Allowed

Canara Bank v. Mudalagiri

DRT16 Sept 2026OA/1425/2025

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed an application filed by Canara Bank to issue a recovery certificate against two defendants for an outstanding agricultural loan of approximately Rs. 43.79 lakhs. The defendants appeared ex parte, leaving the applicant's case unrebutted. The Tribunal found evidence sufficient to prove loan availment, security creation, and default. While allowing the claim, the Tribunal reduced the interest rate to 6.00% p.a. (simple) citing the agricultural purpose of the loan.

What did the court decide?

Issuance of Recovery Certificate for Rs. 43,79,014/- plus 6.00% simple interest from filing date. Recovery directed against joint and several assets including schedule properties.

Canara Bank versus Mudalagiri — 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 16^th Day of September, 2026

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Present: Sri. T. RAJESH Presiding Officer OA.No.1425/2025

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BETWEEN:

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Canara Bank Heragu branch, Heragu, Dist. Hassan – 573 118

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Through its Senior Manager

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Smt. Shantha Lakshmi L …APPLICANT

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AND:

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Mr. Mudalagiri Gowda S/o. Karigowda Aged about 65 years R/at: Karekere Village, Shanthigrama Hobli, Dist. Hassan – 573 118

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Smt. K T Rathnamma W/o. Mudalagiri Gowda Aged about 60 years R/at: Karekere Village, Shanthigrama Hobli,

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Dist. Hassan – 573 118 ...DEFENDANTS

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Counsel on record/appeared for: Applicant : Mr. Venu K V Defendants : Ex parte

OA-1425/2025

FINAL ORDER

The present Original Application in short (OA) has been filed under section 19 of Recovery of Debts and Bankruptcy Act 1993 seeking for issuance of Recovery Certificate against the defendants for Rs 43,79,014/- (Rupees Forty-Three Lakhs Seventy-Nine Thousand and Fourteen 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 defendants are availed an agricultural term loan of Rs. 4,90,000/- (Rupees Four Lakhs Ninety Thousand Only) towards construction of farm house for agricultural purposes.

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It is also the case of the applicant that, in view of the above availed loan, the defendants executed the necessary loan documents along with simple mortgage deed.

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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 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 defendants, they failed to

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appear, resulting the defendants being set ex parte on 16.06.2026.

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OA-1425/2025

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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-12 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

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claim as against the defendants?

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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 defendants remained ex parte. 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 the security interest and the defaults committed in the accounts. The liability of the defendants and the claim of the amount

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due are also proved by the above document. The claim of the applicant is well within the limitation.

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OA-1425/2025

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Hence in view of the findings arrived herein above, the Tribunal

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find both these issues are in favour of applicant and hence, this

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Tribunal is of the view that OA is to be allowed.

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Taking into consideration the facts that the credit facility is

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availed for Agricultural purpose and also that the OA claim is arrived

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at by calculating interest at the agreed rate, this Tribunal is the view

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that the OA can be allowed with a reduced interest of 6.00% (simple).

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In the result, OA.No.1425/2025 stands allowed,

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The applicant is allowed to recover an aggregate sum of

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Rs. 43,79,014/- (Rupees Forty-Three Lakhs Seventy-Nine Thousand and Fourteen Only) with further interest @6.00 % 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 amounts recovered and received during the pendency of the OA and allowed the same to be recovered by proceeding against the schedule properties. Properties 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

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amount due and payable to the applicant bank, the defendants jointly, severally and personally and their assets are liable for all such

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amounts due under the loan accounts.

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OA-1425/2025

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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

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receipt of the order.

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iv) The Recovery Certificate to be drawn in terms of this order

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and transferred to Recovery for execution.

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v) Interim application pending, if any, stands disposed of in

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terms of this final order.

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Communicate a copy of the order to the parties concerned in

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

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(Procedure) Rules, 1993.

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[Dictated to the Stenographer (HS), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 16^th Day of September, 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 Harish M, S/o. Munivenkatappa, Manager, of Applicant Bank.

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Exhibits on the part of the Applicant:

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ANNE XURE S	DESCRIPTION
A1	Sanction letter dated 06.01.2006
A2	Memorandum of agreement for agricultural loans dated 6.01.2006
A3	Simple mortgage deed dated 04.01.2006

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OA-1425/2025

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A4	Letter of revival dated 16.11.2007
A5	Letter of revival dated 11.08.2010
A6	Letter of revival dated 12.06.2013
A7	Letter of revival dated 06.06.2016
A8	Letter of revival dated 19.04.2018
A9	Letter of revival dated 01.09.2020
A10	Letter of revival dated 11.04.2023
A11	Legal notice dated 14.03.2025
A12	True extract of statement of accounts pertaining to the defendant’s aforesaid loan account

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Witness Examined for the Defendants:

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-Nil

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List of Documents Exhibited for the Defendants:

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-Nil -

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Sd/-

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(T. RAJESH) PRESIDING OFFICER

Canara Bank v. Mudalagiri

Case brief

What is this about?

What did the court decide?

Canara Bank v. Mudalagiri

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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Case details

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