Allowed

Canara Bank (Syndicate Bank) v. Ms Mahalingeshwara Cashew Industries

DRT31 Jul 2026OA/1277/2022

Case brief

AI extract

What is this about?

A Debt Recovery Tribunal allowed an Original Application filed by Canara Bank against a cashew industry firm and its partners seeking a Recovery Certificate for a default amount of approximately Rs. 2.06 crores. The Tribunal reduced the agreed interest rate to 10% simple interest.

What did the court decide?

Recovery Certificate issued for Rs. 2,06,89,304/- with further interest @10% p.a. (simple) from filing till realization, recoverable jointly, severally, and personally from defendants against schedule

Canara Bank (Syndicate Bank) versus Ms… — Contract and Commercial Disputes | DRT (2026)

¶1

IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

¶2

Dated this 31^st Day of July, 2026

¶3

Present: Sri. T. RAJESH Presiding Officer

¶4

OA.No.1277/2022

¶5

BETWEEN:

¶6

Canara Bank ‘e’ Syndicate bank Byndoor Branch, Kaveri Mahal, N.H., Byndoor, Udupi-576214. Represented by its Manager.

¶7

…APPLICANT

¶8

AND:

¶9

M/s. Mahalingeshwara Cashew Industries, Represented by its Partners, Mr. M. Manjunath Bhat Mrs. Vanishree Rao, Gudidevasthana, Heranjal, Kundapura Taluk, Udupi District.

¶10

2.Mr. Mnajunath Bhat S/o Mahalinga Bhat, Aged about 44 years,

¶11

Mrs. Vanishree Rao, W/o Gurudatha Rao, Aged about 42 years

¶12

Mr. Mahalinga Bhat, S/o Devappayya Bhat, Aged about 69 years

¶13

Mrs. Vijayashree Bhat,

¶14

2 1277/2022

¶15

W/o Mr. Mahalinga Bhat, Aged about 44 years,

¶16

Mrs. Bhagyashree Baht, D/o Mr. mahalinga Bhat, Aged about 39 years,

¶17

All are Residing at: Heranjal, Kundapura Taluk, Udupi District. ...DEFENDANTS

¶18

Counsel on record/appeared for:

¶19

Applicant : M.R. Shashidhar Defendants : Exparte

¶20

FINAL ORDER

¶21

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 against the defendants for Rs. 2,06,89,304/(Rupees Two Crore Six Lakh Eighty Nine Three Hundred Four Only) with further interest thereon from the date of filing the Application till realization.

¶22

It is the case of the applicant that the defendant No.1 as a Partnership Firm, Defendants No.2 to 6 are the partners of the firm availed the following credit facilities from the applicant bank:-

¶23

I. Term Loan of a sum of Rs. 25,00,000/- (Rupees Twenty Five Lakh Only) on 22.12.2020.

¶24

II. SOD Facility limit of Rs. 32,00,000/- (Rupees Thirty Two Lakh Only)

¶25

3 1277/2022

¶26

III. ODGO Loan limit of Rs. 54,00,000/- (Rupees Fifty Four Lakh Only)

¶27

It is also the case of the applicant that, in view of the above availed loans, the defendants executed necessary loan documents along with Registered Memorandum of Title Deeds, Composite Hypothecation, Guarantee Agreement, Letter of Authority.

¶28

It is further contended that, despite availing the credit facilities, agreeing to service the loan account promptly and regularly, the defendants failed in complying the same, resulting in default in repayment and consequentially turning the loan accounts as NPA.

¶29

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.

¶30

Despite, taking out summons the defendants failed to appear, resulting the defendants being set exparte on 30.01.2026.

¶31

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-21 and got the same marked in evidence.

¶32

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.

¶33

The following issues arise for consideration in this matter:

¶34

4 1277/2022

¶35

i) Whether the applicant had succeeded in proving the OA claim as against the defendants?

¶36

ii) What order are to be passed?

¶37

Both these issues are gone into and decided together.

¶38

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 facilities as stated in the OA, creation of Mortgage and hypothecation as claimed by the applicant bank and the defaults committed in the accounts. 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.

¶39

Hence in view of the findings arrived herein above, the Tribunal find both these issues in favour of applicant and hence, this Tribunal is of the view that OA is to be allowed.

¶40

Taking into consideration the facts that the credit facilities was

¶41

availed for Business 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 10.00% (simple).

¶42

5 1277/2022

¶43

In the result, OA.No.1277/2022, stands allowed,

¶44

i) The applicant is allowed to recovery an aggregate sum of Rs. 2,06,89,304/- (Rupees Two Crore Six Lakh Eighty Nine Thousand Three Hundred Four Only) with further interest @10.00 % p.a.(simple) 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 proceeding against schedule property. Schedule Properties to the OA be the schedule to the recovery certificate.

¶45

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

¶46

amount due and payable to the applicant bank, the defendants jointly, severally and personally and their assets are liable for the amounts due under the loan accounts.

¶47

iii) The applicant bank is allowed cost of the proceedings which

¶48

applicant to file cost memo within 7 days from the date of receipt of the order.

¶49

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

¶50

v) Interim application pending, if any, stands disposed of in terms of this final order.

¶51

Communicate a copy of the order to the parties concerned in terms

¶52

6 1277/2022

¶53

of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure)

¶54

Rules, 1993.

¶55

[Dictated to the Stenographer (DV), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 31^st Day of July, 2026].

¶56

Sd/- (T. RAJESH)

¶57

¶58

ANNEXURES

¶59

WITNESSES EXAMINED FOR THE APPLICANT BANK:

¶60

AW-1: K.P.Hemanth Kumar, Manager of the applicant Bank

¶61

Exhibits on the part of the Applicant:

¶62

Annexure	Date	List of Documents
A1	18.10.2010	Loan application for Credit facilities
A2	22.12.2010	Sanction letter
A3	30.12.2010	Registered Memorandum of Title deeds executed by defendants No.2 to 6
A4	06.01.2011	Composite Hypothecation agreement,
A5	--	Acknowledgement receipt INR 2.25 Lakh on 06.01.2011.2) INR 3.00 lakh on 12.01.2011, 3) INR 2.25 Lakhs On 21.01.2011, 4)INR.1.60 lakhs on 22.02.2011, 5) INR 3.65 lakh on 04.03.2011 6) INR 63,000 on 13.11.2011, INR 3.65 Lakhs on 26.03.2011, 8) INR 1.70Lakhs on 20.04.2011, 9) INR 75,430 on 29.04.2011, 10) INR. 2,53,400 on 7.05.2011, 11) INR. 1,87,500 on 13.05.2011, 12) INR 50,000 on 28.05.2011, 13) INR 73000 on 17.06.2011, 14) INR 12,670 lakhs on 26.03.2016
A6	06.01.2011	Guarantee Agreement executed by the defendants No. 2 to 6

¶63

7 1277/2022

¶64

A7	--	Undertaking for payment of interest executed
A8	--	Letter of authority to debit the SB account.
A9	03.07.2012	Registered Memorandum of Title deeds executed by defendants No.2 to 6
A10	08.02.2014	Application for credit facilities
A11	--	Particulars of Assets and Liabilities executed by the defendants No. 2 &3
A12	04.04.2014	Sanction Letter
A13	23.04.2014	Composite Hypothecation agreement
A14	23.04.2014	Agreement for Pledge of goods executed by the defendants No. 1
A15	23.04.2014	Guarantee Agreement executed by the defendants No. 2 to 6
A16	23.04.2014	Confirmation of Creation of Second/ Subsequent equitable mortgage
A17	15.02.2018	The demand Notice
A18 A19	-	The Letter Dated 23.11.2020 and 24.11.2020
A20 A21 A22	--	The Certified Statement of Accounts

¶65

Witness Examined for the Defendants: -Nil - List of Documents Exhibited for the Defendants: -Nil –

¶66

-Nil -

¶67

Sd/- (T. RAJESH) PRESIDING OFFICER

¶68

8 1277/2022

Canara Bank (Syndicate Bank) v. Ms Mahalingeshwara Cashew Industries

Case brief

What is this about?

What did the court decide?

Canara Bank (Syndicate Bank) v. Ms Mahalingeshwara Cashew 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

Similar cases

Canara Bank versus Ms Kalka Packaging

Hdfc Bank versus M/S Fine Line Retails Pvt. Ltd.

Canara Bank versus Ramappa G Khanagoudar

Mrs Azaz Fatima versus Hero Housing Finance Limited

M/s Pannalal Associates versus Anand Rathi Global Finance Limited

Ranjana Sharma versus Icici Bank Limited