CANARA BANK vs M/S BHAGYALAKSHMI INDUSTRIES AND OTHERS on 8 May 2026

FINAL ORDER:

1. The present Original Application in short (OA) has been filed under section 19 of Recovery of Debts and Bankruptcy Act 1993 for seeking issuance of Recovery Certificate against the defendants for Rs.2,68,84,489/- (Rupees Two Crore Sixty Eight Lakh Eighty Four Thousand Four Hundred and Eighty Nine only) with further interest thereon from the date of filing the Application till realization from the Defendants.

2. It is the case of the applicant that, the defendant No.1 is a partnership firm, rep. by its Partners i.e. Defendant Nos. 2 to 5 herein. The defendants availed Open Cash Credit Limit of Rs.75,00,000/- for establishing Dal processing Unit.

3. It is also the case of the applicant that, in view of the above financed credit facilities, the defendants executed necessary loan documents. Apart from the creation of security interest by way of mortgage over the Schedule property.

4. It is further contended that, despite availing the credit facilities, agreeing to service the loan amount promptly and regularly, the defendants failed in complying the same, resulting in default in repayment and consequentially turning the loan accounts as NPA.

5. In the above circumstances, the applicant approached this Tribunal by filing this OA seeking issuance of Recovery Certificate for the amount due in the accounts.

6. Despite, service of summons on the defendants, they failed to appear, resulting the defendants being set exparte on 14.10.2025. It is reported that the defendant No.3 deceased, represented by his LRS defendant No.3(1) to 3(f). The applicant is filed a memo dated 04.02.2026 stating that, the defendant No.3(f) was brought on record as LR of the defendant No.3 along with other LRs. The Advocate representing the defendant No.3(f) filed a memo stating that the defendant No.3(f) expired. The defendant Nos.3(a) to (e) are the siblings of the defendant No.3(f). The estate of the defendant No.3 is sufficiently represented by the defendant No.3(a) to (e) and they are already on record as LRs of the defendant no.3. Therefore, the case may e proceeded against the Defendant Nos.3(a) to (e).

7. The applicant had let in evidence through AW-1, who filed Proof Affidavit reiterating the contentions taken in the OA and also produced Exhibits A1 to A21 and got the same marked in evidence.

8. Heard the Ld. Counsel for the Applicant and considered the contentions as taken in the OA in the light of documentary evidence and proof affidavit.

9. The following issues arise for consideration in this matter: i) Whether the applicant had succeeded in proving the OA claim as against the defendants? ii) What order are to be passed?

Both these issues are gone into and decided together.

10. The case put forth by the applicant in the Application remains unrebutted as defendants remained exparte. The evidence tendered by the applicant remains uncontroverted and undisputed. The evidences put forth by the applicant were found admissible and are sufficient to prove availment of credit facilities as stated in the OA, creation of security interest as claimed by the applicant bank and the defaults committed in the account. The liability of the defendants and the claim of the amount due are also proved by the above documents. The claim of the applicant is well within the limitation.

11. Hence in view of the above findings which cover both the issues raised in this manner, this Tribunal is of the view that OA is liable to be allowed.

12. Taking into consideration the facts that the credit facilities were availed for business purpose and also that TA claim is arrived at by calculating interest at the agreed rate, this Tribunal in view of the TA can be allowed with a reduced interest of 6.00% p.a.(simple).

13. In the result, TA.No.2269/2017 stands allowed,

i) The applicant is allowed to recovery an aggregate sum of Rs.2,68,84,489/- (Rupees Two Crore Sixty Eight Lakh Eighty Four Thousand Four Hundred and Eighty Nine only) with further interest of 11.00% p.a.(simple) from the date of filing TA till the realization from the defendants No.1,2,4 and 5 and the defendant No.3(a) to (e) to the extent of his inheritance of any estate from the deceased defendant No.3, after giving credit to all the amounts recovered and received during the pendency of the OA and allowed the same to be recovered by proceeding against defendants No.1,2,4 and 5 jointly, severally and personally and also by proceeding against the schedule property. No claim against the deceased defendant No.3(f). The schedule property to the OA be the schedule property to the Recovery Certificate.

ii) If the sale proceeds are not found sufficient to cover the amount due and payable to the applicant bank, the defendants No.1,2,4 and 5 jointly, severally and personally and their other assets and the defendant No.3(a) to (e) to the extent of his inheritance of any estate from the deceased defendant No.3 are liable for all such amounts due under the loan accounts.

iii) The applicant bank is allowed cost of the proceeding which applicant to file cost memo within 7 days from the date of receipt of the order.

iv) The Recovery Certificate to be drawn in terms of this order and transferred to Recovery for execution.

v) Interim Application pending, if any, stands disposed of with this Final Order.

14. 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. [Dictated to the Stenographer (PR), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 8th Day of May 2026].

Sd/-

(T. RAJESH) PRESIDING OFFICER

ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Sri. Bhoom Reddy, Manager of the applicant bank. Exhibits on the part of the Applicant: Sl. No. Description of Documents Date Exhibit Number

Loan application submitted by the defendants 21.03.2002 A1

Sanction memorandum issued by the applicant bank 23.04.2002 A2

Partnership letter submitted by the defendants to the applicant bank 21.03.2002 A3

Particulars of the Guarantors/Co- obligant submitted by the Defendants to the applicant bank 08.04.2002 A4 to A7

Cash credit

agreement for Rs.75,00,000/- executed by the defendant No.1 Rep.by the Defendant No.2 29.04.2002 A8

Pronote for Rs.75,00,000/- executed by the defendant No.1 rep. by defendant No.2 29.04.2002 A9

Request for Overdraft facilities executed by the defendant No.1 Rep. by defendant No.2 29.04.2002 A10

Simple mortgage deed executed by defendant Nos.2 & 3 in favour of the applicant bank 27.04.2002 A11

Two Nos. of Guarantee Covering Letters and Guarantee Agreements executed by the Defendant Nos.2 and 3 29.04.2002 A12 to A15

Four Nos. of Letter of Revival executed by the Defendant No.2 in favour of the applicant bank 28.03.2005 26.02.2008 20.02.2011 A16 to A19

18.02.2014

Recall notice issued by the applicant bank to the defendants 02.08.2016 A20

Certified account extract of the defendants relating to the Open Cash Credit facilities -

A21

Sd/-

(T. RAJESH) PRESIDING OFFICER