Allowed

Canara Bank v. Shankargouda

DRT24 Feb 2026OA/1642/2022

Case brief

AI extract

What is this about?

The applicant bank filed an Original Application for a Recovery Certificate against the defendants for loan defaults. The Tribunal allowed the OA with a reduced interest rate of 6% simple, permitting recovery from the primary borrower and the respondent LRs of the deceased.

What did the court decide?

Recovery Certificate issued for Rs. 20,32,402.80/- plus 6% simple interest; to be recovered from respondent defendants jointly and severally and from schedule property.

Canara Bank versus Shankargouda — Banking and Recovery | 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 February, 2026

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Present: Sri. T. RAJESH

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Presiding Officer

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OA. No.1642/2022

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BETWEEN:

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Canara Bank Head office at: No. 112, JC road, Bangalore – 560 002 Branch office at: Maski, Basavangouda Building, New Bazar, Maski, Lingasugur Taluk, Raichur District – 584 124

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Represented by its Manager and Constituted Attorney Mr. Parashuram L Bharamoji …APPLICANT

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AND:

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Sri. Shankargouda S/o. Sri. Ramangouda Aged about 51 years R/o. no. 157, Halapur, Halapur Village, Manvi Taluk, Raichur District – 584 120

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Sri. Mallikarjuna (Since dead by his LRs) 2(a) Smt. Devamma W/o. late Mallikarjuna Major by age R/o. Medicinal Village, Manvi Taluk, Raichur District – 584 124

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OA. No. 1642/2022

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2(b) Smt. Basamma W/o. late Amaregouda Major By Age R/o. Medicinal Village, Manvi Taluk, Raichur District – 584 124 ...DEFENDANTS

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Counsel on record/appeared for: Applicant : Veena R Rai Defendant no.1, 2 (a & b) : Ex parte Defendant no.2 : Deceased

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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 defendants for Rs. 20,32,402.80/- (Rupees Twenty Lakhs Thirty Two Thousand Four Hundred and Two and Paisa Eighty Only) with further interest thereon from the date of filing the Application till realization from the Defendants.

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It is the case of the applicant that, the deceased borrower Sri. Mallikarjuna, who expired during the pendency of OA have availed the following credit facilities:

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KCCs loan of Rs. 99,000/- (Rupees Ninety Nine Thousand Only).

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OA. No. 1642/2022

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Kisan OD loan of Rs. 4,50,000/- (Rupees Four Lakhs Fifty Thousand Only).

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Farm development loan of Rs. 3,00,000/- (Rupees Three Lakhs Only).

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MSME loan of Rs. 4,50,000/- (Rupees Four Lakhs Fifty Thousand Only).

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It is also the case of the applicant that, in view of the above financed credit facilities, the deceased borrower Sri. Sri. Mallikarjuna executed necessary loan documents. Apart from the creation of security interest by way of simple mortgage deed and hypothecation agreement over the schedule property.

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It is further contended that, despite availing the credit facilities, agreeing to service the loan account promptly and regularly, borrower failed in complying the same, resulting in defaults 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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After filling of the OA, summons sent to defendants by registered post. The summons to defendant no.2 returned unserved with an endorsement “dead” and the applicant bank has filed an IA no. 2132/2023 to bring the LRs of deceased defendant no.2. When the case came up for hearing on 02.05.2025, in spite of granting sufficient time for applicant to take steps on the LRs of

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OA. No. 1642/2022

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defendant no.1, the applicant has not taken steps. Hence, proceeding against the LRs of defendant no.1 closed on 09.12.2024. Despite, services completed, the defendants no 2(a) & (b) placed ex parte on 17.02.2026.

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The applicant let in evidence through AW-3, who filed Proof Affidavit reiterating the contentions taken in the OA and also produced Exhibits A3 to A48 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 the 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 orders 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

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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

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admissible and are sufficient to prove availment of credit facilities

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as stated in the OA, creation of security interest as claimed by the

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OA. No. 1642/2022

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applicant bank and the defaults committed in the account. 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.

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Hence in view of the above findings which cover both the

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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 facilities

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are availed for Agricultural purpose and also that the OA claim is arrived at by calculating interest at the agreed rate, this Tribunal is the view that the OA can be allowed with a reduced interest of 6.00% (simple).

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In the result, OA.No.1642/2022 stands allowed,

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i) The applicant is allowed to recover an aggregate sum of Rs. 20,32,402.80/- (Rupees Twenty Lakhs Thirty Two Thousand Four Hundred and Two and Paisa Eighty Only) consisting of: a. Rs. 57,693.51/- (Rupees Fifty Seven Thousand Six Hundred and Ninety There and Paisa Fifty One Only) under KCCs loan with further interest @6.00 % p.a.(simple) from the date of filing OA till the realization, from the defendant no.1:

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OA. No. 1642/2022

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b. Rs. 11,61,259.06/- (Rupees Eleven Lakhs Sixty One Thousand

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Two Hundred and Fifty Nine and Paisa Six Only) under Kisan OD loan with further interest @6.00 % p.a.(simple) from the date of filing OA till the realization, from the defendant no.1:

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c. Rs. 6,31,591.11/- (Rupees Six Lakhs Thirty One Thousand Five Hundred and Ninety One and Paisa Eleven Only) under Farm development loan with further interest @6.00 % p.a.(simple) from the date of filing OA till the realization, from the defendant no.1: d. Rs. 1,81,859.12/- (Rupees One Lakhs Eighty One Thousand Eighty Hundred and Fifty Nine and Paisa Twelve Only) under MSME loan with further interest @6.00 % p.a.(simple) from the date of filing OA till the realization, from the defendant no.1 & 2:

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From the defendant nos. 2(a) & (b) to the extent of their inheritance of any estate of deceased borrower Sri. Mallikarjuna, 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 defendants jointly, severally and personally and also by proceeding against schedule property. Properties schedule to the OA be the schedule to the recovery certificate.

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OA. No. 1642/2022

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ii) If the sale proceeds are not sufficient to clean the

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liability defendant nos. 2 (a) & (b) are liable to the extent of estate

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they inherited from deceased Sri. Mallikarjuna for the balance amount.

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iii) The applicant bank is allowed cost of the proceeding

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which 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

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order and transferred to Recovery for execution.

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v) Interim Application pending, if any, stands disposed of

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with 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

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DRT (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 24^th Day of February, 2026]

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(T. RAJESH) PRESIDING OFFICER

Sd/-

OA. No. 1642/2022

ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1 Mr. B Krishna, S/o. Mr. Raju, officer, of the applicant bank.

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Exhibits on the part of the Applicant:

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Annexure	date	Particulars
A1	22.09.2010	Loan Application Submitted By Defendant No.1
A2	22.09.2010	Specimen signature card executed by defendant no.1
A3	22.09.2010	Loan Sanction Memorandum
A4	22.09.2010	Agreement of hypothecation for agricultural loans executed bydefendant no. 1
A5	29.01.2013	Letter of revival executed bythe defendant no.1
A6	31.01.2014	Loan application for renewal of loan submitted by defendant no.1
A7	31.01.2014	Sanction memorandum
A8	31.01.2014	Letter renewal executed bydefendant no.1
A9	31.01.2014	Supplemental agreement executed by defendant no.1
A10	10.03.2015	Letter of revival executed bythe defendant no.1
A11	27.06.2015	Loan application for renewal of loan submitted by defendant no.1
A12	27.06.2015	Letter renewal executed bydefendant no.1
A13	27.06.2015	Supplemental agreement executed by defendant no.1
A14	30.01.2014	Application for loan submitted bydefendant no.1
A15	30.01.2014	Specimen signature card executed by defendant no.1
A16	30.01.2014	Loan Sanction Memorandum
A17	30.01.2014	Agreement and deed for Kisan OD executed by defendant no.1
A18	20.01.2014	Simple mortgage deed executed by defendant no.1
A19	30.01.2014	Certificate of loanpapers obtained
A20	27.03.2015	Application for loan submitted bydefendant no.1

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OA. No. 1642/2022

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A21	27.03.2015	Specimen signature card executed by defendant no.1
A22	27.03.2015	Sanction memorandum
A23	27.03.2015	Memorandum of agreement for agricultural loans executed bydefendant no.1
A24	17.03.2015	Simple mortgage deed executed by defendant no.1
A25	27.03.2015	Certificate of loanpapers obtained
A26	15.06.2015	Application for loan submitted bydefendant no.1
A27	15.06.2015	Specimen signature card executed by defendant no.1
A28	15.06.2015	Sanction memorandum
A29	15.06.2015	Agreement cum deed of hypothecation executed bydefendant no.1
A30	15.06.2015	Guarantee agreement executed by defendant no.2
A31	16.06.2015	Guarantee covering letter executed by defendant no.2
A32	15.06.2015	Certificated of loanpapers obtained
A33	15.02.2018	Letter of revival executed by the defendant no.1 for KCCs loan
A34	14.02.2021	Letter of revival executed by the defendant no.1 for KCCs loan
A35	20.01.2017	Letter of revival executed by the defendant no.1 for Kisan OD
A36	09.01.2020	Letter of revival executed by the defendant no.1 for Kisan OD
A37	28.08.2018	Letter of revival executed by the defendant no.1 for farm development loan
A38	25.08.2021	Letter of revival executed by the defendant no.1 for farm development loan
A39	10.06.2018	Letter of revival executed by the defendant no.1 for MSME loan
A40	01.06.2021	Letter of revival executed by the defendant no.1 for MSME loan
A41 to A44	01.08.2022	Recall notices issued to defendants
A45	-------	Statement of account in respect of KCCS loan a/c. no. 0545840006591

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OA. No. 1642/2022

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A46	-------	Statement of account in respect of Kisan OD loan a/c. no. 0545897000442
A47	--------	Statement of account in respect of Farm Development loan a/c. no. 0545883004158
A48	--------	Statement of account in respect of MSME loan a/c. no. 0545768000414

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Witness Examined for the Defendants: List of Documents Exhibited for the Defendants:

-Nil -

-Nil -

Sd/-

(T. RAJESH)

PRESIDING OFFICER

Canara Bank v. Shankargouda

Case brief

What is this about?

What did the court decide?

Canara Bank v. Shankargouda

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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