Allowed

Karnataka Gramin Bank v. Bhimashankar

DRT27 Mar 2026OA/156/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the original application filed by Karnataka Gramin Bank against Bhimashankar for issuance of a Recovery Certificate. The court held that the bank's loan documents and mortgage records were uncontroverted. A competing claim by the second defendant regarding a different borrower and property did not invalidate the bank's established claim.

What did the court decide?

Recovery Certificate issued for aggregate sum of Rs. 22,49,492.72 with pendente lite and future interest of 9% p.a. against Defendant No.1 personally and against schedule property.

Karnataka Gramin Bank versus Bhimashankar — Specific Performance | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL II,

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BENGALURU

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Dated this 27^th Day of March, 2026

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Present: Sri. T. RAJESH

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Presiding Officer OA.No.156/2024

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BETWEEN:

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Karnataka Gramin Bank, Aralagundagi -585310, Jewargi Taluk, Kalburgi District, Rep. by its Branch Manager,

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…APPLICANT

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AND:

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Sri. Bhimashankar, S/o. Sadashiv Nedalagi, R/o. Kuranhalli Village, Kuranhalli- Jewargi Jewargi Taluk -585310, Kalaburgi District.

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State Bank of India, Mandewal Branch, Rep. by its Branch Manager, Sri. Mallikarjun Hugar Complex, Mandewal, Jewargi Taluk -585310, Kalburgi District.

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...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : JN Legal Defendant No.1 : Ex parte Defendant No.2 : G N Satyamurthy

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FINAL ORDER

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The present Original Application in short “OA” has been filed

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under section 19 of Recovery of Debts and Bankruptcy Act 1993 seeking issuance of Recovery Certificate for Rs. 22,49,492.72 (Rupees twenty-

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OA 156/2024

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two lakh forty-nine thousand four hundred ninety-two and paisa seventy-two only) with further interest thereon and cost from the Defendants.

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It is the case of the Applicant that the Defendant No. 1, as borrower, availed a KCC facility of Rs. 2,00,000/- (Rupees Two Lakh Only) for agricultural purposes. Thereafter, the Defendant No. 1 also availed two Agricultural Term Loans of Rs. 1,00,000/- (Rupees One Lakh Only) each for the said purpose.

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It is also the case of the Applicant that, in view of the above loan, the Defendant No.1 executed necessary loan documents in favour of the Applicant bank to secure the loan and also had created mortgage over the schedule property.

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The Applicant further contends that, subsequently, in the year 2020, Defendant No. 2 sanctioned a credit facility of Rs. 5,00,000/(Rupees Five Lakh Only) to Defendant No. 1 by creating a mortgage over the schedule property, which had already been mortgaged in favour of the Applicant Bank. The Applicant submits that it holds a prior and subsisting charge over the said schedule property and is therefore entitled to priority in the recovery of its dues from Defendant No. 1 in accordance with law.

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It is the case of the Applicant that the Defendant No.1, despite availing the credit facility, after agreeing with the Terms and Conditions for the loan, failed in complying with the same, resulting in defaults and

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OA 156/2024

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consequentially turning the loan accounts as Non-Performing Asset (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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Summons were duly served upon the Defendants; however, Defendant No. 1 failed to appear before this Tribunal and was therefore set ex parte on 09.09.2025. Defendant No. 2 appeared through its counsel, filed its written statement, and adduced evidence in support of its case.

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In the written statement filed by Defendant No. 2, it is contended that no credit facility was granted to Defendant No. 1 by mortgaging the schedule property. It is stated that one Smt. Basamma, W/o Bhimashankar, availed a loan of Rs. 5,00,000/- (Rupees Five Lakh Only) from Defendant No. 2 by mortgaging an extent of 5 acres in Sy. No. 79/4, which she had acquired pursuant to a family partition, and the same has been produced and marked as evidence. It is further submitted that Defendant No. 2 has already obtained a decree in O.S. No. 135/2024 for recovery of the said loan, and a certified copy of the decree, along with a memo, has also been produced. The evidence filed by Defendant No. 2 further states that the schedule property described in the OA and the property mortgaged to Defendant No. 2 in lieu of security for Basamma’s credit facility bear different survey numbers and even the measurements differ.

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OA 156/2024

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The Applicant examined AW-1, who filed a proof affidavit in support of the averments made in the Original Application and produced Exhibits A-1 to A-36, which were duly marked. Defendant No. 2 examined DW-1, who filed a proof affidavit in support of its defence and produced Exhibit D-1, which was also marked in evidence.

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Heard the learned counsels for both parties and considered the contentions raised in the OA in light of the documentary evidence and the proof affidavits filed by the parties.

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The following issues arise for consideration in this matter:

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

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ii) If so, to what extent?

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Both the issues are gone into and decided together.

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Upon careful consideration of the pleadings and evidence on record, it is evident that the primary transaction in question pertains to the loan facilities availed by Defendant No. 1 from the Applicant Bank. The documentary evidence produced by the Applicant, including the loan documents and mortgage records, clearly establishes the borrowing by Defendant No. 1 and the creation of security in favour of the Applicant.

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Insofar as Defendant No. 2 is concerned, the materials placed on

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record do not disclose any direct contractual relationship between the Applicant and Defendant No. 2 in respect of the loan transaction forming

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OA 156/2024

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the subject matter of the present OA. The dispute essentially relates to the recovery of dues from Defendant No. 1 based on the loan facilities sanctioned by the Applicant. Further, the evidence adduced by Defendant No. 2 and the mortgage deed produced by the Applicant indicate that the loan transaction relied upon by Defendant No. 2 pertains to a different borrower and a different property, as the survey numbers and measurements mentioned therein are different from those described in the schedule property of the OA. However, the controversy relating to the property does not materially affect the Applicant’s claim against Defendant No. 1 in the present proceedings, and Defendant No. 2 cannot be said to have any bearing on the adjudication of the present claim.

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In view of the above, it is clear that Defendant No. 2 has no connection with the loan transaction between the Applicant and Defendant No. 1 and it’s also to be noted that the defendant No.2 contenting that the property mortgaged to there is different. The Applicant has not sought any specific relief against Defendant No. 2, and no relief is granted against Defendant No. 2 in the present OA. The claim of the Applicant stands independently established against Defendant No. 1.

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The case put forth by the Applicant in the OA remains largely

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OA 156/2024

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unrebutted. Even though Defendant No. 2 adduced evidence, it does not pertain to the loan transaction between the Applicant and Defendant No. 1, nor does it dispute the defaults committed by Defendant No. 1. The evidence produced by the Applicant, including the loan documents and mortgage records, remains admissible, uncontroverted, and sufficient to prove the averments made in the OA. The outstanding loan amount and the Applicant’s right to recover the same are clearly established, and the claim of the Applicant is within the period of limitation.

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The Defendant No. 2 has filed a memo along with the decree passed in O.S. No. 135/2024 by the Hon’ble Senior Civil Judge, Jewargi. The said suit was filed by Defendant No. 2 for recovery of a sum of Rs. 6,19,082/- from one Smt. Basamma. The suit came to be decreed directing that the defendant therein, i.e., Basamma, shall pay the said amount to the plaintiff. It was further ordered that in the event the defendant fails to repay the loan amount within six months from the date of the decree, the plaintiff is at liberty to proceed against the mortgaged property by bringing the same to sale through public auction.

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Hence in view of the above findings this Tribunal comes to the

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conclusion that the OA is liable to be allowed.

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OA 156/2024

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Taking into consideration that the loans were availed for agricultural purposes, and that the OA claim has been calculated based on the agreed interest rate, pendente lite and future interest is awarded at 9% per annum (simple) on all the loans. The prayer for interest with half-yearly rests and for penal interest for the future period is, however, declined.

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In the result, OA.No.156/2024, is allowed,

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i) The Applicant is allowed to recover an aggregate sum of Rs. 22,49,492.72 (Rupees twenty-two lakh forty-nine thousand four hundred ninety-two and paisa seventy-two only) with pendente lite and future interest of 9.00% p.a. (simple) from the date of filing of the OA till the realization, from the Defendant No.1 personally after giving credit to all the amounts recovered and received during the pendency of the OA if any, and allow the same to be recovered by proceedings against schedule property. Property schedule to the OA be the schedule to the Recovery Certificate. It is made clear that no adjudication is made as to the mortgage claimed have been made in favour of defendants nor by its borrowers.

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ii) If the sale proceeds are not found sufficient to clear the loan

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amount due from Defendant No.1 personally, then the Applicant bank is at liberty to proceeded against his other assets for the recovery of

OA 156/2024

the balance due.

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

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which Applicant to file cost memo within seven 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 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 (Procedure) Rules, 1993.

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(Dictated to PY directly on the Computer, after its transcription, corrected and pronounced by me in the open Court on this the 27^th day of March 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: Sri. Srikant S K, Branch Manager and Authorized officer of Applicant Bank.

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Exhibits on the part of the Applicant:

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Exhibit	Date	Particulars of Documents
Nos.
A1	25.05.2005	Application for Crop loan
A2	30.05.2005	Loan Agreement
A3	26.05.2005	Mortgage Deed

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OA 156/2024

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A4	10.04.2017	Acknowledgment of Security
A5	26.05.2008	Revival letter
A6	20.05.2011	Revival letter
A7	15.05.2013	Revival letter
A8	20.04.2016	Revival letter
A9	05.11.2018	Revival letter
A10	02.11.2021	Revival letter
A11	07.06.2008	Application Agri. Dev. Loan
A12	07.06.2008	Loan Appraisal Memorandum cum sanction letter
A13	07.06.2008	Loan agreement
A14	31.05.2008	Mortgage Deed
A15	24.05.2011	Revival letter
A16	17.09.2018	Acknowledgement of liability
A17	30.12.2013	Revival letter
A18	20.12.2016	Revival letter
A19	20.11.2019	Revival letter
A20	02.08.2022	Revival letter
A21	07.06.2008	Application
A22	07.06.2008	Appraisal memorandum cum sanction letter
A23	07.06.2008	Loan agreement
A24	31.05.2008	Mortgage Deed
A25	11.09.2018	Acknowledgement of Security/ Liability
A26	24.05.2011	Revival letter
A27	30.12.2013	Revival letter
A28	25.12.2016	Revival letter
A29	11.09.2018	Revival letter
A30	08.09.2021	Revival letter
A31	05.07.2022	Legal notice
A32	05.07.2022	Legal notice
A33	05.07.2022	Legal notice
A34	--	Statement of account
A35	--	Statement of account
A36	--	Statement of account

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Witness Examined for the Defendant:

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DW-1: Sri. Sarjeet Kumar, Manager of Defendant No.2

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OA 156/2024

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List of Documents Exhibited for the Defendant:

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Exhibit	Date	Particulars of Documents
Nos.
DW1	D1	Mortgage deed

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Sd/-

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(T. RAJESH) PRESIDING OFFICER

Karnataka Gramin Bank v. Bhimashankar

Case brief

What is this about?

What did the court decide?

Karnataka Gramin Bank v. Bhimashankar

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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