Allowed

Canara Bank (Syndicate Bank) v. Prakash Shetty

DRT21 Oct 2025OA/448/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the application by Canara Bank for issuance of a Recovery Certificate against the borrowers and their legal heirs/guarantor for a loan default of approx Rs. 1.38 crore, granting interest at reduced rate.

What did the court decide?

Issuance of Recovery Certificate for Rs. 1,38,61,938/- with 11% p.a. interest against borrowers, heirs, and guarantor; recovery from schedule property.

Canara Bank (Syndicate Bank) versus Prakash Shetty — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 21^st Day of October, 2025

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Present: Sri. T. RAJESH Presiding Officer

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OA. No.448/2022

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BETWEEN:

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Canara Bank Erstwhile Syndicate Bank Kollur Branch, Kollur, Udupi District – 576 220

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By Its Branch Manager

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Sri Nidhin K Anand …APPLICANT

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AND:

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Sri. Prakash Shetty S/o. Late K Surendra Shetty Aged by Major Mayura Guest House, Kollur, Kundapura Taluk, Udupi District – 576 220

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Mrs. Shakila P Shetty D/o. Late K Surendra Shetty Aged about 38 Years

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Miss. Shyamala D/o. Late K Surendra Shetty Aged by Major

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Sri. Pradeep R Shetty S/o. Rajeeva K Shetty Aged about 44 Years

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OA. No. 448/2022

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No.2 to 4 are Residing at: Ambika Guest House Sagar Road, Kolluru, Kundapura Taluk, Udupi District – 576 220 ...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : M S Vinayaka Defendants : Ex parte

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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. 1,38,61,938/- (Rupees One Crore Thirty Eight Lakhs Sixty One Thousand Nine Hundred and Thirty Eight 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 defendant no.1 to 3 is the legal heirs of the deceased borrower late Sri. K Surendra Shetty, who along with defendant no.4 have availed an term loan of Rs. 1,75,00,000/- (Rupees One Crore Seventy Five Thousand Only) on 20.03.2015.

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It is also the case of the applicant that, in view of the above financed credit facility, the deceased borrower Sri. K Surendra

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OA. No. 448/2022

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Shetty and the defendant no.4 executed necessary loan documents. Apart from the creation of security interest by way of simple mortgage deed and hypothecation agreement over the schedule property.

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It is further contended that, despite availing the credit facility, agreeing to service the loan account promptly and regularly, borrowers failed in complying the same, resulting in defaults 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 as against the defendants.

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Despite, service of summons on the defendants, they failed to appear, resulting the defendants being set ex parte on 26.02.2024. 7. The applicant let in evidence through AW-3, who filed Proof Affidavit reiterating the contentions taken in the OA and also produced Exhibits A3 to A19 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 the 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

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OA. No. 448/2022

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claim as against the defendants?

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ii) What orders 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 ex parte. 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 facility 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 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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Since the OA claim is arrived at by calculating agreed rate

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of interest, penal interest/default interest, which this Tribunal

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considers as on the higher side, pendentalite and future interest is awarded at reduced rate @ 11.00% p.a.

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OA. No. 448/2022

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In the result, OA.No.448/2022 stands allowed,

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i) The applicant is allowed to recover an aggregate sum of Rs. 1,38,61,938/- (Rupees One Crore Thirty Eight Lakhs Sixty

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One Thousand Nine Hundred and Thirty Eight Only) with further interest of 11.00% p.a.(simple) from the date of filing OA till the realization from the defendant no. 4 and the defendants no.1 to 3 to the extent of their inheritance of any estate of deceased borrower Sri. K Surendra Shetty, after giving credit to all the amount recovered and be recovered by proceeding against the

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schedule property. The schedule property to the OA be the schedule property to the Recovery Certificate.

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ii) If the sale proceeds are not sufficient to clear the liability, the defendant no.4 personally and his assets and from the defendant no. 1 to 3 to the extent of their inheritance of any estate

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of deceased borrower late Sri. K Surendra Shetty are liable for balance 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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OA. No. 448/2022

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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 in

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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 (HS), transcribed by her, corrected and signed and pronounced by

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me in the Open Court, this the 21^st Day of October 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: C S V L Narasimha Sarman, S/o. C V L Narasimham, worked

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as Chief Manager of the applicant bank.

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Exhibits on the part of the Applicant:

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Annexure	Date	Particulars
A3	27.02.2015	Loan application form submitted bySri. K Surendra Shetty father of the 1^stto 3^rd
		defendants in favour of applicant
A4	20.03.2015	Loan sanction memorandum

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OA. No. 448/2022

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A5	20.03.2015	Composite hypothecation agreement executed bySri. K Surendra Shetty father of the 1^stto 3^rddefendants in favour of applicant
A6	20.03.2015	Letter of undertaking executed bySri. K Surendra Shetty father of the 1^stto 3^rd defendants in favour of applicant
A7	20.03.2015	Letter from borrower regarding undrawn limits executed bySri. K Surendra Shetty father of the 1^stto 3^rddefendants in favour of applicant
A8	20.03.2015	Guarantee agreement executed by 4^th defendant in favour of applicant
A9	30.04.2018	Death certificate of Surendra Shetty
A10	13.03.2019	Death certificate of Sushila K
A11	20.03.2015	Memorandum of deposit of title deeds executed by Surendra Shetty father of the 1^stto 3^rddefendants in favour of applicant registered as document no. 2332/2014- 15
A13	30.07.2019	Acknowledgement of debt for all types of loans by legal heirs executed by Surendra Shetty father of 1^stto 3^rddefendants in favour of applicant
A14	07.02.2022	Legal notice issued to defendants
A15	---------	Postal acknowledgement of 1^stdefendants
A16	---------	Postal acknowledgement of 2^nd defendants
A17	---------	Postal acknowledgement of 3^rd defendants
A18	---------	Postal acknowledgement of 4^th defendants
A19	---------	Statement of loan accounts
Witness	Examined for	the Defendants: -Nil -

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List of Documents Exhibited for the Defendants: -Nil -

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Sd/-

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(T. RAJESH) PRESIDING OFFICER

Canara Bank (Syndicate Bank) v. Prakash Shetty

Case brief

What is this about?

What did the court decide?

Canara Bank (Syndicate Bank) v. Prakash Shetty

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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