Allowed

Canara Bank v. Shivanagouda Ninganagouda Patil

DRT31 Oct 2025OA/496/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an application for a Recovery Certificate. The court found the bank's claim proved based on unrefuted evidence. It awarded realization of the principal and reduced simple interest from defendants jointly and severally, while limiting the third defendant's liability to the mortgaged asset.

What did the court decide?

Recovery Certificate issued for Rs.42,21,199/- plus 10% p.a. simple interest and costs; defendants 1 and 2 jointly liable; defendant 3 liable only to extent of mortgaged asset.

Canara Bank versus Shivanagouda Ninganagouda Patil — Contract and Commercial Disputes | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL-II, BANGALORE

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Dated this 31^st Day of October, 2025

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PRESENT: SHRI T. RAJESH Hon’ble Presiding Officer

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O.A.No.496 of 2023

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Canara Bank, (erstwhile Syndicate Bank), Yeragatti Branch, Yeragatti – 591 129. Soundatti Taluk, Belgaum Dist. Represented by its Senior Manager Sri Rahul Shukla.

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… Applicant.

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Vs.

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Shivanagouda Ninganagouda Patil, S/o.Ninganagouda Patil, Jalikatti Village, Soundatti Taluk, Belgaum Dist. – 591 129.

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Mallikarjun Patreppa Chippalakatti, Sattigeri Village, Soundatti Taluk, Belgaum Dist. – 591 129.

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Basavaraj alias Goudappa Irangouda Patil, S/o. Irangouda Patil, Jalikatti Village, Soundatti Taluk, Belgaum Dist. – 591 129. … Defendants. Counsel for Applicant : M/s.M.R.Rajini. Defendants : Exparte. ……

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ORDER

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The Application is filed under Section 19 (1) of the Recovery of Debts And Bankruptcy Act, 1993 seeking for issuance of a Recovery Certificate for a sum of Rs.42,21,199/- together with interest @14.35% p.a. compounded monthly from the date of application till the date of realisation together with costs from the defendants jointly and severally and by way of sale of schedule mentioned property.

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The Applicant contends that the 1^st defendant approached the erstwhile Syndicate bank for Secured Overdraft Facility of Rs.30,00,000/- for his business and availed the same on 07.04.2018 by execution of necessary loan documents including Demand Promissory Note and Composite Hypothecation Agreement in favour of applicant by which hypothecated the movables described in the schedule to the OA. The 3^rd defendant has also created mortgage over the property described in the schedule to the OA and executed Simple Mortgage on 23.09.2015 as security for the above said loan. The 2^nd defendant stood as guarantor for due repayment of loan availed by 1^st defendant.

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It is also stated that the above facility was availed after execution of necessary loan documents by defendants obliging themselves to repay the amount promptly and regularly, without fail.

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The Applicant further contends that after availing the aforesaid facility, the defendants failed to regularize the said loan and hence the loan account of the defendants was declared as Non-Performing Asset on 29.11.2019. The applicant bank has also issued Legal Notice to the defendants on 21.12.2022. Despite availing the credit facility by obliging to pay back the amount, the defendants failed in compliance of the same and all the efforts of the Applicant to make the defendants pay back the amount failed, forcing the Applicant to file this Application.

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Summons was taken out and as the defendants failed to enter appearance, they were set exparte on 21.03.2025.

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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 A12, got the same marked in evidence.

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Heard. The following issues arise for consideration in this matter:

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i) Whether the applicant succeeded in proving the OA claim as against the Defendants?

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ii)If so, to what extent?

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Both these issues are gone into and decided together.

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The Applicant’s evidence remains un-rebutted and hence proved. The documents produced by the Applicant are found to be admissible

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and are sufficient to prove the OA claim. Hence the Applicant is

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found to be entitled for the OA claim. The OA claim is made within limitation and there is no capitalization of penal interest.

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Since the OA claim is arrived at by calculating interest with default interest and that the facilities are availed in respect of Overdraft Loan the pendent lite and future interest is awarded at simple rate that too at reduced rate of 10% p.a. (simple).

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In view of the above

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i) OA No.496 of 2023 stands allowed,

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ii) Applicant is permitted to recover an amount of Rs. Rs.42,21,199/- (Rupees Forty Two Lakhs Twenty One Thousands One Hundred and Ninety Nine only) together with interest @10% p.a. (simple) and costs from the date of filing of OA till the date of realization from the defendants 1 and 2 jointly, severally and personally after giving credit to all the amounts recovered and received during the pendency of the OA and allowed the same to be recovered by proceeding against the schedule property. The schedule to the OA to be the schedule to the Recovery Certificate. The liability of the 3^rd defendant is limited to the extent of mortgaged asset and no personal liability is vested on him.

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iii) If the sale proceeds are not sufficient to clear the liability, then

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the 1^st and 2^nd Defendants and their other assets are liable to

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be proceeded against for realization of respective dues.

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iv) A Recovery Certificate is to be drawn and issued to the Recovery Officer to enable recovery of the dues as per the above terms.

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v) Interim application pending, if any, stands disposed of in terms of this final order.

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vi) Applicant is allowed to realize cost of the proceeding for which cost memo is to be filed in 7 days’ time from the date of receipt of the copy of the order.

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Communicate a copy of the order to the parties concerned 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 PS, transcribed by him corrected and pronounced by me in the open Court on this the 31^st day of October, 2025)

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Sd./- (T. RAJESH) PRESIDING OFFICER

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Applicant Witness:

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AW1 –Mr.Naga Chetan, Senior Manager, Applicant Bank.

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Exhibits on the part of the Applicant:

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Ext A1 - Loan Application dt.14.01.2015.

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Ext.A2 - Sanction Letter dt.28.09.2015. Ext.A3 - Overdraft/Cash Credit/Loan Facility dt.07.04.2018. Ext A4 - Renewal Letter for all facilities dt.07.04.2018 Ext A5 - Demand Promissory Note dt. 07.04.2018. Ext A6 - Composite Hypothecation Agreement dt.07.04.2018. Ext A7 - Guarantee Agreement dt.07.04.2018. Ext A8 - Simple Mortgage Deed 1992/15-16 dt.23.09.2015. Ext A9 - Encumbrance Certificate for the period from 24.09.2015 to 24.09.2015.

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Ext A10 - Legal Notice dt. 21.12.2022. Ext.A11 - Postal Receipt. Ext A12 - Statement showing the balance outstanding in the loan A/c. No. 0754 of the defendants dt.30.09.2022.

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Witness Examined for the Defendants:

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NIL

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List of Documents Exhibited for the Defendants :

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NIL

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Sd./- (T. RAJESH) PRESIDING OFFICER

Canara Bank v. Shivanagouda Ninganagouda Patil

Case brief

What is this about?

What did the court decide?

Canara Bank v. Shivanagouda Ninganagouda Patil

Case brief

What is this about?

What did the court decide?

What the court decided

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