CANARA BANK vs DINESH RAO RAO on 22 July 2026

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

Dated this the 22nd day of July, 2026

TA No.1259/2016 (OA No.379/2009) Between

Canara Bank, Kundara Branch, Kollam District.

…Applicant [Applicant bank was substituted in place of Syndicate Bank as per order dated 04.01.2023 in IA No.3961/2023] And

Dinesh Rao,

S/o.Harichandran,

residing at Sheeja Nivas,

Mayyanadu P.O.,

Kollam.

…Defendant

This Original Application having been heard on 15.07.2026 in the presence of Advocate Sri.M.S.Kalesh 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.11,25,455.56 due under cash credit account together with future interest thereon @15.50% per annum with monthly rests from the defendant and by sale of ‘A’ schedule property. Facts of the case:

2. The defendant being the proprietor of a small scale industrial concern in the name and style “Ravo’s Enterprises” approached the erstwhile Syndicate Bank and sought for a working capital facility of Rs.10 lakhs. Considering his request, the bank sanctioned a cash credit limit of Rs.10 lakhs on 30.01.2008. As security for the loan, the defendant executed hypothecation agreement dated 30.01.2008 and the machinery and stock of raw materials described in ‘A’ schedule was hypothecated to the bank. After availing the loan, the defendant did not adhere to the repayment schedule and the account became irregular. Hence the bank issued a lawyer notice to the defendant on 14.01.2009 calling upon him to repay the outstanding dues. As the defendant did not respond to the notice, the applicant was constrained to file the OA claiming the following reliefs:

(i) To recover the sum of Rs.11,25,455.56 together with pendente lite and post decree interest thereon from the defendant and by sale of ‘A’ schedule property;

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

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

3. The defendant filed written statement denying the averments in the OA. It is admitted in paragraph 3 of the written statement that he availed a working capital loan of Rs.10 lakhs on 30.01.2008 on the basis of the application dated 02.01.2008. Further, it is claimed that the loan was availed by Kerala Vyapari Vyavasai Samithi, Eravipuram, which made him to believe that it is availing the loan and the defendant is signing the documents as a surety for the loan transaction. Hence the applicant is not entitled to get any relief as against him. Proof Affidavit:

4. To establish the claim on behalf of the applicant, one Mr.K.R.Mohan, Chief Manager of the bank has filed proof affidavit and produced the loan documents marked as Exhibits A1 to A6. The availing of the cash credit limit is well established from the documents placed by the applicant bank.

5. Despite sufficient opportunity granted, the defendant has not filed counter proof affidavit and hence the chance of filing the same stood closed on 16.09.2015.

6. Heard arguments advanced by the learned counsel for the applicant. The defendant remained absent from the proceeding from 29.09.2023.

7. The sole issue arises for consideration is whether the applicant is entitled to recover the amount as claimed in this case.

8. On perusal of the materials, it appears that pursuant to Ext.A1 application submitted by M/s.Ravo’s Enterprises through its proprietor, the defendant herein, erstwhile Syndicate Bank sanctioned a cash credit limit of Rs.10 lakhs as per Ext.A2 sanction letter dated 30.01.2008. The movables described in ‘A’ schedule was hypothecated to the bank to secure the loan and executed Ext.A3 composite hypothecation agreement in favour of the bank on 30.01.2008. Due to default in repayment, lawyer notice dated 14.01.2009 marked as Ext.A4 was issued to the defendant and his proprietary concern recalling the liability which was received by him vide Ext.A5 series postal acknowledgement cards. The account statement would show that no remittance was made by the defendant after receipt of the lawyer notice. As on 25.10.2009, an amount of Rs.11,25,455.56 is outstanding in the cash credit account, which is clearly established from the account statement marked as Ext.A6. In the above circumstance, the applicant is entitled to recover the said amount from the defendant. The issue is answered in favour of the applicant bank.

9. The records would show that the defendant had deposited Rs.2 lakhs by way of demand draft dated 06.08.2012 in favour of the Registrar, DRT, Ernakulam for setting aside the exparte final order dated 31.10.2011 passed in this case. In view of the request made by the learned counsel appearing on either side, Rs.2 lakhs deposited by the defendant was ordered to be appropriated towards the OA claim vide order dated 10.09.2012. Accordingly, cheque No.773975 dated 24.09.2012 for Rs.2 lakhs was returned to the bank which was received by the Senior Manager (Law) of erstwhile Syndicate Bank on 28.09.2012. The applicant was directed to file compliance memo after appropriation of the said amount towards the loan account but they have not filed the same so far.

10. Considering the amount advanced, interest applied and default committed, I am of the view that the applicant bank is entitled to get pendente lite and post-decree interest @10% per annum, which is reasonable in the facts and circumstances of the case.

11. 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.11,25,455.56 (Rupees eleven lakhs twenty five thousand four hundred and fifty five and Paise fifty six only) due under the cash credit account, less the sum of Rs.2,00,000/- (Rupees two lakhs only) received by the applicant bank on 28.09.2012, from the defendant and by sale of ‘A’ schedule properties, if available;

(ii) pendente lite and post-decree interest @10% per annum on the sum of Rs.11,25,455.56 (Rupees eleven lakhs twenty five thousand four hundred and fifty five and Paise fifty six only) from 09.11.2009 till realization from the defendant and by sale of ‘A’ schedule properties, if available; and

(iii) costs and expenses borne by it for realization of the loan from the defendant.

12. ‘A’ schedule to the OA shall be appended to this final order.

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

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

15. 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 22nd day of July, 2026)

[SOVAN KUMAR DASH] PRESIDING OFFICER

A P P E N D I X Witness for Applicant: AW1: Sri.K.R.Mohan, Chief Manager of the applicant bank. Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 02.01.2008 Application for credit facility submitted by the defendant. A2 30.01.2008 Process note and sanction prepared by the bank. A3 30.01.2008 Composite hypothecation agreement executed by the defendant in favour of the bank. A4 14.01.2009 Photocopy of lawyer notice issued to the defendant calling upon him to repay the outstanding dues. A5(a) 17.01.2009 Postal acknowledgment card signed by the defendant. A5(b) 17.01.2009 Postal acknowledgment card signed by the defendant. A6 … Certified copy of the statement of account relating to the cash credit limit.

Defendant’s Exhibits – Nil

PRESIDING OFFICER

PRESIDING OFFICER

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

Dated the 22nd July, 2026

TA No.1259/2016 (OA No.379/2009)

Between

Canara Bank, Kundara Branch, Kollam District. …Applicant And

Dinesh Rao, S/o.Harichandran, residing at Sheeja Nivas, Mayyanadu P.O., Kollam.

…Defendant

F I N A L O R D E R