Allowed

Canara Bank v. Rakshith Kumar

DRT28 Nov 2025OA/1621/2024

Case brief

AI extract

What is this about?

The DRT allowed Canara Bank's recovery application against defendants liable for unsecured loans after defendants appeared exparte. The court validated the claim and issuance of a Recovery Certificate with interest reduced to 12% simple per annum.

What did the court decide?

Recovery Certificate issued for Rs. 70,93,500 plus interest at 12% p.a. (simple) from filing date till realization, recoverable from schedule property and defendants' assets.

Canara Bank versus Rakshith Kumar — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA

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AT BENGALURU

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Dated this 28^th Day of November, 2025

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Present: Sri. T. RAJESH

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Presiding Officer OA.No.1621/2024

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BETWEEN:

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Canara Bank, Manipal Branch, P.B. No. 13, Manipal, Karnataka- 576 104.

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…APPLICANT

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AND:

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Mr. Rakshith Kumar, S/o Sanjeeva Madivala, Aged about 30 years, Prop. Of M/s. Sri Durga Agro Industries, Near Forest guard Shed, Ullur Road, Kudrukod, Navunda Village, Byndoor Tq, Udupi District, Karnataka- 576 224.

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Residing at:

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D.No. 2-3A, Ragihaklu, Kundapura, Heroor, Udupi, Karnataka- 576 224.

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Mr. Shankar H. Madivala, S/o Ananta Madivala, Aged about 66 years, Residing at: No. 2/80A, Ganigarkeri, navunda Village, Byndoor Taluk, Udupi- 576 224. ...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : M/s. HSR & Associates Defendants : Exparte

OA 1621/2024

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. 70,93,500/- (Rupees Seventy lakh Ninety Three Thousand Five Hundred 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 working capital limit of Rs. 20 lakhs, OCC/OD limit of Rs. 20 lakhs and term loan of Rs. 14,50,000/- (Rupees Fourteen Lakh Fifty 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 necessary loan documents along with guarantee covering letter, agreements and registered memorandum of deposit of title deeds.

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It is further contended that, despite availing the credit facilities, agreeing to service the loan account 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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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, summon the defendants, they failed to appear, resulting the defendants being set exparte on 06.01.2025.

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OA 1621/2024

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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-27 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 sufficient to prove availment of credit facilities as stated in the OA, creation of the security interest 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. 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

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OA 1621/2024

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find both these issues in favour of applicant and hence, this Tribunal is of

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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.1621/2024, stands allowed,

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i) The applicant is allowed to recovery an aggregate sum of Rs.

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70,93,500/- (Rupees Seventy lakh Ninety Three Thousand Five Hundred Only) with further interest @12.00 % p.a.(simple) from the date of filing OA till the realization, from the defendants jointly, severally & personally,

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after giving credit to all the amount recovered and received during the pendency of the OA and allowed the same to be recovered by proceeding against 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 & 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 which

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

OA 1621/2024

order.

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

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transferred to Recovery for execution.

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

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of this final 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)

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Rules, 1993.

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[Dictated to the Stenographer (AJ), transcribed by her, corrected and signed and pronounced by me in the

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Open Court, this the 28^th Day of November, 2025].

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Sd/- (T. RAJESH)

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PRESIDING OFFICER

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Pavithra J P, Chief Manager, of Applicant Bank.

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Exhibits on the part of the Applicant:

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Exhibit Nos.	Date	Particulars of Documents
A1	22.06.2021	Loan application submitted by the defendant No.1
A2	30.09.2021	Sanction memorandum issued by the applicant bank
A3	01.10.2021	Pronote executed by the defendant No.1 in favour of the applicant bank
A4	01.10.2021	Request for overdraft facilities executed by the defendant No.1 in favour of the applicant bank

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OA 1621/2024

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A5	01.10.2021	Common hypothecation agreement executed by the defendant No.1 in favour of the applicant bank
A6	01.10.2021	Letter of undertaking Re: loans/ advances executed by the defendant No.1 in favour of the applicant bank
A7 to A10	01.10.2021	Two guarantee covering letter and two corresponding guarantee agreements executed by the defendants in favour of the applicant bank in respect of OCC/OD loan
A11 to A14	01.10.2021	Two guarantee covering letter and two corresponding guarantee agreements executed by the defendants in favour of the applicant bank in respect of Term loan
A15	30.09.2021	Registered memorandum of deposit of title deeds executed by the defendant No.2 in favour of the applicant bank
A16 & A17	--	E-Khata of the schedule property in the name of defendant No.2 in the revenue records issued by the rural development and panchayath raj in from Nos. 9 & 11A
A18	02.02.2022	Loan application submitted to the applicant bank by the defendant No.1 for term loan
A19	08.02.2022	Sanction memorandum issued by the applicant bank
A 20 & A21	09.02.2022	Supplemental common hypothecation agreement & Take delivery letter to DPN and pronote
A22& A23	09.02.2022	Guarantee covering letter and guarantee agreement executed by the defendant No.1
A24	28.03.2024	Letter of revival executed by the defendant No.1 maintained by the applicant bank in respect of 1250026207
A25	--	Certified account extracts of the defendant No.1 maintained by the applicant bank is respect of 125001426207
A26	--	Certified account extracts of the defendant No.1 maintained by the applicant bank is respect of 1700000993443

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OA 1621/2024

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A27	--	Certified account	extracts of the defendant
		No.1 maintained	by the applicant bank is
		respect of 170003	619620

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

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Sd/- (T. RAJESH) PRESIDING OFFICER

Canara Bank v. Rakshith Kumar

Case brief

What is this about?

What did the court decide?

Canara Bank v. Rakshith Kumar

Case brief

What is this about?

What did the court decide?

What the court decided

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