Allowed

Canara Bank v. Mallappa Dodamani

DRT24 Jan 2024OA/220/2022

Case brief

AI extract

What is this about?

A Debt Recovery Tribunal hearing an application filed by Canara Bank for recovery of loans, including a Farm Machinery Loan and KCCS Loan, from the co-borrower and the legal heirs of the deceased co-borrower. The court allowed the application after finding the defendants liable.

What did the court decide?

Recovery of a sum of Rs. 27,59,842/- from the defendants along with applicable interest; liberty to sell scheduled and personal assets for recovery.

Canara Bank versus Mallappa Dodamani — Contract and Commercial Disputes | DRT (2024)

¶1

IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA

¶2

AT BENGALURU

¶3

Dated this 24^th Day of January 2024

¶4

Present: SMT. S. V. GOWRAMMA Hon’ble Presiding Officer

¶5

OA NO.220/2022

¶6

BETWEEN:

¶7

Canara Bank, Shahpur Branch, Yadgir District-585 223. Karnataka. Represented by its Manager and PA Holder Sri.Channabasaiaha.H.M., S/o. Sri Veerabhadraiah H.M.

¶8

… APPLICANT

¶9

AND

¶10

Sri. Mallappa Dodamani S/o. Mallappa, Aged about 52 years,

¶11

Smt. Maralamma, W/o. Mallappa,

¶12

Aged about 48 years,

¶13

Smt. Chandramma, W/o Sharabanna, Aged about 46 years,

¶14

Sri. Bhimappa, S/o Late Mallappa Aged about 40 years.

¶15

Smt.Lakshmi, W/o Ayyappa, Aged about 38 years.

¶16

¶17

OA/220/2022

¶18

All are residing at: Itaga Village & Post, Shahapur Taluk, Gulbarga District Karnataka-585 223. …. DEFENDANTS

¶19

Counsel on record/appeared for:

¶20

Applicant : Sri. H.S. Rukkoji Rao Defendants Nos.1 to 5 : Ex-parte

¶21

FINAL ORDER

¶22

The present Original Application (OA) is filed on 02-06-2022, under section 19 of the Recovery of Debts due to Banks and Financial Institutions Act 1993 for recovery of a sum of Rs.27,59,842/- (Rupees Twenty Five Lakhs Fifty Nine Thousand Eight Hundred and Forty Two only) with further interest thereon from the date of filing till realization from defendants.

¶23

The application filed is within the period of limitation as prescribed under Section 24 of the Recovery of Debts Due to Banks and Financial Institutions Act 1993 and the subject recovery claim falls within the jurisdiction of this Tribunal.

¶24

Brief facts of the case:

¶25

The Applicant Bank submits that the Defendant No.1 was the son Smt. Gowramma, both of them are borrowers of both Farm Machinery Loan and KCCS Loan. The Co-borrower Smt. Gowramma died intestate on 13.02.2009 leaving behind the Defendants as her legal heirs to inherit the estate.

¶26

¶27

OA/220/2022

¶28

The Applicant Bank submits that the Defendant No.1 & his mother Smt. Gowramma have approached the Applicant Bank seeking Farm Machinery loan of Rs.4,50,000/- (Rupees Four Lakhs Fifty Thousand Only) to purchase Tractor & Trailer. The Defendant No.1 & Smt. Gowramma are the owners of the Schedule Property, who offered the same as collateral security for the loan amount sought by them. The Defendant No.1 & Smt. Gowramma have submitted loan Application dated 13.01.2006.

¶29

The Applicant Bank considered the proposal of the Defendant No.1 & Smt. Gowramma and sanctioned the Farm Machinery Loan Rs. 4,50,000/(Rupees Four Lakhs Fifty Thousand Only) to purchase the Tractor & Trailer vide Sanction Memorandum dated 13.01.2006 and the Defendant No.1 & Smt. Gowramma have acknowledged the same.

¶30

The Applicant Bank submits that the Defendant No.1 & Smt. Gowramma have availed Farm Machinery Loan of Rs. 4,50,000/- (Rupees Four Lakhs Fifty Thousand Only) and utilized the same for purchase of Tractor & Trailer. While availing the said facility, the Defendant No.1 & Smt. Gowramma executed Memorandum of Agreement for Agricultural loans dated 17.01.2006 in favour of the Applicant Bank.

¶31

The Applicant Bank submits that under the Agreement for Agricultural Loans, the Defendants No.1 & Smt. Gowramma have agreed to hypothecate the Tractor & Trailer purchased out of the Applicant Bank’s loan in favour of the Applicant Bank. The Defendants No.1 & Smt. Gowramma have agreed to repay the loan in 9 annual installments of Rs. 50,000/- each

¶32

¶33

OA/220/2022

¶34

commencing from 17.01.2007 agreed to pay interest & others charges separately along with the installments. The Defendants No.1 & Smt. Gowramma have agreed to pay interest at 10.75% p.a. compounded half yearly and penal interest of 2% p.a. on the overdue amount.

¶35

The Applicant Bank submits that the Defendants No.1 & Smt. Gowramma are the owners of the Schedule Property, who have created charge on the Schedule Property in favour of the Applicant Bank by executing Simple Mortgage Deed dated 13.01.2006 as security for the loan amount.

¶36

The applicant bank submits that the Defendants No.1 & Smt. Gowramma have executed Letters of Revival dated 16.07.2007 in favour of the Applicant Bank and confirmed the Tractor & Trailer loan availed by them and also execution of the loan documents in favour of the Applicant Bank.

¶37

The applicant bank submits that Smt. Gowramma died on 13.02.2009 leaving behind the Defendants herein as her legal heirs. The Defendant No.1 as legal heir of deceased Smt. Gowramma and as a Co-borrower has executed Letters of Revival dated 16.06.2010 (2 Nos.) 12.02.2013 (2 Nos.) 15.01.2016, 10.01.2016, 12.12.2018 (2 Nos.) & 08.11.2021 in favour of the Applicant Bank.

¶38

The Applicant Bank considered the KCCS Loan proposal of the Defendants No.1 & Smt. Gowramma and sanctioned KCCS Loan of Rs. 50,000/- (Rupees Fifty Thousand only) for the purpose of crop cultivation vide Sanction Memorandum dated 09.11.2006 and the same is

¶39

¶40

OA/220/2022

¶41

acknowledged by the Defendant No. 1. The Defendant No.1 & Smt. Gowramma have executed Agreement and Deed of Hypothecation for Kisan Credit Card dated 09.11.2006 in favour of the Applicant Bank.

¶42

The limit is tenable for 36 months subject to annual review. The Defendants No.1 & Smt. Gowramma agreed that no withdrawal in the account shall remain outstanding for more than 12 months. However, in case of annual yielding crops, the debits shall be wiped out at the time of marketing of the produce or within 18 months, whichever is earlier. The Defendant No.1 & Smt. Gowramma agreed to pay interest @ 9% p.a. compounded half yearly and penal interest of 2% p.a. on the overdue amount. The Defendant No.1 & Smt. Gowramma have hypothecated food grains produced in the Schedule Property in favour of the Applicant Bank.

¶43

The Defendant No.1 & Smt. Gowramma extended the subsisting mortgage of the Schedule Property for the liabilities arising out of KCCS loan by executing Form of Declaration dated 10.10.2006 as security for the loan amount availed by them and the same. The Applicant Bank submits that the Defendant No.1 has executed Letters of Revival dated 08.10.2009, 08.10.2012, 02.01.2015, 31.12.2017 & 02.11.2020 in favour of the Applicant Bank and confirmed the KCCS loan availed by him and also execution of the loan documents in favour of the Applicant Bank. The Defendants are liable to pay interest at applicable rate and penal interest of 2% p.a. on the overdue amount to the Applicant Bank.

¶44

¶45

OA/220/2022

¶46

The Applicant Bank submits that the Defendants, after availing the said multiple loans, failed to repay the loan amount and committed default. calling upon the Defendants to pay the outstanding loan amount. However, there was no positive response from the defendants. Hence, this Original Application (OA) has been filed to recover the dues from the defendants.

¶47

The Applicant Bank submits that it has seized the Tractor & Trailer under the Memorandum of Agreement for Agricultural Loans and the same is sold by conducting auction to the highest bidder. The sale proceeds has been adjusted to the loan account. Farm Machinery Loan A/c. No. 0569856003732 and KCCS Loan A/c. No. 0569840004088 of the Defendant No.1. Even after adjustment, still the Defendants are liable to pay to the Applicant Bank.

¶48

After the filing of the OA, summons was sent to the Defendants No.1 to 5 during the month of April 2022 by RPAD, duly served, Acknowledgement produced. When OA was taken up on 03.08.2022, even after giving sufficient time, there was no appearance or representation from the Defendants, hence, Defendants Nos.1 to 5 was placed ex-parte on 03.08.2022.

¶49

Heard the submissions of Counsels and perused the records.

¶50

To prove the case, the Applicant Bank, Manager, Sri. Channabasaiaha.H.M., aged about 38 years, S/o. Sri.Veerabhadraiah.H.M. has filed Affidavit by way of evidence and same was considered as evidence

¶51

¶52

OA/220/2022

¶53

of AW.1 and marked as Ex.A1, the list of Documents came to be marked as Ex.A2 and documents came to be marked as Ex.A3 to A27. As the defendant remained ex-parte, the OA claim remains unchallenged. There is no contra evidence available on record to repudiate the claim of the Applicant Bank.

¶54

Having regard to the amount advanced, the interest applied, documents executed, the conduct and operations in the loan account and the default committed, this Tribunal comes to the conclusion that the applicant bank is entitled to a final order on the following terms:-

¶55

: O R D E R:

¶56

The OA is allowed with costs,

¶57

a) i) The Applicant bank is allowed to recover from defendants a sum of Rs. 27,59,842/- (Rupees Twenty-Seven Lakhs Fifty

¶58

Nine Thousand Eight Hundred and Forty Two Only) out of the said amount.

¶59

(ii) Farm Machinery loan liability of Rs. 25,53,392/- carry interest @16.50% p.a. compounded half yearly from the date of OA till the date of realization;

¶60

(iii) KCCS liability of Rs.2,06,450/- carry interest @ 9.60% p.a. compounded half yearly from the date of OA till the date

¶61

Of realization; The Defendants Nos. 2 to 5 are liable to pay the OA amount only to the extent of value of their share inherited from their mother Smt. Gauramma.

¶62

¶63

OA/220/2022

¶64

(b) In the event of failure of the defendants to pay the aforesaid amount, the bank is at liberty to recover the amount by sale of the schedule mentioned properties in the OA;

¶65

¶66

(d) If the sale proceeds of the schedule mentioned properties are not sufficient to satisfy the dues as ordered above, the applicant bank is at liberty to sell the personal assets of the defendants (both movables and immovables) to recover the balance dues as required under law;

¶67

(e) The applicant bank shall file the latest memo of calculation of OA amount together with interest, costs etc., to be paid by the defendants duly considering the amounts, if any, paid by the defendants and/or amount realized by sale of assets etc., during the intervening period after the filing of the OA, enabling the Registry to prepare Recovery Certificate for the amount to be paid by

¶68

defendants to the applicant bank.

¶69

(f) The applicant bank shall file memo of costs within ten days from the date of this final order.

¶70

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

¶71

¶72

OA/220/2022

¶73

20. A copy of this order be communicated to the parties concerned.

¶74

[Dictated to the (GS), transcribed by her, corrected and signed by me on this the 24^th day of January 2024].

¶75

Sd/PRESIDING OFFICER DRT-II, BENGALURU

¶76

ANNEXURES

¶77

WITNESSES EXAMINED FOR THE APPLICANT BANK :

¶78

AW-1: Its Chief Manager, Sri.Narasing Rao, of the Applicant Bank.

¶79

Exhibits on the part of the Applicant:

¶80

Annexures	Particulars			Dated
A3	Loan Application submitted Defendant No.1 & Smt. Gowram	by ma	the	13.01.2006
A4	Sanction Memorandum issued Applicant Bank.	by	the	13.01.2006
A5	Memorandum of Agreeme Agricultural loans executed Defendant No.1 & Smt. Gowram	nt by ma.	for the	17.01.2006
A6	Simple Mortgage Deed execute Defendant No.1 & Smt. Gowram	d by ma.	the	13.01.2006
A7	Letters of Revival executed Defendant No.1 & Smt. Gowram	by ma	the	16.07.2007
A8 to A16	Nine Nos. of Letters of Revival by the Defendant No. 1	execu	ted	16.06.2010 (2 Nos.) 12.02.2013 (2 Nos.) 15.01.2016, 10.01.2016, 12.12.2018 (2 Nos.) & 08.11.2021

¶81

¶82

OA/220/2022

¶83

A17	Loan application submitted by the Defendant No.1 & Smt. Gowramma	09.11.2006
A18	Sanction Memorandum issued by the Applicant Bank.	09.11.2006
A19	Agreement and Deed of Hypothecation for Kisan Credit Card executed by the Defendant No.1 & Smt. Gowramma.	09.11.2006
A20	Form of Declaration as required under Section 6 of the Karnataka Agricultural Credit Operations & Miscellaneous Act, 1974	10.10.2006
A21 to A25	5 Nos. of Letters of Revival executed by the Defendant No. 1	08.10.2009 08.10.2012 02.01.2015 31.12.2017 02.11.2020
A26 & A27	Certified Account Extracts of the Defendant No. 1 maintained by the Applicant Bank in respect of Farm Machinery Loan & KCCS loan	-

¶84

Witness Examined for the Defendants:

¶85

-Nil –

¶86

List of Documents Exhibited for the Defendants:

-Nil –

OA/220/2022

SCHEDULE PROPERTY

¶91

The Def at Hand Item Nos.	endants ral Villa Sy. Nos .	are the o ge, Shaha Extent A – G	wners of the f pur Taluk & H	ollowing properties situated obli, Yadagiri District: Boundaries
1.	13	2-09	East by : West by : North by :	Govt. Road, Land of Siddappa, Land of Iranna,
			South by : Dodamani,	Land of Iranna
			East by :	Land of Bhimappa,
2.	35	3-06	West by : North by :	Land of Dyavamma, Land of Bhimaraya,
			South by :	Land of Marappa.
			East by :	Land of Bhimappa,
3.	34	0-15	West by : North by :	Land of Devindrappa, Land of Hanumantha,
			South by :	Land of Marappa.
			East by :	Land of Irappa.
4.	26	3-39	West by : North by :	Land of Saibanna, Land of Hanumantha,
			South by :	Land of Shanthappa.

¶92

Sd/-

¶93

PRESIDING OFFICER DRT-II, BENGALURU

Canara Bank v. Mallappa Dodamani

Case brief

What is this about?

What did the court decide?

Canara Bank v. Mallappa Dodamani

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Md Raziullah Khan versus Canara Bank

Shakti Earth Movers LLP versus State Bank of India

State Bank of India versus Awadhesh Kumar Yadav

Sri Ranjeet Kumar versus Idbi Bank

Yashwant Shaikshanik Krida va Sanskritik Sanstha Buldhana versus Auxilo Finserve Pvt. Ltd. through its Authorized Officer

Smt Asha Devi versus Punjab National Bank