Allowed

Canara Bank v. Chandrashekhar Shetty

DRT13 Mar 2026OA/1686/2023

Case brief

AI extract

What is this about?

TheDebts Recovery Tribunal allowed the bank's application for issuance of a recovery certificate under the RDB Act. The court found the bank's evidence uncontroverted due to the defendant appearing ex parte, confirming the loan availed, defaults, and liability. Interest was reduced to 9% simple.

What did the court decide?

Recovery Certificate issued for aggregate sum of Rs. 1,28,30,330/- with 9% simple interest, recoverable from defendant personally and against secured assets.

Canara Bank versus Chandrashekhar Shetty — 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 13^th Day of March, 2026

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Present: Sri. T. RAJESH Presiding Officer

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OA.No.1686/2023

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BETWEEN:

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Canara Bank, Kokkarne Branch, Brahmavara Taluk, Udupi- 576234, Represented by: It’s Senior Manager, Sri. Anil Kumar L.N.

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…APPLICANT

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AND:

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Sri Chandrashekhar Shetty, S/o Ramanna Shetty, Proprietor of Sri Ram Cashew Industries, D.No. 2-44, Nanchar Village and Post, Ubbalabettu, Nanchar, Udupi- 576234.

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...DEFENDANT

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Counsel on record/appeared for:

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Applicant : C. Vinay Swamy Defendant : M/s. Aruna Shyam Associates

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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 seeking issuance

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of Recovery Certificate against the defendant for Rs. 1,28,30,330/(Rupees One Crore Twenty Eight Lakh Thirty Thousand Three Hundred

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OA 1686/2023

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Thirty 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 availed various loans from the applicant bank:-

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1^st Loan - OD limit of Rs. 35,00,000/- (Rupees Thirty Five lakh Only),

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2^nd Loan - Vehicle loan of Rs. 9,00,000/- (Rupees Nine Lakh Only),

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3^rd Loan - Working Capital demand loan of Rs. 6,00,000/- (Rupees Six Lakh Only),

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4^th Loan - Covid CFITL loan of Rs. 2,54,620/- (Rupees Two lakh Fifty four Thousand Six Hundred Twenty Only),

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5^th Loan - GECL loan of Rs. 15,50,000/- (Rupees Fifteen lakh Fifty Thousand Only),

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6^th Loan- WCTL of Rs. 61,00,000/- (Rupees Sixty One Lakh Only),

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7^th Loan- GECL loan of Rs. 10,70,000/- (Rupees Ten lakh Seventy Thousand Only).

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It is also the case of the applicant that, in view of the above availed loans, the defendant executed necessary loan documents along with memorandum of deposit of title deeds, composite hypothecation agreement and debt restructuring 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

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OA 1686/2023

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by filing this OA seeking issuance of Recovery Certificate for the amount due in the account.

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Despite, entering appearance defendant failed to file written statement within stipulated time, then the defendant filed IA to condone the day, which got dismissed.

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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-38 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

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the applicant remains uncontroverted and undisputed. The evidences put forth by the applicant were found admissible and are sufficient to prove

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OA 1686/2023

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availment of credit facilities as stated in the OA, creation of the security

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interest 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 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

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the view that OA is to be allowed.

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Taking into consideration the facts that the credit facilities are 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 9.00% (simple).

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In the result, OA.No.1686/2023, stands allowed,

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i) The applicant is allowed to recovery an aggregate sum of Rs.

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1,28,30,330/- (Rupees One Crore Twenty Eight Lakh Thirty Thousand Three Hundred Thirty Only) with further interest @9.00 % p.a.(simple) as follows:-

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a) 1^st loan – Rs. 17,33,667/- (Rupees Seventeen Lakh Thirty Three Thousand Six Hundred Sixty Seven Only) 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

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OA 1686/2023

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allowed the same to be recovered by proceeding against schedule property.

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b) 2^nd loan - Rs. 2,23,796/- (Rupees Two lakh Twenty Three Thousand Seven Hundred Ninety Six Only) 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 proceeding against the defendant personally and his asset including the hypothecated assets.

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c) 3^rd loan – Rs. 6,23,731/- (Rupees Six Lakh Twenty Three Thousand Seven Hundred Thirty One Only) 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 proceeding against schedule property.

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D) 4^th Loan – Rs. 1,79,023/- (Rupees One Lakh Seventy Nine Thousand Twenty Three Only) 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 proceeding against the defendant personally and his asset. e) 5^th Loan- Rs. 17,80,500/- (Rupees Seventeen Lakh Eighty Thousand Five Hundred Only) from the date of filing OA till the realization, from the

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OA 1686/2023

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defendant personally, after giving credit to all the amount recovered and

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received during the pendency of the OA and allowed the same to be recovered by proceeding against schedule property.

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f) 6^th Loan – Rs. 70,91,047/- (Rupees Seventy Lakh Ninety One Thousand

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Forty Seven Only) 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 proceeding against schedule property.

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g) 7^th Loan – Rs. 11,98,566/- (Rupees Eleven Lakh Ninety Eight Thousand Five Hundred Sixty Six Only) 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 proceeding against schedule property.

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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 amount due and payable to the applicant bank, the defendant personally and his assets are liable for respective amounts due under the respective

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loan account.

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iii) The applicant bank is allowed cost of the proceedings which applicant to file cost memo within 7 days from the date of receipt of the order.

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OA 1686/2023

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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 in terms

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of this final order.

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14. 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)

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Rules, 1993.

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[Dictated to the Stenographer (AJ), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 13^th Day of March, 2026].

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Sd/- (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: Vinay Kumar, Senior Manager, of Applicant Bank

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Exhibits on the part of the Applicant:

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Annexure	Date	List of Documents
		OD limit of Rs. 35,00,00/- sanctioned on
		06.05.2015 in A/c No. 01527910000948
A1	02.02.2015	Application form
A2	17.04.2015	Memorandum of deposit of title deeds
A3	04.05.2015	Composite hypothecation agreement
A4	23.01.2020	Application to the committee for restructuring
A5	29.01.2020	Agreement for restructuring

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OA 1686/2023

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		Vehicle loan of Rs. 9,00,000/- in A/c No. 01529790000157 sanctioned on 19.17.2017
A6	19.07.2017	Sanction letter
A7	31.07.2017	Composite hypothecation agreement
A8	14.12.2022	Letter of revival
		Working capital demand loan of Rs. 6,00,000/- In A./c No. 05129580000071 sanctioned on 18.06.2020
A9	25.06.2020	Application form
A10	18.06.2020	Sanction memorandum
A11	25.06.2020	Common hypothecation agreement
A12	28.06.2021	Draft letter of undertaking by defendant
A13	28.06.2021	Resolution framework
A14	28.06.2021	Debtor creditor agreement
A15	28.06.2021	Debt restructuring agreement
		Covid CFITL loan of Rs. 2,54,620/- In A/c No. 01527100000979 sanctioned on 03.09.2020
A16	28.06.2021	Application form for restructure
A17	28.06.2021	Sanction memorandum
A18	28.06.2021	Debit restructuring agreement
A19	28.06.2021	Debtor creditor agreement
		GECL loan of Rs. 15,50,000/- in A/c No. 01529160000695 sanctioned on 25.09.2020
A20	25.09.2020	Sanction memorandum
A21	25.09.2020	Common hypothecation agreement
		WCTL loan of Rs. 61,00,000/- in A/c No. 173000208116 sanctioned on 29.11.2021
A22	23.09.2021	Application form
A23	23.11.2021	Sanction memorandum
A24	29.11.2021	Debtor creditor agreement
A25	29.11.2021	Debt restructuring agreement

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OA 1686/2023

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		GECL loan of Rs. 10,70,000/- in A/c NO. 170003197695 sanctioned on 28.12.2021
A26	30.11.2021	Application form
A27	28.12.2021	Sanction memorandum
A28	04.01.2022	Common hypothecation agreement
A29	20.12.2022	Memorandum of deposit of title deeds
A30 & A31	06.07.2023	Legal notice and original postal receipts/ acknowledgements
A32 to A38	--	Statement of accounts
Witnes	s Examined f	or the Defendant: -Nil -
List of	Documents E	xhibited for the Defendant: -Nil –

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Sd/-
(T. RAJESH)
PRESIDING OFFICER

Canara Bank v. Chandrashekhar Shetty

Case brief

What is this about?

What did the court decide?

Canara Bank v. Chandrashekhar Shetty

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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