Allowed

Canara Bank v. Ms Siri Foods

DRT22 May 2026OA/2656/2024

Case brief

AI extract

What is this about?

The DRT allowed an Original Application for a Recovery Certificate under Section 19 RDDB Act. The bank proved loan avowal and defaults in an exparte hearing. The Tribunal reduced interest to 11% simple and directed recovery against the defendants jointly and severally.

What did the court decide?

Recovery Certificate issued for Rs. 28,39,380/- plus 11% simple interest recoverable jointly, severally, and personally from defendants against schedule property.

Canara Bank versus Ms Siri Foods — Company and Corporate | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL II, BENGALURU

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Dated this 22^nd Day of May, 2026

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Present: Sri. T. RAJESH Presiding Officer

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OA.No.2656/2024

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BETWEEN:

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Canara Bank Head office at No. 112, J.C. Road, Bangalore-560 002,

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And one of its branch offices at Shimoga Gopala Branch, Ashok Arcade, KHB Colony, Gopala Main Road, Shimoga-577205, Represented by its Agent and Senior manager, Sri. Kusuru Dinesh …APPLICANT

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AND:

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M/s Siri Foods, Near Railway Station, Pump house Road, Sheshadripuram, Shimoga-577201. Represented by its Proprietor, Smt. Bhanumathi Servier W/o Sevier Varghese Aged about 33 years Residing at NMC Left Side, 5^th Cross, Hosamane Bhadravathi, Shimoga-577301

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Sri Parameshwarappa S/o Late Marulappa, Aged about 70 years R/at Devaranarasipuara, Antharagange, Bhadravathi-577245. ...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : Sri k Shashidhara Parlathaya Defendants : Exparte

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2 OA/2656/2024

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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 seeking issuance of Recovery Certificate for Rs. 28,39,380/- (Rupees Twenty Eight Lakhs Thirty Nine Thousand Three Hundred 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 defendants availed the credit facilities for establishment of new business of Rs. 24,50,000/- on 27.07.2021. It is also the case of the applicant that defendants have undertaken to repay the liability, subject to manual review or on Demand to pay with interest at such rate as revised by the bank from time to time.

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It is also the case of the applicant that, in view of the above amount financed, the defendant executed necessary loan documents along with Loan Application, Sanction Memorandum, Guarantee Agreement, Agreement cum Deed of Hypothecation Re. machineries.

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It is further contended that, the defendants despite availing the credit facilities, agreeing to service the loan account promptly and regularly, 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

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3 OA/2656/2024

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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, service of summons on the defendants, they failed to appear, resulting the defendants being set exparte on 21.08.2025.

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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-11 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 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 exparte. The evidence tendered by the applicant remains uncontroverted and undisputed. The evidences put

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forth by the applicant were found admissible and are sufficient to prove availment of credit facility as stated in the OA, creation of hypothecation

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4 OA/2656/2024

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and mortgage as claimed by the applicant bank and the defaults committed in the accounts. The liability of the defendants and the claim as the amount due is also proved by the above documents. The claim of

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the applicant is well within the limitation.

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Hence in view of the finding arrived herein above, this Tribunal find

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both these issues in favour of applicant and hence this Tribunal is of the view that OA is to be allowed.

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Taking into consideration the facts that the credit facilities are

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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 11.00% (simple).

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In the result, OA.No.2656/2024 stands allowed,

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

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28,39,380/- (Rupees Twenty Eight Lakhs Thirty Nine Thousand Three Hundred Eighty only) with further interest of 11.00% p.a. (Simple) from the date of filing OA till the realization, from the defendants jointly, several and 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 proceedings against the schedule property. Schedule property to the OA be the schedule property to the recovery certificate.

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(ii) If the sale proceeds are not sufficient, the defendants jointly

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severally and personally and their other assets are liable to be proceeded against for the balance amount.

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iii) The applicant bank is allowed cost of the proceedings 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 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 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 (DV), transcribed by him, corrected and signed and pronounced by me in the Open Court, this the 22^nd day of May, 2026].

Sd/-

(T. RAJESH)

6 OA/2656/2024

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK:

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

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Exhibits on the part of the Applicant:

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Exhibit Nos.	Date	Particulars of Documents
A1	01.07.2021	Loan Application
A2	27.07.2021	Sanction Memorandum
A3	27.07.2021	Agreement cum Deed of Hypothecation Re: Machineries executed by the defendant No.1 in favour of the Applicant Bank
A4	27.07.2021	Guarantee Covering Letter executed by the Defendant No.2
A5	27.07.2021	Guarantee Agreement
A6	23.07.2021	Registered Memorandum of Deposit of title deeds
A7	27.07.2022	Statutory Notice under Section 13(2) of the SARFAESI Act.
A8		Returned Postal cover
A9		Returned Postal cover
A10		Postal acknowledgment card
A11		Statement of Loan Account

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

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-Nil -

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-Nil -

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Sd/- (T. RAJESH) PRESIDING OFFICER

Canara Bank v. Ms Siri Foods

Case brief

What is this about?

What did the court decide?

Canara Bank v. Ms Siri Foods

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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