CANARA BANK vs PADMA BAI on 24 June 2026

:FINAL ORDER:

1. the transferred application filed before the DRT-I and stood transferred to this Tribunal and got re-numbered as above is filed seeking recovery of Rs.5,33,20,357/- (Rupees Five Crore Thirty Three Lakh Twenty Thousand Three Hundred and Fifty Seven only) with further interest claimed to be due in a overdraft, cash credit, WCTL which claim to have been availed by the 1st defendant.

2. The 1st defendant a Proprietary concern is the borrower, wherein the 2nd and 3rd defendant had given their personal guarantee and also mortgaged their properties in lieu of the security for the said facility. It is the case of the applicant that, a working capital term limit of Rs.4.95 crores which consist of a working capital of term loan of Rs.2.00 crores and a regular limit one time re-structuring of Rs.2.95 crores. It is also agreed that, the term loan availed is Rs.2.00 crores is also repayable in 53 monthly installments of the Rs.3,70,000/- and 54th installment of Rs.3,90,000/- which is arrived by calculating interest at 11.25% compounded monthly.

3. It is also contended that, even though the credit facilities were renewed on 2019, the defendants committed defaults forcing the applicant to approach this Tribunal by filing the OA.

4. The defendant No.2 entered appearance and filed written statement contending that, the documents filed by the bank cannot be accepted in evidence as the documents are not sufficiently stamped. It is also contended by the 2nd defendant that, the documents are liable to be impounded for want of stamp duty. In respect of the statement of account, it is contended that, the same is not attested as mandate under the statute and the mere entries in the statement of book for mere copies thereof is not sufficient to charge a person with liability. The defendant is also put forth a case that, there is capitalization of the penal interest.

5. The defendant No.3 entered appearance and filed their written statement contending that, the amount as claimed by the bank are not legally recoverable. The validity of the demand promissory note and hypothecation agreement are also disputed by the 3rd defendant. the defendant had given para wise rebuttal though not specific as to the pleadings of the OA and reference as to the documents mentioned by the applicant.

6. The applicant had already let in evidence and got marked documents as exhibit A1 to A14, even though the sufficient opportunities given to the defendants to adduce evidence no defense evidence is adduced leading this Tribunal to hear the matter.

7. Heard the submissions of the applicant counsel and perused the available records.

8. The following issues arise for consideration. i) Whether the applicant had succeeded in proving the liability of the defendants as put forth in the OA and their entitlement to the same recovered? ii) What Orders to be passed? Both the issues are gone into and decided together.

9. The case of the applicant as to the availment of credit facilities as mentioned in the OA is not seriously disputed by defendants. Apart from the vague denial as to the pleadings no specific denial is put forth even in the written statement. The documents produced by the applicant including the sanction letter and common hypothecation agreement which were marked as Annexure A1, A2, A10 evidences the sanctioning of the credit facility as put forth by the applicant. The demand promissory note is produced as A3 along with the guarantee covering letter by defendant Nos. 2 and 3 also proves the case of the applicant as to the sanctioning of the facilities as put forth in the OA. The memorandum of deposit of title deeds is produced at Ex.A9 evidences that the mortgage over the schedule property is created by the first defendant as towards the security of the amounts disbursed by the bank.

10. Even though, the defendant had taken a contention that, the documents produced by the applicant is not sufficiently stamped, this

Tribunal is not implement with the contention of the defendant as the loan documents produced by the applicant are properly stamped and the defendant had failed to put forth any anomaly in respect of the acceptability of the documents. Even otherwise, the defendants are not specifically denying the averments of the applicant as to their claim in the OA. It is trait law, the denial if any to be made in the written statement has to be specific and mere evasive denial tantamount to admission of what stated in the OA.

11. The defendant tries to discard the statement of accounts produced by the applicant as not admissible. Though, such contention taken, this Tribunal had adverted to the statement of accounts and found that statement of account is properly certified. Apart from the aspect as to the above certification no specific case as to the entries of the statement of account has been set up by defense, leaving this Tribunal to accept the amount as shown in the statement to be due in the loan account.

12. The claim of the applicant is well within the limitation, even though the defendant contends that there is capitalization of penal interest, this Tribunal is satisfied that, there is no capitalizations of penal interest and accordingly, the contention in the above regard is to be rejected.

13. Taking note for the fact that, the OA claim is entered by calculating interest at agreed rate that too with penal interest and default charges, this Tribunal is of the view that, the penda lite and future interest can be awarded at reduced rate @12.00%p.a. Taking note of the above, the penal interest is also declined.

14. In the result, TA.No.23/2020 stands allowed.

i) The applicant is allowed to recovery an amount of Rs.5,33,20,357/- (Rupees Five Crore Thirty Three Lakh Twenty Thousand Three Hundred and Fifty Seven only) with further interest of 12.00% p.a.(simple) from the date of filing TA till the realization from defendants, after giving credit to all the amount recovered and received during the pendency of the TA and allowed the same to be recovered by proceeding against the schedule property. The schedule to the TA be the schedule 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 jointly, severally, personally and other their assets 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.

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. [Dictated to the Stenographer (PR), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 24th Day of June 2026].

(T. RAJESH) PRESIDING OFFICER

ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Sri. Niranjan P, Officer of the applicant bank. Exhibits on the part of the Applicant: Annexure Particulars Date A1 Sanction Letter 29.02.2017 A2 Common hypothecation agreement 17.03.2018 A3 PRONOTE 17.03.2018 A4 Guarantee Covering letter by D2 17.03.2018 A5 Guarantee Agreement by D2 17.03.2018 A6 Guarantee Covering letter by D3 17.03.2018 A7 Guarantee Agreement by D3 17.03.2018 A8 Regd. Memorandum of Deposit of Title Deeds by D1 13.03.2018 A9 Sanction letter for OTR 30.09.2019 A10 Debt Restructuring Agreement 30.09.2019 A11 Debtor – Creditor Agreement 30.09.2019 A12 Letter of renewal 10.10.2019 A13 Certified account extract for OCC 19.03.2020

A14 Certified account extract for Term loan 19.03.2020

(T. RAJESH) PRESIDING OFFICER