CANARA BANK vs M/s SSJV Projects Pvt Ltd and Others on 27 February 2026

: - O R D E R - :

This Transfer application in short TA is filed u/s.19 of the Recovery of Debts due to Banks and financial Institution Act, (as it was then) seeking issuance of a Recovery Certificate for Rs.2,29,16,491.64 (Rupees Two Crores Twenty-Nine Lakhs Sixteen Thousand Four Hundred Ninety-One and Sixty-Four Paisa only) together with cost and interest. This Application was originally filed before DRT I and stood transferred to this Tribunal and got renumbered as above.

1. The applicant had filed IA.2721 of 2025, stating that Indian Bank had initiated proceedings u/s 14(1) of the Insolvency and Bankruptcy code 2016 and an order of Moratorium in force as against the 1st defendant. on the above premises, the applicant prays for deletion of 1st defendant, which stood allowed by the order dated 29.09.2025 consequently 1st defendant stood deleted from the party array.

2. The case of the applicant is as follows: The 1st defendant company (as it was then arrayed as a party) has been enjoying various credit facilities, including a Bank Guarantee facility from the year 2004 onwards. Defendants 2 to 6 executed Guarantee Agreements in respect of the said credit facilities, thereby guaranteeing the due repayment thereof. It is the further case of the applicant that the said facilities were renewed from time to time, and consequently, the guarantees executed by Defendants 2 to 6 continued to remain in force and were extended to cover the renewed facilities as well.

3. It is further contended that Defendants 3, 4, 5, and 6 created mortgages over Schedule A to D properties, respectively, as security for the due repayment of the credit facilities enjoyed by the 1st defendant.

4. It is also contended that the borrower company failed to make arrangement for the guarantee amounts extended in pursuant to Bank Guarantee, resulting the debiting of respective amounts to account of the borrower as the applicant Bank had to pay the amount covered by Bank guarantee to the beneficiary.

5. It is the further case of the applicant that despite repeated requests and demands, the defendants failed to make the repayment and the account of the borrower company become NPA. As the repayment was not forth coming, the OA is filed seeking issuance of a Recovery Certificate for the amount due from the defendants.

6. The defendants 1 to 3 had filed a Written Statement denying the averments as made in the OA and contending that the applicant had failed to provide any amicable settlement for the facility closure of the issues.

7. The 7th defendant who got himself impleaded in the OA filed his Written statement contending as follows:- The schedule properties belonged to Hindu undivided family and the 7th defendant had filed a suit for partition.

It is also contented that if the OA is allowed permitting the Bank to proceed, it would amount to allowing a coparcener or Kartha to deal with properties without consent of other coparceners. Hence according to the 7th defendant any arrangement including mortgage if any created over the property is not binding on the owner of the property.

8. The 7th defendant had also given the family tree which they claim is that of the Hindu Undivided Family. The 7th defendant further contends that she along with her sister and defendants 2 and 3 are in joint possession of property were belonged joint Hindu Undivided families. The 7th defendant had also contented that grandfather of the 7th defendant along with his brother was doing business as a partnersip utilizing their joint family and the said partnership form in the course had amazed wealth. The partnership stood dissolved in 1986. It is also stated that the properties were orally partitioned and terms were recorded by a memorandum of oral partition. Hence according to the 7th defendant, the property allotted to the 2nd defendant can be constituted as a joint Family Property. It is further contented that schedule property was purchased using the funds of partnership business of joint family. Hence according to the 7th defendant, the properties alleged to have mortgaged and part of the Hindu Undivided Family which according to the 7th defendant is fort filed by an oral declaration. The 7th defendant also contents that a partition suit came to be filed in the above situation. Hence in short according to the defendant no.7 since she being not a signatory to the alleged mortgaged the same is unenforceable.

9. Heard the Ld. counsel for applicant and when the matter is taking up it was submitted by the Ld. Counsel for defendants 2 and 3 that Moratorium is in force against the 2nd defendant as well, as being the personal guarantor to the Corporate Debtor, who had already been deleted from the party array in view of IBC proceedings.

10. In view of the fact that no relief could be granted against Defendant Nos. 1 and 2, as a moratorium is in force, the Bank is confining its prayer to the reliefs sought as against the other Defendants. It is also to be bone in mind that the defendant 3 to 6 have not contested the matter. In view of the limited scope of lis, this Tribunal is of the view that the case is to be decided against other defendants, namely defendants 3 to 7.

11. The applicant had adduced evidence by filing proof affidavit in term of the pleadings and yet marked Exhibit A3 to A62 where are appended to this order.

12. In view of revival pleadings, the following issues are for considered:

i) Whether the applicant had succeeded in proving the OA claim? ii) Whether the applicant is entitled to set relief as sought for against all the defendants?

13. Both these issues are gone into and decided together.

14. The applicant had let is evidence in the terms of the OA pleadings and got marked Exhibit A3 to A62 which evidences the availment of credit facilities and execution of loan documents. Even the case as to the creation of mortgage against A to D is not disputed by any of the defendants including the 7th defendant. The documents produced by the applicant are admissible in evidence and sufficient prove the case as to the availment of facilities as claimed in the OA and also as to creation of mortgage over the properties.

15. The claim of the applicant is not time barred. There is no capitalization of Penal Interest and the claim of the due amount is legally proved. The applicant is entitled to recover the amount as claimed in the OA. However, there cannot be any adjudication or orders as against the 1st defendant which stood deleted from the party array and also against the 2nd defendant.

16. The applicants case as to the liability of defendants 3 to 6 to repay the amount due in the transaction is successfully proved by evidence and documents. The contention as to the creation of mortgage over schedule properties are also proved by the applicant. The 3rd defendant by virtue of the Guarantee Agreement is liable to pay the due amount as claimed and proved by the Applicant.

17. In respect of the contentions take by the 7th defendant is concerned it is to be noted that the Applicant had proved the creation of mortgage as the respective Title Documents are duly deposited for the purpose of creation of mortgage. The original title documents pertaining to the Schedule A to D properties are produced by the applicant. Even the 7th defendant who is disputing the competence of the mortgages is not disputing the act of creation of mortgage by the mortgagers.

18. The 7th defendant claims that the properties mortgaged belonged to joint family and a partition suit is field in respect of the said properties. However, it is to be noted that till date no order declaring the right of 7th defendant or declaring the title documents deposited void is passed by any competent civil court. In the absence of any such orders this Tribunal is not inclined to enter into any adverse finding against the validity of the mortgage.

19. The contentions of the defendant 7 as to the pendency of Civil Suit and order of any passed by said Civil Court is not proved by any evidence as no defense evidence was let in despite granting sufficient opportunity.

20. In view of the discussion as held above and finding entered there in, this Tribunal is of the view that the applicant entitled to succeed in their claim against defendants 3 to 6 and also to proceed against schedule properties.

21. In the result, i) TA.428 of 2017 stands allowed as against defendants 3 to 6. ii) The applicant is entitled to realize altogether an amount of Rs.2,29,16,491.64(Rupees Two Crores Twenty-Nine Lakhs Sixteen Thousand Four Hundred Ninety-One and Sixty-Four Paisa only) with further interest @ 18.95% PA (simple) from the date of filing the application till realization from the defendants 3 to 6 and also by proceedings against schedule property. iii) If the sale proceed are not sufficient to clear the liability the 3rd defendants personally and his other assets are liable to be proceeded against.

iv) The applicant is entailed for cost of this litigation for which cost memo to be filed in 7 days from the date receipt of this order. v) A Recovery Certificate is to be drawn and issued to the recovery Officer to enable recovery of the as per the above terms. (Dictated to Py, directly on the computer, after its transcription, corrected, signed and pronounced by me in the open court on the 27th day of February, 2026)

Sd/- (T. RAJESH)

PRESIDING OFFICER Applicant Witness:

AW1 –Sri.S P Sivakumar, Senior Manager, Applicant Bank Exhibits on the part of the Applicant:

Exhibit Nos. Date Particulars of Documents A1 -- Evidence Affidavit A2 -- List of Documents A3 24.12.2004 Counter Indemnity A4 24.12.2004 Agreement for opening of the Inland Letter of Credit A5 24.12.2004 On Demand Promissory note A6 24.12.2004 Common Hypothecation agreement A7 24.12.2004 Guarantee Covering letter A8 24.12.2004 Guarantee agreement A9 24.12.2004 Guarantee covering letter A10 24.12.2004 Guarantee Agreement

A11 24.12.2004 Agreement RE: advances against book debts A12 19.03.2005 Corporate Guarantee Agreement A13 19.03.2005 Corporate Guarantee Agreement A14 19.03.2005 Corporate Guarantee Agreement A15 13.02.2006 Supplemental common hypothecation agreement A16 13.02.2006 Guarantee covering letter A17 13.02.2006 Guarantee agreement A18 13.02.2006 Guarantee Covering letter A19 13.02.2006 Guarantee agreement A20 07.03.2006 Corporate Guarantee Agreement A21 07.03.2006 Corporate Guarantee Agreement A22 07.03.2006 Corporate Guarantee Agreement A23 03.11.2008 Copy extract of the resolution A24 11.12.2008 Letter of revival A25 11.12.2008 Letter of revival A26 11.12.2008 Counter Indemnity A27 11.12.2008 Take Delivery letter A28 11.12.2008 Supplemental Common Hypothecation Agreement A29 11.12.2008 Letter of undertaking A30 11.12.2008 Guarantee covering letter A31 11.12.2008 Guarantee agreement A32 11.12.2008 Guarantee covering letter A33 11.12.2008 Guarantee agreement A34 13.02.2010 Letter A35 13.02.2010 Letter A36 13.02.2010 Letter A37 31.03.2010 Letter of Revival A38 31.03.2010 Letter of Renewal A39 31.03.2010 Guarantee covering letter

A40 31.03.2010 Guarantee Agreement A41 31.03.2010 Guarantee covering letter A42 31.03.2010 Guarantee agreement A43 24.12.2004 Letter evidencing Deposit of Title Deeds A44 -- Letter evidencing Deposit of Title Deeds A45 16.01.2004 Sale Deed A46 19.08.2004 Sale Deed A47 06.01.2005 Letter evidencing Deposit of Title Deeds A48 16.01.2004 Sale Deed A49 06.01.2005 Letter evidencing Deposit of Title Deeds A50 16.01.2004 Sale Deed A51 06.01.2005 Letter evidencing Deposit of Title Deeds A52 16.01.2004 Sale Deed A53 04.11.2009 Bank Guarantee A54 27.07.2010 Letter A55 05.02.2011 Letter A56 06.08.2011 Letter A57 01.02.2012 Letter A58 04.12.2012 Letter A59 06.12.2012 Letter A60 06.12.2012 Letter A61 07.02.2013 Legal notice A62 -- Statement of account

Witness examined for the Defendants:

-Nil- List of Documents Exhibited for the Defendants:

-Nil-

Sd/-

(T. RAJESH) PRESIDING OFFICER