Allowed

Canara Bank v. Rayapati Sai Ram

DRT22 Jun 2026OA/886/2025

Case brief

AI extract

What is this about?

The Tribunal allowed the bank's application for recovery of dues under Section 19 of the RD&B Act. Relying on unchallenged documentary evidence and the absence of cross-examination, it held that allegations of partial disbursement and blank signatures were insufficient to discharge the defendants' liability. The bank was granted decree for the sum with interest and the right to enforce the mortgag

What did the court decide?

Directing payment of the claimed sum with future interest at 10.70% p.a. from the date of application, costs, and authorizing the bank to proceed against mortgaged properties and personal estates for

Canara Bank versus Rayapati Sai Ram — Contract and Commercial Disputes | DRT (2026)

¶1

.,ORIGINAL"

¶2

IN THE DEBTS RECOVERY TRIBUNAL-II^{AT HYDERABAD}

¶3

DATED THIS THE 22ND DAY OF JUNE,²⁰²⁶

¶4

PRESENT: SH. RAMESHWAR^{KOTHE, B.COM, L.LB' (HONS.), M.A.} PRESIDING OFFICER

¶5

Original Application No: 886^{OF 2025}

¶6

Canara Bank

¶7

Dharmavaram Branch, 2-637-40, First Floor, Hotel Manju Complex, Dharmavaram H.O., Dharmavaram, Anantapur, Andhra Pradesh - 515671. Rep. by its Chief Manager .....Applicant

¶8

Versus

¶9

Rayapati Sai Ram S/o^{R ThimmaPPa} D No 6/50 Chandracherta^Village H/o Dadulooru Village^{KanaganapalliMandal} Anantapur, Andhra^Pradesh -⁵¹⁵⁶⁴¹

¶10

Rayapati Ramakrishna^{S/o late R. Subbarayudu} R/o D No 22/24 Sai^{Nagar, Dharmavaram} Anantapur, Andhra^Pradesh -⁵¹⁵⁸⁷⁰ ... Defendants

¶11

\tY

¶12

Counsel for the^{Applicant Banks : Mr. P. Sai Chandra Sekhar} Counsel for Defendant No.1 : Mr' Golla Seshadri Counsel for Defendants No.2 : Ex-parte

¶13

:: ORDER::

¶14

The Applicant Banks^{1 to 4 filed the presentOA u/s 19 of Recovery of} ts and Bankruprfy^{Act, 1993 for recoveryof a total sum of B} co<ectoJ f'Ih++ii#?ilrn u'," Defendants 1 & 2^jointlv and^{severallvwith} aS0e( trSfrfuture^{interest @ 11.90o/op.a. from 18.06.2025 till the date of realization} with costs' andⁱⁿ default^{for sale of oA schedute} orooeieful# Arr:l:ts

¶15

2of6

¶16

OA No.886/2025

¶17

The averments of the applicant bank, as stated^{in the OA, in brief,} are that Defendant No.1, Rayapati^{Sairam, approached the ApplicantBank} in 2Ol7 for a horticulture loan for agricultural^{purposesand was sanctioned} a sum of Rs.20,00,000/- on 04.09.2017, at a floating^{interest rate of} LO.70o/o^per annum. Subsequently, in^{2O22, Defendant No.1 also availed a} Kisan Credit Card (KCC) loan of Rs.2,00,000/- at an^{interestrate of} 11,.2Oo/o per annum. Defendant No.2 stood as^{guarantor for the said loans,} thereby undertaking^joint and several liability for^{repayment. In} consideration of the credit facilities, the^{Defendants executednecessary} loan and security documents in favour of the^Bank and^{agreed to abide by} all terms and conditions, including repayment of the loan^amountswith applicable interest,^penal interest in the event of default, and^{revislon of} interest rates at the Bank's discretion. To secure repayment of the loan amounts, Defendant No.1 created an equitable mortgage by deposit of title deeds in respect of immovable^property, formalized through a mortgage deed dated 25.09.2017. By virtue of such mortgage, the Defendants incurred both contractual and statutory liability under the Transfer of Property Act, 1882, thereby making them personally liable to repay the outstanding dues and enabling the Bank to enforce the mortgage as well as seek a personal decree against them. Despite availing the loan facilities and receiving repeated demands from the Bank, the Defendants failed to adhere to the repayment schedule and committed persistent defaults, thereby breaching the terms of the loan agreements. Owing to continuous non-payment, the loan accounts were classified as NPA in accordance with the norms prescribed by the Reserve Bank of India. The Applicant Bank issued a legal demand notice dated 30.05.2025, recalling the entire outstanding liability; however, the Defendants failed to comply therewith. Consequently, the Bank was constrained to initiate the present proceedings for recovery. Mr**

¶18

3 of 6

¶19

OA No.886/2025

¶20

The 2nd Defendant filed written statement.^{The averments, thereof} briefly, are that he approached the^Bank for a^{horticulture loan, a sum of} Rs.20,00,000/- was sanctioned in September^{2Ot7 along with a separate} Kisan Credit Card^(KCC) loan of Rs.2,00,000/-.^{But, Defendant contends} that the Bank failed to disburse the^{entiresanctionedamounts in a timely} and lump sum manner, releasing only^{partial funds, whichadversely} affected his ability to carry on horticulture^{operations and resultedin} substantial losses. The Defendant further^{alleges that the Bankofficials} obtained his signatures, as well as^{those of Defendant No.2 on blank} documents without^proper disclosure,^{and thereaftercompleted the} documentation at their own^{instance, withouthis knowledge or consent.He} further submits that, despite repeated^{requests, the Bank did not complete} or hand over the^proper documentation^{in time. whileadmittingthathe} created a mortgage over^{his property as security (registeredin 2018), he} maintains that he repaid instalments only^{to the extent of the amounts} actually disbursed, and that^{he has not been furnished with authenticated} statements of account to verify the^{allegeddues. The Defendantdisputes} the Bank's claim of default, asserting^{that any delay in repaymentwas} directly attributable to the^{Bank'sfailure to releasethe sanctioned funds in} a timely manner. He also^{challengesthe levy of alleged exorbitantinterest,} contending that the same^{is contraryto the norms prescribedby the} Reserve Bank of India,^{and further assertsthat the account was wrongly} classified-as a NPA-without^{placingthe statementsof account before him} despite repeated^{requests. The Defendant denies having received the legal} demand notice dated 30.05.2025^{and disputes the Bank's claim of an} outstanding amount of^{Rs.39,38,305.86/-, which he allegesis inflated and} not supported by^{proper and reconciledaccounts, and furthersubmitsthat} payments made by him haVe not been^{duly reflectedin the Bank's records.}

Oyu,o

4of6

OA No.885/2025

Accordingly, on these grounds, defendant^prays for the^present Application be dismissed with exemplary costs.

¶25

Summons served on 2nd defendant but no representation. Accordingly 2nd defendant was set ex parte on 09.01.2026 as called absent and no representation.

¶26

In order to prove its case, Applicant Bank examined B. Arun Kumar, Manager as AW-1 and marked 10 documents through them as Exhibits A-1 to A-10.

¶27

In order to substantiate his defence, the 1't Defendant Rayapati Sai Ram examined himself as DW-1 and marked no documents.

¶28

Heard both Learned Counsel appearing for the Applicant Bank and 1't Defendant. Perused the material brought on record.

¶29

B. According to learned counsel for the Applicant Bank, after availing the credit facilities, the defendants committed default in repayment as per agreed terms, despite repeated requests and demands. The claim of the applicant is amply^.proved by.the documents.,exhibited,as -Exs.A. 1 to-A.10 through AW.1 and the recitals therein. The defendant could not establish anything contrary to the evidence of the applicant bank. Hence the OA deserves to be allowed.

¶30

Per contra, the Learned Counsel for the Defendants submits that the Applicant Bank disbursed the sanctioned loan only in part and not in one lump sum, which disrupted horticulture operations and caused losses, and that Bank officials obtained signatures on blank papers and later filled in the documents without consent. It is further contended that the Bank failed to furnish proper documentation and authenticated statements of account

ffiit"

s of6

oA No.886/2025

despite repeated .requests, did^{not reflect all repaymentsmade,and} wrongly classified the account as^{NPAwhile levying excessive interestand} charges contrary to^{RBI norms. The Defendantalso denies receipt of the} demand notice dated 30.05.2025,^{disputes the claimedoutstanding sum of} Rs.39,38,305.86^ps, and^{seeksdismissal of the application with exemplary} costs.

¶35

The^point that arises^{for consideration is:-}

¶36

Whether the Appticant^{Banks are entitled for the OA claim} against the Defenddnts^{1 & 2 and O.A' scheduleproperties?}

¶37

According to^{the Applicant Bank, after the horticulture loan was} sanctioned, the^{Defendants neglectedin repaymentand also failed to} regularize the account^{despite ample opportunity being afforded to them.} In view of the continued^{default, a demand notice dated 30.05.2025was} issued which was^{neither complied with nor respondedto. The present o.A'} has therefore been^{filed,and the Bank submitsthat its claim is fully proved} by the evidence^{affidavitof AW-1 read with the recitals contained in} Exhibits A-1 to^{A-10 marked through him. on this basis, the ApplicantBank} contends that^{the o.A. is fully substantiated and deservesto be allowed'}

¶38

t2:Except..for'making..ba]dstatemerrtthatloanwas-lotdisbursedin lump sum, incorrect^{claim amount, not receiving the demandnotice' wrong} classificationofaccountaSNPA,signaturebeingobtainedonblankforms etc., the contesting^{defendantneither placedrelevant material on recordin} order to substantiate^{his pleas by nor did he chooseto cross-examine the} applicantbank,switnesstodisprovetheveracityofthedocumentsfiledby the applicant bank.^{On the otherhand, the Applicant Bankmarked} documentsthroughitswitnesstosubstantiateitsclaim.Undersuch circumstances,EvidenceAffidavitofAW-lcoupledwiththerecitalsinthe documents viz.,^{Exs.A.1 to A.10 marked on behalf of the ApplicantBank} Mx*

¶39

6of6

¶40

OA No.886l2b2s

¶41

remains unchallenged and un-rebutted. However, mere allegations of defendant do not constitute valid ground to discharge from contractual liability. Under such circumstances, I hold that the defendants 1 & 2 are jointly and severally liable to pay the OA claim to the Applicant Bank with future interest and costs.

¶42

In the result, the present Original Application No.BB6/2025 is allowed as under: -

¶43

(i) TheDefendantsl&2 the a"6^6qoaq1* Applicant Bank a sum of :'1^ffiiffiffi future interest rate of 10.70o/o simple from application till the date of realization; thedate" O#,'*

¶44

(ii) the OA claim is secured by way of mortgage of properties, as described in the schedule annexed to the OA and applicant bank is entiiled to proceed against the same for realization of dues;

¶45

(iii) the Applicant Bank is also entitled to proceed against the person and properties of the defendants 1 & 2 for realization of dues; and

¶46

(iv) the Applicant Bank is entiiled for the costs.

¶47

L4. The Applicant Bank is directed to file Cost Memo within 2 weeks from the date of receipt of this Order.

¶48

Issue Recovery Certificate accordingly.

¶49

Communicate a copy of this order to the parties concerned and ,r1rra!r-:r,i-r,...r:-!i..;ui"l".t,;;:-.r,,t:.r.-r(srrj.,.r1r,.?_ra:81]r. upload in the official website.

¶50

(Dictated to the steno, corrected, signed and pronounced by me in the open court on this the 22no dav of June,2026)

¶51

Ow*u (RAMESHWAR KOTHE) PRESIDING OFFICER

Canara Bank v. Rayapati Sai Ram

Case brief

What is this about?

What did the court decide?

Canara Bank v. Rayapati Sai Ram

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Mr Yempalla Mahipal Reddy versus Union Bank of India

Sri Perumandla Kishan versus M S Ikf Home Finance

Kalla Rajeshwari versus South Indian Bank

Canara Bank versus M/s. Nakoda Shopping Mall.

State Bank of India versus Mr. Veluri Vamshkrishna

Union Bank of India versus M/s. Hygiene Retail India Private Ltd.