Allowed

Tamilnad Mercantile Bank Limited v. Mr. H Narayana Murthy Prop, M/S Kushaal Enterprises

DRT29 May 2026OA/1228/2025

Case brief

AI extract

What is this about?

The Tribunal allowed the Original Application filed by the bank under Section 19 of the RDB Act. The defendants defaulted on a term loan. As they appeared ex-parte, the Tribunal relied on documentary evidence to confirm the debt, mortgage, and defaults, granting the recovery certificate for the outstanding amount.

What did the court decide?

Recovery Certificate for Rs.24,32,891.50 with interest at 9.45% p.a. granted against the defendants jointly severally. Relief to proceed against schedule property and other assets.

Tamilnad Mercantile Bank Limited versus Mr. H Narayana Murthy… — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL II, BENGALURU

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Dated this 29^th Day of May, 2026

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Present: Sri. T. RAJESH Presiding Officer OA.No.1228/2025

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BETWEEN:

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Tamilnad Mercantile Bank Limited Nelamangala Branch Weavers Colony bus stop, B.H. Road, Nelamangala-562123

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…APPLICANT

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AND:

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Mr. H. Narayana Murthy S/o. Mr. Hanumaiah Proprietor of M/s Kushaal Enterprises D.No.212/1, Ground floor, Lokasevaniratham, Nelamangala-562123

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And also at: No.260, 2^nd Main Road, 17^th cross, Lohith Nagara Nelamangala- 562123

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Mrs. M Rekha W/o. Mr. H Narayana Murthy No.260, 2nd Main Road, 17th cross, Lohith Nagara Nelamangala- 562123 ...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : Sri. N. Eshwarprasath Defendants : Exparte

OA 1228/2025

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 Rs.24,32,891.50 (Rupees twenty four lakh thirty two thousand eight hundred ninety one and paisa fifty 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 No.1 as borrower and Defendant No.2 as guarantor have availed the Term Loan credit facilities of Rs.25,00,000/- (Rupees twenty five lakhs only) from the applicant bank.

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It is also the case of the applicant that, in view of the above amount financed, the defendants executed necessary loan documents along with guarantee agreement, memorandum of deposit and demand promissory note in favor of the applicant bank.

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It is further contended that, the defendant despite availing the credit facility, agreeing to service the loan account promptly and regularly, failed in complying the same, resulting in defaults

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OA 1228/2025

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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 14.10.2025.

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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-20 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 1228/2025

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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 facilities as stated in the OA, creation of mortgage as claimed by the applicant bank and the defaults committed in the accounts. The liability of the defendants and the claim as the amount due is 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 finding arrived herein above, this Tribunal find both these issues in favour of applicant and hence 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 by defendants for Term Loan purpose, this Tribunal in view of the rate of interest as claimed need not be reduced. However as the OA Claim is arrived at by calculating interest at

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OA 1228/2025

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the agreed rate and also by applying default interest, the prayer

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for monthly rest and future penal interest are declined.

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In the result, OA.No.1228/2025, stands allowed,

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i) The applicant is allowed to recovery an aggregate

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sum of Rs.24,32,891.50 (Rupees twenty four lakh thirty two thousand eight hundred ninety one and paisa fifty only) with further interest @9.45% p.a. (Simple),

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from the date of filing OA till the realization, from the defendants jointly severally and 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 schedule property. Properties schedule to the OA be the schedule to the recovery certificate.

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(ii) If the sale proceeds are not sufficient, the defendants Jointly severally and personally and their other assets are liable to be proceeded against for the balance amount.

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iii) 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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OA 1228/2025

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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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v) 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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of DRT (Procedure) Rules, 1993.

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[Dictated to the Stenographer (JV), transcribed by him, corrected and signed and pronounced by me in the Open Court, this the 29^th day of May, 2026].

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Sd/ (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: Arun Pandi. P, Bran 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	29.04.2022	Sanction intimation letter
A2	29.04.2022	Reuisition letter to avail the limit asigned by the 1^stand 2^nddefendant agreeing to abide by term and conditions
A3	29.04.2022	Demand promissory note for term loan of Rs.25 lakhs
A4	29.04.2022	Letter signed by D1 undertaking for payment
A5	29.04.2022	Take delivery letter signed by D1

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OA 1228/2025

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A6	29.04.2022	Letter of undertaking from defendants to regard to EMI
A7	29.04.2022	Article of agreement executed by D1
A8	29.04.2022	Undertaking letter to keep the security in tact in case of mortgage of immovable property by D1
A9	29.04.2022	Consent letter signed by D1 offering his property as security
A10	29.04.2022	Consent clause in loan agreement executed by D2 consenting of disclosure to CIBIL in case of Default
A11	29.04.2022	Guarantee letter
A12	29.04.2022	Guarantee agreement executed by D2 to secure credit limit
A13	29.04.2022	Memorandum of deposit of title deeds form No.26 with list of document
A14	29.04.2022	Sale deed Doc No.5536/2020-21 in favor of the D1
A15	29.04.2022	Memorandum of deposit of title deed registered as Doc No.1269/22-2023 by D2
A16	29.04.2022	Encumbrance certificate
A17	04.07.2022	Encumbrance certificate
A18	26.07.2024	Encumbrance certificate
A19	13.06.2022	Cersai Registration Certificate
A20	06.09.2024	Statement of account of term loan

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

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-Nil -

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Sd/ (T. RAJESH)

Tamilnad Mercantile Bank Limited v. Mr. H Narayana Murthy Prop, M/S Kushaal Enterprises

Case brief

What is this about?

What did the court decide?

Tamilnad Mercantile Bank Limited v. Mr. H Narayana Murthy Prop, M/S Kushaal Enterprises

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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