Allowed

Karnataka Bank Limited v. Jayanthi Kunder

DRT24 Jun 2026OA/1048/2022

Case brief

AI extract

What is this about?

The DRT allowed the claim for issuance of a recovery certificate against the borrower and guarantor who failed to appear with evidence. The court rejected defenses based on stamp duty evasion and unspecified interest rates, finding the bank's documents and statement of account proved the default and quantified dues.

What did the court decide?

Issuance of a Recovery Certificate for Rs. 85,35,546/- with future interest at 8% per annum simple, allowing recovery through schedule properties and other assets.

Karnataka Bank Limited versus Jayanthi Kunder — Contract and Commercial Disputes | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL II,

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BENGALURU

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Dated this 24^th Day of June, 2026

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Present: Sri. T. RAJESH

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Presiding Officer OA.No.1048/2022

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BETWEEN:

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Karnataka Bank Ltd., Shri Krishna Complex, Near Bus Stand, Karantha Beedhi, Saligrama -576225, Udupi District i.e., Chitrapady Branch Rep. by one of its principal officers viz, The Branch Manager,

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…APPLICANT

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AND:

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Smt. Jayanthi Kunder, W/o. Basava Bangera, Residing at #4-54A, Jaya Hosa Bengre, Kodi – Kanyana Sasthana, Udupi District, Karnataka -576226.

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Sri. Sandeep Kunder, S/o. Basava Bangera, Residing at #4-54A, Jaya Hosa Bangre, Kodi- Kanyana Sasthana, Udupi District, Karnataka -576226.

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...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : C. S. Satish Defendant : A. S. Nanjundappa

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FINAL ORDER

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The present Original Application in short “OA” has been filed under

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section 19 of Recovery of Debts and Bankruptcy Act 1993 seeking issuance

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OA 1048/2022

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of Recovery Certificate for Rs. 85,35,546/- (Rupees eighty-five lakh thirtyfive thousand five hundred and forty-six only) with further interest thereon and cost from the Defendants.

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It is the case of the Applicant that Defendant No. 1, being the borrower, had availed a Term Loan of Rs. 60,00,000/- (Rupees Sixty Lakh Only) from the Applicant Bank for the purpose of construction of a deepsea steel fishing boat. In consideration of the said loan facility, Defendant No. 2 stood as guarantor. Both the Defendants agreed to repay the loan amount in accordance with the terms and conditions stipulated in the loan documents executed in favour of the Applicant Bank.

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It is also the case of the Applicant that, in consideration of the aforesaid loan facility, the Defendants executed the necessary loan documents and created a charge by way of hypothecation and mortgage over the schedule properties in favour of the Applicant Bank as security for due repayment of the said loan facility.

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It is the case of the Applicant that the Defendants, despite having availed the credit facility and agreed to the terms and conditions thereof, failed to comply with the same, resulting in defaults and the loan account being classified as a Non-Performing Asset (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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Summons were issued to the Defendants. The Defendants entered

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OA 1048/2022

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appearance through counsel and filed their written statement. However, despite being granted sufficient opportunities, they failed to adduce evidence in support of their defence, and the matter was proceeded further in accordance with law.

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In the written statement, the Defendants contend that the documents are not properly stamped and that there is evasion of stamp duty in respect of documents such as the mortgage deed, hypothecation agreement, two confirmation of balance letters, and one agreement. The Defendants have further disputed the entire statement of account on various grounds and have called upon the Applicant to prove each and every entry therein strictly. It is also contended that the Applicant has not mentioned the rate of interest in the statement of account.

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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-18, got the same marked in evidence.

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Heard both sides, and considered the contentions raised in the OA in the light of the documentary evidence and proof affidavits. It is noted that the Applicant alone has adduced evidence in support of its case, whereas the Defendants have not led any evidence and have merely filed the written statement.

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The following issues arise for consideration in this matter:

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i) Whether the Applicant succeeded in proving the OA claim as

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OA 1048/2022

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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 contention of Defendants that the loan documents are inadmissible for want of proper stamp duty is devoid of merit. The records disclose that the defendants voluntarily availed the credit facilities from the applicant and executed the loan and security documents in token of acceptance of the terms and conditions governing the facility. Having executed the said documents and acted upon them, the defendants cannot now be permitted to dispute their validity on the ground of alleged insufficiency of stamp duty. Further, the defendants have not taken any effective steps in accordance with law for impounding the documents on the ground that they are insufficiently stamped. It is also pertinent to note that the stamp duty payable on the documents was borne and paid by the defendants at the time of execution of the loan documents. Therefore, the defendants cannot be allowed to take advantage of their own alleged omission, if any, and avoid their contractual liability. Accordingly, the contention regarding violation of the Karnataka Stamp Act, evasion of stamp duty, and inadmissibility of the loan documents is rejected.

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The statement of account maintained by the Applicant Bank is a regularly maintained business record and carries a presumption of

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OA 1048/2022

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correctness unless rebutted by credible evidence, which is absent in the present case. The Defendants have failed to adduce any material to discredit the entries reflected therein or to establish any specific discrepancy. The mere denial or a general challenge to the statement of account is not sufficient in law to dislodge its evidentiary value. Further, the absence of a separately stated rate of interest therein does not render the account invalid, particularly when the applicable rate of interest is governed by the loan documents executed between the parties. Accordingly, the objection raised by the Defendants is devoid of merit

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The evidence tendered by the Applicant remains uncontroverted and undisputed. The evidence put forth by the Applicant is found admissible and sufficient to prove the averments made in the OA, and the default committed by the Defendants in repaying the loan amount due. The liability of the Defendant and the loan amount due are also proved by the above documents.

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Hence in view of the above findings this Tribunal comes to the conclusion that the OA is liable to be allowed.

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Taking into consideration of the fact that the loans are availed is term loan and also the fact that OA claim is arrived at by calculating interest at the agreed rate, pendente lite and future interest is awarded

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OA 1048/2022

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at 8.00% (simple). The prayer for interest with compounded monthly rests

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and for penal interest for the future period is hereby declined.

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In the result, OA.No. 1048/2022, is allowed,

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i) The Applicant is allowed to recover an aggregate sum of Rs. 85,35,546/- (Rupees eighty-five lakh thirty-five thousand five hundred and forty-six only) with pendente lite and future interest of 8.00% p.a. (simple) from 01.06.2022 till the realization from the Defendants jointly, severally and personally after giving credit to all the amounts recovered and received during the pendency of the OA if any, and allowed the same to be recovered

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by proceeding against the schedule properties. The schedule of properties to the OA shall form part of the Recovery Certificate.

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ii) If the sale proceeds are found insufficient to clear the loan amount due from the Defendants jointly, severally and personally, then the Applicant Bank shall be at liberty to proceed against their other assets for recovery of the balance amount due.

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iii) The applicant bank is allowed cost of the proceedings for which Applicant to file cost memo within seven days from the date of receipt of the order.

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iii) The Recovery Certificate to be drawn in terms of this order and transferred to Recovery for execution.

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OA 1048/2022

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iv) Interim application pending, if any, stands disposed of in terms

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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) Rules, 1993.

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(Dictated to PY directly on the Computer, after its transcription, corrected and pronounced by me in the open Court on this the 24^th day of June, 2026).

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Sd/-

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(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: Avinasha, 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	08.12.2014	Sanction order
A2	11.12.2014	Term loan agreement
A3	11.12.2014	Declaration
A4	11.12.2014	Undertaking letter to Hypothecate
A5	30.09.2015	Hypothecation Agreement
A6	24.01.2017	Acknowledgement of Debt
A7	18.01.2018	Acknowledgement of Debt
A8	18.01.2021	Acknowledgement of Debt
A9	29.12.2014	Registered Mortgage
A10	15.07.2015	Recall Notice
A11	28.07.2015	Recall Notice
A12	19.08.2015	Recall Notice
A13	08.09.2015	Recall Notice
A14	--	Returned Postal Cover
A15	--	Postal receipt

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OA 1048/2022

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A16	--	Returned Postal Cover
A17	14.05.2020	Recall Notice
A18	--	Statement of account

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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:

-Nil -

Sd/-

(T. RAJESH)

PRESIDING OFFICER

Karnataka Bank Limited v. Jayanthi Kunder

Case brief

What is this about?

What did the court decide?

Karnataka Bank Limited v. Jayanthi Kunder

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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