Allowed

Canara Bank v. Modern Apparels

DRT27 Aug 2026OA/1600/2024

Case brief

AI extract

What is this about?

The Tribunal allowed the applicant bank's Original Application for issuance of Recovery Certificate against a loan defaulter. The application was tried ex parte as the defendant did not appear, resulting in an order for recovery with reduced interest.

What did the court decide?

Recovery Certificate issued for Rs.24,36,302.62/- plus 10% p.a. simple interest from filing date till realization.

Canara Bank versus Modern Apparels — 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 27^th Day of August 2026

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Present: Sri. T. RAJESH Presiding Officer

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OA. No.1600/2024

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BETWEEN:

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Canara Bank No.112, J.C. Road, Bangalore-560002.

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…APPLICANT

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AND:

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M/s.Modern Apparels Proprietor: Mrs.Nethravathi T.G. W/o. Mr.Umamesh, No.31, Floor, Harinagara Cross, Amruthnagar, Bangalore-560062.

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And also at:

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Jayadeva Hostel B.H. Road, Tiptur, Karnataka-572201. ...DEFENDANT

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Counsel on record/appeared for:

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Applicant : Mrs.Sushree Priya Monhanty Defendant : Exparte

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2 OA No.1600/2024

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: FINAL ORDER:

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The present Original Application in short (OA) has been filed under section 19 of Recovery of Debts and Bankruptcy Act 1993 for seeking issuance of Recovery Certificate against the defendant for Rs.24,36,302.62/- (Rupees Twenty-Four Lakhs Thirty-Six Thousand Three Hundred and Two and Paisa Sixty-Two Only) with further interest thereon from the date of filing the Application till realization from the Defendant.

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The Defendant availed Rs.20,00,000/- (Rupees Twenty Lakhs Only) for purpose of Term Loan and availed Rs.5,00,000/- (Rupees Five Lakh Only) for Cash Credit Loan. The Defendant approached the applicant bank for renewal of loan up to Rs.5,00,000/- (Rupees Five Lakhs Only) the applicant bank enhanced the loan up to Rs.5,00,000/-

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It is also the case of the applicant that, in view of the above financed credit facility, the defendant executed necessary loan documents. Apart from the creation of security interest by way of hypothecation.

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It is further contended that, despite availing the credit facility, agreeing to service the loan amount promptly and regularly, the defendant failed in complying the same, resulting in default in repayment and consequentially turning the loan account 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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3 OA No.1600/2024

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Despite, service of summons on the defendants, they failed to appear, resulting the defendants being set exparte on 08.04.2026.

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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 A1 to A11 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 facility as stated in the OA, creation of security interest as claimed by the applicant bank and the defaults committed in the account. The liability of the defendants and the claim of the amount due

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4 OA No.1600/2024

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are 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 above findings which cover both the issues raised in this manner, this Tribunal is of the view that OA is liable to be allowed.

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Taking into consideration the facts that the credit facility was availed for business purpose and also, that 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% p.a.(simple).

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In the result, OA.No.1600/2024 stands allowed.

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i) The applicant is allowed to recover an aggregate sum of for Rs.24,36,302.62/- (Rupees Twenty-Four Lakhs Thirty-Six Thousand Three Hundred and Two and Paisa Sixty-Two Only) along with current and future interest of 10% from the date of filing the application till the date of realization, from the defendant, after giving credit to all the amounts recovered and received during the pendency of the OA if any.

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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 defendant and his other assets are liable for all such amounts due in loan accounts.

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5 OA No.1600/2024

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iii) The applicant bank is allowed cost of the proceeding 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

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transferred to Recovery for execution.

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v) Interim Application pending, if any, stands disposed of with this Final Order.

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Communicate a copy of the order to the parties concerned in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure)

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Rules, 1993.

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[Dictated to the Stenographer (GS), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 27^th Day of August 2026].

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Sd/(T. RAJESH) PRESIDING OFFICER

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6 OA No.1600/2024

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Sri. Bhagavan, Senior Manager of the Applicant Bank.

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Exhibits on the part of the Applicant:

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Sl. No.	Description of Documents	Date	Exhibits Number
1.	Loan application	09.12.2021	A1
2.	Sanction Letter dated	30.12.2021	A2
3.	Agreement Cum Deed of Hypothecation	30.12.2021	A3
4.	Letter of Undertaking	30.12.2021	A4
5.	Cash Credit Agreement	30.12.2021	A5
6.	Sanction Memorandum	27.12.2022	A6
7.	Letter of Renewal	27.12.2022	A7
8.	Letter of Revival	27.12.2022	A8
9.	Legal Notice	05.04.2024	A9
10.	Statement of A/c No.1470003066564		A10
11.	Statement of A/c No.125001352300		A11

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Sd/(T. RAJESH) PRESIDING OFFICER

Canara Bank v. Modern Apparels

Case brief

What is this about?

What did the court decide?

Canara Bank v. Modern Apparels

Case brief

What is this about?

What did the court decide?

What the court decided

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