Allowed

Canara Bank v. Sri. Kanakaraju

DRT20 May 2024OA/595/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the bank's original application under the Recovery of Debts Act. The court confirmed the loans were within limitation and, with the defendants in ex parte, allowed recovery of principal, interest, and costs from the mortgaged and personal assets.

What did the court decide?

Allowed recovery of Rs.25,55,090/ along with interest; granted liberty to sell mortgaged and personal assets.

Canara Bank versus Sri. Kanakaraju — Contract and Commercial Disputes | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 20^th Day of May, 2024

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Present: SMT. S. V. GOWRAMMA

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Hon’ble Presiding Officer

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OA. No.595/2023

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BETWEEN:

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Canara Bank Hassan Main Branch-I, No.45, Near NR circle, Malnad House, Hassan-573 201, Hassan District. Represented by its Senior Manager, Sri. Hanumanthappa H … APPLICANT

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AND:.

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Sri. Kanakaraju S/o Kariyaiah Aged about 47 yers, R/at. Hongere Village, Shantigrama Hobli, Hassan Taluk, Hassan District-573 220.

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Sri. Sachin S/o Kanakaraju Aged about 20 years, R/at. Hongere Village, Shantigrama Hobli, Hassan Taluk, Hassan District-573 220.

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Kum. Supriya D/o Kanakaraju Aged about 20 years, R/at. Hongere Village, Shantigrama Hobli, Hassan Taluk, Hassan District-573 220.

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Kum. Suchitra D/o. Kanakaraju Aged about 20 years, R/at. Hongere Village, Shantigrama Hobli,

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OA. No. 595/2023

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Hassan Taluk, Hassan District-573 220. (Being a Minor is represented by her Natural Guardian and father Sri. Kanakaraju the D-1)

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...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : Sri. V. Haridas Bhat Defendant No.1 : Sri. J.N. Rohitha Defendant Nos.2 to 4 : Exparte.

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FINAL ORDER

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The present Original Application (OA) is filed on 08.03.2023 under section 19 of Recovery of Debts and Bankruptcy Act 1993 for recovery of a sum of Rs.25,55,090/- (Rupees twenty five lakh fifty five thousand ninety Only) with further interest thereon from the date of filing the Application till realization from the Defendants.

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The application filed is within the period of limitation as prescribed under Section 24 Recovery of the Debts and Bankruptcy Act 1993 and the subject recovery claim falls within the jurisdiction of this Hon’ble Tribunal.

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Brief facts of the case:

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It is the case of the applicant bank where in Defendant Nos.1 is the borrower and Defendant Nos.2 to 4 are co-mortgagors. The 1^st defendant approached the applicant bank seeking for Kissan Overdraft Loan of Rs.6,00,000/- (Rupees six lakh only) an loan application dated 27.12.2014 for the purpose of developing and levelling his agricultural land. After considering the request of the Defendant Nos.1, favorably the applicant bank sanctioned an Kissan Overdraft Loan of Rs.6,00,000/- (Rupees six lakh only) vide Sanction Memorandum dated 27.12.2014. The said loan

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OA. No. 595/2023

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was tenable for a period of 3 year, subject to renewal. The 1^st defendant agreed to pay the interest as and when due on the outstanding amounts in the loan account interest @ 12.20% p.a. compounded half yearly from the date of grant of loan and also agreed to pay overdue interest @ 2% p.a. overdue in the event of his default in repayment of the said loan. 3.1. The defendants executed necessary loan documents in favour of the applicant bank as security for the due repayment of the loans, interest, cost and charges, and Defendants executed Loan Agreement dated 27.12.2014 and Simple Mortgage Deed dated 24.12.2014, which was registered in the office of the Sub-Registrar, Hassan as Document NO. HSN-1-8082-201415 and stored in C.D. No. HSND260 and Letter of Revival dated 16.08.2017, 25.11.2019 and 29.03.2022 in favour of the Applicant Bank.

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Further, During the year 2014, the 1^st defendant approached the applicant bank seeking for KCC Loan of Rs.3,00,000/- (Rupees three lakh only) an loan application dated 27.12.2014 for the purpose of growing ginger, potato and other crops. After considering the request of the Defendant Nos.1, favorably the applicant bank sanctioned an KCC Loan of Rs.3,00,000/- (Rupees three lakh only) vide Sanction Memorandum dated 27.12.2014. The said loan was tenable for a period of 5 year, subject to renewal. The 1^st defendant agreed to pay the interest as and when due on the outstanding amounts in the loan account interest @ 11.20% p.a. compounded half yearly from the date of grant of loan and also agreed to

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OA. No. 595/2023

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pay overdue interest @ 2% p.a. overdue in the event of his default in repayment of the said loan.

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4.1. The defendants executed necessary loan documents in favour of the applicant bank as security for the due repayment of the loans, interest, cost and charges, and Defendants executed Agreement and Deed of Hypothecation for KCC Loan dated 27.12.2014 and Simple Mortgage Deed dated 24.12.2014, which was registered in the office of the Sub-Registrar, Hassan as Document NO. HSN-1-8085-2014-15 and stored in C.D. No. HSND260 and Letter of Revival dated 23.05.2017, 25.11.2019 & 29.03.2022 in favour of the Applicant Bank.

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The Applicant Bank submits that the Defendants, after availing the said facilities, failed to repay the loan amount and committed default. The loan account of the Defendant had been classified as a Non Performing Asset (NPA) and the Applicant Bank issue a Notice dated 25.01.2022 and Legal Notice dated 09.01.2023 calling upon the defendant to repay the entire 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.

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After the filing of the OA, summons was sent to the Defendant Nos.2 to 4 Registered Post with Acknowledgment Due the same is duly served on 14.02.2024 and Defendant No.1 entered appearance through counsel Sri. J.N. Rohitha by filling Vakalath, but did not file the written statement in spite of opportunity, hence Written Statement of Defendant

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OA. No. 595/2023

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No.1 was closed on 04.12.2023. When OA was taken up on 04.12.2023 even after giving sufficient time, there was no appearance or representation from the Defendants; hence, Defendants Nos.2 to 4 was placed exparte on 04.12.2023.

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Heard the submissions of Applicant Bank and perused the records.

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To prove the case of the Applicant Bank, Sri. Hanumanthappa H

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S/o late. H. Siddappa, Senior Manager, has filed Affidavit by way of evidence and same was considered as evidence of AW.1 and marked as Ex.A1, the list of Document came to be marked as Ex.A2 and documents

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came to be marked as Ex.A3 to A21. As the Defendant remained exparte, the OA claim remains unchallenged. There is no contra evidence available on record to repudiate the claim of the Applicant Bank.

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Having regard to the amount advanced, the interest applied, the

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conduct and operations in the 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:

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: O R D E R:

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The OA is allowed with costs,

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(a) The applicant bank is allowed to recover from Defendants to pay an amount of Rs.25,55,090/- (Rupees twenty five lakh fifty five thousand ninety Only) Consisting of :

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OA. No. 595/2023

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i. A sum of Rs.18,47,725/- (Rupees eighteen lakh forty seven thousand seven hundred and twenty five only) under Kissan Overdraft Loan along with interest @ 14.90% p.a. compounded half yearly rest from the date of OA Application till the date of realization.

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ii. A sum of Rs.7,07,365/- (Rupees seven lakh seven thousand three hundred and sixty five only) under KCC Loan along with interest @ 12.40% p.a. compounded half yearly rest from the date of OA Application till the

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date of realization.

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(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

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mentioned property in the OA;

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order;

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(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 movable and immovable) respectively to recover the balance dues as required under law;

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(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 defendant and/or amount

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OA. No. 595/2023

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realized by sale of assets etc., during the intervening period after the filing

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of the OA, enabling the Registry to prepare Recovery Certificate for the

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amount to be paid by the respective defendants to the applicant bank.

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(f) The applicant bank shall file memo of costs within ten days from the

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date of this final order.

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(g) Recovery Certificate shall be drawn up and issued to the Recovery

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Officer in terms of the final order.

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(h) Interim Application pending if any, stands disposed of with this Final Order.

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

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[Dictated to the (CS), transcribed by her, corrected and signed by me on this the 20^th Day of May 2024].

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Sd/-

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PRESIDING OFFICER DRT-II, BENGALURU

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Sri Sri. Hanumanthappa H S/o late. H. Siddappa, Senior Manager, of Applicant Bank.

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Exhibits on the part of the Applicant:

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Exhibit Nos.	Particulars of Documents	Date
A1	Applicant Evidence
A2	List of Documents.
	Kissan Overdraft Loan of Rs.6,00,000/-
A3	Loan Application for Development Loan of Rs.6,00,000/-	27.12.2014

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OA. No. 595/2023

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A4	Loan Sanction Memorandum	27.12.2014
A5	Loan Agreement executed by 1^stDefendant.	27.12.2014
A6	Mortgage Deed executed by defendants, registered in the office of the Sub-Registrar, Hassan as Document No. HSN-1-8082-2014-15 and stored in C.D. No. HSND260.	24.12.2014
A7	Letter of Revival executed by 1^stDefendant.	16.08.2017
A8	Letter of Revival executed by 1^stDefendant.	25.11.2019
A9	Letter of Revival executed by 1^stDefendant.	29.03.2022
	II- KCC Loan of Rs.3,00,000/-
A10	Loan application for KCC Loan of Rs.3,00,000/-	27.12.2014
A11	Loan Sanction Memorandum	27.12.2014
A12	Agreement and Deed of Hypothecation for KCC Loan executed by 1^stDefendant.
A13	Mortgage Deed executed by Defendants, registered in the office of the sub-Registrar, Hassan as Document No. HSN-1-8085-2014-15 and stored in C.D. No. HSND260.	24.12.2014
A14	Letter of Revival executed by 1^stDefendant.	23.05.2017
A15	Copy of Letter of Revival executed by 1^st defendant.	25.11.2019
A16	Copy of Letter of Revival executed by 1^st defendant.	29.03.2022
A17	Letter requesting to convert the Crop Loan to Term Loan.	25.11.2022
A18	Notice issued by the applicant bank to the 1^st defendant.	25.01.2022
A19	Legal Notice got issued by the Applicant Bank to the defendants.	09.01.2023
A20	Statement of A/c in respect of Kissan OD Loan A/c No.0531897000243
A21	Statement of A/c in respect of KCC Loan A/c No.0531897013395

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List of Witness Examined for the Defendants:

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-Nil -

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List of Documents Exhibited for the Defendants: -Nil -

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SCHEDULE

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(The description of the Immovable Property Mortgaged by the Defendant)

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OA. No. 595/2023

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All that piece and parcel of 6 acres 35 guntas of land in Sy.No.240/4 of Hongere Village, Shantigrama Hobli, Hassan Taluk & District, and bounded on:

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East by: Land of Murthy West by: Land of Chandregowda North by: Tank

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South by: Land of Murthy.

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Sd/-

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PRESIDING OFFICER DRT-II, BENGALURU

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OA. No. 595/2023

Canara Bank v. Sri. Kanakaraju

Case brief

What is this about?

What did the court decide?

Canara Bank v. Sri. Kanakaraju

Case brief

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What did the court decide?

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