IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI Dated the 9^th day of May, 2025 PRESENT: HON’BLE MR. JUSTICE G. CHANDRASEKHARAN CHAIRPERSON (arising out of OA 1458/2013 on the file of DRT, Bangalore)

Between

1. Sri Sreekumar S/o C.G. Menon, R/o No.5, Sungrace Apartments, Karakkat Road, Cochin 682 016.

2. Mrs. Shalini N. Menon, W/o G.R. Sreenivasan, Rep. by her Power Agent Sri Sreekumar, R/o No.5, Sungrace Apartments, Karakkat Road, Cochin 682 016.

…..Appellants And

1. Canara Bank, Gandhinagar Branch, Rep. by its Asst. General Manager Sri K. Anjaneyulu, Ground Floor, 2^nd Cross, Gandhinagar, Bangalore, 560 009.

(Amended as per Order dated 20.4.22 passed in IA 583/2021)

2. M/s Srishti Components, Represented by its Partners, Sri C. Naresh Babu & Sri C Raghavendra No.13/F, KIADB Industrial Estate, Doddaballapur, Bangalore 561 203.

3. Smt. Preetha Menon, W/o Achuthan K. Menon, No.600, 5^th Cross, 16^th Main, IV Block, Koramangala, Bangalore 560 034.

4. Mr. C. Naresh Babu, S/o Giddaiah, C/o C. Lakshminarayana, Lakshmi Nivas Building, Near Bharath Gas H.O., Rojipur, Doddaballapur, Bangalore 561 203.

5. Mr. T. Janeeth Kumar, S/o H.C. Thimmaiah, R/o No.7, Neerubhavi Muniyappa Compound, Anjanappa Layout Hebbal – Kempapura, Bangalore 560 024.

6. Sri C. Raghavendra, S/o Shivaiah, Saibaba Medical and General Stores, Opp: Govinda Rao Petrol Bunk, Raichur.

…..Respondents Counsel for Appellants : M/s Prashant Rajagopal & Co.

Counsel for R1 Bank : M/s P.Sreenivasulu & Co.

R2 to R6 are given up.

ORDER

1. This appeal is filed under Section 20 of RDDB & FI Act against the order passed by Learned Presiding Officer, DRT, Bangalore in OA No.1458/2013 on

27.1.2016.

2. Respondents 3 and 4 before the Tribunal below are the appellants.

The first respondent bank filed OA 1458/2013 against respondents therein for recovery of an aggregate sum of Rs.41,32,064.05p. towards Term Loan of Rs.24,96,059.69p together with interest at 18.25 % p.a with monthly rests and Over Draft amount of Rs. 16,36,004.36p together with interest at 16.25% p.a. from 28.2.2013 till date of realization and sale of hypothecated movables, along with costs.

3. The case of the first respondent bank is that second respondent, viz.

M/s Srishti Components is a partnership firm. Second respondent through its partners, viz., Smt. Preetha Menon, first appellant, Sri Sreekumar and the second appellant, Mrs. Shalini N. Menon approached the bank on 16.6.2008 for a Term Loan of Rs.35.00 lakhs for purchase of machinery and working capital of Rs.15.00 lakhs. Accordingly, first respondent bank sanctioned the said Term Loan of Rs.35.00 lakhs and an Overdraft facility of Rs.5.00 lakhs in favour of respondents 2 to 6 and appellants. Partners of the second respondent firm executed Composite Hypothecation Agreement dated 4.7.2008 in favour of the first respondent bank. Smt. Preethi Mohan and Shri P. Sreekumar stood as guarantors for the amount borrowed by the partnership firm by executing necessary guarantee agreements.

Partnership firm represented by its Managing Partner Mrs.Preethi Menon approached the first respondent bank in the month of April, 2009 and informed about the change in the constitution of the partnership firm to the effect that Sri C. Naresh Babu and Sri T. Janeeth Kumar have replaced Sri Sreekumar and Smt. Shalini M. Menon as per the fresh partnership deed dated 18.2.2009. They executed fresh set of documents in support of financial facility availed by the partnership firm earlier on 4.7.2008. They executed new composite hypothecation agreement dated 16.4.2009 in favour of the first respondent bank. Smt. Preetha Mohan, Sri C. Naresh Babu and Sri T. Janeeth Kumar executed fresh guarantee agreement on the same day. The firm represented by Shri C. Naresh Babu approached the bank on 4.10.2009 for enhancement of OD facility towards working capital requirement upto a limit of Rs.14.00 lakhs. Accordingly, OD Limit was enhanced to Rs.14.00 lakhs. Shri Naresh Babu and Shri T. Janeeth Kumar executed fresh composite h