Allowed

Karnataka Gramin Bank v. S M Agencies

DRT30 Oct 2025OA/260/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed Original Application filed by Karnataka Grameena Bank seeking Recovery Certificate against defaulting borrowers. Case was heard ex parte, and liability for principal and interest was established based on uncontroverted documentary evidence.

What did the court decide?

Recovery Certificate ordered for Rs.20,71,712 with 11% p.a. interest; proceeds recoverable jointly/severally from Defendants 1-3 and against schedule 'B' property of Defendants 4-5.

Karnataka Gramin Bank versus S M Agencies — Company and Corporate | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 30^th Day of October, 2025

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Present: Sri. T. RAJESH

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Presiding Officer

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OA. No.260/2022

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BETWEEN:

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Karnataka Grameena Bank Branch office at Super Market, Gulbarga-585102, Karnataka, Rep. by its Asst. Manager & Principal Officer in-charge

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… APPLICANT

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AND:

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Mr. Khaja Pasha Mulla Proprietor:

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M/s. S M Agencies S/o. Mr. Abdul Zabar Mulla H.No.4-629/2, Santraswadi Darga Road, Gulbarga – 585102

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Mr. Zulfiqar Adana Khan S/o. Mr. Abdul Zabbar Mulla H.No.5-993/20/14/15 Sy.No.20, Azadpur, Gulbarga-585102

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Mr. Taufeeq Ahmad S/o. Mr. Mahemood Patel H.No.4-840, Hafth Gumbaz, Maktampura, Gulbarga-585101

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Mr. Shaik Azhar Hussain S/o. Mr. Afsar Hussain H.No.4-629/2, Santraswadi Darga Road, Gulbarga-585102

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OA. No.260/2022

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Mrs. Sajida Begaum D/o. Mr. Ameer Ali H.No.5-993/20/14/15 Sy.No.20, Azadpur, Gulbarga-585102 ...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : Mr. T.P. Muthanna, Defendants : Exparte

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:FINAL ORDER:

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The present Original Application in short (OA) has been filed under section 19 of Recovery of Debts and Bankruptcy Act 1993 for seeking issuance of Recovery Certificate against the defendants for Rs.20,71,712/- (Rupees Twenty Lakh Seventy One Thousand Seven Hundred and Twelve 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 No.1 to 3 availed the Open Cash Credit limit of Rs.3,00,000/- on 08.06.2006. The defendant No.2 had sold the mortgaged property to defendant No.4, the defendant No.4 sold the same to defendant No.5. In view of the above, the defendant No.4 and 5 have arrayed as parties to the OA.

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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 apart from the creation of security interest by way of

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OA. No.260/2022

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hypothecation and mortgage over the Schedule ‘A & B’ proeprties.

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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 accounts.

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Despite, service of summons on the defendants, they failed to appear, resulting the defendants being set exparte on 09.08.2024.

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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 A18 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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OA. No.260/2022

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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 security interest 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 findings which cover both the issues raised in this manner, this Tribunal is of the view that OA is liable to be allowed.

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OA. No.260/2022

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Taking into consideration the facts that the credit facilities

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was 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 11.00% p.a.(simple).

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In the result, OA.No.260/2022 stands allowed,

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i) The applicant is allowed to recovery an aggregate sum of Rs.20,71,712/- (Rupees Twenty Lakh Seventy One Thousand Seven Hundred and Twelve only) with further interest of 11.00% p.a.(simple) from the date of filing OA till the realization from the defendants No.1 to 3, after giving credit to all the amounts recovered and received during the pendency of the OA allowed the same to be recovered by proceeding against defendants No.1 to 3 jointly, severally and personally and the defendant No.4 and 5 to the extent of schedule ‘B’ property and also by proceeding against the schedule properties. The schedule properties to the OA be the schedule properties 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, defendants

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OA. No.260/2022

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No.1 to 3 jointly, severally and personally and their other assets

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and the defendant No.4 and 5 to the extent of schedule ‘B’

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property, 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

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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

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order and transferred to Recovery for execution.

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v) Interim Application pending, if any, stands disposed of

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with this Final Order.

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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

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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 30^th Day of October 2025].

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(T. RAJESH) PRESIDING OFFICER

OA. No.260/2022

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Mr. G R Venkatesh, Manager of the applicant bank.

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Exhibits on the part of the Applicant:

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Annexure	Particulars
A1	Applicant evidence
A2	List of documents
A3	Copy of application for Trade Advances dated 08.06.2006
	Copy of sanction letter for Rs.3,00,000/-
A4	acknowledged by defendant No.1,2 and 3 dated 08.06.2006
A5	Copy of demand promissory note and DPN delivery letter executed by defendant no.1, 2 and 3 dated 08.06.2006
A6	Copy of the loan agreement dated 08.06.2006 by defendant No.1
A7	Copy of the Guarantee Agreement executed by defendant No.2 and 3 dated 08.06.2006
A8	Copy of the letter evidencing deposit of title deeds executed by the defendant No.2 dated 11.07.2005
	Copy of the letter confirming continuation of
A9	EMT for enhanced limit executed by the defendant No.2 dated 14.07.2005
A10	Copy of the revival letter -I dated 03.03.2009

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8 OA. No.260/2022

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A11	Copy of the revival letter executed defendant no.1 dated 03.03.2009	by
A12	Copy of the revival letter executed defendant Nos.1,2 and 3 dated 03.06.2018	by
	Copy of the letter confirming continuation	of
A13	EMT for enhanced limit executed by defendant No.2 dated 08.06.2006	the
A14	Recall notice dated 05.07.2018
A15	Recall notice dated 26.07.2018
A16	Reply by defendant No.1 dated 06.08.2018
A17	Demand notice under S.13(2) da 07.08.2018	ted
A18	Copy of the statement of account

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(T. RAJESH) PRESIDING OFFICER

Karnataka Gramin Bank v. S M Agencies

Case brief

What is this about?

What did the court decide?

Karnataka Gramin Bank v. S M Agencies

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

Coram

Case details

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