CANARA BANK vs M/s Worldizen Goods on 16 October 2025

FINAL ORDER

1. This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 against the defendant sseeking issuance of a Recovery Certificate for recovery of a sum of Rs.60,46,654/- together with interest at the rate of 10.75% per annum with monthly rests plus 2% penal interest from the date of the application till the date of realisation along with costs of the application.

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

3. It is the case of the applicant that the 1st defendant represented by 2nd defendant approached the erstwhile Syndicate Bank for grant of credit facility to meet out its working capital requirements by loan application dated 23.11.2016 and the applicant considering the said request vide sanction dated 23.12.2016 sanctioned Working Capital Loan of Rs.50,00,000/- under SOD Synd MSE Facility. The defendants having availed the credit facility executed Demand Promissory Note and Composite Hypothecation Agreement both dated 26.12.2016 in favour of the applicant.

4. While so, pursuant to the notification of Government of India dated 4.3.2020, Syndicate Bank got merged with Canara Bank and hence the

Canara Bank is now proceeding against the defendants for recovery of its dues.

5. It is also the case of the applicant that the defendants were not operating the loan account in accordance with the terms and conditions of sanctions and defaulted in repayments. It is the further case of the applicant that despite repeated demands the defendants did not come forward to regularize the loan account and hence the same was classified as NPA on 18.12.2018 in accordance with the guidelines of RBI. As the defendants did not come forward to clear the dues the applicant issued a lawyer’s notice on 28.6.2021. Despite the said notice the defendants did not come forward to clear the dues. Hence the applicant is filing this OA for recovery of its dues.

6. Summons was taken out to the defendant and the same returned unserved with endorsement “Door Locked”, however, the 1st defendant represented by a Ld. Counsel and 2nd defendant was present in person before the Tribunal on 19.07.2022. As there was no representation on behalf of the defendants continuously and on 08.06.2023, the defendants were called absent and placed ex-parte on that day. Applicant Bank filed Proof Affidavit along with 6 documents, which were marked as Ex. A-1 to A-6 on 27.06.2024. The Ld. Counsel for Applicant Bank made his submissions on

15.09.2025 and thereafter the matter stood till this date for passing final orders.

7. 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.

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

9. The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-6 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 defendants. It is clear from the statement of accounts that penal interest is not capitalized.

10. 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.

11. In view of the fact that the loan facility availed by the defendant is a Working Capital Loan for business purposes and the applicant has claimed interest at contractual rate till the date of filing of the OA, this Tribunal is of the view that the pendente lite interest can be awarded at reduced rates and prayer for award of penal interest is rejected.

12. 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.133 of 2022 stands allowed.

(b) Applicant is permitted to realize a sum of Rs.60,46,654/- together with interest at the date of 9% (Simple) 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 other assets of the defendants.

(c) It is made clear that the 2nd defendant is 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.

13. 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 16th day of October, 2025)

EXHIBITS MARKED BY APPLICANT BANK

S. No. Date Description of Documents Exhibit Nos.

1. 23.11.2016 Loan application submitted by defendants A-1

2. 23.12.2016 Loan sanction letter A-2

3. 26.12.2016 Demand Promissory Note executed by the defendants. A-3

4. 26.12.2016 Composite hypothecation Agreement executed by the defendants A-4

5. 28.06.2021 Lawyer’s notice issued by the applicant A-5

6. Statement of Accounts A-6

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DESCRIPTION OF PROPERTY

NIL

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