CANARA BANK vs SRI.POORNIMA SURESH KHODAY PROPRIETRIX M S S P EXIMS on 28 May 2025

FINAL ORDER

1. The present Application was filed before the Debts

Recovery Tribunal-I, Bengaluru on 15.06.2020 under section 19 of Recovery of Debts and Bankruptcy Act 1993 and numbered as DY.No.1356/2020 to recover a Sum of Rs.1,94,87,696/-(Rupees one crore ninety four lakhs eighty seven thousand six hundred ninety six only) with further interest thereon from the date of filing the Application till realization from the Defendant. Subsequently, the Application was transferred from Debts Recovery Tribunal-I, Bangalore to this Tribunal and renumbered as TA.No.26/2020.

2. It is the case of the applicant that the defendant No.1 is borrower and Defendant No.2 stood as guarantor. Further, Defendant No.1 availed the a Cash Credit limit of Rs.1,50,00,000/- (Rupees one crore fifty lakhs only) for OCC loan amount.

3. It is also the case of the applicant that, in view of the above amount financed, the defendants executed necessary loan documents along with letter of proprietorship, common hypothecation agreement, on demand promissory note and guarantee covering letter.

4. It is also the case that the Defendant No.1 approached the applicant bank for restricting the facility dues to the applicant bank of Rs.1,80,00,000/- (Rupees one crore eighty lakhs only) on account of the OCC limit. Further, the applicant bank permitted the Defendant No.1 to convert the principal deficit out of working capital of Rs. 1,80,00,000/- (Rupees one crore eighty lakhs only) as Working Capital Term Loan of Rs.1,00,00,000/- (Rupees one crore only) and balance portion of Rs.80,00,000/- (Rupees eighty lakhs only) to be continued under regular limit under its One Time Restructuring Scheme.

5. It is further contended that, the defendant despite availing the credit facility, agreeing to service the loan account promptly and regularly, failed in complying the same, resulting in defaults in repayment and consequentially turning the loan accounts as NPA.

6. In the above circumstances, the applicant approached this Tribunal by filing this TA seeking issuance of Recovery Certificate for the amount due in the account.

7. Despite, service of summons on the defendants, they failed to appear, resulting the defendant being set exparte on 22.04.2024.

8. The applicant had let in evidence through AW-1, who filed Proof Affidavit reiterating the contentions taken in the TA and also produced Exhibits A-3 to A-17 and got the same marked in evidence.

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

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

Both these issues are gone into and decided together.

11. The case put forth by the applicant in the Application remains unrebutted as defendant 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 TA, creation of mortgage as claimed by the applicant bank and the defaults committed in the accounts. The liability of the defendants and the claim as the amount due is also proved by the above documents. The claim of the applicant is well within the limitation.

12. Hence in view of the finding arrived herein above, this Tribunal find both these issues in favour of applicant and hence this Tribunal is of the view that TA is liable to be allowed.

13.

13. Taking into consideration the facts that the credit facilities are availed by defendants for pure OCC loan purpose, this Tribunal in view of the rate of interest as claimed need not be reduced. However, as the TA claim is arrived at by calculating interest at the agreed rate and also by applying default interest, the prayer for monthly rest and future penal interest are declined.

14. In the result, TA.No.26/2020, stands allowed, The applicant is allowed to recovery an aggregate sum of Rs.1,94,87,696/-(Rupees One crore ninety four lakhs eighty seven thousand six hundred ninety six only) consisting of: i) For OCC loan limit a sum of Rs.85,94,083/- (Rupees eighty five lakhs ninety four thousand and eighty three only) with future interest @12.55% (Simple) and

ii) For Term loan a sum of Rs.1,08,93,613/- (Rupees one crore eight lakhs ninety three thousand six hundred and thirteen only) with future interest @13.55% (Simple) from the date of filing TA till the realization, from the defendant personally after giving credit to all the amount recovered and received during the pendency of the OA and allowed the same to be recovered by proceedings against the schedule property. Properties schedule to the TA be the schedule to the recovery certificate.

(ii) If the sale proceeds are not sufficient, the defendant and his other assets are liable to be proceeded against for the balance amount.

iii) The applicant bank is allowed cost of the proceedings 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 in terms of this final order.

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 (JV), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 28th day of May, 2025]. Sd/ (T. RAJESH) PRESIDING OFFICER

ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Sanjeev S Panicker, Senior Manager, of Applicant Bank. Exhibits on the part of the Applicant:

Exhibit Nos. Date Particulars of Documents A1 -- Applicant Evidence A2 -- List of Documents. A3 06.06.2017 Sanction Letter A4 06.06.2017 Letter of Proprietorship A5 06.06.2017 Pronote A6 06.06.2017 Common Hypothecation agreement A7 06.06.2017 Guarantee Covering letter A8 06.06.2017 Guarantee Agreement A9 31.05.2017 Regd. Memorandum of Deposit of Title deeds by D1 A10 31.05.2017 Regd. Memorandum of Deposit of Title deeds by D2 A11 24.08.2018 Letter of Renewal A12 30.09.2019 Sanction letter for restructuring A13 30.09.2019 Debt Restructuring Agreement A14 30.09.2019 Debtor- creditor agreement A15 10.10.2019 Letter of Renewal A16 19.03.2020 Certified Account Extract for OCC A17 19.03.2020 Certified Account Extract for Term loan.

Witness Examined for the Defendant: -Nil - List of Documents Exhibited for the Defendant: -Nil -

Sd/ (T. RAJESH) PRESIDING OFFICER