Allowed

Federal Bank v. Arun Kumar M

DRT28 Oct 2025OA/123/2023

Case brief

AI extract

What is this about?

DT-II, Bangalore allowed the Recovery Certificate application for a vehicle loan default. The court held the applicant's evidence proved and adjusted interest to 8% p.a. simple, permitting recovery against hypothecated property and personal assets.

What did the court decide?

Recovery Certificate issued for Rs.24,35,623 with 8% simple interest; defendants jointly and severally liable; recovery via sale of hypothecated property.

Federal Bank versus Arun Kumar M — Contract and Commercial Disputes | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL-II, BANGALORE

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Dated this 28^th Day of October, 2025

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PRESENT: SHRI T. RAJESH Hon’ble Presiding Officer

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O.A.No.123 of 2023

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Federal Bank Limited, Branch office at Jayanagar, Bengaluru K.M.Plaza, Kanakapura Main Road, 30^th Cross, 7^th Block, Jayanagar, Bangalore – 560 082.

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… Applicant.

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Vs.

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Mr.Arunkumar M., S/o.Munikrishna @ Muniswamy.

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Mrs.Harshitha C., W/o.Arun Kumar.M.

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Both are R/at 661/A, 4^th Main, Pipe Line, Srinagar, Bengaluru – 560 050.

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Also at No.23, 3^rd Cross, Kattrigupe Main Road, Banashankari, Bengaluru – 560 085.

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Also at No.10/2, Pipeline Kallappa Block, Srinagar, Bengaluru – 560 050. … Defendants.

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Counsel for Applicant : Sri Nagaraj Damodar. Defendants : Exparte.

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ORDER

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The Application is filed under Section 19 (1) of the Recovery of Debts And Bankruptcy Act, 1993 seeking for issuance of a Recovery Certificate for a sum of Rs.24,35,623/- together with future interest @14.95% p.a. with monthly rests from 21.10.2022 till the date of realisation together with costs from the defendants jointly and severally and by way of sale of schedule mentioned hypothecated movable property.

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The Applicant contends that the defendants approached the applicant bank for Vehicle Loan of Rs.25,14,371/- for purchase of Toyota Innova Crysta 2.4 Z Car and availed the same on 05.06.2020 by execution of necessary loan documents including Agreement for Federal Personal Car Loan in which the defendants have hypothecated the same in favour of applicant.

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It is also stated that the above facility was availed after execution of necessary loan documents by defendants obliging themselves to repay the amount promptly and regularly, without fail.

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The Applicant further contends that after availing the aforesaid facility, the defendants failed to regularize the said loan and hence the loan account of the defendants was declared as Non-Performing

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Asset on 17.05.2022. The applicant bank has also initiated proceedings under the SARFAESI Act. Despite availing the credit facility by obliging to pay back the amount, the defendants failed in compliance of the same and all the efforts of the Applicant to make the defendants pay back the amount failed, forcing the Applicant to file this Application.

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Summons was taken out and as the defendants failed to enter appearance, they were set exparte on 18.10.2024.

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The Applicant had let in evidence through AW-1, who filed Proof Affidavit reiterating the contentions taken in the OA and also produced Exhibits A1 to A11, got the same marked in evidence.

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Heard. The following issues arise for consideration in this matter:

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i) Whether the applicant succeeded in proving the OA claim as against the Defendants?

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ii)If so, to what extent?

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Both these issues are gone into and decided together.

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The Applicant’s evidence remains un-rebutted and hence proved. The documents produced by the Applicant are found to be admissible and are sufficient to prove the OA claim. Hence the Applicant is found to be entitled for the OA claim. The OA claim is made within limitation and there is no capitalization of penal interest.

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Since the OA claim is arrived at by calculating interest with default

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interest and that the facilities are availed in respect of Vehicle Loan the pendent lite and future interest is awarded at simple rate that too at reduced rate of 8% p.a. (simple).

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In view of the above

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i) OA No.123 of 2023 stands allowed,

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ii) Applicant is permitted to recover an amount of Rs.24,35,623/(Rupees Twenty Four Lakhs Thirty Five Thousands Six Hundred and Twenty Three only) together with interest @8% p.a. (simple) from the date of filing of OA till the date of realization together with costs from the defendants jointly, severally and personally after giving credit to all the amounts recovered and received during the pendency of the OA and allowed the same to be recovered by proceeding against the schedule mentioned hypothecated property. The schedule to the OA to be the schedule to the Recovery Certificate.

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iii) If the sale proceeds are not sufficient to clear the liability, then the Defendants are personally and their other assets are liable to be proceeded against for realization of respective dues.

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iv) A Recovery Certificate is to be drawn and issued to the Recovery Officer to enable recovery of the dues as per the above terms.

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v) Interim application pending, if any, stands disposed of in terms of this final order.

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vi) Applicant is allowed to realize cost of the proceeding for which cost memo is to be filed in 7 days’ time from the date of receipt of the copy of the order.

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Communicate a copy of the order to the parties concerned in terms

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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, transcribed by him corrected and pronounced by me in the open Court on this the 28^th day of October, 2025)

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Sd./-

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(T. RAJESH)

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PRESIDING OFFICER

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Applicant Witness:

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AW1 –Mr.Shrikrishna Sharma, Vice President, Applicant Bank.

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Exhibits on the part of the Applicant:

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Ext A1 - Evidence Affidavit. Ext.A2 - List of documents. Ext.A3 - Loan Application dt.27.05.2020. Ext.A4 - Sanction Letter dt.05.06.2020. Ext.A5 - Agreement for Federal Personal Car Loans Scheme dt.05.06.2020. Ext.A6 - Copy of Personal Loan Agreement dt.05.06.2020.

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Ext.A7 - Demand notice u/s.13(2) of SARFAESI Act dt.24.05.2021. Ext.A8 - Postal receipts and Acknowledgements. Ext.A9 - Notice dt.13.07.2022. Ext.A10 - Statement of Account Extract. Ext.A11 - Certificate u/s.2A(B) & 2A(C) of the Bankers’ Books Evidence Act.

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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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Sd./-

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(T. RAJESH) PRESIDING OFFICER

Federal Bank v. Arun Kumar M

Case brief

What is this about?

What did the court decide?

Federal Bank v. Arun Kumar M

Case brief

What is this about?

What did the court decide?

What the court decided

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