Allowed

Canara Bank v. Sri. Prabhakar Shetty Prop:Sheshadri Cashews

DRT27 Jun 2025OA/965/2023

Case brief

AI extract

What is this about?

This judgment allowed an Original Application filed under Section 19 of the RDB Act by Canara Bank for issuance of a Recovery Certificate. The Tribunal found the bank's evidence uncontroverted, noted partial recovery via auction, and directed the issue of a certificate for the balance amount against remaining assets.

What did the court decide?

Recovery Certificate issued for Rs. 1,55,61,739.54 with future interest at 8% p.a. from date of filing after crediting auction proceeds. Defendants jointly and severally liable for balance.

Canara Bank versus Sri. Prabhakar Shetty Prop:Sheshadri Cashews — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 27^th Day of June, 2025

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Present: Sri. T. RAJESH Presiding Officer

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OA. No.965/2023

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BETWEEN:

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Canara Bank Hemmady Branch, Jewel Park Complex, N.H.66, Kundapur, Udupi District-576230 Rep. by its Chief Manager, Sri. Roopesh M.G., … APPLICANT

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AND:

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Sri. Prabhakar Shetty S/o. Mahabala Shetty, Aged about 38 years, Prop: Sheshadri Cashews, Having its Registered Office at: Yelajith Village-576214, Byndoor Hobli, Kundapur Taluk, Udupi District.

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Smt. Sushma P Shetty W/o. Prabhakar Shetty Aged about 32 years, Residing at: Hegademakki, Hosadu Village and Post – 576247 Kundapur Taluk, Udupi District ...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : Sri. M. Mohan Rao Defendants : Exparte

OA. No. 965/2023

FINAL ORDER

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.1,55,61,739.54 (Rupees One Crore Fifty Five Lakhs Sixty One Thousand Seven Hundred Thirty Nine and Paise Fifty 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 have availed the following faculties:

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i) Overdraft facility of Rs.55,00,000/- and Rs.45,00,000/- on 30.01.2016;

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ii) Term loan facility of Rs.82,50,000/- on 10.02.2016 and iii) Guaranteed Emergency Credit Line loan facility of Rs.28,00,000/- on 23.10.2020.

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It is also the case of the applicant that, in view of the above financed credit facilities, the defendants have executed necessary loan documents apart from the creation of security interest by way of mortgage over the Schedule properties and hypothecation.

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It is further contended that, despite availing the credit facilities, agreeing to service the loan amount promptly and regularly, the defendants failed in complying the same, resulting in

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OA. No. 965/2023

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default 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 accounts.

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Despite, service of summons on the defendants, they failed to appear, resulting the defendants being set exparte on 07.12.2023. It is seen in the proceedings dated 22.03.2024, the defendants entered appearance by filing Vakalath on 22.03.2024 along with IA.No.284/2024 a petition to recall the exparte order. However, the vide order dated 09.12.2024, this Tribunal had dismissed the IA.No.284/2024 and consequently the defendants remained exparte.

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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 A32 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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OA. No. 965/2023

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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 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 defendant and the claim of the amount due is also proved by the above documents. The claim of the applicant is well within the limitation.

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Since the OA claim is arrived at by calculating agreed rate

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of interest, penal interest/default interest, which this Tribunal considers as on the higher side, pendentalite and future interest is awarded at the rate of 8% p.a. This is also Taking note that the bank had adjusted the sale proceeds of property to loan account,

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which itself evidences that the applicant had realized total interest on that account.

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OA. No. 965/2023

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The applicant has filed a memo dated 09.12.2024 for part

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recovery of claim amount stating that the applicant has taken recovery action under SARFAESI Act and the schedule property mentioned in the OA was sold in public auction after taking possession for an amount of Rs.56,00,000/- which is taken to the loan account No.0268/791/1608 of the borrower(defendant) and by issuing the sale certificate on 15.11.2024.

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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

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liable to be allowed.

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In the result, OA.No.965/2023 stands allowed,

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i) The applicant is allowed to recover an aggregate sum of Rs.1,55,61,739.54 (Rupees One Crore Fifty Five Lakhs Sixty One Thousand Seven Hundred Thirty Nine and Paise Fifty Four only) with current and future interest thereon at the rate of 8.00% p.a (simple) from the date of filing OA till the realization from defendants, after giving credit to all the amount recovered and received during the pendency of the OA including the amount of Rs.56,00,000/- recovered through sale of the Schedule ‘A’ property and allowed the same to be recovered by proceeding

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OA. No. 965/2023

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against schedule ‘B’ properties. The schedule to the OA be the

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

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iii) The applicant bank is allowed cost of the proceeding which applicant to file cost memo within 7 days from the date of

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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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15. 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 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 27^th Day of June 2025].

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Sd/-

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

OA. No. 965/2023

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Sri. Roopesh M.G., Senior Manager of the applicant bank.

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Exhibits on the part of the Applicant:

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Annexure	Particulars	Date
A1	Applicant Evidence	-
A2	List of Documents	-
A3	Loan sanction letter	30.01.2016
A4	On Demand Promissory Note executed by defendant No.1 in favour of the applicant bank	12.02.2016
A5	Request for Overdraft facility executed by defendant No.1 in favour of the applicant bank	12.02.2016
A6	Composite Hypothecation Agreement executed by defendant No.1 in favour of the applicant bank	12.02.2016
	Guarantee Agreement executed by	12.02.2016
A7	defendant No.1 in favour of the applicant bank.
	Guarantee Agreement executed by	12.02.2016
A8	defendant No.1 in favour of the applicant bank
A9	Memorandum of Deposit of title deeds executed by defendant No.1 in favour of the applicant bank	11.02.2016

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OA. No. 965/2023

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A10	Memorandum of Deposit of title deeds executed by defendant No.1 in favour of the applicant bank	09.06.2016
	Request for Overdraft facility	23.05.2019
A11	executed by defendant No.1 in favour of the applicant bank
	On Demand Promissory Note	23.05.2019
A12	executed by defendant No.1 in favour of the applicant bank.
	Guarantee Agreement executed by	23.05.2019
A13	defendant No.1 in favour of the applicant bank.
	Guarantee Agreement executed by	23.05.2019
A14	defendant No.2 in favour of the applicant bank
A15	Loan application	-
A16	Loan sanction letter	14.01.2022
A17	Statement of account	-
A18	Loan application	06.07.2015
	Consideration Receipt for	10.02.2016
A19	Rs.82,50,000/- executed by
	defendant No.1 in favour of the applicant bank
	Composite Hypothecation Agreement	10.02.2016
A20	executed by defendant No.1 in favour of the applicant bank
A21	Letter handing over Deposit of Title Deeds of properties executed by	12.06.2015

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OA. No. 965/2023

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	defendant No.1 in favour of the applicant bank
A22	Statement of account	-
A23	Loan application	07.07.2020
A24	Sanction letter	22.10.2020
	Agreement cum Deed of	23.10.2020
A25	Hypothecation executed by defendant No.1 in favour of the applicant bank
	Guarantee Agreement executed by	23.10.2020
A26	defendant No.2 in favour of the applicant bank
	Acknowledgement Overdraft Debt	05.02.2019
A27	executed by defendant No.1 in favour of the applicant bank.
	Letter of Revival executed by	02.04.2020
A28	defendant No.1 in favour of the applicant bank
A29	Notice issued by the applicant bank to the defendants	09.11.2021
A30	Notice issued by the applicant bank to defendants	09.11.2021
A31	Served Acknowledgement	-
A32	Statement of account	-

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Sd/-

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(T. RAJESH) PRESIDING OFFICER

Canara Bank v. Sri. Prabhakar Shetty Prop:Sheshadri Cashews

Case brief

What is this about?

What did the court decide?

Canara Bank v. Sri. Prabhakar Shetty Prop:Sheshadri Cashews

Case brief

What is this about?

What did the court decide?

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