Allowed

Canara Bank v. Shivaiah Siddaiah

DRT25 Nov 2025OA/522/2023

Case brief

AI extract

What is this about?

The DRT allowed the bank's application for a Recovery Certificate under Section 19(1) of the RDB Act. The court found the evidence un-rebutted, determining the defendants jointly and severally liable for the principal debt and reduced interest of 6% p.a. due to agricultural loan status.

What did the court decide?

Recovery Certificate for Rs. 29,60,436/- plus interest at 6% p.a. (simple); recovery allowed from joint/several/personal assets and schedule properties.

Canara Bank versus Shivaiah Siddaiah — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL-II, BANGALORE

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Dated this 25^th Day of November, 2025

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PRESENT: SHRI T. RAJESH Hon’ble Presiding Officer

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O.A.No.522 of 2023

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Canara Bank, Channarayapatna Branch, Mysuru Road, Channarayapatna, Dist.Hassan – 573 116. Through its Chief Manager, Mr.Chandrashekhara Patil.

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… Applicant.

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Vs.

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Mr.Shivaiah Siddaiah, S/o.Siddaiah, Having address at: At & Post Kodibelagola Village, Shravanabelagola, Hopbli, Channarayapatna Taluk, Dist. Hassan. Karnataka – 573 116.

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Mr.Manjunath Siddaiah, S/o. Siddaiah, Having address at: At & Post Kodibelagola Village, Shravanabelagola, Hopbli, Channarayapatna Taluk, Dist. Hassan. Karnataka – 573 116.

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Mr.Ashoka Siddaiah, S/o. Siddaiah, Having address at: At & Post Kodibelagola Village, Shravanabelagola, Hopbli, Channarayapatna Taluk, Dist. Hassan. Karnataka – 573 116.

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Mr.Gangadhara Siddaiah, S/o. Siddaiah, Having address at: At & Post Kodibelagola Village, Shravanabelagola, Hopbli, Channarayapatna Taluk, Dist. Hassan. Karnataka – 573 116. … Defendants.

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Counsel for Applicant : M/s.Girish S.Poojary. 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.29,60,436/- together with further interest @12.60% compounded Half Yearly from 09.11.2022 till the date of realisation together with costs from the defendants jointly and severally and by way of sale of schedule mentioned properties.

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The Applicant contends that the defendants approached the applicant for financial assistance of Rs.4,90,000/-towards agricultural purpose and availed the same on 20.06.2026 by execution of necessary loan documents including Memorandum of Agreement of Agricultural Loan by 1^st defendant coupled with Simple Mortgage Deed dt.19.06.2026 in respect of schedule mentioned properties executed by all the defendants in favour of applicant.

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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. The applicant bank has also issued Legal Notice dt.20.06.2022 to the defendants to repay the outstanding liability. 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 07.02.2024.

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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 A3 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 and are sufficient to prove the OA claim. Hence the Applicant is 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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Even though the defendants 2 to 4 have only extended the mortgage of their properties and has not given any personal guarantee there is a clause in the simple mortgage deed, which states as follows : “…..in the event of the sale proceeds being insufficient to completely discharge the mortgage money due from the mortgagors, the mortgagors agree to be personally liable to pay the balance remaining due or any sum accruing due from the mortgagors under this deed”. Hence, defendants 2 to 4 are also personally liable for the amount due.

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Since the OA claim is arrived at by calculating interest with default interest and that the facilities are availed for the purpose of agricultural purpose, the pendent lite and future interest is awarded at simple rate that too at reduced rate of 6% p.a. (simple).

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In view of the above

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i) OA No.522 of 2023 stands allowed.

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ii) Applicant is permitted to recover an amount of Rs.29,60,436/(Rupees Twenty Nine Lakhs Sixty Thousands Four Hundred and Thirty Six only) together with interest @6% p.a. (simple) from the date of filing of OA till the date of realization together with costs from the defendants 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 mentioned properties. The schedule to the OA to be the schedule to the Recovery Certificate.

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iii) If the sale proceeds are not sufficient to clear the liability, then the defendants and their other assets are liable to 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

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of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT

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(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 25^th day of November, 2025)

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Sd./-

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(T. RAJESH) PRESIDING OFFICER

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Applicant Witness:

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AW1 –Mr.Saransh Garg, Chief Manager, Applicant Bank.

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Exhibits on the part of the Applicant:

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Ext.A1 - Applicant Evidence by way of affidavit. Ext.A2 - List of Documents. Ext.A3 - Loan Application dt.19.06.2006. Ext.A4 - Sanction Letter dt.20.06.2006. Ext.A5 - Memorandum of Agreement for Agricultural Loan dt.20.06.2006. Ext.A6 - Simple Mortgage Deed dt.19.06.2006. Ext.A7 - Letter of Revival dt.01.01.2013. Ext.A8 - Letter of Revival dt.22.12.2015. Ext.A9 - Letter of Revival dt.07.12.2018. Ext.A10 - Letter of Revival dt.23.11.2021. Ext.A11 - Notice dt.20.06.2022. Ext.A12 - True Extract of Statement of Accounts pertaining to the Defendant’s Loan A/c.

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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 Sd./- (T. RAJESH) PRESIDING OFFICER

Canara Bank v. Shivaiah Siddaiah

Case brief

What is this about?

What did the court decide?

Canara Bank v. Shivaiah Siddaiah

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

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Case details

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