Allowed

Canara Bank v. Ms Five Star Food Products

DRT24 Jul 2026OA/1382/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an application for issuance of a Recovery Certificate against a proprietor concern for an outstanding loan of Rs. 25.57 lakhs. The Tribunal reduced the interest rate to 6% p.a. (simple) and directed recovery from the defendant personally and her hypothecated assets.

What did the court decide?

Issuance of Recovery Certificate for Rs. 25,57,379/- with interest @6% p.a. (simple); recovery from defendant personally and assets including hypothecated schedule.

Canara Bank versus Ms Five Star Food Products — Execution and Attachment | 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.1382/2023

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BETWEEN:

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Canara Bank DVG Road Branch, Mo.66, DVG Road, Basavanagudi, Bengaluru-560 004. Repersented by its Chief Manager, Smt. Srimathi Kini Shenoy.

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…APPLICANT

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AND:

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M/s Five Star Food Products Proprietrix: Shaistha Banu W/o Mohammed Nasrulla Shariff, Aged about 35 years, No.22, M R R Lane, Kalaipalyam Bus Stand, Bengaluru-560002.

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...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : M R Rajini Defendants : Exparte

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FINAL ORDER

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The present Original Application in short (OA) has been filed under

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section 19 of Recovery of Debts and Bankruptcy Act 1993 seeking issuance

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of Recovery Certificate against the defendants for Rs. 25,57,379/- (Rupees Twenty Five Lakh Fifty Seven Thousand Three Hundred Seventy Nine Only) with further interest thereon from the date of filing the Application till realization.

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It is the case of the applicant that the defendant is a Proprietory Concern, represented by its Proprietrix Shaistha Banu availed the following loan facilities:-

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I. Term Loan of a sum of Rs. 19,00,000/- (Rupees Nineteen Lakh Only) on 04.02.2021.

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II. Overdraft Facility of Rs.4,75,000/- (Rupees Four Lakh Seventy Five Thousand Only) on 04.02.2021.

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It is also the case of the applicant that, in view of the above availed loans, the defendants executed necessary loan documents along with Letter of Proprietorship, Deed of Hypothecation, Cash Credit Agreement.

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It is further contended that, despite availing the credit facilities, agreeing to service the loan account promptly and regularly, the defendant failed in complying the same, resulting in default 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, taking out summons the defendant failed to appear,

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resulting the defendants being set exparte on 21.04.2026.

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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 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 claim as against the defendant?

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ii) 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 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 hypothecation

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as claimed by the applicant bank and the defaults committed in the accounts. The liability of the defendant and the claim of the amount due are also 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 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.

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Taking into consideration the facts that the credit facilities was 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 6.00% (simple).

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In the result, OA.No.1382/2023, stands allowed,

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i) The applicant is allowed to recovery an aggregate sum of Rs. 25,57,379/- (Rupees Twenty Five Lakh Fifty Seven Thousand Three hundred Seventy Nine Only) with further interest @6.00 % 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 her assets including the schedule hypothecation. Schedule to the OA be the schedule to the recovery certificate.

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ii) If the sale proceeds are not found sufficient to cover the amount due and payable to the applicant bank, the defendant personally

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and her assets are liable for the amounts due under the loan accounts.

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iii) The applicant bank is allowed cost of the proceedings 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 in terms of this final order.

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

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of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

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[Dictated to the Stenographer (DV), 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/-

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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: Raj Bhushan PD Verma of the applicant Bank

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Exhibits on the part of the Applicant:

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Annexure	Date	List of Documents
A1	18.01.2021	Loan Application
A2	04.02.2021	Sanction Letter

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A3	04.02.2021	Letter of Proprietorship
A4	04.02.2021	Deed of Hypothecation
A5	04.02.2021	Request for Overdraft Facilities
A6	04.02.2021	Pronote
A7	04.02.2021	Cash Credit Agreement
A8	13.05.2023	Legal Notice
A9	--	Postal Receipt
A10	--	Postal Acknowledgement
A11	10.04.2023	Statement showing the balance outstanding in the A/c No. 0473727000009 of the defendant
A12	10.04.2023	Statement showing the balance outstanding in the A/c No. 0473261005397 of the defendant

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

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Sd/-
(T. RAJESH)
PRESIDING OFFICER

Canara Bank v. Ms Five Star Food Products

Case brief

What is this about?

What did the court decide?

Canara Bank v. Ms Five Star Food Products

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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Case details

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