Allowed

Canara Bank v. Rahamathulla

DRT31 Dec 2025OA/1882/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the bank's application under the RDB Act for a recovery certificate against three defendants who failed to appear. The court validated the loan documents and defaults, directing recovery of the principal sum plus reduced interest at 10% p.a. simple.

What did the court decide?

Issuance of Recovery Certificate for Rs. 21,32,574/- with 10% p.a. simple interest from filing date; defendants held jointly, severally, and personally liable.

Canara Bank versus Rahamathulla — 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 31^st Day of December, 2025

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Present: Sri. T. RAJESH

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Presiding Officer

OA. No.1882/2023

BETWEEN:

Canara Bank

Branch office at

Anandpura-577412 Branch, Sagara Taluk, Rep. by its Branch Manager, Sri. Abdulahmad J Suranagi … APPLICANT

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AND:

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Mr. Rahamathulla S/o. Mr. P G Abdulla Aged about 46 years Basavanabeedi, Anandapura-577412 Sagar Taluk, Shimoga District

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Ms. Anisha D/o. Mr. Rahamathulla Aged about 27 years Basavanabeedi, Anandapura-577412 Sagar Taluk, Shimoga District

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Sri. Nagaraja Shetty S/o. Sri. Narayana Shetty Aged about 46 years 7th cross, Nehru Nagar, Sagar – 577401 ...DEFENDANTS

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Counsel on record/appeared for: Applicant : Smt. Velanganni C Defendants : Exparte :FINAL ORDER:

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The present Original Application in short (OA) has been filed

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OA. No.1882/2023

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under section 19 of Recovery of Debts and Bankruptcy Act 1993 for seeking issuance of Recovery Certificate against the defendants for Rs.21,32,574/- (Rupees Twenty One Lakh Thirty Two Thousand Five Hundred and Seventy Four only) with further interest thereon from the date of filing the Application till realization from the Defendants.

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It is the case of the applicant that, the defendants availed the working capital OD facility of Rs.8,00,000/- for the purpose of working capital requirements on 10.11.2014 and working capital OD facility of Rs.10,00,000/- on 29.11.2017.

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It is also the case of the applicant that, in view of the above financed credit facilities, the defendants executed necessary loan documents.

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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 account 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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OA. No.1882/2023

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Despite, service of summons on the defendants, they failed to appear, resulting the defendants being set exparte on 23.07.2024.

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The applicant had let in evidence through AW-1, who filed their Proof Affidavit reiterating the contentions taken in the OA and also produced Exhibits A1 to A35 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: 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

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OA. No.1882/2023

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as stated in the OA, as to the execution of loan documents as claimed by the applicant bank 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 above finding which cover both the issues raised in this manner, 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 were availed for business purpose and also that 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 10.00% (simple).

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In the result, OA.No.1882/2023 stands allowed,

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i) The applicant is allowed to recovery an aggregate sum of Rs.21,32,574/- (Rupees Twenty One Lakh Thirty Two Thousand Five Hundred and Seventy Four only) with further interest of 10.00% p.a.(simple) from the date of filing OA till the realization from defendants, 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 the defendants jointly,

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OA. No.1882/2023

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severally and personally and their other assets, including the schedule is liable for all such amounts due under the loan account. The 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 amount due and payable to the applicant bank, the defendants jointly, severally and personally and their other assets are liable for all such amounts due under the loan accounts.

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ii) In the event of failure of the defendants to pay the aforesaid amount, the bank is at liberty to proceed against the defendants jointly, severally and personally and their other assets are liable for all such amounts due under the loan account.

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iii) The applicant bank is allowed cost of the proceeding 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 and transferred to Recovery for execution.

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v) Interim Application pending, if any, stands disposed of with this Final Order.

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OA. No.1882/2023

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14. Communicate a copy of the order to the parties concerned

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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 the Stenographer (PR), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 31^st Day of December 2025].

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Pramod Kumar Naik, Branch Manager of the applicant bank.

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Exhibits on the part of the Applicant:

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Annexure	Particulars
A1	Copy Of the Application for OD Dated 10.11.2014
A2	Copy of the sanction memorandum dated 10.11.2014
A3	Copy of the request for Overdraft facilities dated 10.11.2014
A4	Copy of letter of Undertaking re loans/Advances dated 10.11.2014
A5	Copy of the Pronote dated 10.11.2014
A6	Copy of the cash credit agreement dated 10.11.2014
A7	Copy of the loan application dated 04.02.2017
A8	Copy of the sanction memorandum dated 04.02.2017
A9	Copy of the letter of renewal dated 04.02.2017

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OA. No.1882/2023

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A10	Copy of the letter revival dated 10.02.2017
A11	Copy of the application for Overdraft facticity dated 29.11.2017
A12	Copy of the loan sanction memorandum dated 29.11.2017
A13	Copy of the letter of renewal dated 29.11.2017
A14	Copy of the Link letter in respect of enhancement of credit facilities dated 29.11.2017
A15	Copy of the Pronote dated 29.11.2017
A16	Copy of the request for Overdraft facilities dated 29.11.2017
A17	Copy of the supplemental agreement dated 29.11.2017
A18	Copy of the agreement re: collateral security machinery, vehicles dated 29.11.2017
A19	Copy of the guarantee covering letter along with Guarantee Agreement dated 29.11.2017
A20	Copy of the loan application dated 24.04.2019
A21	Copy of the loan sanction memorandum dated 24.04.2019
A22	Copy of the letter of renewal dated 24.04.2019
A23	Copy of the letter of revival dated 24.04.2019
A24	Copy of the letter of revival dated 24.04.2019
A25	Copy of the application for education loan dated 15.09.2017
A26	Copy of the sanction memorandum dated 15.09.2017
A27	Copy of the education loan agreement dated 15.09.2017
A28	Copy of the guarantee covering letter along with guarantee agreement of dated 24.11.2017
A29	Letter of revival dated 30.06.2020 executed by defendant No.1 and 2
A30	Letter of revival dated 04.05.2023 executed by defendant No.1

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OA. No.1882/2023

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A31	Letter of revival dated 04.05.2023 executed by defendant No.2
A32, A33	Copy of the legal notices dated 30.09.2023
A34	Copy of the statement of account certified under Bankers’ Book of Evidence Act., showing the outstanding liability under educational loan Account No.3151651000085
A35	Copy of the statement of account certified under Bankers’ Book of Evidence Act., showing the outstanding liability under educational loan account No.3151651000005

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Sd/-

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(T. RAJESH) PRESIDING OFFICER

Canara Bank v. Rahamathulla

Case brief

What is this about?

What did the court decide?

Canara Bank v. Rahamathulla

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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