Allowed

Canara Bank v. Vasantha Laxmi

DRT24 Jul 2026OA/588/2022

Case brief

AI extract

What is this about?

The DRT allowed the Original Application filed by Canara Bank Maski for issuance of a Recovery Certificate against 10 respondents. The defendants were absent. The court awarded recovery of the principal amount plus interest at reduced rates.

What did the court decide?

Allowed recovery of Rs. 87,65,958.91 with simple interest at 6% p.a. (CKOD/KCC) and 10% p.a. (Producer loan). Recovery Certificate to be drawn and transferred for execution.

Canara Bank versus Vasantha Laxmi — 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 July 2026

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Present: Sri. T. RAJESH

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Presiding Officer

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OA. No.588/2022

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BETWEEN:

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Canara Bank Maski, Basavan Gouda Building, New Bazaar, Raichur District-584124. …APPLICANT

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AND:

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Smt.Vasantha Laxmi

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S/o.Murali Krishna

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R/a Balagnur Village,

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Sindhanur Taluk,

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Raichur District-584138.

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M/s. K.Vishnumurthy Warehouse Represented by its Promoters R/at. Shankar Nagar Camp,

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Manvi Taluk,

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Raichur District-584138.

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a) Sri.Vishnumurthy Warehouse

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S/o.Venkatreddy R/at. Shankar Nagar Camp, Manvi Taluk,

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Raichur District-584138.

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b) Smt.K.Lakshmi

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W/o.K.Vishnumurthy R/at. Shankar Nagar Camp, Manvi Taluk,

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Raichur District-584138.

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2 OA No.588/2022

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c) Sri.K. Venkatesh S/o.K.Veshnumurthy R/at. Shankar Nagar Camp, Manvi Taluk,

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Raichur District-584138.

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d) Smt.Sridevi

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W/o.Venkatesh R/at. Shankar Nagar Camp, Manvi Taluk,

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Raichur District-584138.

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e) Sri.K.Murali Krishna S/o.Vishnumurthy R/at. Shankar Nagar Camp, Manvi Taluk,

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Raichur District-584138.

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f) Smt.K.Vasant Lakshmi D/o.Vishnumurthy R/at. Shankar Nagar Camp, Manvi Taluk,

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Raichur District-584138.

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g) Smt.K.Bedi

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W/o.Radha Venkata Krishna R/at. Shankar Nagar Camp, Manvi Taluk, Raichur District-584138. ...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : Sri. K.Raveendran Defendants : Exparte

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3 OA No.588/2022

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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.87,65,958.91/- (Rupees Eighty-Seven Lakhs Sixty-Five Thousand Nine Hundred Fifty-Eight and Paisa Ninety-One Only) with further interest thereon from the date of filing the Application till realization from the Defendants.

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The Applicant Bank sanctioned financial facilities to an overall exposure limit of Rs.900 Lakhs to various farmers, which includes the subject loan facilities availed by 1st Defendant against agricultural produce stored in the warehouse of M/s.K.Vishnumurthy Warehouse. Defendant Nos.2 to 9 created charge over the schedule Immovable properties. Defendant Nos.2 to 9 also executed guarantee agreement. The Defendants Nos.2 to 9 stood as guarantors for overall exposure of 900 Lakhs

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The Defendant No.1 availed CKOD Loan facilities of Rs.4,00,000/(Rupees Four Lakh Only). The defendant No.1 has deposited the original title deeds.

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4 OA No.588/2022

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The Defendants No.1 availed KCC loan of Rs.0.99 Lakhs (Rupees Ninety-Nine Thousand Only) hypothecating the and schedule properties.

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The Defendant availed Rs.50.00 Lakhs Produce Loan, The Defendants Nos.3 to 9 had executed Guarantee Agreement. The defendant has executed a Warehouse Receipt there by giving the details of number of paddy bags stored in the gowdown along with its value.

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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, Hypothecation of paddy bags, Guarantee Agreement, apart from the creation of security interest by way of mortgage over the Schedule properties.

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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 09.07.2025.

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5 OA No.588/2022

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The applicant had let in evidence through AW-1, who filed the Proof Affidavit reiterating the contentions taken in the OA and also produced Exhibits A1 to A23 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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a. Whether the applicant had succeeded in proving the OA claim as against the defendants?

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b. 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 Hypothecation

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in favour of the applicant bank and the defaults committed in the account.

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The liability of the defendants and the claim of the amount due are also

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

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6 OA No.588/2022

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Hence in view of the above findings which cover both the issues

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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 working capital 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 simple interest.

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In the result, OA.No.588/2022 stands allowed,

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i) The applicant is allowed to recovery an aggregate sum

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of Rs.87,65,958.91/- (Rupees Eighty-Seven Lakhs Sixty-Five Thousand

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Nine Hundred Fifty-Eight and Paisa Ninety-One Only) in following manner:

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a) The Defendant No1. liable to pay a sum of Rs.6,17,020.00/- (Rupees Six Lakhs Seventeen Thousand Twenty Only) with further interest of 6% p.a. (simple from date of application till the date of realization, due as CKOD Loan.

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b) The Defendants jointly and severally is liable to pay a sum of Rs.65,592.91/- (Rupees Sixty-Five Lakhs Five Hundred Ninety-Two and Paisa Ninety-One Only) with further interest of 6% p.a.(simple) from date of application till the date of realization, due as KCC Loan.

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7 OA No.588/2022

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c)^{The Defendants jointly and severally is liable to pay a sum of}

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Rs.80,83,346.00/- (Rupees Eighty-Lakhs Eighty-Three Thousand Three Hundred and Forty-Six Only) with further interest of 10% p.a.(simple) from date of application till the date of realization, due as Producer Loan.

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The defendants after giving credit to all the amounts recovered and received during the pendency of the OA if any, and allowed the same to be recovered by proceeding against the schedule properties. The schedule

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properties to the OA be the schedule properties to the Recovery Certificate.

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

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due and payable to the applicant bank, the respective defendants jointly, severally and their other assets are liable for all such amounts due in respective loan accounts.

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iii) The applicant bank is allowed cost of the proceeding 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 with this Final Order.

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8 OA No.588/2022

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17. 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 (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/-

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(T. RAJESH) PRESIDING OFFICER

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1: Sri.Yerramala Veeranna , Asst. 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.	Common Application Cum Appraisal for Credit facilities dated 28.08.2010	A1
2.	Simple Mortgage Deed dated 01.09.2010	A2
3.	Sanction Memorandum dated 24.09.2010	A3
4.	Agreement and Deed of Hypothecation for kisan Credit Card dated 24.09.2010	A4
5.	Letter of Revival dated 25.08.2013	A5
6.	Letter of Revival dated 19.06.2015	A6
7.	Letter of Revival dated 19.06.2018	A7
8.	Letter of Revival dated 19.06.2020	A8
9.	Statement of account in respect of CKOD Account No.0545897000314	A9
10.	Common Application Cum Appraisal for Credit facilities dated 17.12.2014	A10

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9 OA No.588/2022

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11.	Sanction Memorandum dated 17.12.2014	A11
12.	Agreement of Hypothecation for Agricultural Loans dated 17.12.2014	A12
13.	Nomination Cum Authority Letter dated 17.12.2014	A13
14.	Letter of Revival dated 16.12.2017	A14
15.	Letter of Revival dated 15.12.2020	A15
16.	Statement of account in respect of KCC loan account No.545840007501	A16
17.	Application for loan on goods or documents of title to goods along with enclosures dated 10.03.2017	A17
18.	Sanction Memorandum dated 10.03.2017	A18
19.	Warehouse Receipt dated 10.03.2017	A19
20.	Demand Notice dated 21.02.2019	A20
21.	Letter of Revival dated 02.02.2020	A21
22.	Legal Notice dated 22.12.2020	A22
23.	Statement of account in respect of PL account No.0545844010124 along with interest sheet and certificate	A23

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Sd/-

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(T. RAJESH) PRESIDING OFFICER

Canara Bank v. Vasantha Laxmi

Case brief

What is this about?

What did the court decide?

Canara Bank v. Vasantha Laxmi

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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