Allowed

Canara Bank v. Sai Ganesh Clothing

DRT24 Mar 2026TA/60/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the application filed by Canara Bank (formerly Syndicate Bank) to recover a loan amount of ₹60,23,832.64 along with interest from the borrower, M/s. Sai Ganesh Clothing, whose evidence remained uncontradicted.

What did the court decide?

Defendant directed to pay ₹60,23,832.64 with future simple interest at 12% p.a. from 29.10.2020 till realization; recoveries through sale of hypothecated properties secured.

Canara Bank versus Sai Ganesh Clothing — Banking and Recovery | DRT (2026)

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TRANSFERRED ORIGINAL APPLICATION NO.60 OF 2023

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DEBTS RECOVERY TRIBUNAL No.2, MUMBAI

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PRESIDING OFFICER: HARISH KUMAR KAUSHIK

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TRANSFERRED ORIGINAL APPLICATION NO.60 OF 2023 IN ORIGINAL APPLICATION NO.429 OF 2022

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Date of Institution: 29.10.2020 Date of Decision: 24.03.2026

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TOTAL CLAIM AMOUNT :

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₹ 60,23,832.64/-

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CANARA BANK (ERSTWHILE SYNDICATE BANK) A body corporate constituted under the Banking Companies (Acquisition & Transfer and amongst other places, a Branch Office at of Under Takings) Act, 1970, having its Head] Office at 112, JC Road, Bengaluru-560002, Faizan Apartment, Ground Floor, S.V. Road Jogeshwari West, Mumbai-400102 Through: Mr. Arun J Likhite Senior Branch Manager, Holding Proper Power of Attorney … Applicant

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Versus

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M/S. SAI GANESH CLOTHING (Through its Sole Proprietor Mr. Niranjan Narayan Shetty) At: Gala No.201, Dama Industrial Estate Near Dhumal Nagar, Vasai (East), Maharashtra - 401208. Also At:

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Page 1 of 8

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TRANSFERRED ORIGINAL APPLICATION NO.60 OF 2023

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Flat No. D-204, Evershine Classique Sector-B, Opp. Reliance Fresh, Evershine City, Vasai (East), Maharashtra-401208 …Defendant

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APPEARANCES For the Applicant : Mr Mohit Shamdasani i/b M/s. B.M. Gupta & Associates - Advocate

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For Defendant : None

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J U D G M E N T

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(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 ₹60,23,832.64/- (Rupees Sixty Lakhs Twenty-Three Thousand Eight Hundred Thirty-Two and paisa Sixty-Four Only) with future interest @ 18.10% per annum with monthly rest thereon from the date of presentation of the Transferred Original Application i.e. 29.10.2020 till payment/realization and to enforce the hypothecated securities.

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Page 2 of 8

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TRANSFERRED ORIGINAL APPLICATION NO.60 OF 2023

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The details of the claim amount are as under: -

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Sr	Nature of	O/s. am ou nt	Unreali zed	Total A m ou nt
No	Facility		Interest from 23.02 .2018 to 30.09 .2020 @ from 9.50% per
			annu m to
			18.10 % per
			annu m as appli cab le from tim e to tim e as per guideli nes
1	SOD (H)/ Over draft Loan Account No.505714000 00388	₹40, 70, 657. 24/-	₹19, 53, 175. 40/-	₹60,23,832.64/-

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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 04.07.2025. Despite service, the defendant did not enter its appearance and therefore, it was set ex-parte on 31.07.2025.

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(3) Defendant no.1 is the borrower who approached the Erst-while Syndicate Bank and sought financial assistance by way of SOD (H)/Overdraft Loan Account No.50571400000388 under Synd MSME (Textile) Scheme Facility. Pursuant to the loan application made by defendant, the Erstwhile Syndicate Bank sanctioned the loan vide Sanction Letter dated 02.03.2016 for a sum of ₹40,00,000/- (Rupees Forty Lakhs Only) payable with interest at the rate of Base rate + 1 % per annum equivalent to 10.70%. The said loan is

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Page 3 of 8

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TRANSFERRED ORIGINAL APPLICATION NO.60 OF 2023

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covered under CGTMSE Scheme. The Applicant, earlier Syndicate Bank, pursuant to the Gazette Notification No. G.S.R. 155 (E) dated 04.03.2020 of Department of Financial Services, Ministry of Finance, had been amalgamated into Canara Bank w.e.f. 01.04.2020.

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The details of the Sanction amount are as under: -

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Sr	D ate of	Amoun t	R OI	Secu ri ty
No	Sanct ion
1	02.03 .20 16	₹40,00 ,000 /-	Base rate + 1 % per	Hyp otheca ted	Sto ck
			annum equiv alen t to	locate d in Vas	ai ( E) a nd
			10.70 %	Machineri es	Value o f
				₹9.25 Lakh s	in Gala
				No .201 , Da ma	In dustri es
				Es tate n ear	Dhu mal
				Nagar, Valiv , V and Bo ok- de bts 90 day s	asai ( Ea st) less tha n
	Tota l	₹ 40,00 ,00 0/ -	-	-
	Amoun t

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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. 4 and 5(a) to (f) of the Original Application. Defendant hypothecated Stock located in Vasai (E) and Machineries Value of ₹9.25 Lakhs in Gala No.201, Dama Industries Estate near Dhumal Nagar, Valiv, Vasai (East) and Book-debts less than 90 days to secure the loan. The details of the documents executed by the Defendant are as under: -

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(a) Sanction Letter dated 02.03.2016 ₹40,00,000/- (Rupees Forty Lakhs Only);

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Page 4 of 8

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TRANSFERRED ORIGINAL APPLICATION NO.60 OF 2023

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(b) Demand Promissory Note dated 02.03.2016; (c) Overdraft Opening Request Form (Doc. ASD2) dated 02.03.2016;

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(d) Composite Hypothecation Agreement dated 02.03.2026;

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(e) Notarized Power of Attorney Charge and Hypothecation of Book-debts Agreement dated 02.03.2016;

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(f) Renewal Letter for All Facilities dated 25.05.2017;

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(g) Acknowledgement of Debt for all types of facilities by borrower/sureties dated 04.03.2020.

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(5) After availing the loan, defendant 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 borrower was declared as Non-Performing Assets (N.P.A.) on 27.09.2018 as per RBI Guidelines. Therefore, on 09.08.2019, the applicant, through its advocate, called upon defendant to liquidate the outstanding in the sum of ₹50,05,286/- (Rupees Fifty Lakhs Five Thousand Two Hundred EightySix Only) jointly and severally with further interest thereon at the applicable rate or such other rate as per RBI directions from 01.08.2019 within 15 days from receipt of the said notice. Despite notice, defendant no. 1 failed and

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Page 5 of 8

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TRANSFERRED ORIGINAL APPLICATION NO.60 OF 2023

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neglected to pay.

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(6) As on 30.09.2020, there was owing, due and payable by defendant to the applicant the aggregate sum of ₹60,23,832.64/- (Rupees Sixty Lakhs Twenty-Three Thousand Eight Hundred Thirty-Two and paisa Sixty-Four Only) with future interest @ 18.10% per annum with monthly rest 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 Transferred Original Application which was presented on 29.10.2020.

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(8) The applicant has filed affidavit (exhibit-6) in lieu of examination in chief of Mr Ashwini Kumar, Senior Manager and list of documents (exhibit-7) thereby adducing in evidence the documents at Exhibit-1 to Exhibit-10, which are admitted in evidence, read, recorded and exhibited.

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(9) Accordingly, in the Transferred Original Application was filed for the recovery of ₹60,23,832.64/- (Rupees Sixty Lakhs TwentyThree Thousand Eight Hundred Thirty-Two and paisa Sixty-Four Only) with future interest @ 18.10% per annum with monthly rest thereon from the date of presentation of the Transferred

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Page 6 of 8

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TRANSFERRED ORIGINAL APPLICATION NO.60 OF 2023

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Original Application i.e. 29.10.2020 till payment/realisation.

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(10) The Tribunal has scrutinised and examined the allegations contained in the Transferred 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 Transferred 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, Transferred 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 Transferred Original Application No.60 of 2023 in Original Application No.429 of 2022 is allowed with costs.

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(B) Defendant is hereby ordered and directed to pay to the applicant, the aggregate sum of ₹60,23,832.64/(Rupees Sixty Lakhs TwentyThree Thousand Eight Hundred Thirty-Two and paisa Sixty-Four Only) with future simple interest @ 12% per annum thereon from the date of presentation of the Transferred Original

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Page 7 of 8

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TRANSFERRED ORIGINAL APPLICATION NO.60 OF 2023

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Application i.e. 29.10.2020 till

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payment/realization.

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(C) The aforesaid adjudicated amount is secured by the valid and subsisting hypothecated properties, that is, Stock located in Vasai (E) and Machineries Value of ₹9.25 Lakhs in Gala No.201, Dama Industries Estate near Dhumal Nagar, Valiv, Vasai (East) and Book-debts less than 90 days.

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(D) Defendant is hereby 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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(Harish Kumar Kaushik)

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Presiding Officer, DRT-2, Mumbai

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Page 8 of 8

Canara Bank v. Sai Ganesh Clothing

Case brief

What is this about?

What did the court decide?

Canara Bank v. Sai Ganesh Clothing

Case brief

What is this about?

What did the court decide?

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