Allowed

State Bank of India v. M/s Shankar Rice Industries

DRT30 Apr 2026OA/1051/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed an Original Application for a recovery certificate issued by State Bank of India against multiple respondents, including legal heirs of a deceased borrower, for an outstanding loan of approximately Rs. 5.29 crores. The court reduced the claimed interest rate to 12% simple.

What did the court decide?

Order issued allowing recovery of Rs. 52,98,00,359 with 12% simple interest from filing date till realization from respondents against their inherited estate and schedule property.

State Bank of India versus M/s Shankar Rice Industries — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA

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AT BENGALURU

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Dated this 30^th Day of April, 2026

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Present: Sri. T. RAJESH Presiding Officer

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OA. No.1051/2022

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BETWEEN:

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State bank of India II floor, Office Complex, LHO campus No. 65, Sr. Marks Road, Bangalore – 560 001

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Represented By its Assistant General Manager Sri. Nagmani Sinha …APPLICANT

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AND:

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M/s. Shankar Rice Industries Being a partnership firm Having its place of business at: Plot no. 133/D, 2^nd phase, KIADB Antharasanahally Industry Area Lingapura, Sira Road, Tumkur – 572 106

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Represented by its partners

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Sri. K S Shankar Major S/o. Late K N Sathyanarayan Nanjundeshwara Nilaya, 2^nd Cross, CSI Layout, Tumkur – 572 102

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OA. No. 1051/2022

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Sri. Nagaraja Shetty T K Major S/o. late G B Krishnaiah Shetty No. 89, JC road, Vinayaka Nagar Tumkur – 572 102

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Sri. Ramesh Babu T K Major S/o. Krishnaiah Shetty No.1, Isiri Vasavi Nagar, Behind Mahaveera Jain Temple Opposite Anikenthan Vidya Mandir, Site Gate, Tumkur – 572 101

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Sri. Vivek G N Major S/o. T K Nagaraja Shetty

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Sri. G N Vinod Major S/o. T K Nagaraja Shetty

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Both defendant no. 5 and 6 are residing at: “Tulasi, 2^nd main, 1^st cross, Opp. D C bungalow, Sira Gate, Vasavi Nagara, Tumkur – 572 106

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Smt. K S Pushpavathy (Since deceased, rep by her LR Defendant no.2) ...DEFENDANTS

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Counsel on record/appeared for: Applicant : Nayana Tara B G Defendant no.7 : Deceased Defendant nos.1 to 6 : Exparte

OA. No. 1051/2022

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. 52,98,00,359/(Rupees Fifty-Two Lakhs Ninety-Eight Thousand Three Hundred Fifty-Nine 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 defendant no. 2 is the legal heirs of the deceased borrower Smt. K S Pushpavathy, who expired during the pendency of OA have availed the credit facilities:

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Cash Credit of Rs. 26,25,00,000/- (Rupees Twenty-Six Cores Twenty-Five Lakhs Only).

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SLC of Rs. 3,75,00,000/- (Rupees Three Crores Seventy-Five Lakhs Only).

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CCECL of Rs. 2,60,00,000/- (Rupees Two Crores Sixty Lakhs Only).

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It is also the case of the applicant that, in view of the above financed credit facilities, the deceased borrower Smt. K S Pushpavathy executed necessary loan documents. Apart from the creation of security interest by way of simple mortgage deed and hypothecation agreement over the schedule property.

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It is further contended that, despite availing the credit facilities, agreeing to service the loan account promptly and

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OA. No. 1051/2022

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regularly, borrower 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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After filling of the OA, summons sent to defendants by registered post. The summons to defendant no.1 returned unserved with an endorsement “dead” and the applicant bank has filed a memo stating that defendant no.1 expired, the defendant no. 2 surviving legal heirs of deceased defendant no.7. Despite, services completed, the defendant nos. 1 to 6 placed ex parte on 22.07.2024.

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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 A1 to A28 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 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 OA

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claim as against the defendants?

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OA. No. 1051/2022

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ii) What orders 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 ex parte. 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 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 findings which cover both the 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 facilities

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are availed for Business purpose and also that the OA claim is arrived at by calculating interest at the agreed rate, this Tribunal

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of the view that OA can be allowed with a reduced interest of

12.00%(simple).

OA. No. 1051/2022

In the result, OA.No.1051/2022 stands allowed,

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i) The applicant is allowed to recover an aggregate sum of Rs. 52,98,00,359/- (Rupees Fifty-Two Lakhs Ninety-Eight Thousand Three Hundred Fifty-Nine Only) with further interest of 12.00% p.a.(simple) from the date of filing OA till the realization, from the defendants no. 1 to 6, to the extent of their inheritance of any estate form the deceased borrower, Smt. K S Pushpavathy, after giving credit to all the amounts recovered and received during the pendency of the OA allowed the same to be recovered by proceeding against the schedule property. The schedule property to the OA be the schedule property to the Recovery Certificate.

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ii) If the sale proceeds are not sufficient to clean the liability defendant nos. 1 to 6 are liable to the extent of estate, they inherited from deceased Smt. K S Pushpavathy for the balance amount.

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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 receipt of the order.

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OA. No. 1051/2022

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iv) The Recovery Certificate to be drawn in terms of this order

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and transferred to Recovery for execution.

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v) Interim Application pending, if any, stands disposed of with this Final Order.

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Communicate a copy of the order to the parties concerned in

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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 (HS), transcribed by her, corrected and signed and pronounced by

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me in the Open Court, this the 30^th Day of April, 2026].

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Sd/-

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(T. RAJESH) PRESIDING OFFICER

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ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1 Gajanan Valu Rathod, S/o. late Valu Rathod, Assistant

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General Manager, of the applicant bank.

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Exhibits on the part of the Applicant:

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Annexure	Particulars
A1	Letter Of Arrangement Dated 17.10.2017
A2	Agreement of loan for overall limit dated 25.10.2017
A3	Agreement Of Hypothecation of Goods Dated 25.10.2017
A4	Deed ofguarantee dated 25.10.217
A5	Letter regarding the grant of individual limits within overall limit dated 25.10.2017

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OA. No. 1051/2022

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A6	Memorandum recording deposit of title deeds dated 18.12.2017
A7	Letter of arrangement dated 26.03.2019
A8	Workingcapital consortium agreement dated 09.08.2019
A9	Inter se agreement dated 09.08.2019
A10	Joint deed of hypothecation dated 09.08.2019
A11	Deed ofguarantee dated 09.08.2019
A12	Balance confirmation letter
A13	Letter of arrangement dated 04.05.2020
A14	Supplemental working capital consortium agreement dated 07.05.2020
A15	The supplemental joint deed of hypothecation dated 07.05.2020
A16	Deed ofguarantee dated 07.05.2020
A17	Demandpromissorynote dated 07.05.2020
A18	Workingcapital agreement dated 10.09.2020
A19	Inter se agreement dated 10.09.2020
A20	Joint deed of hypothecation dated 10.09.2020
A21	Deed ofguarantee dated 10.09.2020
A22	Letter ofguarantee dated 10.09.2020
A23	Letter confirmation extension of mortgage dated 06.11.2020
A24	Demand notice
A25	Demand notice dated 29.07.2021
A26	Replyletter dated 12.04.2021
A27	Possession notice dated 30.08.2021
A28	Statement of accounts
Witness E List of Doc	xamined for the Defendants: -Nil - uments Exhibited for the Defendants: -Nil -

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Sd/-

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(T. RAJESH) PRESIDING OFFICER

State Bank of India v. M/s Shankar Rice Industries

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/s Shankar Rice Industries

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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