Allowed

Karnataka Bank Limited v. Sugappa and Others

DRT12 Nov 2025OA/81/2025

Case brief

AI extract

What is this about?

The DRT-II, Bengaluru allowed a recovery certificate application filed by Karnataka Bank Ltd. against three defaulting defendants. The defendants appeared ex-parte. The court approved the principal amount but awarded interest at 6% simple p.a. due to the agricultural purpose of the loans and allowed recovery against secured and unsecured assets.

What did the court decide?

Issuance of Recovery Certificate for Rs. 17,99,979.67 from respondents 1 & 2 and Rs. 5,21,058.70 from respondents 1 & 3 with interest at 6% p.a. simple, recoverable against mortgaged/hypothecated prop

Karnataka Bank Limited versus Sugappa and Others — Specific Performance | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 12^th Day of November, 2025

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Present: Sri. T. RAJESH Presiding Officer

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OA.No.81/2025

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BETWEEN:

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The Karnataka Bank Ltd., Branch at, CMC No. 5-1-176/1, Friend Arcade, Opp. District Court, Yadgiri- 585 202, Represented by its Branch Manager, Mr. Damodar M K S/o Late M K Pullaiah.

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…APPLICANT

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AND:

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Sri. Sugappa, S/o Virupaksh, Aged about 73 years, Residing at 9/45, Post Naikal, Shahapur Taluk, Yadgir- 585 202.

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Sri. Sharangouda, S/o Sugappa, Aged about 40 years, Residing at H.No. 9-45, Naikal, Shahapur Taluk, Yadgir- 585 202.

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Sri. Chandrashekar, S/o Basalingappa, Aged about 45 years, Residing at, Post Chatnalli, Shahapur Taluk, Yadgir- 585 202.

...DEFENDANTS

OA 81/2025

Counsel on record/appeared for:

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Applicant : Nithin Chandra M 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 seeking issuance

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of Recovery Certificate against the defendants for Rs. 23,21,038.37 (Rupees Twenty Three Lakh Twenty One Thousand Thirty Eight and Paise Thirty Seven Only) with further interest thereon from the date of filing the Application till realization.

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It is the case of the applicant that the defendant No.1 as borrower and defendant No.2 as guarantor availed a sum of Rs. 10 lakhs under ODKC for agricultural purposes. The defendant No.1 as borrower and defendant No.3 as guarantor availed a sum of Rs. 5 lakhs under term loan for agricultural purposes.

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It is also the case of the applicant that, in view of the above availed loans, the defendants executed necessary loan documents along with deed of mortgage and hypothecation agreement.

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It is further contended that, despite availing the credit facilities, agreeing to service the loan account promptly and regularly, the defendants failed in complying the same, resulting in default in repayment and consequentially turning the loan accounts as NPA.

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In the above circumstances, the applicant approached this Tribunal

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OA 81/2025

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by filing this OA seeking issuance of Recovery Certificate for the amount due in the account.

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Despite, Summons on defendants they failed to appear resulting the defendants being set exparte on 03.07.2025.

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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 A-1 to A-20 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 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

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unrebutted as defendants remained exparte. The evidence tendered by the applicant remains uncontroverted and undisputed. The evidences put

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forth by the applicant were found admissible and are sufficient to prove

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availment of credit facilities as stated in the OA, creation of the security

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OA 81/2025

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interest and the defaults committed in the accounts. The liability of the

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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 findings arrived herein above, the Tribunal

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find both these issues in favour of applicant and hence, 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 are

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availed for Agriculture purpose and also that the OA 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.81/2025, stands allowed,

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i) The applicant is allowed to recovery an aggregate sum of Rs.

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23,21,038.37 (Rupees Twenty Three Lakh Twenty One Thousand Thirty Eight and Paise Thirty Seven Only) with further interest @6.00 %

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p.a.(simple) as follows:-

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a) Rs. 17,99,979.67 (Rupees Seventeen Lakh Ninety Nine Thousand Nine

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Hundred Seventy Nine and Paise Sixty Seven Only) in ODKC loan account from the date of filing OA till the realization, from the defendants Nos. 1

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& 2 jointly, severally & personally, after giving credit to all the amount

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recovered and received during the pendency of the OA and allowed the

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OA 81/2025

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same to be recovered by proceeding against the schedule property.

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b) Rs. 5,21,058.70 (Rupees Five Lakh Twenty One Thousand Fifty Eight and Paise Seventy Only) from the date of filing OA till the realization, from the defendants Nos. 1 & 3 jointly, severally & personally, after giving credit to all the amount recovered and received during the pendency of the OA and allowed the same to be recovered by proceeding against the schedule property.

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Properties 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 the

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amount due and payable to the applicant bank, the defendants jointly, severally & personally and their assets are liable for respective amounts

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due under the respective loan accounts.

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iii) The applicant bank is allowed cost of the proceedings which

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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 in terms of this final 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 (Procedure)

OA 81/2025

Rules, 1993.

[Dictated to the Stenographer (AJ), transcribed by her, corrected and signed and pronounced by me in the

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Open Court, this the 12^th Day of November, 2025].

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Sd/- (T. RAJESH)

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PRESIDING OFFICER ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Damodar M K, Branch Manager, of Applicant Bank.

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Exhibits on the part of the Applicant:

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Exhibit Nos.	Particulars of Documents
A1	True copy of the power of attorney
	RE: ODKC of Rs. 10,00,000/- ODKC A/c No. 85370008000019901
A2	Copy of the credit sanction order BMR/853/13396/2015-16 DTD 22.07.2015
A3	Copy of the composite agreement for Kisan credit facility and term loan facility dtd 23.07.2015
A4	Copy of the declaration dated 23.07.2015 executed by defendants together
A5	Copy of the consent letter dtd 23.07.2015
A6	Copy of deed of mortgage dtd 20.072015
A7	Copy of the letter of acknowledgement of debt dated 9.12.2020
	Regarding term loan of Rs. 5,00,000/- A/c No. 8537001800017501
A8	Copy of the credit sanction order CMRS/ R400/3499/2017-18/28-04- 2017 dtd 28.04.2017
A9	Copy of the term loan agreement dated 09.05.2017
A10	Copy of the declaration dated 09.05.2017
A11	Copy of the consent letter dtd 24.05.2017
A12	True copy of the letter of hypothecation dtd 09.05.2017
A13	True copy of the hypothecation agreement dtd 09.05.2017
A14	Copy of the letter of deed of mortgage dtd 09.05.2017
A15	Copy of the said letter of acknowledgement of debt dated 30.03.2020
A16	Copy of the recall notice dtd 28.09.2022
A17	Copy of the legal Notice/s dtd 16.02.2023

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OA 81/2025

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A18	Copy of the legal notice/s dtd 17.02.2023
A19	Certified true extract of the said statement of account of the term loan- 1, certified as per bankers books of evidence
A20	Certified true extract of the said statement of account of the term loan, certified as per bankers books of evidence

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

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Sd/-
(T. RAJESH)

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PRESIDING OFFICER

Karnataka Bank Limited v. Sugappa and Others

Case brief

What is this about?

What did the court decide?

Karnataka Bank Limited v. Sugappa and Others

Case brief

What is this about?

What did the court decide?

What the court decided

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Case details

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