CANARA BANK vs M. A. SALIM on 18 September 2025

FINAL ORDER

1. This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, against the defendants’seeking issuance of a Recovery Certificate for recovery of an aggregate sum of Rs.17,09,78,796.80p comprising of:

(a) A sum of Rs.99,35,327.94p with further interest at the rate of 7.55% per annum with monthly rests plus 2% penal interest being the amount due under Housing Loan Account No.2648619001425; (b) A sum of Rs.14,48,39,265.10p with further interest at the rate of 14.25% per annum with monthly rests plus 2% penal interest being the amount due under the OD Loan Account No.2648261000015;

(c) A sum of Rs.2,45,444.52p with further interest at the rate of 14.25% per annum with monthly rests plus 2% penal interest being the amount due under DPN Loan Account No.2648741001330;

(d) A sum of Rs.34,11,732.91p with further interest at the rate of 8.3% per annum with monthly rests plus 2% penal interest being the amount due under Vehicle Loan Account No.2648603001301; (e) A sum of Rs.38,82,373.69p together with further interest at the rate of 17.2% per annum with monthly rests plus 2% penal interest being the amount due under FITL I Loan Account No.2648746000002; (f) A sum of Rs.30,46,529.04p together with further interest at the rate of 14.35% per annum with monthly rests plus 2% penal interest being the amount due under FITL II Loan Account No.2648746000003; (g) A sum of Rs.56,18,123.63p together with further interest at the rate of 14.25% per annum with monthly rests plus 2% penal interest being the amount due under FITL III Loan Account No.2648746000006;

2. The subject matter of the case is the various credit facilities availed by the defendants from the Applicant Bank.

3. Housing Loan

(a) The 1st Defendant approached the Applicant for grant of Housing Loan and considering the said request the applicant sanctioned Housing Loan of Rs.1 crore vide sanction dated 20.09.2016 of Rs.1.00 Crores, repayable in 120 months, with EMI of Rs.1,35,215/-, against the equitable mortgage of the property more fully described as Item-I of the schedule to the OA. The 3rd Defendant stood as co-obligant for the Housing loan sanctioned to the 1st Defendant.

(b) The 1st and 3rd defendant executed Housing Loan Agreement on 26.09.2016. The 1st defendant executed Memorandum of Deposit of Title Deeds on 30.12.2016, registered as Doc. No.1690/2016 with an intention to create equitable mortgage over item No.1 of property, more fully described in the schedule to the OA.

4. SOD Limit

(a) The 2nd Defendant a Proprietorship firm represented by the 1st defendant approached the Applicant Bank for a grant of SOD Limit and the applicant considering the said request vide sanction dated 24.08.2017 sanctioned a sum of Rs.9.50 crore for its business purposes towards working capital.

(b) The 2nd defendant executed various loan and security documents on 01.09.2017. The defendants 1, 3 and 4 executed guarantee agreements on 1.9.2017 thereby guaranteeing repayment of the credit facility availed by the 2nd defendant under SOD Loan Account.

(c) The 1st defendant extended the equitable mortgage created earlier to secure the SOD Limit of Rs.9.50 crores availed by the 2nd defendant by executing the Memorandum of Deposit of Title deeds on 25.09.2017

registered as Doc. No.1094/2017 and 1095/2017 in respect of Item No.1 and Item No.2 more fully described in the schedule to the OA.

(d) The 4th Defendant also created equitable mortgage over the property more fully described in Item No.3 to the OA schedule by executing Memorandum of Deposit of Title deeds dated 13.10.2017, Registered as Doc. No.6643/2017.

5. DPN Loan The applicant considering the request of the 1st defendant sanctioned a DPN Loan of Rs.3 lakhs vide sanction dated 27.02.2018 and the 1st defendant executed documents on 27.02.2018 viz., Pronote and Take delivery letter to DPN.

6. Vehicle Loan

(a) The 1st defendant approached the applicant bank for grant of vehicle loan for purchase of Mercedes Benz GLA 200D 2017 and considering the said request the applicant sanctioned “Canara Vehicle Loan” of Rs.31,53,000/- vide its sanction dated 23.02.2018.

(b) The 1st defendant executed Canmobile Loan Agreement and particulars of the vehicle on 8.3.2018 and also deposited the registration certificate of the vehicle bearing Regn. No.TN-10 BC-0760.

7. FITL Limit – I, II and III

(a) At the request of the 2nd defendant, the SOD Limit of Rs.9.50 crores was restructured vide sanction dated 30.03.2019 as FITL-I limit of Rs.26.84 lakhs; FITL-II Limit of Rs.23 lakhs and FITL-III Limit of Rs.47 lakhs.

(b) The 1st defendant executed loan and security documents in respect of the FITL-I Limit, FITL-II Limit and FITL-III limits on 30.3.2019, 30.03.2019 and 04.09.2019 respectively.

8. The 1st defendant executed acknowledgement of debt and security on 04.09.2019 in respect of Housing Loan Limit, on 05.01.2021 in respect of Vehicle Loan and on 20.01.2021 in respect of DPN Loan. Similarly, the 4th defendant executed acknowledgement of debt and security on 04.09.2019 in respect of SOD Limit.

9. The defendants failed to comply with the terms and conditions of sanction and defaulted in repayments. Despite repeated demands by the applicant to the defendants for regularization of the loan, the defendants did not come forward to clear the outstanding dues and hence the applicant bank classified the loan account as NPA on 09.01.2020.

10. As no payment was forthcoming from the defendants, the applicant invoked the provisions of SARFAESI Act and issued the demand notice on

28.01.2020. The 2nd defendant vide letter dated 16.02.2021 requested for grant of One Time Settlement, which was rejected by the applicant bank by its letter dated 18.02.2021.

11. Despite the requests of the applicant bank and issuance of demand notice under Section 13(2) of the SARFAESI Act, the defendants did not come forward to clear the outstanding dues; hence this OA is filed by the applicant for recovery of its dues.

12. Summons was taken out to the defendants 1 to 4 and the same were served. As there was no representation on behalf of the defendants continuously and on 11.05.2023 the defendants were called absent and placed ex-parte on that day. Applicant Bank filed Proof Affidavit along with 48 documents, which were marked as Ex. A-1 to A-48 on 23.02.2024, however, Ex. A-18, A-30 to A-40, A-43 and A-47 were subject to proof and relevancy being photocopies. The Ld. Counsel for Applicant Bank made his submissions on 20.08.2025 and thereafter the matter stood till this date for passing final orders.

13. The following issues arise for consideration in the matter: - (a) Whether the applicant had succeeded in proving the liability of the defendants?

(b) What order as to cost of the proceedings need be passed?

These issues are considered together.

14. Heard the Ld. Counsel for the applicant, perused the OA averments and the record placed before the Tribunal.

15. The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-48 along with the proof affidavit. The documents produced in evidence are all found admissible. The proof affidavit of the applicant bank remained unchallenged and unrebutted. Therefore, on careful consideration of proof affidavit along with exhibits filed on behalf of the applicant bank, besides the material placed before the Tribunal, the Tribunal is satisfied that the applicant bank has successfully proved the OA claim against the defendants. Further, the statement of accounts in respect of the loan account produced and certified under the Banker’s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendant. It is clear from the statement of accounts that penal interest is not capitalized.

16. In view of the foregoing, it is clearly evident that the application filed by the applicant bank is well within the period of limitation and this Tribunal possesses the territorial and pecuniary jurisdiction to entertain this OA.

17. In view of the fact that the loan facilities availed by the defendants are primarily for business purpose, purchase of vehicle and house and in view of the fact that due to the defaults committed by the defendants the SOD Limit was restructured into FITL-I, II & III Loan and in view of the fact that even thereafter the defendants did not come forward to clear the dues, this Tribunal is of the view that no interference is called for in the interest rates claimed by the applicant bank, however, the prayer for award of penal interest is rejected.

18. In view of the afore mentioned discussions, the only conclusion this Tribunal can draw is that the applicant had clearly proved the disbursement of the loan, which the applicant is entitled to realize. Hence, OA is disposed off in the following manner: - (a) TA No.296 of 2022 stands allowed.

(b) Applicant is permitted to realize an aggregate sum of Rs.17,09,78,796.80p together with interest as mentioned in the following manner from the date of filing of the application till the date of realization in full, from the defendants jointly and severally after deducting all the amounts received / realized by them during the pendency of OA and also by selling the schedule mentioned properties and other assets of the defendants:

(i) A sum of Rs.99,35,327.94p with further interest at the rate of 7.55% per annum with monthly rests being the amount due under Hosing Loan Account No.2648619001425;

(ii) A sum of Rs.14,48,39,265.10p with further interest at the rate of 14.25% per annum with monthly rests being the amount due under the OD Loan Account No.2648261000015;

(iii) A sum of Rs.2,45,444.52p with further interest at the rate of 14.25% per annum with monthly rests being the amount due under DPN Loan Account No.2648741001330;

(iv) A sum of Rs.34,11,732.91p with further interest at the rate of 8.3% per annum with monthly rests being the amount due under Vehicle Loan Account No.2648603001301;

(v) A sum of Rs.38,82,373.69p together with further interest at the rate of 17.2% per annum with monthly rests being the amount due under FITL I Loan Account No.2648746000002;

(vi) A sum of Rs.30,46,529.04p together with further interest at the rate of 14.35% per annum with monthly rests being the amount due under FITL II Loan Account No.2648746000003;

(vii) A sum of Rs.56,18,123.63p together with further interest at the rate of 14.25% per annum with monthly rests being the amount due under FITL III Loan Account No.2648746000006;

(c) If sale proceeds are not found sufficient to cover the amount allowed to be recovered, the defendants 1, 3 and 4 are personally liable for all such amounts due as ordered above.

(d) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 15 days from the date of receipt of the copy of the order.

(e) The Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of this final order.

15. Communicate a copy of the order to the parties concerned in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

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(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 18th day of September, 2025)

EXHIBITS MARKED BY APPLICANT BANK

S. No. Date Description of Documents Exhibit Nos.

1. 20.09.2016 Sanction Memorandum given by the applicant to the 1st Defendant A-1

2. 26.09.2016 Housing Loan Agreement executed by 1st Defendant & 3rd Defendant A-2

3. 24.08.2017 Sanction Memorandum given by the Applicant to the 2nd Defendant A-3

4. 01.09.2017 Letter of Proprietorship A-4

5. 01.09.2017 Pronote for Rs.9,50,00,000/- A-5

6. 01.09.2017 Common Hypothecation Letter executed by the 2nd Defendant A-6

7. 01.09.2017 Guarantee Covering Letter executed by the 1st Defendant A-7

8. 01.09.2017 Guarantee Agreement executed by the 1st Defendant A-8

9. 01.09.2017 Guarantee Covering Letter executed by the 3rd Defendant A-9

10. 01.09.2017 Guarantee Agreement executed by the 3rd Defendant A-10

11. 01.09.2017 Guarantee Covering Letter executed by the 3rd Defendant A-11

12. 01.09.2017 Guarantee Agreement executed by the 4th Defendant A-12

13. 27.02.2018 Personal Loan Application cum Sanction to 1st Defendant A-13

14. 27.02.2018 Take Delivery Letter to DPN A-14

15. 27.02.2018 Pronote A-15

16. 23.02.2018 Sanction Memorandum issued by Applicant to 1st Defendant A-16

17. 27.02.2018 Canmobile Loan Agreement A-17

18. 07.03.2018 RC Book for Vehicle No.TN10DC0760 A-18

19. 08.03.2018 Particulars of vehicle executed by the 1st Defendant A-19

20. 30.03.2019 Sanction Memorandum issued by Applicant to 2nd Defendant for one-time Restructuring A-20

21. 30.03.2019 Draft Letter of Undertaking – FITL - I A-21

22. 30.03.2019 Debt Restructuring Agreement A-22

23. 30.03.2019 Debtor-Creditor Agreement A-23

24. 30.03.2019 Draft Letter of Undertaking – FITL – II A-24

25. 30.03.2019 Debt Restructuring Agreement A-25

26. 30.03.2019 Debtor Creditor Agreement A-26

27. 04.09.2019 Draft Letter of Undertaking – FITL –III A-27

28. 04.09.2019 Debt Restructuring Agreement A-28

29. 04.09.2019 Debtor Creditor Agreement A-29

30. 30.12.2016 Memorandum of Deposit of Title Deeds executed by 1st Defendant A-30

31. 25.09.2017 Memorandum of Deposit of Title Deeds executed by 1st Defendant A-31

32. 25.09.2017 Memorandum of Deposit of Title Deeds executed by 1st Defendant A-32

33. 30.08.2016 Agreement for Construction of an independent house A-33

34. 17.10.2016 Sale Deed Document No.1427/2016 standing the name of 1st Defendant A-34

35. 17.10.2016 Sale Deed Document No.1428/2016 standing in the name of 1st Defendant A-35

36. 17.10.2016 Sale Deed Document No.1429/2016 standing in the name of 1st Defendant A-36

37. 28.05.2017 Sale Deed Document No.638/2017 standing in the name of 1st Defendant A-37

38. 28.05.2017 Sale Deed Document No.639/2017 standing in the name of 1st Defendant A-38

39. 13.10.2017 Memorandum of Deposit of Title Deeds executed by the 5th Defendant A-39

40. 23.03.1994 Settlement Deed Document No.4443/1994 standing in the name of 5th Defendant A-40

41. 04.09.2019 Acknowledgement of Debt and Security Housing Loan of Rs.1,00,00,000/- A-41

42. 04.09.2019 Acknowledgement of Debt and Security for overdraft limit of Rs.9,50,00,000/-- A-42

43. 28.01.2020 Demand Notice issued by the Applicant Bank to all the Defendants A-43

44. 05.01.2021 Acknowledgement of Debt and Security for Vehicle Loan A-44

45. 20.01.2021 Acknowledgement of Debt and Security for DPN Loan A-45

46. 16.02.2021 OTS request letter given by the 2nd Defendant A-46

47. 18.02.2021 Reply given by the Applicant to the 2nd Defendant A-47

48. Statement of Accounts A-48

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DESCRIPTION OF PROPERTY Item No.1: (A) Property in the name of 1st defendant, covered vide Doc No 1427/2016 All that piece and parcel of Land and building measuring about Acre 0.04 Cents (House site) comprised in S.No 573, Town Survet No H/5/8,situated at Ootacamund Town and bounded on the North by : 16 feet wide road. South by : Part of R.S No.H/5/8 East by : Part of R.S No.H/5/8 belonging to vendor and proposed to be conveyed to purchaser. West by : Part of R.S No.H/5/8

Ootacamund. Measuring: North to South (Eastern side) – 50 Sq. ft.; North to South (Western side) – 48 sq. ft; East to West (Northern side) – 35.3/4 sq. ft.; East to West (Southern side) – 35.3/4 Sq. ft. (B)

Cents (House Site ) comprised in S No.573, Town Survey No.H/5/8, Situated at Ootacamund Town and bounded on the North by : Part of R.S No.H/5/8 South by: Part of R.S No.H/5/8 East by : 16 Feet road

West by: Part of R.S No.H/5/8

Ootacamund. Measuring – North to South (Eastern side) – 25.50 sq. ft; North to South (Western side) – 25 sq. ft.; East to West (Both sides) – 69.25 Sq. ft. (C)

Cents (House site) comprised in S.No.573,Town Survey No.H/5/8,situated at Ootacamund town and bounded on the North by : Part of R.S No.572/1 South by :Part of R.S No H/5/8 belonging to the purchaser East by : 16 Feet road West by: Part of R.S No H/5/8 belonging to the purchaser and within the Registration district of Nilgiris and registration Sub-District of Ootacamund. Measuring – North to South (Eastern side) – 25.50 sq. ft; North to South (Western side) – 25 sq. ft.; East to West (Both sides) – 69.25 Sq. ft.

Item No.2: (A)

Cents comprised in R.S.No.574,town Survey No.H/5/8, Situated at Ramakrishnapuram (R.K Puram), Ootacamund town and bounded on the North by : Municipal path South by : Part of R.S No H/5/8, belonging to K A MohideenBasha

East by : Municipal path West by: Part of R.SNo.H-5/8 Measuring: North to South (both sides0 – 10.03 meters; East to West (North) – 27.04meters; East to West (South) – 18 meters (B)

Cents comprised in R.S.No.574,town Survey No.H/5/8,bearing D No 319 at Ramakrishnapuram (R.K Puram), Ootacamund town and bounded on the North by : Part of T.S NO.H-5/8 belonging to M A Salim South by : Part of R.S No H/5/8 East by : Municipal path West by: Part of R.SNo.H-5/8 and within the Registration district of Nilgiris and registration Sub-District of Ootacamund. Measuring – North to South (Eastern side) – 14.00 meters; North to South (Western side) – 15.02 meters.; East to West (Northern side) – 18.00 meters; East to West (Southern side) – 7.00 meters.

Item No.3 Property covered in the name of 4th defendant, covered vide Doc.No.

All that piece and parcel of Land and Building bearing Plot No.45 Part, Kalaignar Karunanithi Main Road, Kaveri Rangan Nagar, Saligramam, Chennai-600093, comprised in Survey No.136/1, situated at No.110,

Saligramam Village, Egmore-Nungambakkam Taluk,Chennai Disrict measuring a extent of 3200 sq.ft. being bounded on the North by : 40 ft road South by : Plot No.56 & 57 part East by : Plot No.46 and West by : Plot No.45 part In all admeasuring an extent of 3200 sq.ft. of land and situated within the Registration District of Chennai South and Sub -Registration District of Virugambaakkam. Measuring: East to West (both sides) – 40 feet; North to South (both sides) – 60 feet.

Item No.4: (Movable) Hypothecation of Mercedes Benz Car GLA-200D 2017, Registration No.TN10-BC0760, Engine No.:65193034323692, Chassis No.:WDC1569086L007820

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