CANARA BANK vs M/S SSJV PROJETS P. LTD. & ORS. on 30 June 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.69,41,62,722/- (Rupees Sixty Nine Crore Forty One Lakh Sixty

Two Thousand Seven Hundred and Twenty Two only) claim to be due from the 1st defendant company in lieu of various facilities availed by the said company including the bank guarantee.

2. It is also the case of the applicant that, other defendants No.2 to 6 have executed the guarantee agreements in security for the above facilities. The applicant contends that, the facilities were also secured by schedule properties owned by defendant No.3 to

6. Apart from the hypothecation over the movable assets. It is further contended by the applicant that, despite the amounts being disbursed on the assurance of repaying the same promptly, defaults occurred in the account, resulting the accounts becoming NPA and despite the repeated reminders and request no payments were forthcoming, resulting filing of this OA.

3. The defendant No.1 to 3 have filed their written statement contending that, the OA is filed after suppression of material facts, the applicant failed to put forth the facts, so claimed classification of the account as NPA is also disputed. Apart from the above, parawise evasive denial of pleadings is also put forth in the written statement.

4. The defendant No.4 has also filed written statement contending that there also contention taken by defendant No.1 and

2 were reiterated. Hence, going by the pleadings, it is clear that, the written statement of No.4 to 6 nothing but a verbatim reproduction of written statement filed by defendant No.1 to 3.

5. The defendant No.7 has filed written statement contending that the claim put forth in the OA is frivolous and it is also stated that, the defendant has filed a suit for partition as OS.No.8584/2012 for the purpose of partition and also for declaration of mortgage deed in respect of her share in the property is not sustainable. The 7th defendant had also prayed for keeping in abeyance to the proceedings till the matter is settled by the competent Civil Court in respect of partition suit. According to the 7th defendant, the schedule property A to C to the plaint before the Civil Court are joint family properties and the along with 2nd and 3rd defendant are all entitled to equal share in the estates and return of the said portion of the property. Hence, according to the 7th defendant if at all a recovery certificate is issued, the same can be enclosed excluding the rights portion over the 7th defendant is having right.

6. The applicant had let in evidence through AW-1, who filed Proof Affidavit reiterating the contentions taken in the OA and also produced Exhibits A3 to A55 and got the same marked in evidence. though sufficient opportunity granted to the defendants, no defense evidence is adduced.

7. In the meanwhile, the proceedings were initiated before the National Company Law Tribunal against the defendant Nos.1 to 3 whereby a moratorium came to be affected pursuant to which the application No.2325/2022 came to be filed seeking permission to proceed against the defendants No.3 to 6 alone. When the matter was taken up for hearing on 17.11.2025 the Ld. Counsel for the applicant submits that, taking view of the fact that, the moratorium is in effect with defendant Nos.1 to 3, the bank is intending to proceed against the defendant No.3 to 6 alone and consequent to which the applicant was permitted to carry out the amendment and the amendment to the effect has been carried out.

8. Heard the Ld. Counsel for the Applicant and Garnishee namely the National Highway Authority who denied the existence of Arbitration Award as claimed by the applicant against the defendant.

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. Since the applicant had taken a decision to give off their claim against the defendant Nos.1 to 3 in whose favour a moratorium in force in view of the proceedings before the NCLT the only question that is to be gone into is regarding the enforceability of the claim against the defendant No.3 to 6.

11. The applicant had produced Corporate Guarantee executed by 4 to 6 defendants and letter evidencing deposit of title deeds by the said defendants which in fact supports the pleadings of the applicant as to the guarantee extended by the defendants No.4 to 6 and also as to the mortgage created in lieu of security for the said facility. The loan document executed by the other defendant Nos.1 to 3 also substantiate the case as to the availment of loan in question, the documents produced by the applicant admissible in evidence and are sufficient prove the case of the applicant as put forth in the OA. The applicant has filed a part satisfaction memo, according to that, the bank had recovered an amount of Rs.38,30,39,000/- by the sale of OA schedule properties, which also evidences that the mortgage in respect of the said properties was valid and as there is no successful challenge as to the sale conducted as per the provision of the SARFAESI Act.

12. In the absence of any defense evidence and in absence of any written statement filed by the defendant Nos. 3 to 6 which in turn tantamount to admission of pleadings of the applicant as to the OA claim, this Tribunal is of the view that, the applicant is entitled to succeed the OA and accordingly the OA stands allowed as against defendant No.3 to 6.

13. Even though the Applicant filed an application seeking Garnishee order against National Highway Authority stating that an Arbitration award is passed against said Authority directing payment to the defendants, the said Authority filed the objection contending that the details furnished by the Applicant is not correct. In view of the above and also taking into consideration that no restrain order is sought against said Authority, no orders could be passed against it. Hence it will be open for the Applicant to pursue said remedy, if they choose, in Recovery Proceedings before the Recovery Officer.

14. Taking into consideration the facts that the credit facility was availed for business purpose and the security is already sold under SARFAESI proceeding and also that OA claim is arrived at by calculating interest at the agreed rate, this Tribunal in view of the OA can be allowed with a reduced interest of 12.00% p.a.(simple).

15. In the result, TA.No.1388/2017 stands allowed,

i) The applicant is allowed to recovery an aggregate sum of Rs.69,41,62,722/- (Rupees Sixty Nine Crore Forty One Lakh Sixty Two Thousand Seven Hundred and Twenty Two only) with further interest of 12.00% p.a.(simple) from the date of filing OA till the realization from the defendants Nos.3 to 6, after giving credit to all the amounts recovered and received during the pendency of the OA.

ii) In the event of failure of the defendant to pay the aforesaid amount, the bank is at liberty to proceed against the defendants No.3 to 6 jointly, severally, personally and their other assets are liable for all such amounts due under the loan account.

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.

16. 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 30th Day of June 2026].

(T. RAJESH) PRESIDING OFFICER ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Sri. Pramodh G, Officer and Power of Attorney of the applicant bank.

Exhibits on the part of the Applicant: Exhibit Nos Date Description A3 24.12.2004 Counter Indemnity executed by 1st Defendant A4 24.12.2004 Agreement for opening of the Inland Letter of Credit, executed by 1st Defendant A5 24.12.2004 On Demand Promissory Note executed by 1st Defendant A6 24.12.2004 Common Hypothecation Agreement executed by 1st Defendant

A7 24.12.2004 Guarantee Covering Letter executed by the 2nd Defendant A8 24.12.2004 Guarantee Agreement executed by the 2nd Defendant A9 24.12.2004 Guarantee Covering Letter executed by the 3rd Defendant A10 24.12.2004 Guarantee Agreement executed by the 3rd Defendant A11 24.12.2004 Agreement RE: advances against book debts, executed by 1st Defendant A12 19.03.2005 Corporate Guarantee Agreement executed by the 4th Defendant A13 19.03.2005 Corporate Guarantee Agreement executed by the 5th Defendant A14 19.03.2005 Corporate Guarantee Agreement executed by the 6th Defendant A15 13.02.2006 Supplemental Common Hypothecation Agreement executed by the 1st Defendant A16 13.02.2006 Guarantee Covering Letter executed by the 2nd Defendant A17 13.02.2006 Guarantee Agreement executed by the 2nd Defendant A18 13.02.2006 Guarantee Covering Letter executed by the 3rd Defendant A19 13.02.2006 Guarantee Agreement executed by the 3rd Defendant A20 07.03.2006 Corporate Guarantee Agreement executed by the 4th Defendant

A21 07.03.2006 Corporate Guarantee Agreement executed by the 5th Defendant A22 07.03.2006 Corporate Guarantee Agreement executed by the 6th Defendant A23 03.11.2008 Extract of the resolution passed by the 1st Defendant A24 11.12.2008 Letter of Revival executed by the 1st Defendant A25 11.12.2008 Letter of Renewal executed by the 1st Defendant A26 11.12.2008 Counter Indemnity executed by the 1st Defendant A27 11.12.2008 On Demand Promissory Note executed by the 1st Defendant for Rs.54 Crores A28 11.12.2008 Supplemental Common Hypothecation Agreement executed by the 1st Defendant A29 11.12.2008 Letter of Undertaking executed by the 1st Defendant A30 11.12.2008 Guarantee Covering Letter executed by the 2nd Defendant A31 11.12.2008 Guarantee Agreement executed by the 2nd Defendant A32 11.12.2008 Guarantee Covering Letter executed by the 3rd Defendant A33 11.12.2008 Guarantee Agreement executed by the 3rd Defendant A34 13.02.2010 Letter addressed by the 4th Defendant A35 13.02.2010 Letter addressed by the 5th Defendant

A36 13.02.2010 Letter addressed by the 6th Defendant A37 31.03.2010 Letter of Revival executed by the 1st Defendant A38 31.03.2010 Letter of Renewal executed by the 1st Defendant A39 31.03.2010 Guarantee Covering Letter executed by the 2nd Defendant A40 31.03.2010 Guarantee Agreement executed by the 2nd Defendant A41 31.03.2010 Guarantee Covering Letter executed by the 3rd Defendant A42 31.03.2010 Guarantee Agreement executed by the 3rd Defendant A43 24.12.2004 Letter Evidencing Deposit of Title Deeds by 3rd Defendant A44 26.04.2007 Letter Evidencing Deposit of Title Deeds by 3rd Defendant A45 16.01.2004 Sale Deed executed Smt. Lakshmi Bai Gurjer & others in favour of the Defendant Nos. 3, registered as Document No.95.03- 04, volume No. ADR-7, at pages 70-95, of Book- 1, in the Office of the Sub- Registrar, Chickamagalur A46 19.08.2004 Sale Deed executed by Sri. M. Vittal Shetty in favour of the 3rd Defendant, registered as Document No.39/04-05, volume No.ADR-10 at pages 38-42, of Book-1 in the Office of the Sub-Registrar, Chickamagalur.

A47 06.01.2005 Letter Evidencing Deposit of Title Deeds by the 4th Defendant A48 16.01.2004 Sale deed executed by Smt. Lakshmi Bai Gurjer & others In favour of the 4th Defendant registered as Document No.97/03-04, volume No.ADR-7,at pages 117-137, of Book-1, in the Office of the Sub-Registrar. Chickamagalur. A49 06.01.2005 Letter Evidencing Deposit of Title deeds by the 5th Defendant. A50 16.01.2004 Sale deed executed by Smt. Lakshmi Bai Gurjer & others in favour of the 5th Defendant registered as Document No.98.03-04, Volume No.ADR-7 at pages 138-158, of Book-1 in the Office of the Sub-Registrar, Chickamagalur A51 06.01.2005 Letter Evidencing Deposit of Title Deeds executed by the 6th Defendant. A52 16.01.2004 Sale Deed executed by Smt. Lakshmi Bai Gurjer & others in favour of the 6th Defendant registered as Document No.96/03-04, volume No.ADR-7,at pages 96-116, of Book-I, in the Office of the Sub-Registrar, Chickamagalur A53 26.05.2010 Recall notice issued by the Applicant bank A54 31.07.2010 Legal notice got issued by the Applicant bank A55 02.03.2010 Sanction Letter addressed by the Applicant bank and accepted by the 1st Defendant

A56 - Statement of accounts in respect of Bank Guarantee Commission due from the 1st Defendant A57 - Statement of accounts in respect of the Term Loan Account No.44 A58 - Interest Calculation Sheet

(T. RAJESH) PRESIDING OFFICER