Allowed

Karnataka Bank Limited v. Rajdhani Cotton

DRT29 Aug 2025OA/1316/2023

Case brief

AI extract

What is this about?

The DR Tribunal allowed an original application under Section 19 of the RDB Act for issuance of a Recovery Certificate. The Tribunal found the claim against multiple defendants for loan defaults proved on evidence as they appeared ex parte.

What did the court decide?

Recovery Certificate issued for Rs. 10,01,29,642 plus convenience interest @ 12% p.a. simple from date of filing till realization, recoverable jointly, severally and personally from defendants and aga

Karnataka Bank Limited versus Rajdhani Cotton — Contract and Commercial Disputes | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 29^th Day of August, 2025

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Present: Sri. T. RAJESH

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Presiding Officer

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OA.No.1316/2023

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BETWEEN:

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M/s. Karnataka Bank Ltd. Branch office among others at: Minerva Circle Branch, No. 163, Ground Floor, Rajeshwari Complex, R.V. Road, Bengaluru- 560004. Karnataka. Represented by its Assistant Branch Manager, Sri. Ramachandra T.

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…APPLICANT

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AND:

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M/s Rajdhani Cotton, A partnership firm, Having its office at, No. 16/B, Ground Floor, 35^th Main, 4^th ‘C’ Cross, Jai Maruthinagar, Nandini Layout, Bengaluru- 560096. Represented by its partner, i) Mr. Prashanth Shiva Prasadem, ii) Mr. Praseeth Shiva Prasedem, iii) Mr. Jayakumar Veluswamy, iv) Mrs. Rekha Gupta.

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Mr. Prashanth Shiva Prasadem, S/o Late Sri. M.K. Saminathan, Aged about 41 years,

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OA 1316/2023

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Residing at Shiva Prasadam, House No. 10/151, Vengeri Kozhikode, Kerala- 673010.

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Mr. Praseeth Shiva Prasadem, S/o Late Sri. M.K. Saminathan, Aged about 37 years, Residing at Shiva Prasadam, House No. 10/151, Vengeri Kozhikode, Kerala- 673010.

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Mr. Jayakumar, S/o Mr. Velusamy S, Aged about 51 years, Residing at No. 44 & 45, Ramakrishnapuram, Karur, Tamilnadu- 639001.

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Mrs. Rekha Gupta, W/o Sri Rajat Gupta, Aged about 35 years, Residing at No. Flat No. 1 CD Ground Floor, Ascot Apartments, No. 0191, 6^th Main Raod, Defence Colony, Indiranagar, Bengaluru- 560038.

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Mr. Veluswamy Shanmugam, S/o Mr. Hankuam, Aged about 82 years, Residing at No. 44 & 45, Ramakrishnapuram, Karur, Tamilnadu – 639001.

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...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : Sri. K.V. Shyamaprasada

OA 1316/2023

Defendants : Exparte

FINAL ORDER

The present Original Application in short (OA) has been filed under section 19 of Recovery of Debts and Bankruptcy Act 1993 seeking issuance of Recovery Certificate against the defendants for Rs. 10,01,29,642/- (Rupees Ten Crore One Lakh Twenty Nine Thousand Six Hundred and Forty Two Only) with further interest thereon from the date of filing the Application till realization.

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It is the case of the applicant that, the defendants availed overdraft facility of Rs. 6,50,00,000/(Rupees Six Crore Fifty Lakh Only), term loan of Rs. 98,00,000/- (Rupees Ninety Eight Lakh Only) and Interest Deferment DPN 2020 of Rs. 28,85,000/(Rupees Twenty Eight lakh Eighty Five Thousand Only).

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It is also the case of the applicant that, in view of the above availed loans, the defendants executed the necessary loan documents along with memorandum of deposit of title deeds, Hypothecation agreement and copy of declaration.

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It is further contended that, despite availing the credit facilities, agreeing to service the loan amount promptly and regularly, the defendants failed in complying the same, resulting in default in repayment and consequentially turning the loan accounts as NPA.

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OA 1316/2023

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In the above circumstances, the applicant approached this Tribunal by filing this OA seeking issuance of Recovery Certificate for the amount due in the account.

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Despite, service of summons on the defendants, they failed to appear, resulting the defendants being set exparte on 28.10.2024.

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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 A-1 to A-51 and got the same marked in evidence.

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Heard the Ld. Counsel for the Applicant and considered the contentions as taken in the OA in the light of documentary evidence and proof affidavit.

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The following issues arise for consideration in this matter:

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

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ii) What order are to be passed?

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Both these issues are gone into and decided together.

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The case put forth by the applicant in the Application remains unrebutted as defendants remained exparte. The evidence tendered by the applicant remains uncontroverted and undisputed. The evidences put forth by the applicant were found admissible and are

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OA 1316/2023

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sufficient to prove availment of credit facilities as stated in the OA, creation of the security interest and hypothecation and the defaults committed in the accounts. The liability of the defendants and the claim of the amount due are also proved by the above documents.

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The claim of the applicant is well within the limitation.

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Hence in view of the findings arrived herein above, the Tribunal find both these issues in favour of applicant and hence, this Tribunal is of the view that OA is to be allowed.

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Taking into consideration the facts that the credit facilities are

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availed for Business purpose and also that the OA claim is arrived at by calculating interest at the agreed rate, this Tribunal in view of the OA can be allowed with a reduced interest of 12.00% (simple).

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In the result, OA.No.1316/2023, stands allowed,

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i) The applicant is allowed to recovery an aggregate sum of Rs. 10,01,29,642/- (Rupees Ten Crore One Lakh Twenty Nine Thousand Six Hundred and Forty Two Only) with further interest @12.00 % p.a.(simple) from the date of filing OA till the realization, from the defendants jointly, severally & personally, after giving credit

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to all the amount recovered and received during the pendency of the

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OA and allowed the same to be recovered by proceeding against

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OA 1316/2023

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schedule property. Properties schedule to the OA be the schedule to the recovery certificate.

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ii) If the sale proceeds are not found sufficient to cover the

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amount due and payable to the applicant bank, the defendants jointly, severally and personally and their assets are liable for respective amounts due under the respective loan accounts.

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iii) The applicant bank is allowed cost of the proceedings

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which applicant to file cost memo within 7 days from the date of receipt of the order.

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iv) The Recovery Certificate to be drawn in terms of this order

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and transferred to Recovery for execution.

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v) Interim application pending, if any, stands disposed of in

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terms of this final order.

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Communicate a copy of the order to the parties concerned in

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terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT

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(Procedure) Rules, 1993.

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[Dictated to the Stenographer (AJ), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 29^th Day of August, 2025].

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Sd/- (T. RAJESH) PRESIDING OFFICER

OA 1316/2023

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Sasmita Pangari W/o Saranjay Jena, Senior Branch Manager, of

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Applicant Bank.

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Exhibits on the part of the Applicant:

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Exhibit Nos.	Date	Particulars of Documents
A1	24.03.2020	Loan Sanction letter bearing No. GMS/CS- ME/001/8328/2019-20
A2	02.04.2020	The copy of On Demand promissory note
A3	02.04.2020	Take delivery letter
A4	02.04.2020	The copy of declaration letter executed defendant No.1
A5	02.04.2020	The copy of declaration letter executed defendant No.2
A6	02.04.2020	The copy of declaration letter executed defendant No.3
A7	02.04.2020	The copy of declaration letter executed defendant No.4
A8	02.04.2020	The copy of declaration letter executed defendant No.5
A9	02.04.2020	The copy of declaration letter executed defendant No.6
A10	02.04.2020	The copy of undertaking letter executed by defendants
A11	02.04.2020	The copy of letter of authority executed by defendants
A12	02.04.2020	The copy of letter of authority executed by defendants
A13	02.04.2020	The copy of letter of authority executed by defendants
A14	02.04.2020	The copy of the guarantee agreement
A15	02.04.2020	The copy of hypothecation agreement in favour of applicant bank
A16	01.10.2018	The copy of the memorandum of deposit of title deeds
A17	24.06.2020	The copies of the supplementary deed of deposit of title deeds

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OA 1316/2023

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A18	16.06.2020	The copies of the supplementary deed of deposit of title deeds
A19	25.06.2020	The copy of term loan agreement executed by defendants
A20	25.06.2020	The copy of declaration letter executed defendant No.1
A21	25.06.2020	The copy of declaration letter executed defendant No.2
A22	25.06.2020	The copy of declaration letter executed defendant No.3
A23	25.06.2020	The copy of declaration letter executed defendant No.4
A24	25.06.2020	The copy of declaration letter executed defendant No.5
A25	25.06.2020	The copy of declaration letter executed defendant No.6
A26	25.06.2020	The copy of the guarantee agreement executed by defendants
A27	25.06.2020	The copy of hypothecation agreement executed by defendant No.1 in favour of bank
A28	25.06.2020	The copy of general power of attorney executed by defendant No.1
A29	25.06.2020	The copy of declaration letter executed by defendant No.1
A30	--	The Copy of partnership letter
A31	25.06.2020	The copy of affidavit cum undertaking letter
A32	22.07.2020	The copy of sanction letter bearing No. DGMS/CS- ME/001/2846/2020-147-14921
A33	22.07.2020	The copy of On demand promissory note
A34	22.07.2020	The copy of take delivery letter
A35	22.07.2020	The copy of declaration letter
A36	22.07.2020	The copy of declaration letter
A37	22.07.2020	The copy of declaration letter executed by defendant No.3
A38	22.07.2020	The copy of declaration letter executed by defendant No.4
A39	22.07.2020	The copy of declaration letter executed by defendant No.5
A40	22.07.2020	The copy of the letter of authorities
A41	22.07.2020	The copy of the letter of authorities
A42	22.07.2020	The copy of the letter of authorities
A43	22.07.2020	The copy of hypothecation agreement

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OA 1316/2023

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A44	22.07.2020	The copy of guarantee letter dated
A45	22.07.2020	The copy of general power of attorney
A46	22.07.2020	The copy of affidavit cum undertaking letter
A47	06.12.2022	The copy of sale certificate
A48	17.09.2021	Demand notices under section 13(2) of SARFEASI Act along with acknowledgement
A49	--	Certified true extract of accounts of overdraft facility bearing No. 0627000600108701
A50	--	Certified true extract of accounts of term loan bearing No. 0627001800038401
A51	--	Certified True extract of accounts of interest deferment DPN 2020 loan bearing No. 0627001400016801

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Witness Examined for the Defendants: List of Documents Exhibited for the Defendants:

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-Nil -

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-Nil -

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Sd/- (T. RAJESH) PRESIDING OFFICER

Karnataka Bank Limited v. Rajdhani Cotton

Case brief

What is this about?

What did the court decide?

Karnataka Bank Limited v. Rajdhani Cotton

Case brief

What is this about?

What did the court decide?

What the court decided

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