Allowed

Karnataka Bank Limited v. Maqboolpatel

DRT24 Jul 2026OA/1183/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application by Karnataka Bank Ltd. for a recovery certificate against three defendants for loan defaults totaling over Rs. 1.19 crore, granting simple interest on term and overdraft loans.

What did the court decide?

Recovery certificate issued allowing recovery of Rs. 1,19,35,228.02/- with interest along with costs.

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

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 24^th Day of July 2026

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Present: Sri. T. RAJESH Presiding Officer

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OA. No.1183/2023

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BETWEEN:

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The Karnataka Bank Ltd.,

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1^st Floor, Bheemannappa Badiger Complex, Near TMC, Bus Stand Road, Shborapur-585224 Yadgir Dist, Karnataka …APPLICANT

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AND:

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Mr. Maqbool Patel S/o. Mohammed Patel, R/at: Heggandoddi Village & Post, Shorapura-585216

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Mr. Piddappa H Gosi S/o.Hanumanthraya Gosi, R/at: Godrihal Village, Shorapur-582216

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Mr. Krishnaram Ghanchi S/o.Ruparamji Ghanchi R/at: House No.E/7/3/70/1 Near Gandhi Chowk, Dhobi Mohalla, Shorapur-585224 ...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : Sri. Nithin Chanra.M Defendants : Exparte

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2 OA No.1183/2023

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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 for seeking issuance of Recovery Certificate against the defendants for Rs.1,19,35,228.02/- (Rupees One Crore Nineteen Lakhs Thirty-Five Thousand Two Hundred and Twenty-Eight and Paisa Two Only) with further interest thereon from the date of filing the Application till realization from the Defendants.

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The Defendants No.1 and 2 availed credit facilities of Rs.25,00,000/(Rupees Twenty-Five Lakhs Only) The Defendant No.1 as Borrower and Defendant No.2 as Guarantor for setting up of Sheep Farming unit for their business purposes.

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The Defendants No.1 is the Borrower and Defendant No.3 is the Co-obligant who are jointly and severally liable availed 2^nd Overdraft Loan of Rs.10,20,000/- (Rupees Ten Lakhs Twenty Thousand Only) by executing necessary loan documents.

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The Defendant No.1 as Borrower and Defendant No.3 as Guarantor availed Term Loan of Rs.80,000/- (Rupees Eighty Lakhs Only) Under Term Loan by executing necessary loan documents.

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3 OA No.1183/2023

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It is also the case of the applicant that, in view of the above financed credit facility, the defendants executed necessary loan documents including Metlife PNB Life Insurance Policy, Hypothecation apart from the creation of security interest by way of mortgage over the Schedule properties.

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It is further contended that, despite availing the credit facility, agreeing to service the loan amount promptly and regularly, the defendants failed in complying the same, resulting in default in repayment and consequentially turning the loan account 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 defendants, they failed to appear, resulting the defendants being set exparte on 16.01.2024.

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The applicant had let in evidence through AW-1, who filed the Proof Affidavit reiterating the contentions taken in the OA and also produced Exhibits A1 to A26 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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4 OA No.1183/2023

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The following issues arise for consideration in this matter:

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a. Whether the applicant had succeeded in proving the OA claim as against the defendants?

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b. 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 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 Hypothecation in favour of 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 facility was availed for working capital purpose and also that OA claim is arrived at by calculating interest at the agreed rate, this Tribunal in view of the OA can be allowed as prayed with simple interest.

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5 OA No.1183/2023

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In the result, OA.No.1183/2023 stands allowed,

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i) The applicant is allowed to recovery an aggregate sum

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of Rs.1,19,35,228.02/- (Rupees One Crore Nineteen Lakhs Thirty-Five

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Thousand Two Hundred and Twenty-Eight and Paisa Two Only) in following manner:

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a) The Defendants No.1 & 2 jointly, severally liable to pay a sum of Rs.16,97,769.16/- (Rupees Sixteen Lakhs Ninety-Seven Thousand Seven Hundred and Sixty-Nine and Paise Sixteen Only) with further interest of 11.85% p.a.(simple) from 14.03.2023 till the date of realization, due as Term Loan.

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The Defendants No.1 and 3 jointly and severally is liable to pay a sum b) of Rs.12,71,967.76 (Rupees Twelve Lakhs Seventy-One Thousand Nine Hundred and Sixty-Seven and Paise Seventy-Six Only) with further interest of 12% p.a.(simple) from 14.03.2023 till the date of realization, due as

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Overdraft Loan.

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c)^{The Defendants No.1 and 3 jointly and severally is liable to pay a} sum of Rs.89,65,491.10 (Rupees Eighty-Nine Lakhs Sixty-Five Thousand Four Hundred and Ninety-One and Paise Ten Only) with further interest of 12% p.a.(simple) from 14.03.2023 till the date of realization, due as Term Loan.

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6 OA No.1183/2023

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The defendants after giving credit to all the amounts recovered and

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received during the pendency of the OA if any, and allowed the same to be recovered by proceeding against the schedule properties. The schedule

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properties to the OA be the schedule properties to the Recovery Certificate.

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ii) If the sale proceeds are not found sufficient to cover the amount

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due and payable to the applicant bank, the respective defendants jointly, severally and their other assets are liable for all such amounts due in respective loan accounts.

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iii) The applicant bank is allowed cost of the proceeding 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 with this Final Order.

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Communicate a copy of the order to the parties concerned in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

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7 OA No.1183/2023

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[Dictated to the Stenographer (GS), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 24^th Day of July 2026].

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Sd/(T. RAJESH) PRESIDING OFFICER

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Sri.H.KIRAN KUMAR , Branch Manager of the applicant bank.

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Exhibits on the part of the Applicant:

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Sl. No.	Description of Documents	Exhibit Number
	Original copy of the Credit Sanction order dtd
1.	12.02.2018 vide Sanction reference No.CMRS/R400/47742/2017-18/12.02.2018	A1
2.	Original copy of the Term Loan Agreement dated 16.02.2018	A2
3.	Original copy of the Declaration by Borrower dated 16.02.2018	A3
4.	Original copy of the Declaration by Guarantor dated 16.02.2018	A4
5.	Original copies of Hypothecation Letter dated 16.02.2018	A5
6.	Original copies of Hypothecation Agreement dtd 16.02.2018	A6
7.	Original copy of the Deed of Mortgage dtd 14.02.2018	A7
8.	Original copy of the Letter of Acknowledgement of Debt dated 15.01.2021	A8
	Original copy of Credit Sanction Intimation
9.	bearing Ref No:SMRS/R050/772/2020- 2021/16.04.2020 dtd 16.04.2020	A9
	Original copy of the Composite Agreement for
10.	Kisan Credit Card Facility and Term Loan Facilityexecuted byDefendant D3.	A10

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8 OA No.1183/2023

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11.	Original copy of the Declaration dtd 11.05.2020 from the Borrower executed byDefendant No.1	A11
	Original copy of the Declaration dtd 11.05.2020
12.	from the Guarantor by executed by Defendant No.3	A12
	Original copy of the key Fact Statement dated
13.	11.05.2020 duly acknowledgement by the Defendant No.1 & 3	A13
14.	Original copy of Deed of Mortgage dated 07.05.2020	A14
15.	Original copy of the Letter of Acknowledgement of Debt dated 05.01.2022.	A15
	Original copy of the Credit Sanction Order dtd
16.	11.08.2020 vide Sanction referenced No.AGMS/RO50/23201/11-08-2020	A16
17.	Original copy of the Term Loan Agreement dated 17.08.2020	A17
18.	Original copy of the Declaration by Borrower dated 17.08.2020(2 No’s)	A18 & A19
19.	Original copy of the Hypothecation Agreement	A20
20.	Original copy of Guarantee Letter dtd 17.08.2020	A21
21.	Original copy of Deed Mortgage dated 12.08.2020	A22
22.	Original copy of Deed of Mortgage dtd 13.08.2020	A23
23.	Certified Original extract of the statement of Account of the Term Loan-1	A24
24.	The Certified Original extract of the said Agreement of Account of the overdraft	A25
25.	Certified Original extract of the said statement of Account of the Term Loan-2	A26.

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Sd/-

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(T. RAJESH) PRESIDING OFFICER

Karnataka Bank Limited v. Maqboolpatel

Case brief

What is this about?

What did the court decide?

Karnataka Bank Limited v. Maqboolpatel

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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