Allowed

Canara Bank v. Sri K Muralikrishna

DRT25 Nov 2025OA/726/2022

Case brief

AI extract

What is this about?

In an ex-parte recovery proceeding, the Tribunal allowed the bank's application for a recovery certificate, reducing interest to 6% simple and authorizing recovery from schedule properties and jointly thereafter. Total claim approved was over Rs. 1 crore.

What did the court decide?

Recovery Certificate to be drawn for aggregate sum of Rs.1,01,82,870.68 with 6% simple interest, recoverable from schedule properties and jointly from all defendants.

Canara Bank versus Sri K Muralikrishna — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 25^th Day of November, 2025

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Present: Sri. T. RAJESH Presiding Officer

OA.No.726/2022

BETWEEN:

CANARA BANK

Maski Branch Basavan Gouda Building, New Bazaar, Maski, Raichur District - 584 124, represented by its Manager Mr. Sudhir Kumar Jitti … APPLICANT

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AND:

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Sri. K. Muralikrishna S/o. K Vishnumurthy R/at. 16/B, Shankar Nagar Camp Maski, Lingasur Tq, Raichur Dist. Karnataka – 584124

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Sri. K Vishnumurthy S/o. Venkat Reddy Prop: M/s. Vishnumurthy Warehouse, R/at. 16/B, Shankar Nagar Camp Maski, Lingasur Tq, Raichur Dist. Karnataka – 584124

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Sri. K Venkatesh S/o. K Vishnumurthy R/at. 16/B, Shankar Nagar Camp Maski, Lingasur Tq, Raichur Dist. Karnataka – 584124

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2 OA/726/2022

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Smt. K Laxmi W/o. K Vishnumurthy R/at. 16/B, Shankar Nagar Camp Maski, Lingasur Tq, Raichur Dist. Karnataka – 584124

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Smt. K Sridevi W/o. Venkatesh Maski, Lingasugur Tq Raichur Dist Karnataka -584124

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Smt. Vasanthalakshmi D/o. K Vishnumurthy R/at. 16/B, Shankar Nagar Camp Maski, Lingasur Tq, Raichur Dist. Karnataka – 584124

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Smt. K Bebi W/o. Radha Venkata Krishna Maski, Lingasugur Tq, Raichur Dist, Karnataka – 584124 ...DEFENDANTS

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Counsel on record/appeared for: Applicant : M/s. V S Associates 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 for seeking issuance of Recovery Certificate against the defendants for Rs.1,01,82,870.68 (Rupees One Crore One Lakh Eighty Two Thousand Eight Hundred Seventy and Sixty Eight Paisa only) with further interest thereon from the date of filing the Application till realization.

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3 OA/726/2022

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The case of the Applicant Bank is that during its business activity, it offered credit facilities in the form of ‘Produce Loan’ (Short Term Loan) to farmers on the security of agricultural produce/hypothecation of paddy grown in their agricultural lands. The scheme of the facility was the Farmers store their agricultural produce/paddy bags in the approved/empanelled Warehouse. Upon receipt of agricultural goods/produce from the farmers, the warehouse owner shall issue a Warehouse receipt. Farmers, who stored their agricultural produced/goods in the Warehouse and who are in need of financial assistance, shall approach the bank and submit an application for loan along with the original Warehouse Receipt. The warehouse owner and guarantors execute guarantee agreements and create mortgage of their immovable properties in favour of the bank as security for the loans to be extended by bank within the overall loan exposure limit fixed, to the individual borrowers.

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It is the case of the applicant bank that the Defendant No.1 as the borrower, availed the agricultural loans of Rs.7,50,000/- on 24.06.2010/15.07.2014; Rs.3,00,000/on 06.10.2010 and 20.07.2016; Rs.50,00,000/- on 10.03.2017 and Rs.10,00,000/- on 26.09.2017.

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4 OA/726/2022

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On the discussion with the Defendant No.1 availed agricultural Produce Loan with a sanctioned limit of Rs.50,00,000/out of the overall exposure limit of Rs.900.00 lakh in favour of the applicant bank. Defendant Nos.1 to 7 has executing Simple Mortgage Deed dated 13.12.2013 as collateral security to the facilities availed by the various farmers. Defendant Nos.2 to 7 have executing guarantee agreement dated 15.03.2016 along with Guarantee Covering Letters unconditionally and irrevocably guaranteed the repayment of the overall exposure limit of Rs.900.00 lakh which includes Rs.50.00 lakh advance to 1^st Defendant. The Defendant Nos.2 to 7 stood guarantors to the applicant bank for the overall exposure of Rs.900.00 lakhs to various farmers. The Defendant Nos.1 to 7 created charges over the Schedule Immovable Properties by executing Regd. Simple Mortgage Deed and secured the Produce Loan availed by the farmers within the overall loan exposure limit including the Produce Loan of Rs.50,00,000/- availed by the Defendant No.1 from the applicant by creating mortgage in respect of schedule immovable properties in favour of the applicant bank.

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After availing the credit facility, Defendants failed and neglected to repay the dues and committed default. Applicant bank issued Legal Notice dated 22.12.2020 and 08.04.2022. However, the Defendants failed to repay the loan amount due. Therefore, the

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5 OA/726/2022

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applicant bank has filed the present Original Application (OA) to recover the amount due from the Defendants.

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Despite, service of summons on the defendants, they failed to appear, resulting the defendants being set exparte on 20.11.2024.

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The applicant let in evidence through AW-1, who filed Proof Affidavit reiterating the contentions taken in the OA and also produced Exhibits A-3 to A29 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

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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

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remains unrebutted as defendants remained exparte. The

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6 OA/726/2022

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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 finding which cover both the

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issues raised in this manner, this Tribunal is of the view that OA is liable to be allowed.

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Taking into consideration the facts that the credit facility is

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availed for purchase of agricultural activities and also that the OA

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claim is arrived at by calculating interest at the agreed rate, this Tribunal in view of the OA can be allowed with a reduced interest of 6.00% (simple).

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In the result, OA.No.726/2022 stands allowed,

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i) The applicant is allowed to recovery an aggregate sum

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of Rs.1,01,82,870.68 (Rupees One Crore One Lakh Eighty Two

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Thousand Eight Hundred Seventy and Sixty Eight Paisa only)

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7 OA/726/2022

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consisting of:

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a. Rs.10,84,579.34 with further interest of 6.00% p.a.(simple)

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from the date of filing OA till the realization from the defendant No.1;

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b. Rs.2,86,442.96 with further interest of 6.00% p.a.(simple) from the date of filing OA till the realization from the defendant No.1;

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c. Rs.84,93,906/- with further interest of 6.00% p.a.(simple) from the date of filing OA till the realization from the defendant No.1,2,3,4,5,6 & 7;

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d. Rs.3,17,942.38 with further interest of 6.00% p.a.(simple) from the date of filing OA till the realization from the defendant No.1,

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after giving credit to all the amount recovered and received during the pendency of the OA and allowed the same to be recovered by proceedings against schedule properties. The property 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

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the amount due and payable to the applicant bank, the defendants

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jointly, severally and personally and their other assets are liable for all such amounts due under the loan account.

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8 OA/726/2022

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iii) The applicant bank is allowed cost of the proceedings

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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

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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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14. Communicate a copy of the order to the parties concerned

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in 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 (PR), transcribed by her, corrected and signed and pronounced by me in the Open Court, 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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DRT-II, BENGALURU

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9 OA/726/2022

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Sri. Parashuram, Manager of the applicant bank.

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Exhibits on the part of the Applicant:

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Annexure	Particulars
A1	Applicant Evidence
A2	List of Documents
A3	Application & Sanction letter dated 28.08.2010, 24.09.2010 and renewal sanction dated 15.07.14
A4	Application & Sanction letter dated 28.08.2010, 06.10.2010 & 20.07.2016
A5	Application & Sanction letter dated 10.03.2017
A6	Application & Sanction letter dated 26.09.2017
A7	Agreement and Deed for Kisan OD executed by Defendant No.1 in favour of Applicant dated 24.09.2010
A8	Letter of Renewal for Agricultural advances executed by Defendant No.1 in favour of Applicant dated 15.07.2014
A9	Credit Card executed by Defendant No.1 in Agreement and Deed of Hypothecation for Kisan favour of Applicant dated 06.10.2010
A10	Letter of renewal executed by Defendant No.1 in favour of Applicant dated 18.01.2014
A11	Supplemental Agreement executed by Defendant No.1 in favour of Applicant dated 18.01.2014
A12	Letter of renewal executed by Defendant No.1 in favour of Applicant dated 02.03.2015
A13	Supplemental Agreement executed by Defendant No.1 in favour of Applicant dated 02.03.2015
A14	Letter of renewal executed by Defendant No.1 in favour of Applicant dated 20.07.2016
A15	Supplemental Agreement executed by Defendant No.1 in favour of Applicant dated 20.07.2016
A16	Access letter to godown executed by Defendant No.2 in favour of Applicant Bank dated

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10 OA/726/2022

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A17	Warehouse Receipt executed by Defendant No.1 Letter for loans/advances against securities i.e. in favour of Applicant Bank dated 10.03.2017
	Demand Promissory Note along with take delivery
A18	note executed by Defendant No.1 in favour of applicant dated 10.03.2017
	Warehouse receipt issued by Vishnumurthy
A19	warehouse in favour of Defendant No.2 dated 08.03.2017 dated 10.03.2017
A20	Canmobile Agreement executed by Defendant No.1 in favour of Applicant Bank dated 26.09.17
A21	Copy of the consolidated RSM deed for a value of Rs.900 lakhs which includes the present fifth loan to Defendant No.1, executed by Defendant No.1 to 7 in favour of applicant dated 13.12.2013
	Guarantee covering letter and consolidated Guarantee agreement for value of Rs.9.00 crores
A22	executed by Defendant No. 1, 2, 3, 4, 5, 6 & 7 in favour of applicant, for Vishnumurthy warehouse issuing Warehouse Receipts to farmers for availing loans from Applicant Bank dated. 15.03.2016
A23	Letter of Revival executed by Defendants dated 20.08.2013, 13.06.2016, 01.032019 21.09.2020 14.02.2013,08.06.2015 1.03.2019,
A24	RSM executed by Defendant No.1 dated 01.09.2010 and 03.01.2014
A25	Demand Notice dated 21.02.2019 and Legal Notice dated 22.12.2020 and 08.04.2022
A26	True Extract of Statement of Accounts pertaining to the Loan Defendant's Accounts 0545897000312
A27	True Extract of Statement of Accounts pertaining Loan Accounts- to Defendant's the 0545840006666
A28	True Extract of Statement of Accounts pertaining to Defendant's the Loan Accounts 0545844010125
A29	True Extract of Statement of Accounts pertaining to the Defendant's Loan Accounts -0545603006564

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(T. RAJESH) PRESIDING OFFICER DRT-II, BENGALURU

Canara Bank v. Sri K Muralikrishna

Case brief

What is this about?

What did the court decide?

Canara Bank v. Sri K Muralikrishna

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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