Allowed

Karnataka Gramin Bank v. Obala Reddy H S

DRT24 Jul 2026OA/425/2025

Case brief

AI extract

What is this about?

The Tribunal allowed the applicant bank's Original Application for a Recovery Certificate despite the defendants appearing ex parte. Finding the evidence uncontroverted, the Court reduced the agreed interest rate to 6% simple interest per annum and directed recovery from the defendants and schedule property.

What did the court decide?

Recovery Certificate issued for Rs.32,37,427/- with 6% simple interest p.a., recoverable from defendants and schedule property.

Karnataka Gramin Bank versus Obala Reddy H S — Company and Corporate | 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 July 2026

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Present: Sri. T. RAJESH

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Presiding Officer

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OA. No.425/2025

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BETWEEN:

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Karnataka Grameena Bank

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Byrakur Branch,

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Byrakur Village & Post, Byrakur Hobli, Mulbagal Taluk, Kolar District-573131

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… APPLICANT

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AND:

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Sri.Obala Reddy H.S

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S/o.Sreeramareddy

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C.Hosahalli Village,

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Byrakur Post,

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Mulbagal Taluk,

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Kolar District-563131

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Sri.H.P.Srinivasa Reddy S/o.Peddanna, C.Hosahalli Village,

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Byrakur Post,

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Mulbagal Taluk,

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Kolar District-563131

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Sri.Prabhakar. N

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S/o.Narayanappa Bhattarahalli village, Kasaba Hobli, Mulbagal Taluk, Kolar District-563132.

...DEFENDANTS

OA. No.425/2025

Counsel on record/appeared for:

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Applicant : Sri.G.Lokesh Murthy Defendant : Exparte

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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.32,37,427/- (Rupees Thirty-Two Lakhs Thirty-Seven Thousand Four Hundred and Twenty-Seven Only) with further interest thereon from the date of filing the Application till realization from the Defendant.

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The Defendant No.1 availed Rs.9,00,000/- (Rupees Nine Lakh only) under LCC -Crop Loan Scheme for growing Hybrid Tomatoes. for Agricultural purposes.

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The Defendants availed 2^nd Loan of Rs.4,70,000/- (Rupees Four Lakh Seventy Thousand Only) of ATL for Land development & Repairs to farm equipment.

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The Defendant No.1 clandestinely has created 3^rd party interest in the mortgaged property be executing a sale deed in favour of Defendant No.3 for a valuable consideration in respect of schedule mentioned agricultural property.

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OA. No.425/2025

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It is also the case of the applicant that, in view of the above financed credit facility, the defendants executed necessary loan documents, including deed of hypothecation apart from the creation of security interest by way of mortgage over the Schedule property.

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It is further contended that, despite availing the credit facility, agreeing to service the loan amount promptly and regularly, the defendants 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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Despite, service of summons on the defendants, they failed to appear, resulting the defendants being set exparte on 02.04.2026.

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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 A20 and got the same marked in evidence.

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OA. No.425/2025

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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 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 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 are also proved by the above documents. The claim of the applicant is well within the limitation.

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OA. No.425/2025

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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 agricultural 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 6% p.a.(simple).

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In the result, OA.No.425/2025 stands allowed.

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i) The applicant is allowed to recover an aggregate sum of Rs.32,37,427/- (Rupees Thirty-Two Lakhs Thirty-Seven Thousand Four Hundred and Twenty-Seven Only)

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a) The Defendants are jointly and severally liable to pay a sum of Rs.32,37,427/(Rupees Thirty-Two Lakhs Thirty-Seven Thousand Four Hundred and Twenty-Seven Only) with further interest @ 6% (simple) p.a from the defendants after giving credit to all the amounts recovered and received during the pendency of the OA if any, in the respective accounts and allowed the same to be recovered by proceeding the schedule property. The schedule property to the OA be the schedule property to the Recovery Certificate.

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OA. No.425/2025

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ii) If the sale proceeds are not found sufficient to cover

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the amount due and payable to the applicant bank, the respective

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defendants jointly, several and their other assets are liable for all

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such amounts due in respective loan accounts.

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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

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in 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 the Stenographer (GS), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 24^th Day of July 2026].

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Sd/(T. RAJESH) PRESIDING OFFICER

OA. No.425/2025

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Sri.Kanumuri Sarath Babu, Branch 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		Exhibit Number
1.	Original Loan Application dated 01.0 Sanction memorandum dated 08.03.20	1.2018, 18	A1 & A2
	Original Loan sanction conveying	letter,
2.	Memorandum of Agreement for Agri loans both dated 14.03.2018	cultural	A3 & A4
	Original Simple Mortgage Deed	dated	A5 to
3.	14.03.2018, letter of Revival 29.04.2020,31.10.2020(two)	dated	A8
4.	Original Loan Application 01.01.2018		A9
5.	Original Sanction memorandum 08.03.2018, pronote and Take Deliver to DPN, Agreement cum deed of Hypoth both dated 14.03.2018	dated y letter ecation	A10 to A12
6.	Original Simple Mortgage dated 14.0 Letter of Revival dated 17.11.202 20.10.2023(two)	3.2018, 0 and	A13 to A16
7.	Office copy of Legal notice, dated 26.11. RPADpostal receipts	2024 &	A17& A18
8.	Certified copy of 2 Loan account statem	ents	A19 & A20

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Sd/(T. RAJESH) PRESIDING OFFICER

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OA. No.425/2025

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0.0.

Karnataka Gramin Bank v. Obala Reddy H S

Case brief

What is this about?

What did the court decide?

Karnataka Gramin Bank v. Obala Reddy H S

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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