CANARA BANK vs M/s Ride Motors on 10 February 2026

1. M/s.Ride Motors,

M.C.Road, New Ponson Building,

Near Railway Overbridge,

Chengannur,

Represented by its managing partner.

2. Vipin V.,

Partner, M/s.Ride Motors,

Vinu Villa, Karuvatta,

Alappuzha.

3. Binulal S.,

Partner, M/s.Ride Motors,

Shyla Bhavanam,

Karuvatta North,

Alappuzha – 690 517.

4. S.Nizar,

Partner, M/s.Ride Motors,

Vazhavilayil,

Pallisserikkal P.O.,

Sasthamkotta, Kollam.

5. Karthikeyan K.S.,

Sunitha Bhavan,

Thiruvambady, Alappuzha.

6. Syamala Kumari,

W/o.Jagal Simhan,

Kalpana, Mangad P.O.,

Kollam – 691 015.

7. Vinu V.,

S/o.Viswanathan N.,

Vinu Villa, Karuvatta,

Alappuzha.

…Defendants This Original Application having been heard on 20.01.2026 in the presence of Advocate Smt.Uma G.Krishnan for the applicant bank and stood over to this day for consideration, the Tribunal delivered the following: F I N A L O R D E R

This Original Application has been filed under S.19(1) of the Recovery of Debts and Bankruptcy Act, 1993 for recovery of a sum of Rs.45,23,898/- due under overdraft account together with future interest thereon @15.50% per annum with monthly rests from the defendants jointly and severally and by sale of ‘A’ to ‘E’ schedule properties. Facts of the case:

2. The applicant is a body corporate incorporated under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its head office at Bangalore and one of its branches at Chengannur.

3. The 1st defendant, a partnership firm, approached the applicant bank for an overdraft limit of Rs.7 lakhs which was sanctioned on various terms and conditions. As security for repayment of the balance in the overdraft limit, the 1st defendant through its partners executed demand promissory note and agreement-cum-deed of hypothecation on 15.07.2005 whereby the movables described in ‘A’ and ‘B’ schedules were hypothecated to the bank. The defendants 5 to 7 executed guarantee agreement to secure repayment of the loan. The overdraft limit was enhanced from time to time and finally enhanced to Rs.33 lakhs. The defendants 3 to 6 executed guarantee agreements for the enhanced limit and the 3rd defendant created equitable mortgage over ‘C’ schedule property and the 4th defendant created mortgage over ‘D’ and ‘E’ schedule properties towards collateral security for the loan. The defendants 3 and 4 executed memorandum of deposit of title deeds and the extension thereof to secure the enhanced overdraft limit. The defendants availed the facility but committed default in repayment. Hence the applicant issued demand notice under the SARFAESI Act recalling the liability but the defendants did not liquidate the dues. In such premises, the applicant was constrained to file the OA claiming the following reliefs:

(i) To recover the sum of Rs.45,23,898/- together with pendente lite and post-decree interest thereon from the defendants jointly and severally and by sale of ‘A’ to ‘E’ schedule properties;

(ii) To recover the costs, charges and expenses from the defendants;

(iii) To issue Recovery Certificate to the Recovery Officer with a direction to recover the amount and pay it to the applicant bank. Written statement

4. The defendants 2, 3 and 5 jointly filed written statement admitting the availing of loan and execution of guarantee agreement as well as creation of mortgage over ‘C’ schedule property by the 3rd defendant. It is claimed that as per the valuation taken by the bank, value of ‘C’ schedule property is only Rs.19,40,700/- and hence the liability fastened with the 3rd defendant is only to such amount. All other averments against these defendants are not sustainable and hence the OA may be dismissed with costs.

5. The 6th defendant filed written statement denying the averments in the OA. It is claimed that she is not a guarantor to the alleged transactions and she is not liable to pay any amount to the applicant bank. While the property mortgaged by her was released, the applicant bank issued a letter dated 08.10.2007 stating that there is no liability outstanding against the mortgage of the said property and hence the OA may be dismissed with costs. Proof Affidavit:

6. In order to establish the claim on behalf of the applicant bank, one Mrs.Shuba B.S., Manager Sri.Renjit G.K., Chief Manager have filed proof affidavit and additional proof affidavit respectively and produced the loan documents marked as Exhibits A1 to A34. The availing of loan and creation of hypothecation as well as mortgage charge over the schedule properties are well established from the documents placed by the applicant bank.

7. In the additional proof affidavit filed by the applicant bank, it is averred that the property mortgaged by the 6th defendant was released upon part payment of the amount but she cannot be exonerated from the liability in view of the guarantee agreement executed by her which is still in force.

8. The defendants 3 and 4 filed separate counter proof affidavit admitting the availing of loan and creation of mortgage over ‘C’ to ‘E’ schedule properties. It is claimed that they are ready to pay the amount due to the applicant bank to the extent of the value of securities furnished by them and no liability can be fastened on them more than the value of properties.

9. The defendants 1, 4 and 7 neither appeared nor were they represented and hence they were set exparte on 02.11.2012.

10. The contesting defendants 2, 3, 5 and 6 remained absent from the proceeding from 09.11.2017 and none appeared to address argument in this case. Heard arguments advanced by the learned counsel for the applicant bank.

11. The sole issue arises for consideration is whether the applicant is entitled to get the relief as claimed in the OA?

12. Admittedly, the 1st defendant partnership firm through its partners defendants 2 to 4 availed an initial overdraft limit of Rs.7 lakhs from the applicant bank on 15.07.2005 which was enhanced from time to time and finally enhanced to Rs.33 lakhs on 31.03.2009. In order to secure the loan, the 1st defendant through its partners executed the loan documents marked as Exts.A1 to A4, A9, A10, A19, A20 and A26 to A29 in favour of the applicant bank. The defendants 5 and 6 executed guarantee agreements and guarantee covering letters dated 15.07.2005 marked as Exts.A5 to A8, defendants 3, 5 and 6

executed guarantee agreements and guarantee covering letters dated 10.02.2006 marked as Exts.A11 to A16 and the 4th defendant executed guarantee agreement and guarantee covering letter dated 27.03.2008 marked as Exts.A21 and A22 guaranteeing due repayment of the outstanding loan amount. The defendants 3 and 4 have also executed Exts.A31 and A32 extension of guarantee for the increased limit of Rs.33 lakhs.

13. It is also the admitted case of defendants 3 and 4 that they had created mortgage over ‘C’ to ‘E’ schedule properties and extended the same towards collateral security for the enhanced overdraft limit of Rs.33 lakhs availed by the 1st defendant partnership firm. By virtue of execution of the guarantee agreement, the 6th defendant cannot be absolved from the liability due to part payments made by her for release of her property as her liability is co-extensive with that of the principal debtor.

14. According to the applicant bank, the 7th defendant stood as guarantor for the initial overdraft limit of Rs.7 lakhs availed by the 1st defendant. However, the applicant has not produced any guarantee agreement claimed to have been executed by the 7th defendant nor produced any other document executed by him. In such backdrop, the 7th defendant cannot be held liable for the loan availed by the 1st defendant firm.

15. In view of the above, the issue is answered in favour of the applicant bank and it is entitled to recover the amount claimed in this case from defendants 1 to 6 jointly and severally and by sale of ‘A’ to ‘E’ schedule properties.

16. Considering the amount advanced, interest applied, repayments effected and default committed, I am of the view that the applicant bank is entitled to get pendente lite and post decree interest @12% per annum, which is reasonable in the facts and circumstances of the case.

17. The applicant bank, therefore, is entitled to get a final order on the following lines: In the result, the applicant bank is given a final order allowing it to recover:

(i) the sum of Rs.45,23,898/- (Rupees forty five lakhs twenty three thousand eight hundred and ninety eight only) due under the overdraft account from defendants 1 to 6 jointly and severally and by sale of ‘A’ to ‘E’ schedule properties;

(ii) pendente lite and post-decree interest on the sum of Rs.45,23,898/- (Rupees forty five lakhs twenty three thousand eight hundred and ninety eight only) @12% per annum from 21.02.2011 till realization from defendants 1 to 6 jointly and severally and by sale of ‘A’ to ‘E’ schedule properties; and

(iii) costs and expenses borne by it for realization of the loans from defendants 1 to 6.

18. ‘A’ to ‘E’ schedules to the OA shall be appended to this final order.

19. The applicant bank shall file memo of costs within ten days from the date of this final order.

20. Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of the final order.

21. Communicate copy of this order to both parties as provided in R.16 r/w R.2(c) of the Debts Recovery Tribunal (Procedure) Rules, 1993. (Dictated to my PA, corrected and pronounced by me in the open Tribunal on this the 10th day of February, 2026)

[SOVAN KUMAR DASH] PRESIDING OFFICER

A P P E N D I X Witness for Applicant: AW1: Smt.Shuba B.S., Manager of the applicant bank. AW2: Sri.Renjit G.K., Chief Manager of the applicant bank.

Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 15.07.2005 Demand promissory note for Rs.7 lakhs executed by the 1st defendant through defendants 2 to 4. A2 15.07.2005 Overdraft agreement executed by the 1st defendant through defendants 2 to 4. A3 15.07.2005 Agreement-cum-deed of hypothecation executed by the 1st defendant through defendants 2 to 4. A4 15.07.2005 Deed of hypothecation executed by the 1st defendant through defendants 2 to 4. A5 15.07.2005 Guarantee agreement executed by the 5th defendant. A6 15.07.2005 Guarantee covering letter executed by the 5th defendant. A7 15.07.2005 Guarantee agreement executed by the 6th defendant. A8 15.07.2005 Guarantee covering letter executed by the 6th defendant. A9 10.02.2006 Demand promissory note for Rs.8 lakhs executed by the 1st defendant through defendants 2 to 4. A10 10.02.2006 Supplemental agreement executed by the 1st defendant through defendants 2 to 4. A11 10.02.2006 Guarantee agreement executed by the 3rd defendant. A12 10.02.2006 Guarantee covering letter executed by the 3rd defendant. A13 10.02.2006 Guarantee agreement executed by the 5th defendant.

A14 10.02.2006 Guarantee covering letter executed by the 5th defendant. A15 10.02.2006 Guarantee agreement executed by the 6th defendant. A16 10.02.2006 Guarantee covering letter executed by the 6th defendant. A17 02.12.2005 Partition deed No.2455/2005 of Harippad SRO. A18 10.02.2006 Letter executed by the 3rd defendant confirming the deposit of title deeds with the applicant bank. A19 28.03.2008 Demand promissory note for Rs.15 lakhs executed by the 1st defendant through defendants 2 to 4. A20 28.03.2008 Supplemental agreement executed by defendants 2 to 4. A21 27.03.2008 Guarantee agreement executed by the 4th defendant. A22 27.03.2008 Guarantee covering letter executed by the 4th defendant. A23 08.11.2006 Sale deed No.3437/2006 of Sasthamcotta SRO. A24 15.11.2007 Sale deed No.3252/2007 of Sasthamcotta SRO. A25 28.03.2008 Letter executed by the 4th defendant confirming the deposit of title deeds with the applicant bank. A26 31.03.2009 Demand promissory note for Rs.30 lakhs executed by the 1st defendant through defendants 2 to 4. A27 31.03.2009 Supplemental agreement executed by the 1st defendant through defendants 2 to 4. A28 31.03.2009 Link letter in respect of enhancement of credit facilities executed by the 1st defendant. A29 31.03.2009 Link letter in respect of enhancement of credit facility (adhoc limit of Rs.3 lakhs) executed by the 1st defendant. A30 31.03.2009 Letter evidencing deposit of title deeds with the applicant bank and the extension thereof. A31 09.01.2009 Extension of guarantee for supplemental limit executed by the 3rd defendant.

A32 … Extension of guarantee for supplemental limit executed by the 3rd defendant. A33 03.09.2009 Copy of demand notice under S.13(2) of the SARFAESI Act issued to the 1st defendant. A34 … Certified copy of the statement of account relating to the overdraft facility.

Defendants’ Exhibits – Nil

PRESIDING OFFICER

PRESIDING OFFICER

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

Dated the 10th February, 2026

TA No.1179/2016 (OA NO.84/2011)

Between

Canara Bank, Chengannur Branch, Chengannur. …Applicant

And

M/s.Ride Motors, M.C.Road, New Ponson Building, Near Railway Overbridge, Chengannur, Represented by its managing partner & 6 others.

…Defendants

F I N A L O R D E R