Allowed

Canara Bank v. Manivel

DRT3 Jul 2026OA/478/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the bank's original application for recovery of non-performing agricultural loans. Finding the defendant in default and evidence unchallenged due to ex-parte disposal, the court directed recovery of principal amounts but modified the interest claims, awarding simple interest at 6% instead of the claimed compound and penal interest.

What did the court decide?

Directing the Defendant to pay Rs.51,26,002.44 with simple interest at 6% p.a. from filing date; liberty to sell mortgaged properties if payment is not made within one month.

Canara Bank versus Manivel — Banking and Recovery | DRT (2026)

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OA No. 478/2023

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 03^rd DAY OF JULY, 2026 PRESENT: SEEMA SINHA,

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[PR. DISTRICT & SESSIONS JUDGE – Retd] PRESIDING OFFICER

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OA No.478/2023

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Between

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Canara Bank, Bodinayakanur Branch, No.16, Kamarajar Bazar, Bodinayakanur, Theni District - 625513 Rep. by its Chief Manager. ---Applicant Bank

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And

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Mr. M.Manivel, S/o. Late Sundarajamoorthy, Ward No.23, Door No.36, Manicka Vasagar street, Kuppinaiyakan patty, Bodinayakanur, Theni District ---- Defendant

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Counsel for the Applicant Bank : M/s C Deepak, M Vengatesh & M Chandra Sekar

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This Original Application was heard and fixed for passing final order before me in the presence of the above said Advocate for Applicant Bank and the Defendant having been set ex-parte and upon hearing the arguments of Counsel for Applicant Bank and upon perusing the material available on the records and having stood over for consideration till this day, this Tribunal delivered the following:

Page 1 of 9

OA No. 478/2023

JUDGEMENT

1 . This Application has been filed under Sec.19 (1) of the "The Recovery of Debts due to Banks and Financial Institutions Act, 1993" now amended as The Recovery of Debts and Bankruptcy Act, 1993 by the Applicant Bank on 27.06.2023 to recover from the Defendant a sum of Rs.51,26,002.44p i.e., i) Rs.24,39,765.86p together with interest at the rate of 11.90% p.a. with monthly rests plus penal interest at the rate of 2 % p.a. ii) Rs.16,80,623.86p together with interest at the rate of 11.90% p.a. with monthly rests plus penal interest at the rate of 2 % p.a & iii) Rs.10,05,612.72p together with interest at the rate of 11.40% p.a. with monthly rests plus penal interest at the rate of 2 % p.a in respect of Agricultural Farm Development loans I, II & III respectively from the date of filing of Application till the date of realization with cost and by sale of mortgaged/hypothecated properties, more fully described in Schedules of the application.

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2 . The brief averments of the application filed by the Applicant Bank are as follows:-

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The Defendant has approached the Applicant bank for availing an loan facility for Agricultural purpose on 12.11.2013 and the applicant has sanctioned the said loan to the tune of Rs.8,00,000/- as an Agricultural Farm Development Loan (ALFD) on 12.11.2013 with the Rate of Interest fixed at 12.45 % of Repayment in Rs.80,000/- X 10 yearly installments commenced from November 2014 of interest debited is to be recovered along with yearly Principal Installments. For the said loan facilities that the defendant has executed the Memorandum of Agreement for Agricultural Loans on 12.11.2013.

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The defendant has applied another loan for Agriculture purpose on 20.1.2014 and the applicant has sanctioned the loan to the tune of Rs.5,60,000/- as an ALFD on 20.1.2014 with the Rate of Interest fixed at 12.70% of Repayment Rs.56,000 X 10 Yearly Installments commencing from Jan 2015. That in consideration of loan facilities, that and the defendant has executed the Memorandum of Agreement for Agricultural Loan on 20.1.2014.

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The defendant has again approached the applicant bank for farm development loan and the applicant has sanctioned the loan to the tune of Rs.3,50,000/- as an ALFD on 20.3.2014 with the Rate of Interest fixed at 12.20% of Repayment Rs.70,000 X 5 Yearly Installments commencing from Mar 2015.The applicant further submits that in consideration of loan facilities, that the defendant has executed the Agreement of Hypothecation for Agricultural Loans on 20.3.2014 and the defendant has executed the Link Letter for Additional Loan on 20.3.2014. The applicant further submits that in consideration of loan facilities, that the defendant has executed the Memorandum of Deposit of Title Deeds in Doc No. 6261/2013 on 25.10.2013.

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Page 2 of 9

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OA No. 478/2023

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After receiving the loan amount, the Defendants was not regular in repaying the loan and consequently defaulted in repayment as promised to the Applicant. The defendants have committed default in repaying the loan amount with interest & costs and thus account became NPA on 29.03.2023. Despite repeated demands made by the Applicant Bank the defendants did not take any sincere steps to discharge the loan.

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Hence, the Applicant Bank has filed the OA for recovery of a sum of Rs.51,26,002.44p i.e., i) Rs.24,39,765.86p together with interest at the rate of 11.90% p.a. with monthly rests plus penal interest at the rate of 2 % p.a. ii) Rs.16,80,623.86p together with interest at the rate of 11.90% p.a. with monthly rests plus penal interest at the rate of 2 % p.a & iii) Rs.10,05,612.72p together with interest at the rate of 11.40% p.a. with monthly rests plus penal interest at the rate of 2 % p.a in respect of Agricultural Farm Development loans I, II & III respectively from the date of filing of Application till the date of realization with cost.

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The Applicant Bank has submitted the following documents in support its claim in the OA, which are as follows:

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List of Documents

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Sl. No.	Date	Particulars	Exhibit No.
1	12.11.2013	Common Application Form cum Appraisal Report for Credit Facilities for Agricultural Loan	Ex. No. A-01
2	12.11.2013	Sanction Letter	Ex. No. A-02
3	12.11.2013	Memorandum of Agreement for Agricultural Loans	Ex. No. A-03
4	10.11.2016	Acknowledgement of Debt and Security	Ex. No. A-04
5	08.11.2019	Acknowledgement of Debt and Security	Ex. No. A-05
6	05.11.2022	Acknowledgement of Debt and Security	Ex. No. A-06
7	20.01.2014	Common Application Form cum Appraisal Report for Credit Facilities for Agricultural Loan	Ex. No. A-07
8	20.01.2014	Sanction Letter	Ex. No. A-08
9	20.01.2014	Memorandum of Agreement for Agricultural Loans	Ex. No. A-09
10	18.01.2017	Acknowledgement of Debt and Security	Ex. No. A-10
11	16.01.2020	Acknowledgement of Debt and Security	Ex. No. A-11
12	12.01.2023	Acknowledgement of Debt and Security	Ex. No. A-12

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Page 3 of 9

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OA No. 478/2023

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13	20.12.2014	Common Application Form cum Appraisal Report for Credit Facilities for Agricultural Loan	Ex. No. A-13
14	20.03.2014	Sanction Letter	Ex. No. A-14
15	20.03.2014	Agreement of Hypothecation for Agricultural Loans	Ex. No. A-15
16	20.03.2014	Link Letter to be Obtained when Additional Loan is Granted	Ex. No. A-16
17	18.01.2017	Acknowledgement of Debt and Security	Ex. No. A-17
18	18.12.2019	Acknowledgement of Debt and Security	Ex. No. A-18
19	16.12.2022	Acknowledgement of Debt and Security	Ex. No. A-19
20	16.12.2011	Registered Partition Deed executed between Manivel and his family members (Doc. No. 8271/2011)	Ex. No. A-20
21	25.10.2013	Registered Memorandum of Deposit of Title Deeds (Doc. No. 6261/2013)	Ex. No. A-21
22	—	Statement of Accounts maintained by the applicant bank in the regular course of business	Ex. No. A-22

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SCHEDULE OF PROPERTIES

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“A” SCHEDULE – MORTGAGED PROPERTIES

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1.) Theni District, Periyakulam Registration District, Bodinayakanur Sub District, Melachokkanathapuram Village. comprised in S.No.508/2,as per sub division bearing Patta No.4539, S.No.508/2 measuring 5 Cents (0.02.0 ares) of nanja land out of 25 cents on the south bounded on:

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East: Nanja Land of S.No.580/3 South Nanja Land of S.No.580/4 West: Nanja Land of S.No.581/2D North Nanja land of Kannan.

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2). Theni District, Periyakulam Registration District , Bodinayakanur Sub District, Melachokkanathapuram Village, , bearing Patta No.4489. S.No.580/5 measuring 36 Cents (0.14.5 ares) of nanja land bounded on:

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East: Nanja Land of S.No.580/4 South: Nanja Land of S.No.581/3C West: Nanja Land of S.No.581/3C North: Nanja land of S.No.580/4

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3). Theni District, Periyakulam Registration District, Bodinayakanur SubDistrict, Melachokkanathapuram Village, bearing Patta No.4574, S.No.581/3C measuring 19 Cents (0.07.5 ares) of nanja land bounded on:

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Page 4 of 9

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OA No. 478/2023

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East: Nanja Land of S.No.580/5 South: Nanja Land of S.No.581/4B West: Nanja Land of S.No.581/3A North: Nanja land of S.No.581/3B

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4). Theni District, Periyakulam Registration District, Bodinayakanur SubDistrict. Melachokkanathapuram Village, bearing Patta No.4574, S.No.581/4B measuring 22 Cents (0.09.0 ares) of punja land bounded on:

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East : Nanja Land of S.No.580/5 South : River West : Nanja Land of S.No.581/4A North : Nanja land of S.No.581/3C

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5.) Theni District, Periyakulam Registration District, Bodinayakanur SubDistrict, Melachokkanathapuram Village bearing Patta No.4489 comprised in S.No.580/4, measuring 64 Cents (0.26.0 acres) & S.No.581/3B measuring 55 cents (0.22.5 acres) totaling 1.19½ acres of nanja land bounded on:

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East : Nanja Land of S.No.580/3 South : Nanja Land of S.No.581/3C, 580/5 West : Nanja Land of S.No.581/3A North : Nanja land of S.No.581/2D, 580/2, 580/3

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6.) Theni District, Periyakulam Registration District, Bodinayakanur SubDistrict, Melachokkanathapuram Village comprised in S.No.577/4B as per sub-division bearing Patta No.4539, S.No.577/4B3 measuring 40 Cents (0.16.5 acres) of punja land out of 77 cents on the south bounded on:

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East : Nanja Land of S.No.577/4D2 South : Nanja Land of S.No.580/4, 577/4C West : Nanja Land of S.No.580/2 North : Nanja land of Kannan

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7.) Theni District, Periyakulam Registration District, Bodinayakanur SubDistrict, Melachokkanathapuram Village comprised in S.No.580/3 as per sub-division bearing Patta No.4539, S.No.580/3B measuring 94 Cents (0.38.0 acres) of nanja land out of 2.43 cents on the south bounded on:

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East : Nanja Land of S.No.577 part South : Nanja Land of S.No.580/4, 578 part West : Nanja Land of S.No.580/2 North : Nanja land of Kannan

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8.) Theni District, Periyakulam Registration District, Bodinayakanur SubDistrict, Melachokkanathapuram Village bearing Patta No.4574 comprised in S.No.581/4A, measuring 10 Cents (0.04.0 acres) of punja land bounded on:

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Page 5 of 9

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OA No. 478/2023

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East : Land of S.No.581/4B South : Land of S.No.579 part West : Nanja Land of S.No.581/3A North : Land of S.No.581/3B & 3A

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9.) Theni District, Periyakulam Registration District, Bodinayakanur SubDistrict, Melachokkanathapuram Village comprised in S.No.581/2B as per sub-division bearing Patta No.4539, S.No.581/2B2 measuring 1.31 Cents (0.53.0 acres) of punja land out of 6.94 cents on the south bounded on:

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East : Land of S.No.581/3A South : Land of S.No.584 part West : Land of S.No.581/2A North : Land of Kannan

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3 . On the other hand, Notices were issued to Defendant and since from the beginning of the case, there was no representation on behalf of the Defendant. Hence, Defendant was set ex-parte.

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4. Now the main point for consideration before me is as to whether the Applicant has been able to prove his case on his own leg?

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Having gone through the affidavit of the applicant and the documents filed by them and also considering the submission of the counsel for the Applicant, I find that the Applicant Bank, in order to prove its claim, has filed Proof Affidavit executed by one Mr. T. Vijaya Raghavan, who is the Chief Manager of the Applicant Bank.

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He has stated in his affidavit that the defendant has availed Agricultural Farm Development loans from the Applicant Bank, but they failed to pay the outstanding loan amount, hence he has filed the case. The applicant bank has also filed the documents signed by the defendants at the time of sanctioning the loan amount, which have been marked as exhibits No.A-01 to A-22 in support of its claim in the OA.

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I scrutinized the document filed by the applicant bank and I find that the Applicant Bank relies upon the following documents in support of its claim: (i) Common Application Form cum Appraisal Report for Credit Facilities for Agricultural Loan dated 12.11.2013, marked as Ex. No. A-01; (ii) Sanction Letter dated 12.11.2013, marked as Ex. No. A-02; (iii) Memorandum of Agreement for Agricultural Loans dated 12.11.2013, marked as Ex. No. A-03; (iv) Acknowledgement of Debt and Security dated 10.11.2016, marked as Ex. No. A-04; (v) Acknowledgement of Debt and Security dated 08.11.2019, marked as Ex. No. A-05; (vi) Acknowledgement of Debt and Security dated 05.11.2022, marked as Ex. No. A-06; (vii) Common Application Form cum Appraisal Report for Credit Facilities for Agricultural Loan dated 20.01.2014,

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OA No. 478/2023

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marked as Ex. No. A-07; (viii) Sanction Letter dated 20.01.2014, marked as Ex. No. A-08; (ix) Memorandum of Agreement for Agricultural Loans dated 20.01.2014, marked as Ex. No. A-09; (x) Acknowledgement of Debt and Security dated 18.01.2017, marked as Ex. No. A-10; (xi) Acknowledgement of Debt and Security dated 16.01.2020, marked as Ex. No. A-11; (xii) Acknowledgement of Debt and Security dated 12.01.2023, marked as Ex. No. A-12; (xiii) Common Application Form cum Appraisal Report for Credit Facilities for Agricultural Loan dated 20.12.2014, marked as Ex. No. A-13; (xiv) Sanction Letter dated 20.03.2014, marked as Ex. No. A-14; (xv) Agreement of Hypothecation for Agricultural Loans dated 20.03.2014, marked as Ex. No. A-15; (xvi) Link Letter to be Obtained when Additional Loan is Granted dated 20.03.2014, marked as Ex. No. A-16; (xvii) Acknowledgement of Debt and Security dated 18.01.2017, marked as Ex. No. A-17; (xviii) Acknowledgement of Debt and Security dated 18.12.2019, marked as Ex. No. A-18; (xix) Acknowledgement of Debt and Security dated 16.12.2022, marked as Ex. No. A-19; (xx) Registered Partition Deed executed between Manivel and his family members, bearing Document No. 8271 of 2011, dated 16.12.2011, marked as Ex. No. A-20; (xxi) Registered Memorandum of Deposit of Title Deeds bearing Document No. 6261 of 2013, dated 25.10.2013, marked as Ex. No. A-21; and (xxii) Statement of Accounts maintained by the Applicant Bank in the regular course of business, marked as Ex. No. A-22. So the averments of the applicant as well as the statement of the pleading have been corroborated by the above mentioned documents.

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As the Defendant remained ex-parte, the claim of the Applicant Bank is neither disproved nor dislodged and goes on record as proved. Accordingly a cumulative analysis of both the Proof Affidavit and documents marked by the Applicant Bank would prove the claim of the Applicant Bank in the OA.

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So far the claim of interest is concerned, it is a well settled Law that the Tribunal has got powers to award pendente lite interest in view of the Judgment of the Hon’ble Supreme Court in N.M. Veerapa Vs Canara Bank (reported in AIR 98(1), 1101 & in Central bank of India Vs Ravindra and OS (AIR, 2001(1), 3095).

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So far the penal interest is concerned Hon'ble supreme court stated in the said judgement as followed " Though interest can be capitalised on the anology that the interest falling due on the accrued date and remaining unpaid, partakes the character of amount advanced on that date, yet penal interest, which is charged by way of penalty for non payment, cannot be capitalized. Further interest, i.e interest on interest, whether simple, compound or penal, cannot be claimed on the amount of penal interest. Penal interest cannot be capitalized. It will be opposed to public policy ".

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Page 7 of 9

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OA No. 478/2023

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Therefore, this Original Application is allowed . Since the defendant has obtained loans for agricultural purpose, the Applicant Bank is entitled for a final order on the following lines:-

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The Applicant Bank is entitled to recover from the Defendant, a sum of Rs.51,26,002.44p i.e., i) Rs.24,39,765.86p together with simple interest at the rate of 6 % p.a. , ii) Rs.16,80,623.86p together with simple interest at the rate of 6 % p.a. & iii) Rs.10,05,612.72p together with simple interest at the rate of 6 % p.a. in respect of Agricultural Farm Development loans I , II & III respectively from the date of filing of Application till the date of realization with cost. Accordingly, it is hereby

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ORDERED

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(a) That the Defendant is directed to pay personally a sum of Rs.51,26,002.44p i.e., i) Rs.24,39,765.86p together with simple interest at the rate of 6 % p.a. , ii) Rs.16,80,623.86p together with simple interest at the rate of 6 % p.a. & iii) Rs.10,05,612.72p together with simple interest at the rate of 6 % p.a. in respect of Agricultural Farm Development loans I , II & III respectively from the date of filing of Application till the date of realization with cost within one month from the date of receipt of this order.

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(b) In case of default of payment by the above mentioned Defendant, the Applicant Bank is at liberty to sell the movable / immovable properties more fully described in Schedule of the original application for appropriation of sale proceeds towards the satisfaction of amount due to the Applicant Bank.

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(c) If the sale proceeds are not sufficient, after defraying the expenses of such sale, for the payment of all such amounts, the defendant is personally liable to pay the amount of such deficiency with interest mentioned above until realization.

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Page 8 of 9

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OA No. 478/2023

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(d) Any amount remitted during the course of this proceedings shall be

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given due credit, to the loan account of the defendants.

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(e) Recovery Certificate be prepared, as per the directions given above, and issue accordingly. A copy of the order is to be communicated to the parties concerned, immediately.

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(f) It is further ordered that the Applicant Bank shall file cost memo within a period of one month from the date of receipt of this order, so as to prepare the recovery certificate with cost for the Agricultural Farm Development loans and the Recovery Officer is also directed to proceed with the matter in accordance with law. In case, cost memo is not filed before said period of one month, Recovery Certificate will be prepared with available records.

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Dictated to P N, taken down, transcribed, typed by him, corrected and pronounced by me in the Open Court in this the 03^rd July, 2026.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 20.07.26

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Page 9 of 9

Canara Bank v. Manivel

Case brief

What is this about?

What did the court decide?

Canara Bank v. Manivel

Case brief

What is this about?

What did the court decide?

What the court decided

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