Allowed

Canara Bank v. Sri. G Vishnumurthy

DRT20 Apr 2024OA/929/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the applicant bank's Original Application for recovery of an outstanding loan sum of approximately Rs. 59.36 lakh from the defendant, who failed to repay agricultural facility loans and interest, ruling in favor of the bank upon unchallenged documents.

What did the court decide?

Recovery of Rs. 59,36,988.98 along with interest from defendants jointly and severally; liberty to recover by sale of schedule properties and personal assets.

Canara Bank versus Sri. G Vishnumurthy — Banking and Recovery | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA

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AT BENGALURU

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Dated this 20^th day of April 2024

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

OA NO.929/2022

BETWEEN:

Canara Bank

Maski Branch Basavangouda Building, New Bazar,Maski Taluk, Raichur Dist, Karnataka – 584124 Through its Manager Mr. Sudhir Kumar Jitti ...APPLICANT

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AND

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Sri. G Vishnumurthy,

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S/o.Venkat Reddy,

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Prop: M/s. G Vishnumurthy & Ors warehouse,

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R/a Shankar Nagar Camp

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Maski, Lingasugur Tq Raichur Dist

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Karnataka – 584124

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Sri.G Venkateshwara Rao, S/o.G Vishnumurthy, R/a , Shankar Nagar Camp Maski, Lingasugur Tq Raichur Dist

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Karnataka – 584124

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Sri.G Sathyanarayana S/o. G Vishnumurthy, R/a, Shankar Nagar Camp

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Maski, Lingasugur Tq Raichur Dist

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Karnataka – 584124 …DEFENDANTS

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Counsel on record/appeared for:

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Applicant : VS Associates Defendant Nos.1 to 3 : Ex-parte.

OA No. 929/2022

FINAL ORDER

The present Original Application (OA) is filed on 19-05-2022, under section 19 of the Recovery of Debts due to Banks and Financial Institutions

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Act 1993 for recovery of a sum of Rs.59,36,988.98/-(Rupees Fifty Nine Lakhs Thirty Six Thousand Nine Hundred and Eighty Eight and Ninety Eight Paisa Only) with further interest thereon from the date of filing till realization from defendants.

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The Application filed is within the period of limitation as prescribed

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under Section 24 of the Recovery of Debts Due to Banks and Financial

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Institutions Act 1993 and the subject recovery claim falls within the jurisdiction of this Tribunal.

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Brief facts of the case:

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The Defendant No.1 approached the Applicant Bank for various occasions as more particularly set out in the dates and events for financial assistances towards agricultural purposes and the Applicant Bank, after due diligence, promptly sanctioned financial assistance to Defendant No.1 the

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details are below.

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Sl.	Loan Account No.	Date of	Date of	Amount
No		Application	Sanction
1	0545840007389	12.08.14	12.08.14	Rs.3,00,000
2	0545897000485	12.08.14	12.08.14	Rs. 7,50,000

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OA No. 929/2022

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3	0545844010349	17.04.17	17.04.17	Rs.50,00,000
		Total:		Rs. 60,50,000

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The Defendant No.1 executed various securities documents in favour of the Applicant.

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LOAN ACCOUNT NO. 0545840007389

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Sl. No	Date of Documents	Security documents executed by Defendants
1	12.08.2014	Agreement and Deed of Hypothecation for Kisan
		Credit Card executed by Defendant No.1 in
		favour of Applicant

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LOAN ACCOUNT NO.0545897000485

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Sl. No	Date of Documents	Security documents executed by Defendants
1	12.08.2014	Agreement and Deed of Hypothecation for Kisan
		Credit Card executed by Defendant No.1 in favour
		of Applicant

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LOAN ACCOUNT NO.0545844010349

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Sl. No	Date of Documents	Security documents executed by Defendants
1	17.04.2017	Access letter to godown executed by Defendant
		No.1 in favour of Applicant Bank

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OA No. 929/2022

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2	17.04.2017	Letter for loans/advances against securities i.e.
		Warehouse Receipt executed by Defendant No.1 in favour of Applicant Bank
3	17.04.2017	Demand Promissory Note along with take delivery note executed by Defendant No.1 in favour of
		applicant
4	17.04.2017	Warehouse receipt issued by Vishnumurthy
		warehouse in favour of Defendant No.1

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The Applicant submits that the Applicant has been extending Warehouse Receipt Loans to farmers those who depositing agricultural produce at the warehouses maintained by one M/s. G Vishnumurthy Warehouse. The Defendant No.1 by pledging agricultural produce. The pledged agricultural produce that are stored with the warehouses maintained by M/s. G Vishnumurthy Warehouse keeping in mind all the natural causes and market value concerned, the financial assistances were granted for a tenor of 1 year with a margin of 30%.

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The Defendant No.1 along with other guarantors created charge over the Schedule Properties by executing Mortgage Deed 08.08.2014 as a collateral security to the facilities availed by the various farmers. In addition to the above i.e. creating charge over the schedule properties by executing Mortgage Deed dated 08.08.2014. The Defendant No.1 for a sum of Rs.50 lakhs, against agricultural produce stored in the warehouse of M/s.

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OA No. 929/2022

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G Vishnumurthy Warehouse. The Defendant No.2 & 3 stood as guarantors to the Applicant Bank, by executing Guarantee Agreement dated 19.03.2016. The Defendant No.1 executed Revival letter on 28.07.2017 in case of first & second loan. Further Defendant No.1 has executed Simple Mortgage deed on 08.08.2014, in favour of the Applicant Bank.

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The Applicant Bank submits that though the Defendant No.1 had availed and utilized the financial assistance granted to Defendant No.1, failed and/or neglected to repay the aforesaid financial assistance granted to the Defendant No.1. The Account has become NPA when the loan installments due together with interest have not been paid as agreed. The Applicant Bank issued Legal Notice on 04.05.2022 demanding the Defendants to repay the outstanding liability and the same was duly accepted and acknowledged.

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The Applicant Bank further submits that the liability of Defendant No.2 & 3 is co-extensive that of the Defendant No.1 by execution of Agreement 19.03.2016. The Applicant Bank submits that they are entitled to recover an aggregate sum of Rs.59,36,988.98 as on 31.03.2022 along with interest @12.05% (10.05+2% penalty rate) in case of first loan, @13.00% (11.00+2% penalty rate) in case of second loan and @12.35% (10.35+2% penalty rate) in case of third loan thereon compounded half yearly with effect from 01.04.2022, till full and final payment and/or realization. The Applicant Bank submits that the Defendants, after availing the loans, failed to repay the loan amount and committed default. However,

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OA No. 929/2022

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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 Defendants No.1 on 12.10.222 and D2 & D3 on 13.03.2023 duly served, Acknowledgement produced. Hence, summons through substitute service was taken and the Applicant Bank published the summons to the Defendants in two daily leading newspapers kannada daily Newspaper “Samyuktha Karnataka ’’ and English Daily ‘’The New Indian Express” on 03.06.2023. When OA was taken up on 13,09.2023, even after giving sufficient time, there was no appearance or representation from the defendants, hence, Defendants No.1 to 3 was placed ex-parte on 13.09.2023.

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To prove the case, Sri.Sudhir Kumar Jitti S/o. Shivanand, aged about 34 years, Manager of the Applicant Bank, has filed Affidavit by way of evidence and same was considered as evidence of AW.1 and marked as Ex.A1, and documents came to be marked as Ex.A3 to A15. As the defendants remained ex-parte, 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, documents executed, the conduct and operations in the loan account and

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OA No. 929/2022

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the default committed, this Tribunal comes to the conclusion that the

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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 defendant Nos.1 to 3 jointly or severally, a sum of Rs. Rs.59,36,988.98/-(Rupees Fifty Nine Lakhs Thirty Six Thousand Nine Hundred and Eighty Eight and Ninety Eight Paisa Only) out of which:

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i) Pass an Order in favour of the Applicant directing the Defendant No.1, to pay the Applicant Bank balance sum of Rs.3,78,466.87 (Rupees Three Lakhs Seventy Eight Thousand Four Hundred Sixty Six and Paise Eighty Seven only) as on 31.03.2022 along with further interest @12.05% per annum (10.05+2% penalty rate) compounded half yearly with effect from 01.04.2022 Loan Account No.0545840007389.

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ii) Pass an Order in favour of the Applicant directing the Defendant No.1, to pay the Applicant Bank balance sum of Rs.10,53,466.11 (Rupees Ten lakhs Fifty Three Thousand Four Hundred Sixty Six and Paise Eleven only) as on 31.03.2022 along with further interest @13.00% per annum (11.00+2% penalty rate) compounded half yearly with effect from 01.04.2022, Loan Account No.0545897000485.

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OA No. 929/2022

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iii) Pass an Order in favour of the Applicant directing the Defendant Nos.1, 2 & 3 to pay the Applicant Bank balance sum of Rs.45,05,056/-(Rupees Forty Five lakhs Five Thousand Fifty Six only) as on 31.03.2022 along with further interest @12.35%(10.35+2% penalty rate) per annum compounded half yearly with effect from 01.04.2022 till full and final payment or date of realization, Loan Account No.0545844010349.

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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 mentioned properties in the OA;

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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 movables and immovables) 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

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OA No. 929/2022

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defendants and/or amount realized by sale of assets etc., during the intervening period after the filing of the OA, enabling the Registry to

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prepare Recovery Certificate for the amount to be paid by defendants to the applicant bank.

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(f) The Applicant Bank shall file memo of costs within ten days from the 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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12. A Copy of this order be communicated to the parties concerned.

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[Dictated to the (GS), transcribed by him, corrected and signed by me on this the 20^th day April 2024].

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Sd/-

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PRESIDING OFFICER DRT-II, BENGALURU ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Sri. Parashuram, Manager of the Applicant Bank.

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Exhibits on the part of the Applicant:

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Sl. No	Particulars	Exhibits
1	Application & Sanction letter dated 12.08.2014	A3
2	Application & Sanction letter dated 12.08.2014	A4
3	Application & Sanction letter dated 17.04.2017	A5
4	Agreement and Deed of Hypothecation for Kisan Credit Card executed by Defendant No.1 in favour of Applicant dated 12.08.2014	A6

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OA No. 929/2022

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5	Agreement and Deed of Hypothecation for Kisan Credit Card executed by Defendant No.1 in favour of Applicant dated 12.08.2014	A7
6	Access letter to godown executed by Defendant No.2 in favour of Applicant Bank dated 17.04.2017	A8
7	Letter for loans/advances against securities i.e. Warehouse Receipt executed by Defendant No.1 in favour of Applicant Bank dated 17.04.2017	A9
8	Demand Promissory Note along with take delivery note executed by Defendant No.1 in favour of applicant dated 17.04.2017	A10
9	Warehouse receipt issued by Vishnumurthy warehouse in favour of Defendant No.1 dated 17.04.2017	A11
10	Consolidated RSM deed for a value of Rs.900 lakhs which includes the present fifth loan to Defendant No.1, executed byDefendant dated 08.08.2014	A12
11	Guarantee covering letter and consolidated Guarantee agreement for value of Rs.9.00 crores executed by Defendant No. 1, 2, 3, 4, 5, 6 & 7 in favour of applicant, for Vishnumurthy warehouse issuing Warehouse Receipts to farmers for availing loans from Applicant Bank dated 19.03.2016	A13
12	Revival letter dated 28.07.2017	A14
13	Simple Mortgage Deed dated 08.08.2014	A15
14	Legal Notice dated 04.05.2022	A16
15	True Extract of Statement of Accounts pertaining to the Defendant’s Loan Accounts - 0545840007389	A17
16	True Extract of Statement of Accounts pertaining to the Defendant’s Loan Accounts - 0545844010349	A18

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Witness Examined for the Defendants:

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-Nil –

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List of Documents Exhibited for the Defendants:

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-Nil –

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SCHEDULE PROPERTY

Unit-I

OA No. 929/2022

All that piece and parcel of immovable property located in Maski Taluk belonging to Sri. G Vishnumurthy S/o. Venkatareddy in Sy Nos. as mentioned below :

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Sl No	Sy No.	Village	Extent (A-G)	Boundary Description
1	5 Hissa 1	Kabberal	5.00	East : G Varalakshmi land West : K Narasimha Rao land North : Road South : Nagappa land
2	10//	Hanchinal	10.00	East : Road West : Manappa Land North : Gangappa Land South : K Venu Land
3	44//	S Ramaladinni	2.25	East : Canal West : M Ramarao Land North: Road South: Canal

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Unit-II

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All that piece and parcel of immovable property located in S Ramaladinni

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village Maski Taluk belonging to Sri. G Venkateshwara Rao S/o.Vishnumurthy in Sy Nos. as mentioned below :

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Sl No	Sy No.	Extent (A-G)	Boundary Description
1	44//	0.03	East : G Venkataramana land
			West : D Anjaneyalu land North: Road South: Road

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Unit-III

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All that piece and parcel of immovable property located in Kabberal village Maski Taluk belonging to Sri. G Sathyanarayana S/o.Vishnumurthy in Sy Nos. as mentioned below :

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OA No. 929/2022

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Sl No	Sy No.	Extent (A-G)	Boundary description
1	5/*/2	2.33	East : P Sathyanarayan land West : G Venkateshwar Rao North : Road South : Neelakantappa Land
2	6/*/1	1.27	East : P Sathyanarayan land West : P Sathyanarayan land North : Road South : Neelakantappa Land

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Sd/-

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PRESIDING OFFICER DRT-II, BENGALURU

Canara Bank v. Sri. G Vishnumurthy

Case brief

What is this about?

What did the court decide?

Canara Bank v. Sri. G Vishnumurthy

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

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Statutes considered

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Case details

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