CANARA BANK vs GUNALAN ENTERPRISES on 22 October 2026

FINAL ORDER

1. This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 against the defendants’ seeking issuance of a Recovery Certificate for recovery of a sum of Rs.37,48,287.62p together with interest at the rate of 10.85% per annum with yearly rests from the date of the application till the date of realisation along with costs of the application.

2. The subject matter of the case is the agricultural loan availed by the defendants from the Applicant Bank.

3. It is the case of the applicant that the defendants approached the applicant bank for grant of financial assistance by submitting application dated 12.11.2019 for developing business of cashew farming by hypothecating the cashew stocks at the warehouse and on the basis of transferable receipt. It is also the case of the applicant that the applicant bank considering the request of the defendants sanctioned a sum of Rs.31,95,000/- vide its sanction dated 12.11.2019.

4. It is also the case of the applicant that the sanction was subject to terms and conditions including the condition for repayment of the amount within twelve months. It is submitted that the 3rd defendant stood as guarantor for due repayment of the loan availed. It is the further case of the applicant

that the defendants executed necessary loan documents on 12.11.2019 and the defendants also executed guarantee agreement dated 12.11.2019.

5. It is the case of the applicant that the defendants defaulted in repayment and failed to comply with the terms and conditions of sanction the applicant issued the recall notice dated 25.12.2020. Despite the said notice the defendants did not come forward to clear the outstanding dues and hence the loan account was classified as NPA on 01.03.2021. As the defendants did not come forward to clear the outstanding dues despite repeated demands the applicant bank had no other option but to file the present OA is filed for recovery of its dues.

6. Summons was taken out to the defendants and the summons to the 3rd defendant was served and the defendants 1 and 2 were served with summons by way of substituted service by causing paper publication. As the defendants were absent and as there was no representation for the defendants on 10.01.2023, they were set ex-parte on that day. Applicant Bank filed Proof Affidavit along with 8 documents, which were marked as Ex. A-1 to A-8 on 04.04.2024. The Ld. Counsel for Applicant Bank made his submissions on 02.09.2026 and thereafter the matter stood till this date for passing final orders.

7. The following issues arise for consideration in the matter: - (a) Whether the applicant had succeeded in proving the liability of the defendants?

(b) What order as to cost of the proceedings need be passed?

These issues are considered together.

8. Heard the Ld. Counsel for the applicant, perused the OA averments and the record placed before the Tribunal.

9. The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-8 along with the proof affidavit. The documents produced in evidence are all found admissible. The proof affidavit of the applicant bank remained unchallenged and unrebutted. Therefore, on careful consideration of proof affidavit along with exhibits filed on behalf of the applicant bank, besides the material placed before the Tribunal, the Tribunal is satisfied that the applicant bank has successfully proved the OA claim against the defendants. Further, the statement of accounts in respect of the loan account produced and certified under the Banker’s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendants. It is clear from the statement of accounts that penal interest is not capitalized.

10. In view of the foregoing, it is clearly evident that the application filed by the applicant bank is well within the period of limitation and this Tribunal possesses the territorial and pecuniary jurisdiction to entertain this OA.

11. In view of the fact that the loan facility availed by the defendants are Cash Credit facilities for the purpose of its business and the applicant has claimed interest at contractual rate till the date of filing of the OA, this Tribunal is of the view that the pendente lite interest can be awarded at reduced rates.

12. In view of the afore mentioned discussions, the only conclusion this Tribunal can draw is that the applicant had clearly proved the disbursement of the loan, which the applicant is entitled to realize. Hence, OA is disposed off in the following manner: - (a) TA No.60 of 2022 stands allowed.

(b) Applicant is permitted to realize a sum of Rs.37,48,287.62p with further interest @9% per annum (simple) from the date of filing of the application till the date of realization in full, from the defendants jointly and severally after deducting all the amounts received / realized by them during the pendency of OA and also by selling the other assets of the defendants.

(c) It is made clear that the defendants are personally liable for all such amounts due as ordered above.

(d) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 15 days from the date of receipt of the copy of the order.

(e) The Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of this final order.

13. 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.

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(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 22nd day of October, 2026)

EXHIBITS MARKED BY APPLICANT BANK

S. No. Date Description of Documents Exhibit Nos.

1. 12.11.2019 Loan Application A-1

2. 12.11.2019 Sanction Memorandum issued by Applicant Bank. A-2

3. 12.11.2019 Agreement cum deed of hypothecation A-3

S. No. Date Description of Documents Exhibit Nos.

4. 12.11.2019 Guarantee covering letter A-4

5. 12.11.2019 Guarantee Agreement by 3rd defendant A-5

6. 07.11.2019 Lien letter to warehouse A-6

7. Legal Notice A-7

8. 05.06.2021 Statement of Accounts along with certificates under Bankers’ Book Evidence Act. A-8

Sd/-

DESCRIPTION OF PROPERTY

NIL

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