney and list of documents (exhibit-7) thereby adducing in evidence the documents at AW-1 to AW-22, which

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Page 8 of 11

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ORIGINAL APPLICATION NO.580 OF 2022

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are admitted in evidence, read, recorded and exhibited.

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(9) Accordingly, in the Original Application was filed for the recovery of aggregate sum of ₹29,44,970.78/- (Rupees Twenty-Nine Lakhs Forty-Four Thousand Nine Hundred Seventy and paisa Seventy-Eight Only) under OCC/ODBD Facility bearing account no.0131261011714 wherein a sum of ₹20,24,666/- (Rupees Twenty Lakhs Twenty-Four Thousand Six Hundred Sixty-Six Only) plus unapplied interest of ₹7,45,844.90/- (Rupees Seven Lakhs Forty-Five Thousand Eight Hundred Forty-Four and paisa Ninety Only) with different rates of interest per annum compounded with monthly rest (from 01.07.2017 to 10.06.2019) and penal interest of 95,511.88/- (Rupees Ninety-Five₹ Thousand Five Hundred Eleven and paisa EightyEight Only) @ 2% per annum (from 01.07.2017 to 10.06.2019) plus a sum of ₹78,948.00/- (Rupees Seventy-Eight Thousand Nine Hundred FortyEight Only) towards costs, charges, which includes Insurance charges, late stock statement charges, godown inspection charges, CGTMSE fee etc. thereon from the date of presentation of the Original Application i.e. 11.06.2019 till payment/realisation.

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(10) The Tribunal has scrutinised and examined the

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Page 9 of 11

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ORIGINAL APPLICATION NO.580 OF 2022

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allegations contained in the Original Application and analysed the evidence adduced by the applicant which has gone unchallenged, uncontroverted and unrebutted.

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(11) Upon careful scrutiny and the examination of the Original Application, analysing the evidence and giving due weightage to the documentary evidence adduced by the applicant, the Tribunal views that there is no reason to disbelieve the claim made by the applicant bank.

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(12) In view of the observations made hereinabove, Original Application filed by the applicant deserves to be allowed.

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(13) Hence, the following order:

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ORDER

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(A) The Original Application No.580 of 2022 is allowed with costs.

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(B) Defendant no.1 is ordered and directed to pay to the applicant, either jointly or severally, the aggregate sum of aggregate sum of ₹29,44,970.78/- (Rupees Twenty-Nine Lakhs Forty-Four Thousand Nine Hundred Seventy and paisa Seventy-Eight Only) under OCC/ODBD Facility bearing account no.0131261011714 payable with interest @ 12% per annum thereon from the date of presentation of the Original Application i.e. 11.06.2019 till payment/realization after adjusting the recoveries

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Page 10 of 11

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ORIGINAL APPLICATION NO.580 OF 2022

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made by the Applicant under SARFAESI Act, 2002 or any other amount paid by the borrowers after filing of this present O.A. No.580 of 2022.

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(C) The aforesaid adjudicated amount is secured by the valid and subsisting hypothecated properties, that is, Primary security of Stocks and Bookdebts.

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(D) Defendant no.1 is entitled to redeem the hypothecated properties as per law failing which the applicant has right to proceed to sell the hypothecated properties and recover dues as per law.

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(E) The Applicant is also hereby directed to submit the details of claim amount received from the Central Government since the facility is granted under CGTMSE Scheme.

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(F) Issue Recovery Certificate.

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(G) The learned Registrar is directed to send a copy of the judgment and recovery certificate to (i) the applicant, (ii) defendant and (iii) the Recovery Officer by post and email.

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Sd/-

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(Harish Kumar Kaushik)

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Presiding Officer, DRT-2, Mumbai

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Page 11 of 11

Canara Bank v. M/S S P Decoration through Prop. Suhas Shivram Desai

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/S S P Decoration through Prop. Suhas Shivram Desai

Case brief

What is this about?

What did the court decide?

What the court decided

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