Allowed

Canara Bank v. Basanna

DRT29 Oct 2025OA/1236/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the applicant bank's application for a recovery certificate against the defendant, who defaulted on agricultural produce loans secured by mortgage. The court found the claim proved due to lack of rebuttal and permitted recovery of the principal amount plus interest from schedule properties.

What did the court decide?

Recovery of Rs.21,34,109/- plus interest at 6% p.a. simple; issuance of Recovery Certificate against schedule properties and other assets.

Canara Bank versus Basanna — Specific Performance | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL-II, BANGALORE

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Dated this 29^th Day of October, 2025

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PRESENT: SHRI T. RAJESH Hon’ble Presiding Officer

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O.A.No.1236 of 2022

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Canara Bank, Branch at Maski, Basavan Gouda Building, New Bazaar, Maski, Raichur District – 584 124. Represented by its Manager and Constituted Attorney. . . . Applicant

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Versus

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Mr.Basanna, S/o.Mariyanna, Proprietor: M/s.Basanna Warehouse, R/a Hirekadboor, Manvi Taluk, Raichur District – 584 124. . . . Defendant.

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Ld. Counsels on record / appeared :-

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Counsel for Applicant :-Sri K.Raveendran. Counsel for Defendant :- Sri Sugurappa Mallappa. : - O R D E R - :

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The Application was filed by applicant before this Tribunal by the applicant under Section 19(1) of the Recovery of Debt And Bankruptcy Act, 1993 and numbered as above seeking for issuance of a Recovery Certificate for a sum of Rs.21,34,109/- together with

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OA No.1236/2022

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further interest @ 10.05% p.a. and 2% penal interest with half yearly rests from the date of OA till the date of realisation together with costs from the defendant and by way of sale of schedule mentioned properties.

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The defendant availed financial facilities for a sum of Rs.10,00,000/upon execution necessary loan documents with an overall exposure limit of Rs.53,00,000/- sanctioned to various farmers against agricultural produce stood in the warehouse of M/s.Basanna Warehouse wherein the defendant is the proprietor. The defendant created charge over the schedule mentioned properties by executing Regd. Simple Mortgage Deed dt.31.12.2015 registered as Doc.No.MNV-1-11032/2015-16 in the office of Senior Sub-Registrar, Manvi, Raichur as collateral security to the facilities availed by various farmers. The defendant also created charge over the schedule mentioned properties by executing Regd. Simple Mortgage Deed dt.11.01.2018 registered as Doc.No.MNV-1-11180/2017-18 in the office of Senior Sub-Registrar, Manvi, Raichur as collateral security to the facilities availed by various farmers. The defendant also executed Guarantee Agreement dt.03.10.2017 in favour of applicant bank for the said produce loan.

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OA No.1236/2022

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It is also stated that the facility is secured by mortgage of immovable properties described in Schedule to the OA.

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The Applicant further contends that despite availing the credit facility by obliging to pay back the amount, the defendant failed in compliance of the same and all the efforts of the Applicant to make the defendant pay back the amount failed forcing the Applicant to file this Application.

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Summons was taken out and the defendant filed written statement. The applicant adduced their evidence through AW1, who filed proof affidavit, produced documents and got marked Exhibits A1 to A11. Despite sufficient opportunities granted to defendant no defence evidence was adduced.

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In the statement of objection filed by the defendant, there is only denial of all the contentions of the applicant. It is further contended that applicant bank had not made M/s.Basanna Warehouse as a party to the proceedings. It is also contended that the schedule property is an ancestral property and the defendant has no right to mortgage the same. It is also the case of the defendant that his signatures were obtained in blank papers, statement of account did not reflect the accurate payments and also that the applicant bank charged exorbitant interest rates and unnecessary charges. Hence, the

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OA No.1236/2022

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defendant prayed for dismissing the OA.

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The OA claim is made within limitation and there is no capitalization of penal interest.

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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 as the only issue as to the proof of OA claim is answered in favour of the applicant. The defendant failed to substantiate his defence with the support of any kind of documentary evidence.

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Since the OA claim is arrived at by calculating interest with default interest and that the facilities are availed in respect of agricultural produce loan the pendent lite and future interest is awarded at simple rate that too at reduced rate of 6%. p.a. (simple)

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In view of the above

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i. OA 1236 of 2022 stands allowed.

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ii. Applicant is permitted to recover an amount of Rs.21,34,109/(Rupees Twenty One Lakhs Thirty Four Thousands One Hundred and Nine only) along with pendente lite and future interest @ 6% p.a. (simple) from the date of filing of OA till realization from the defendant after giving credit to all the amounts recovered

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OA No.1236/2022

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and received during the pendency of the OA and allowed the

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same to be recovered by proceeding against the schedule properties. 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 Defendant and his 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 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 29^th day of October, 2025)

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Sd./- (T. RAJESH) PRESIDING OFFICER

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OA No.1236/2022

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Applicant Witness:

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AW1 –Sri Korrapati Santhosh Satyanarayana, Senior Manager, 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 - Simple Mortgage Deed dt.31.12.2015. Ext A4 - Simple Mortgage Deed dt.11.01.2018. Ext A5 - Application for loan on goods or documents of title to goods along with enclosures dt.12.01.2016. Ext A6 - Sanction Memorandum dt.12.01.2016. Ext A7 - Agreement between the Warehouse/Cold Storage Unit and bank dt.03.10.2017. Ext A8 - Guarantee Agreement dt.03.10.2017. Ext A9 - Guarantee Covering Letter dt.03.10.2017. Ext A10 - Letter of Revival dt.12.12.2018. Ext A11 - Statement of Account in respect of PL account No.0545844009494 along with interest sheet and certificate.

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Witness Examined for the Defendant:

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NIL

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List of Documents Exhibited for the Defendant:

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NIL

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Sd./-

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(T. RAJESH) PRESIDING OFFICER

Canara Bank v. Basanna

Case brief

What is this about?

What did the court decide?

Canara Bank v. Basanna

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

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Case details

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