Allowed

Canara Bank v. Sri M.K Prakash Prop of M/S Garuda Infotech

DRT12 Jun 2026OA/1109/2023

Case brief

AI extract

What is this about?

The Tribunal allowed an Original Application filed under Section 19 of the RDB Act for issuance of a Recovery Certificate against a defaulter who did not appear. The Tribunal confirmed the loan availed, default, and liability, restricting interest to 12% simple.

What did the court decide?

Recovery Certificate allowed for Rs. 24,86,791.02 with further interest at 12.00% p.a. (Simple).

Canara Bank versus Sri M.K Prakash Prop of M/S Garuda Infotech — Specific Performance | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL II, BENGALURU

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Dated this 12^th Day of June, 2026

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Present: Sri. T. RAJESH Presiding Officer

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OA.No.1109/2023

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BETWEEN:

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Canara Bank Head Office at: No.112, J.C Road, Bengaluru-560001. Branch Office at: J.P Nagar, 7^th Phase Branch, Bengaluru-560 078. Represented by its Manager , Sri. Surendra Kumar Verma. …APPLICANT

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AND:

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Sri. M. K. Prakash S/o Sri Kantharaja Setty, Aged about 48 years, Proprietor of M/s Garuda Infotech, No. 61, 6^th Main, M.S. Ramaiah City, J.P Nagar, 7^th Phase, Bengaluru -560076. Residing at No. 72, “Sumukha Marvel Apartment” Kothanur Dinne, J.P Nagar 8^th Phase, Bengaluru-560 076. ...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : K. Aswathanarayana Defendants : Exparte

OA 1109/2023

FINAL ORDER

The present Original Application in short (OA) has been filed under section 19 of Recovery of Debts and Bankruptcy Act 1993 seeking issuance of Recovery Certificate for Rs. 24,86,791.02/- (Rupees Twenty Four Thousand Eighty Six Thousand Seven Hundred Ninety One and Paise Two only) with further interest thereon from the date of filing the Application till realization from the Defendant.

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It is the case of the applicant that the defendant is the Proprietorship concern availed the following credit facilities from the applicant bank:-

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I. MSME OD OCC Loan for a sum of Rs. 10,00,000/- (Rupees Ten lakh Only) on 06.10.2020.

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II. MSME Services Loan for sum of Rs. 14,00,000/- (Rupees Fourteen Lakh Only) for Term Loan purpose on 06.10.2020.

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It is also the case of the applicant that, in view of the above

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amount financed, the defendant executed necessary loan documents along with Sanction Memorandum, Cash Credi Agreement, Demand Promissory Note, Deed of Hypothecation Agreement.

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It is further contended that, the defendant despite availing

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OA 1109/2023

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the credit facilities, agreeing to service the loan account promptly and regularly, 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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Despite, service of summons on the defendant, He failed to appear, resulting the defendant being set exparte on 06.06.2025.

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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-7 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

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OA claim as against the defendant?

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ii) What order are to be passed?

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OA 1109/2023

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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 defendant 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 hypothecation taken by the applicant and the defaults committed in the accounts. The liability of the defendant and the claim as the amount due is also

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proved by the above documents. The claim of the applicant is

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well within the limitation.

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Hence in view of the finding arrived herein above, this

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Tribunal find both these issues in favour of applicant and hence

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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

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are availed for Cash Credit 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 12.00% (simple).

OA 1109/2023

In the result, OA.No.1109/2023, stands allowed,

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i) The applicant is allowed to recovery an aggregate

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sum of Rs. 24,86,791.02/- (Rupees Twenty Four Thousand Eighty Six Thousand Seven Hundred Ninety One and Paise Two only) with further interest @ 12.00% p.a. (Simple), from the date of filing OA till the realization, from the defendant 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 proceedings against the defendant and their assets including the schedule hypothecation. Schedule to the OA be the schedule to the recovery certificate.

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ii) 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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iii) 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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iv) Interim application pending, if any, stands disposed of

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in terms of this final order.

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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

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OA 1109/2023

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of DRT (Procedure) Rules, 1993.

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[Dictated to the Stenographer (DV), transcribed by him, corrected and signed and pronounced by me in the Open Court, this the 12^th day of June, 2026].

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(T. RAJESH)

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PRESIDING OFFICER

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Sandeep Kumar Srivastava, Chief Manager of Applicant

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Bank.

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Exhibits on the part of the Applicant:

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Exhibit Nos.	Date	Particulars of Documents
A1	24.05.2020	Loan Application submitted by the defendant Sri. M.K. Prakash Proprietor of M/s. Garuda Infotech in favour of the Applicant for open Cash Credit facility of Rs. 10. Lakhs and Term Loan of Rs. 14,00,000/-
A2	06.10.2020	Sanction Memorandum issued by the applicant in favour of the defendant granting OCC Loan of Rs. 10 Lakhs and Term Loan of Rs. 14,00,000/-
A3	06.10.2020	Request for Over Draft facilities submitted by the defendant
A4	06.10.2020	Cash Credit Agreement executed by the defendant Sri M. K. Prakash Proprietor of M/s Garuda Infotech in favour of the Applicant for open Cash Credit facility of Rs. 10. Lakhs.
A5	06.10.2020	On Demand Promissory Note executed by the defendant Sri M. K. Prakash Proprietor of M/s Garuda Infotech in favour of the Applicant for open Cash Credit facility of Rs. 10. Lakhs.
A6	06.10.2020	On Demand Promissory Note executed by the defendant Sri M. K. Prakash Proprietor of M/s Garuda Infotech in favour of the Applicant for open Cash Credit facility of Rs. 14. Lakhs.

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OA 1109/2023

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A7	06.10.2020	Letter of undertaking Re: loans/ advance executed by the defendant Sri M. K. Prakash Proprietor of M/s Garuda Infotech in favour of the Applicant
A8	28.12.2021	Letter of Proprietorship submitted by the defendant
A9	28.12.2021	Letter of Renewal executed by the defendant in favour of the applicant
A10	14.12.2022	Legal Notice issued by the applicant in favour of the defendant
A11 & A12	14.12.2022	Postal Registration Receipts
A13 & A14	16.12.2022	RPAD un-claimed Covers
A15	15.05.2023	Certified Statement of Account in respect of MSME OD/OCC Loan A/c No. 3197261000086 of the defendant M/s. Garuda Infotech with interest calculation sheet and Certificate.
A16	15.05.2023	Certified Statement of Account in respect of MSME Services Loan A/c No. 3197768000308 of the defendant M/s. Garuda Infotech with interest calculation sheet and Certificate.
A17	--	Consolidated Statement

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

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(T. RAJESH)

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PRESIDING OFFICER

Canara Bank v. Sri M.K Prakash Prop of M/S Garuda Infotech

Case brief

What is this about?

What did the court decide?

Canara Bank v. Sri M.K Prakash Prop of M/S Garuda Infotech

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

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