Allowed

Canara Bank v. Lakkavva Magdum

DRT31 Dec 2025OA/678/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed the applicant bank's original application for a recovery certificate. The court found the defendants in default on agricultural credit facilities and, despite agreeing on the principal, reduced the interest rate to 6% p.a.

What did the court decide?

Issued a recovery certificate for Rs.41,03,234/- plus interest at 6% p.a. (simple) against the schedule property jointly and severally with other assets.

Canara Bank versus Lakkavva Magdum — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL II, BENGALURU

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Dated this 31^st Day of December, 2025

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Present: Sri. T. RAJESH

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Presiding Officer

OA.No.678/2024

BETWEEN:

Canara Bank

Branch office at:

Athani, Belagavi District, Karnataka …APPLICANT

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AND:

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Smt. Lakkavva Magdum W/o. Sri. Basappa Magdum Parthanahalli Village, Athani Taluk, Belagavi District-591304

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Sri. Mahadev Magdum S/o. Sri. Basappa Magdum Parthanahalli Village, Athani Taluk, Belagavi District-591304

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Sri. Ravindra Magdum S/o. Sri. Basappa Magdum Parthanahalli Village, Athani Taluk, Belagavi District-591304

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Sri. Shrishail Kempawad S/o. Sri. Irappa Kempawad Parthanahalli Village, Athani Taluk, Belagavi District-591304

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OA 678-2024

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M/s. Athani Sugars Limited A Company Registered under The Company Act, 1956 (No.1 of 1956) Represented by its Directors Sri. Shrimant B Patil- Chairman Registered office & Factory Vishnuannanagar Navalihal Post- 591234 Athani Taluk, Belagavi District ...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : M & R Consult 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

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1993 seeking issuance of Recovery Certificate for Rs.41,03,234/- (Rupees forty one lakh three thousand two hundred thirty four 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 No.1 to

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3 are borrowers and defendants NO.4 & 5 as guarantors availed the following credit facilities from the applicant bank:-

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I. Term Loan for Irrigation of a sum of Rs.17,95,000/-

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(Rupees seventeen lakh ninety five thousand Only),

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OA 678-2024

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SKCC loan limit of Rs.3,00,000/- (Rupees Three Lakh Only)

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It is also the case of the applicant that, in view of the above amount financed, the defendants executed necessary loan documents along with simple mortgage deed, guarantee agreement, and letter of revival in favor of the applicant bank..

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It is further contended that, the defendants despite availing the credit facility, agreeing to service the loan account promptly and regularly, 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.

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Despite, service of summons on the defendants, they failed to appear, resulting the defendants being set exparte on 15.10.2024.

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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-1 to A-15 and got the same marked in evidence.

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OA 678-2024

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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

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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 remains unrebutted as defendants remained exparte. 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 facilities as stated in the OA, creation of hypothecation and mortgage as claimed by the applicant bank and the defaults committed in the accounts. The liability of the defendants and

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the claim as the amount due is also proved by the above

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OA 678-2024

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documents. The claim of the applicant is well within the

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limitation.

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Hence in view of the finding arrived herein above, this

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Tribunal find both these issues in favour of applicant and hence

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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

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are availed by defendants for agricultural purpose and also that

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OA claim is arrived at by calculating interest at the agreed rate,

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this Tribunal, in view of the OA can be allowed with a reduced interest @6% p.a.(Simple).

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In the result, OA.No.678/2024 stands allowed,

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i) The applicant is allowed to recovery an aggregate

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sum of Rs.41,03,234/- (Rupees forty one lakh three thousand

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two hundred and thirty four only) consisting of:-

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a) Rs.36,14,426/- (Rupees thirty six lakh fourteen thousand

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four hundred twenty six Only) with further interest @6% p.a. (Simple) for which defendants NO.1,2,3 & 5 are liable,

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b) Rs.4,88,808/- (Rupees four lakh eighty eight thousand

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OA 678-2024

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eight hundred and eight Only) with further interest @6% p.a. (Simple) for which defendants No.1 & 4 are liable,

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from the date of filing OA till the realization, from the defendants jointly severally and personally after giving credit to

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all the amount recovered and received during the pendency of the OA and allowed the same to be recovered by proceedings against the schedule property. Properties schedule to the OA be the schedule to the recovery certificate.

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(ii) If the sale proceeds are not sufficient, the defendants jointly severally and personally and their other assets are liable to be proceeded against for the balance amount.

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iii) The applicant bank is allowed cost of the

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proceedings 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

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in terms of this final order.

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OA 678-2024

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15. Communicate a copy of the order to the parties

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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 the Stenographer (JV), transcribed by him, corrected and signed and pronounced by me in the Open Court, this the 31^th day of December, 2025].

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Sd/ (T. RAJESH)

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PRESIDING OFFICER

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Frony John, Chief Manager, of Applicant Bank.

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Exhibits on the part of the Applicant:

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Exhibit Nos.	Date	Particulars of Documents
A1	18.06.2015	Application for agricultural credit
A2	18.06.2015	Application for agricultural credit
A3	20.06.2015	Agreement for agricultural advances
A4	10.06.2015	Simple mortgage deed
A5	06.06.2015	True copy of Resolution No.15 passed in the executive committee meeting of the board of directors of Athani Sugars Ltd. At Registered office
A6	09.06.2015	Guarantee agreement executed by M/s Athani Sugars ltd.
A7	28.04.2017	Application cum sanction
A8	02.05.2017	Agreement for agricultural advances
A9	02.05.2017	Deed of guarantee for agricultural advances
A10	24.04.2018	Application for renewal cum sanction
A11	29.09.2022	Loan recall notice in respect of Account No.05368210000734
A12	29.09.2022	Loan recall notice in respect of Account No.05368010030672

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OA 678-2024

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A13	05.01.2022	Loan recall notice issued to M/s Athani Sugars Limited in respected of Account No.05368210000734
A14		Copy of statement of account certified under Bankers Book of evidence act- showing the outstanding liability under minor irrigation account no.05368210000734
A15		Copy of statement of account certified under bankers book of evidence act- showing the outstanding liability under SKCC Account No.005368010030742

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Witness Examined for the Defendant: -Nil - List of Documents Exhibited for the Defendant: -Nil -

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-Nil -

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Sd/ (T. RAJESH)

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PRESIDING OFFICER

Canara Bank v. Lakkavva Magdum

Case brief

What is this about?

What did the court decide?

Canara Bank v. Lakkavva Magdum

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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