Allowed

Karur Vysya Bank v. Shobha a Hiremath and Others

DRT28 Oct 2025OA/318/2024

Case brief

AI extract

What is this about?

This judgment allows an original application for issuance of a recovery certificate against three defendants for debt amounts of approximately Rs. 2.15 crore. The debt arose from OCC, Smart Home, and Car loans where defendants availed credit and defaulted. The court noted the claim was within limitation and allowed recovery with specific interest rates while declining requests for penal interest.

What did the court decide?

a recovery certificate for an aggregate sum of Rs. 2,14,95,027.11 including simple interest on specific loan components. the order allowed recovery as per the equity schedule to certificate.

Karur Vysya Bank versus Shobha a Hiremath and Others — 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 28^th Day of October, 2025

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Present: Sri. T. RAJESH Presiding Officer

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OA.No.318/2024

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BETWEEN:

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The Karur Vysya Bank Limited, Branches amongst other place at No. 101, Ground Floor, ‘Sree Siddalingeswara Swamy Arcade’ Vivekananda Main Road, Off: M.G. Road, Tumkur- 572 101. Represented by its Chief Manager, Sri. Mahadevan S.R, ARB Branch, Divisional Office, V.V. Puram, Bangalore- 560 004. AND:

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…APPLICANT

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Smt. Shoba A. Hiremath, W/o Sri. A.B. Hiremath, Aged about 51 years, Proprietrix M/s. ABH Enterprises, Having its Business Place at shop No. 14, ‘Santrupti Complex’, Vivekananda Road, Tumkur- 572 101.

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Also at:

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Smt. Shoba A. Hiremath, R/at: Basavaraju House, Sunadakatee, Aralepet, Tumkur- 572 101.

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Sri. A.B. Hiremath, S/o Sri. Basavaiah, Aged about 56 years.

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Sri. A.H. Basavaraju, S/o Sri. A.B. Hiremath, Aged about 28 years,

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All are R/at : Basavaraju House, Sunadakatee, Aralepet, Tumkur- 572 101.

...DEFENDANTS

OA 318/2024

Counsel on record/appeared for:

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Applicant : T. Mohandas Rao 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 seeking issuance of Recovery Certificate against the defendants for Rs. 2,14,95,027.11 (Rupees Two Crore Fourteen Lakh Ninety Five Thousand Twenty Seven and Paise Eleven 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 defendant No.1 availed the following credit facilties:-

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OCC Fresh limit of Rs. 2 crore, defendant No. 2 & 3 stood as guarantors.

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KVB Smart Home loan of Rs. 32,50,000/- (Rupees Thirty Two lakh Fifty Thousand Only), defendant No. 2 & 3 stood as guarantors.

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Flexi Mobile- Car loan of Rs. 15,40,000/- (Rupees Fifteen lakh Forty Thousand Only) defendant No.2 stood as guarantor.

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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 hypothecation agreement, agreement of guarantee, memorandum of deposit of title deeds and on demand promissory note.

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It is further contended that, despite availing the credit facilities,

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OA 318/2024

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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 summons of Defendants they failed to appeared, hence the defendants were placed on 25.09.2024.

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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-3 to A-49 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

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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

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OA 318/2024

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unrebutted as defendants remained exparte. The evidence tendered by

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the applicant remains uncontroverted and undisputed. The evidences put forth by the applicant were found admissible and are sufficient to prove

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availment of credit facilities as stated in the OA, creation of 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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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 by defendants for various purposes, this Tribunal in view that interest as claimed can be allowed with simple interest. However taking into consideration the fact that the applicant had arrived at the OA claim

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calculating interest at the agreed rate and also by calculating default interest, the prayer for monthly rest and penal interest for future period is declined.

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In the result, OA.No.318/2024, stands allowed,

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

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2,14,95,027.11 (Rupees Two Crore Fourteen Lakh Ninety Five Thousand

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OA 318/2024

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Twenty Seven and Paise Eleven Only) which consists of:-

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a) Rs. 1,65,13,645.84 (Rupees One Crore Sixty Five Lakh Thirteen Thousand Six Hundred Forty Five and Paise Eight Four Only) in OCC loan with further interest @ 13.15 % p.a.(simple), from the date of filing OA till the realization, from the defendants Nos. 1, 2 & 3 jointly, severally & personally after giving credit to all the amounts recovered and received during the pendency of the OA and allowed to recover the same by proceeding against the schedule Property.

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b) Rs. 43,49,111.51 (Rupees Forty Three Lakh Forty Nine Thousand One Hundred Eleven and Paise Fifty Only) in KVB Smart Home loan with further interest @ 10.65% p.a. (Simple) from the date of filing OA till the realization, from the defendants Nos. 1, 2 & 3 jointly, severally & personally, after giving credit to all the amount recovered and received during the pendency of the OA and the allowed to same to be recovered

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by proceeding against the defendants Nos. 1 , 2 & 3 jointly, severally & personally and also by proceeding against their assets.

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c) Rs. 6,32,269.76 (Rupees Six Lakh Thirty Two Thousand Two Hundred Sixty Nine and Paise Seventy Six Only) in Flexi Mobile-Car loan with further interest @ 9.15% p.a. (Simple) from the date of filing OA till the realization, from the defendants Nos. 1 & 2 jointly, severally & personally, after giving credit to all the amount recovered and received during the

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OA 318/2024

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pendency of the OA and the allowed to same to be recovered by

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proceeding against the defendants Nos. 1 & 2 jointly, severally & personally and also by proceeding against their assets.

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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 in OCC loan, the defendants Nos. 1, 2 & 3 jointly, severally & personally and their other

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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 proceedings which

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

Sd/- (T. RAJESH)

OA 318/2024

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Shachi Singh, Legal Officer, of Applicant Bank.

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Exhibits on the part of the Applicant:

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Exhibit Nos.	List of documents
A1	Affidavit in lieu of evidence
A2	List of exhibits
A3	Sanction letter dated 19.03.2018
A4	Agreement for take over of liabilities from another bank dated 19.03.2018
A5	Hypothecation agreement for cash credit dated 19.03.2018
A6	Agreement of guarantee dated 19.03.2018
A7	Letter of authority dated 19.03.2018 for paying insurance premium
A8	Letter of authority from the guarantors dated 19.03.2018
A9	Letter of authority from the borrowers dated 19.03.2018
A10	Documents execution certificate dated 19.03.2018
A11	Guarantor’s consent letter dated 19.03.2018
A12	Letter of proprietorship dated 19.03.2018
A13	On demand promissory note dated 19.03.2018
A14	Take delivery letter cum continuity letter dated 19.03.2018
A15	Letter of pegging dated 19.03.2018
A16	Agreement cum undertaking to create mortgage dated 19.03.2018
A17	Memorandum of deposit of title deeds dated 23.03.2018 registered as Document No. TMK-I-21751-2017-18 in Book-I, stored in CD NOI. TMKD 820 in the office of the Sub-registrar, Tumkur
A18 & A19	Affidavits dated 26.03.2018 (2 Nos)
A20	Sanction letter dated 07.03.2019
A21	Affidavit dated 06.03.2019 confirming the extension of mortgage dated 23.03.2018
A22	Recall notice dated 20.01.2020
A23	Revival letter dated 15.03.2021 confirming the liability
A24	Sanction letter dated 19.03.2018

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OA 318/2024

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A25	Agreement for Take over of liabilities from another bank dated 19.03.2018
A26	Housing loan agreement dated 19.03.2018
A27	Agreement of guarantee dated 19.03.2018
A28	Agreement cum undertaking to create mortgage dated 19.03.2018
A29	On demand promissory note dated 19.03.2018
A30	Letter of authority from the borrower dated 19.03.2018
A31	Letter of authority from the guarantors dated 19.03.2018
A32	Documents execution certificate dated 19.03.2018
A33	Letter of authority for paying insurance premium by the guarantors and the borrower dated 19.03.2018
A34	Letter of waiver of notice (Given by the borrower/ guarantors) in case of revision in rate of interest dated: 19.03.2018
A35	Guarantor’s consent letter dated 19.03.2018
A36	Letter of undertaking agreeing for the interest reset periodically dated 19.03.2018
A37	Letter of undertaking to repay the installments dated 19.03.2018
A38	Revival letter dated 15.03.2021 confirming the loan availed
A39	Sanction letter dated 19.03.2018
A40	Hypothecation of motar vehicle agreement dated 19.03.2018
A41	Agreement of guarantee dated 19.03.2018
A42	On demand promissory note dated 19.03.2018
A43	Letter of undertaking to hypothecate vehicle dated 19.03.2018
A44	Letter of authority to make payment to the suppliers dated 19.03.2018
A45	Letter of undertaking to repay in instalments dated 19.03.2018
A46	Letter giving description of the vehicle dated 19.03.2018
A47 to A49	Extracts of the statement of accounts (3nos)

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

-Nil -

-Nil -

Sd/- (T. RAJESH)

PRESIDING OFFICER

Karur Vysya Bank v. Shobha a Hiremath and Others

Case brief

What is this about?

What did the court decide?

Karur Vysya Bank v. Shobha a Hiremath and Others

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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