Allowed

Canara Bank v. Eranna

DRT31 Jul 2026OA/599/2022

Case brief

AI extract

What is this about?

The DRT allowed the bank's original application for a recovery certificate of Rs. 26.22 lakhs. Despite defendants appearing ex parte, the court accepted uncontroverted evidence of loan availment and default. The court granted the claim with reduced interest at 6% p.a. but dismissed the claim against two specific defendants.

What did the court decide?

Recovery Certificate issued for Rs. 26,22,737 with 6% simple interest against respondents excluding Nos. 3 and 10; costs awarded.

Canara Bank versus Eranna — 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 31^st Day of July, 2026

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Present: Sri. T. RAJESH Presiding Officer

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OA.No.599/2022

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BETWEEN:

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Canara Bank Hunase Halli Branch, Sira Taluk-579235, Tumakuru District. Represented by its Chief Manager, Sri. Rameshwar Mandal

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…APPLICANT

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AND:

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Sri. M.R. Eranna S/o Late Ramanna, Aged about 62 years.

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Smt. Thayamma W/o Late Ramanna Aged about 69 years.

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Sri. Gangamma, W/o Shivanna, Aged about 49 years.

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Smt. Jayamma, W/o Kariyanna, Aged about 42 years.

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Sri. Devaraju, S/o Late Ramanna, Aged about Ramanna.

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Miss Sunitha D/o Lakshman,

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Aged about 35 years.

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Sri. Ramesh S/o M.R. Eranna, Aged about 35 years.

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Miss Mahalaxmi, D/o M.R. Eranna Aged about 34 years.

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Sri. Mahesh S/o M. R. Eranna, Aged about 34 years. All are residing at Kariyalada Mudala Hatti, Javanagondanahalli Village, Kasaba Hobli, Hiriyur Taluk, Chitradurga District.

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Sri. Kariyanna S/o Kariyanna, Aged about 58 years, Residing at Muddenahally Village, Hosur Post, Sira Taluk, Tumakuru District. ...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : Mohamed Afroze Ahamed Defendants : 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 seeking issuance of Recovery Certificate against the defendants for Rs. 26,22,737/- (Rupees Twenty Six Lakh Twenty Two Thousand Seven Hundred Thirty Seven Only) with further interest thereon from the date of filing the Application till

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realization.

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It is the case of the applicant that the defendants availed the Farm Machinery Loan credit facility of Rs. 5,00,000/- from the applicant bank. It is stated that in wide proceedings order dated 26.11.2025 that, OA claim against the defendant No.3 and 10 stands dismissed.

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It is also the case of the applicant that, in view of the above availed loans, the defendants executed necessary loan documents along with Memorandum of Agreement for Agricultural loans, Registered Mortgage Deed.

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It is further contended that, despite availing the credit facility, agreeing to service the loan account promptly and regularly, the defendants 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 by filing this OA seeking issuance of Recovery Certificate for the amount due in the account.

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Despite, taking out summons the defendants failed to appear, resulting the defendants being set exparte on 24.07.2026.

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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 A-1 to A-16 and got the same marked in evidence.

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Heard the Ld. Counsel for the Applicant and considered the

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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 Mortgage as claimed by the applicant bank and the defaults committed in the accounts. 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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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 the view that OA is to be allowed.

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Taking into consideration the facts that the credit facility was

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availed for purchase of Tractor AND Trailor purpose and also that the OA

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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 6.00% (simple).

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In the result, OA.No.599/2022, stands allowed,

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i) The applicant is allowed to recovery an aggregate sum of Rs. 26,22,737/- (Rupees Twenty Six Lakh Twenty Two Thousand Seven Hundred Thirty Seven Only) with further interest @6.00 % p.a.(simple) from the date of filing OA till the realization, from the defendants jointly severally 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. Schedule Properties to the OA be the schedule to the recovery certificate. OA claim against the defendants No. 3 and 10 stands dismissed.

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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 defendants jointly, severally and personally and their assets are liable for the amounts due under the loan accounts.

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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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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 (DV), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 31^st Day of July, 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: Girish. S.R., Branch Manager of the applicant Bank

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Exhibits on the part of the Applicant:

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Annexure	Date	List of Documents
A1	06.03.2006	Loan Application
A2	06.03.2006	Sanction Letter
A3	06.03.2006	Memorandum of Agreement for Agricultural Loans executed by the defendants
A4	12.04.2006	NF-373, Particulars of Machinery Hypothecated
A5	03.03.2006	Registered Mortgage Deed
A6	06.03.2006	Particulars of the Guarantor/ Co-Obligant
A7	03.03.2010	Copy of the Insurance Policy issued by new India Assurance Company Ltd.

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A8	12.04.2006	The Copy of the Invoice issued by the Amruth Tractor Enterprises
A9	03.03.2006	The Copy of the Quotation issued by Amruth Tractor Enterprises
A10	20.02.2009	Letter of Revival executed by the defendants
A11	20.01.2012	Letter of Revival executed by the defendants
A12	01.01.2015	Letter of Revival executed by the defendants
A13	02.11.2017	Letter of Revival executed by the defendants
A14	16.07.2020	Letter of Revival executed by the defendants
A15	--	RPAD postal Acknowledgement
A16	--	Statement of Account in Farm Machinery Loan - A/No.1867856003863

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Witness Examined for the Defendants: -Nil - List of Documents Exhibited for the Defendants: -Nil –

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-Nil -

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Sd/- (T. RAJESH) PRESIDING OFFICER

Canara Bank v. Eranna

Case brief

What is this about?

What did the court decide?

Canara Bank v. Eranna

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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