Allowed

Canara Bank v. Mahalingappa

DRT29 Aug 2025OA/285/2023

Case brief

AI extract

What is this about?

In an exparte application for a recovery certificate under the RDB Act, the Tribunal upheld the bank's claim of approx Rs. 26 lakhs arising from an agricultural loan default. The order granted recovery at a reduced interest rate of 6% simple.

What did the court decide?

Recovery certificate issued for Rs. 26,50,491/- with interest at 6% p.a. (simple) recoverable jointly, severally against defendants and schedule properties.

Canara Bank versus Mahalingappa — 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.285/2023

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BETWEEN:

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Canara Bank Kallambella Branch, Sira Taluk – 572139 Tumakuru District, Rep. by its Senior Manager Sri. Dhananjaya N P … APPLICANT

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AND:

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Sri. Mahalingappa S/o. Late Iramadappa Aged about 66 years

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Sri. Shashidhara S/o. Mahalingappa Aged about 37 years,

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Sri. Pradeep S/o. Mahalingappa, Aged about 32 years,

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All are Residing at, Karapehalli Village, Kallamebella Hobali, Sira Taluk, Tumakuru District ...DEFENDANTS

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Counsel on record/appeared for: Applicant : Sri. Mohamed Afroze Ahamed Defendants : Exparte

OA. No. 285/2023

FINAL ORDER

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.26,50,491/- (Rupees Twenty Six Lakh Fifty Thousand Four Hundred and Ninety One 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 loan of Rs.25,00,000/- for the purpose of Protected Cultivation of Capsicum under Polyhouse construction on 29.07.2015.

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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 mortgage over the Schedule properties.

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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. No. 285/2023

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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 accounts.

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Despite, service of summons on the defendants, they failed to appear, resulting the defendants being set exparte on 27.06.2024.

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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 A8 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

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remains unrebutted as defendants remained exparte. The

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evidence tendered by the applicant remains uncontroverted and

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OA. No. 285/2023

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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 account. The liability of the defendants and the claim of the amount due is also proved by the above documents. The claim of the applicant is well within the limitation.

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Taking into consideration the facts that the credit facilities

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was availed for agriculture 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 6.00% (simple).

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Hence in view of the above finding which cover both the

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issues raised in this manner, this Tribunal is of the view that OA is liable to be allowed.

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In the result, OA.No.285/2023 stands allowed,

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i) The applicant is allowed to recovery an aggregate sum

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of Rs.26,50,491/- (Rupees Twenty Six Lakh Fifty Thousand Four

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OA. No. 285/2023

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Hundred and Ninety One only) with further interest of 6.00% p.a.(simple) from the date of filing OA till the realization from the defendants, 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 jointly, severally, personally and also by proceeding against the schedule properties.

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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

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

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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. 285/2023

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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 29^th Day of August 2025].

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Sd/-

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(T. RAJESH) PRESIDING OFFICER

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Nagalingamurthy M R, Branch Manager of the applicant bank.

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Exhibits on the part of the Applicant:

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Annexure	Date	Particulars
A1	29.07.2015	Loan application
A2	29.07.2015	Sanction memorandum
A3	29.07.2015	Memorandum of agreement for agricultural loans
A4	18.09.2015	NF 373 Particulars of hypothecation
A5	21.07.2015	Regd. Simple Mortgage Deed
A6	23.07.2018	Revival letter
A7	20.07.2020	Revival letter
A8	--	Statement of account

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(T. RAJESH) PRESIDING OFFICER

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Sd/-

Canara Bank v. Mahalingappa

Case brief

What is this about?

What did the court decide?

Canara Bank v. Mahalingappa

Case brief

What is this about?

What did the court decide?

What the court decided

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Case details

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