Allowed

Union Bank of India v. K v Muniswamy Naidu

DRT24 Jul 2026OA/78/2025

Case brief

AI extract

What is this about?

The Tribunal allowed an application under Section 19 of the RDB Act for issuance of a Recovery Certificate against borrowers and guarantors. After hearing the applicant ex parte, it verified loan availing, defaults, and security interests, granting recovery with reduced agricultural interest.

What did the court decide?

Issuance of Recovery Certificate aggregating Rs 1,54,60,201 with reduced simple interest (6%) for calculation, recoverable against defendants and inherited estate.

Union Bank of India versus K v Muniswamy Naidu — 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 24^th Day of July, 2026

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Present: Sri. T. RAJESH Presiding Officer OA.No.78/2025

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BETWEEN:

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Union Bank of India Robertsonpet, KGF Town, KGF Taluk, Kolar District,

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Karnataka …APPLICANT

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AND:

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Sri. K V Muniswamy Naidu S/o. Sri. K Vengama Naidu Aged 76 years R/at: Bennavara Village, Kysamballi Hobli, Srinivasandra Post, Bangarpet Taluk – 563 114 Kolar District

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Smt. Koushalymma W/o. late B V Krishna Naidu Aged major R/at: Bennavara Village, Kysamballi Hobli, Srinivasandra Post, Bangarpet Taluk – 563 114 Kolar District

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Sri. Sudhakar S/o. late B V Krishna Naidu Aged major R/at: Bennavara Village, Kysamballi Hobli, Srinivasandra Post, Bangarpet Taluk – 563 114 Kolar District

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Sri. B M Jayaprakash S/o. Sri. K V Muniswamy Naidu Aged major

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OA-78/2025

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R/at: Bennavara Village, Kysamballi Hobli, Srinivasandra Post, Bangarpet Taluk – 563 114 Kolar District ...DEFENDANTS

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Counsel on record/appeared for:

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Applicant : N G Ravi Kumar Defendants : Ex parte

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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 for issuance of Recovery Certificate against the defendant for Rs 1,54,60,201/- (Rupees One Crore Fifty-Four Lakhs Sixty Thousand Two Hundred and One Only) with further interest thereon from the date of filing the Application till realization.

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It is the case of the applicant that, the defendants no.2 & 3 are the legal heirs of the deceased guarantor. The defendant no. 1 as borrower, defendant no 4 as well as deceased Sri. B V Krishna Naidu as guarantors availed the following credit facilities:

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Term Loan of Rs. 4,93,000/- (Rupees Four Lakhs Ninety-Three Thousand Only) for the purpose of purchase of tractor, trailer and its accessories.

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CKFM loan of Rs. 5,00,000/- (Rupees Five Lakhs Only) for the purpose of installation of the drip irrigation system.

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CKLS loan of Rs. 4,00,000/- (Rupees Four Lakhs Only) for the purpose of development of the land.

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OA-78/2025

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CCCK loan of Rs. 8,00,000/- (Rupees Eight Lakhs Only) for the purpose of growing banana, potato and tomato crops.

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AGTL loan of Rs. 10,50,000/- (Rupees Ten Lakhs Fifty Thousand Only) for the installation of the drip irrigation system.

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It is also the case of the applicant that, in view of the above

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availed loans, the defendants executed the necessary loan document along with Registered mortgage deed.

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It is further contended that, despite availing the credit facilities, 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 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, service of summons on the defendants, they failed to appear, resulting the defendants being set ex parte on 20.11.2025.

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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-126 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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OA-78/2025

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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 ex parte. 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 facilities as stated in the OA, creation of the security interest 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 document. 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 are 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 is

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availed for Agricultural purpose and also that the OA claim is arrived at by calculating interest at the agreed rate, this Tribunal is the view that the OA can be allowed with a reduced interest of 6.00% (simple).

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OA-78/2025

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In the result, OA.No.78/2025 stands allowed,

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The applicant is allowed to recover an aggregate sum of Rs.

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1,54,60,201/- (Rupees One Crore Fifty-Four Lakhs Sixty Thousand Two Hundred and One Only) consisting of:

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a. 20,14,537/- (Rupees Twenty Lakhs Fourteen Thousand Five Hundred and Thirty-Seven Only) under the first loan with further interest @12.50 % p.a.(simple) from the date of filing OA till the realization, from the defendant nos.1 to 3:

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b. 35,57,607/- (Rupees Thirty-Five Lakhs Fifty-Seven Thousand Six Hundred and Seven Only) under the second and third loan with further interest @10.08 % p.a.(simple) from the date of filing OA till the realization, from the defendant no.1:

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c. 98,88,057/- (Rupees Ninety-Eight Lakhs Eighty-Eight Thousand

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and Fifty-Seven Only) under the fourth and fifth loan with further interest @10.08 % p.a.(simple) from the date of filing OA till the realization, from the defendant nos.1 & 4:

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From the defendant nos. 1 & 4, from the defendant nos. 2 & 3 to the extent of their inheritance of any estate of deceased guarantor Sri. B V Krishna Naidu after giving credit to all the amount recovered and be recovered by proceeding against the schedule property. The schedule property to the OA be the schedule property to the Recovery

OA-78/2025

Certificate.

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

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liability, the defendant nos. 2 & 3, to the extent of their inherited form the deceased Sri. B V Krishna Naidu, is liable to the proceeds against for the balance amount.

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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

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and transferred to Recovery for execution.

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v) Interim application pending, if any, stands disposed of in

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terms of this final order.

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Communicate a copy of the order to the parties concerned in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT

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(Procedure) Rules, 1993.

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[Dictated to the Stenographer (HS), 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

OA-78/2025

ANNEXURES

WITNESSES EXAMINED FOR THE APPLICANT BANK:

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AW-1 Sri G Ravi, S/o. V Gangaiah, Manager, of Applicant Bank.

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Exhibits on the part of the Applicant:

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Exhibit	Date	Particulars of Documents
Nos.
A1	03.09.2009	Loan application
A2	05.09.2009	Credit sanction intimation
A3	05.09.2009	Agreement for term loans executed by defendant no.1
A4	05.09.2009	Agreement of hypothecation of vehicles executed by defendant no.1
A5	05.09.2009	Unattested deed of hypothecation of crops to secure crop loan account executed by defendant no.1
A6	04.09.2009	Registered mortgage deed executed by defendant no.1
A7	05.09.2009	Guarantee agreement executed by Sri. B V Krishna Naidu
A8	19.07.2012	Demand promissory note for the outstanding liability of Rs. 4,56,234/-
A9	19.07.2012	Take delivery letter to DPN
A10	11.06.2015	Demand promissory note for the outstanding liability of Rs. 6,55,537/-
A11	11.06.2015	Take delivery letter to DPN
A12	22.05.2018	Acknowledgement of debt and liability by the borrowers
A13	12.02.2021	Application for rephasement/restructuring of loan
A14	12.02.2021	Credit sanction intimation for restructuring loan account to 4 years in yearly equal instalments of Rs. 3,27,539/- and interest theron.
A15	12.02.2021	General term loan agreement
A16	12.02.2021	Hypothecation agreement for agricultural advances
A17	12.02.2021	Demand promissory note for the outstanding liability of Rs. 13,10,158/-
A18	12.02.2021	Letter of continuity to on-demand promissory note
A19	12.02.2021	Letter of continuity for equitable mortgage/simple executed by defendant no.1
A20	12.02.2021	Letter of confirmation acknowledging the loan liability executed by defendant no.1

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OA-78/2025

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A21	20.04.2021	SD-23 composite debit balance confirmation letter executed by defendant no.1
A22	09.08.2023	Demand promissory note for the outstanding liability of Rs. 16,67,455/-
A23	09.08.2023	Letter undertaking/fresh promise in case of time barred debts
A24	09.08.2023	SD-23 composite debit balance confirmation letter executed bydefendant no.1
A25	14.03.2024	Statement of accounts 12.02.2024 to 14.03.2024
A26	03.09.2009	Loan application
A27	08.09.2009	Credit sanction intimation
A28	08.09.2009	Agreement for term loans
A29	08.09.2009	Unattested deed of hypothecation of crops movables
A30	08.09.2009	Unattested deed of hypothecation of crops to secure croploan account
A31	19.07.2012	Demand promissory note for the outstanding liability of Rs. 8,46,006/-
A32	19.07.2012	Take delivery letter to DPN
A33	11.06.2015	Demand promissory note for the outstanding liability of Rs. 8,46,006/-
A34	11.06.2015	Take delivery letter to DPN
A35	22.05.2018	Acknowledgement of debt and liability by the borrowers
A36	12.02.2021	Application for rephasement/restructuring of loan
A37	12.02.2021	Credit sanction intimation for restructuring repayment schedule repayable in 4yearlyequal installments
A38	12.02.2021	General term loan agreement
A39	12.02.2021	Hypothecation agreement (for agricultural advances)
A40	12.02.2021	Demand promissory note for the outstanding liability of Rs. 13,42,598/- & letter of continuity to on-demand promissorynote
A41	12.02.2021	Letter of continuity for equitable mortgage/simple executed bydefendant no.1
A42	12.02.2021	Letter of confirmation acknowledging the loan liability executed bydefendant no.1
A43	20.04.2021	SD-23 composite debit balance confirmation letter executed bydefendant no.1
A44	09.08.2023	Demand promissory note for the outstanding liability of Rs. 17,08,742/- & letter undertaking/freshpromise in

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OA-78/2025

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		case of time barred debts
A45	14.03.2024	Statement of accounts 12.02.2024 to 14.03.2024
A46	10.11.2010	Loan application
A47	02.12.2010	Credit sanction intimation
A48	02.12.2010	Agreement for term loans
A49	02.12.2010	Common deed of hypothecation of movables/assets/debts executed bythe defendant no.1
A50	02.12.2010	Unattested deed of hypothecation of crops/stocks (including live/non-live stocks) to secure demand cash credit account executed bythe defendant no.1
A51	02.12.2010	Demand promissory note for the outstanding liability of Rs. 4,00,000/-
A52	02.12.2010	Take delivery letter to DPN
A53	25.11.2010	Registered deed of simple mortgage executed by defendant no.1 for limit of Rs. 12,00,000/-
A54	19.06.2013	Demand promissory note for the outstanding liability of Rs. 3,93,592/-
A55	19.06.2013	Take delivery letter to DPN
A56	31.05.2016	Acknowledgement of debt and liability by the borrowers
A57	12.02.2021	Application for rephasement/restructuring of loan
A58	12.02.2021	Credit sanction intimation for restructuring repayment schedule repayable in 4yearlyequal installments
A59	12.02.2021	General term loan agreement
A60	12.02.2021	Hypothecation agreement
A61	12.02.2021	Demand promissory note for the outstanding liability of Rs. 9,90,670/-
A62	12.02.2021	Letter of continuity to on-demand promissory note
A63	12.02.2021	Letter of continuity for equitable mortgage/simple executed bydefendant no.1
A64	12.02.2021	Letter of confirmation acknowledging the loan liability executed bydefendant no.1
A65	20.04.2021	Composite debit balance confirmation letter executed bydefendant no.1
A66	09.08.2023	Demand promissory note for the outstanding liability of Rs. 12,34,203/-
A67	09.08.2023	Letter undertaking/fresh promise in case of time barred debts

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OA-78/2025

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A68	09.08.2023	SD-23 composite debit balance confirmation letter executed bydefendant no.1
A69	14.03.2024	Statement of accounts 12.02.2024 to 14.03.2024
A70	10.11.2010	Loan application
A71	02.12.2010	Credit sanction intimation
A72	02.12.2010	Unattested deed of hypothecation of crops to secure croploan account executed bydefendant no.1
A73	02.12.2010	Demand promissory note for the outstanding liability of Rs. 8,00,000/-
A74	02.12.2010	Take delivery letter to DPN
A75	02.12.2010	Guarantee agreement executed by defendant no.4
A76	08.06.2012	Renewal application
A77	08.06.2012	Sanction/renewal intimation for the limit of Rs. 16,00,000
A78	08.06.2012	Demand promissory note for the outstanding liability of Rs. 16,00,000/-
A79	08.06.2012	Take delivery letter to DPN
A80	20.06.2013	Demand promissory note for the outstanding liability of Rs. 15,16,559/-
A81	20.06.2013	Take delivery letter to DPN
A82	09.11.2013	Renewal application
A83	09.11.2013	Sanction/renewal intimation for the limit of Rs. 21,15,000/-
A84	09.11.2013	Demand promissory note for the outstanding liability of Rs. 21,15,000/-
A85	09.11.2012	Take delivery letter to DPN
A86	05.03.2016	Letter requesting for conversion of crop loan to term loan/rephasingrepayment schedule of term loans
A87	05.03.2016	Advise of rephasing repayment schedule to further 4 years
A88	10.05.2016	Acknowledgement of debt/liability by the borrowers
A89	01.02.2021	Application for rephasement/restructuring of loan
A90	01.02.2021	Credit sanction intimation for restructuring repayment schedule repayable in 4yearly
A91	01.02.2021	General term loan agreement
A92	01.02.2021	Hypothecation agreement

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OA-78/2025

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A93	01.02.2021	Demand promissory note for the outstanding liability of Rs. 44,19,000/-
A94	01.02.2021	Letter of continuity to on-demand promissory note
A95	01.02.2021	Letter of continuity for equitable mortgage/simple executed bydefendant no.1
A96	01.02.2021	Letter of confirmation acknowledging the loan liability executed bydefendant no.1
A97	20.04.2021	SD-23 composite debit balance confirmation letter executed bydefendant no.1
A98	09.08.2023	Demand promissory note for the outstanding liability of Rs. 53,13,845/-
A99	09.08.2023	Letter undertaking/fresh promise in case of time barred debts
A100	09.08.2023	SD-23 composite debit balance confirmation letter executed bydefendant no.1
A101	14.03.2024	Statement of accounts 12.02.2024 to 14.03.2024
A102	13.12.2013	Loan application
A103	13.12.2013	Credit sanction intimation
A104	13.12.2013	Agreement for term loans executed by defendant no.1
A105	13.12.2013	Common deed of hypothecation of crops/stocks executed bythe defendant no.1
A106	13.12.2013	Demand promissory note for the outstanding liability of Rs. 10,50,000/-
A107	13.12.2013	Take delivery letter to DPN
A108	13.12.2013	Memorandum of deposit of title deeds executed by defendant no.1
A109	13.12.2013	Guarantee agreement executed by defendant no.4
A110	04.01.2019	Acknowledgement of debt and liability by the borrowers
A111	12.02.2021	Application for rephasement/restructuring of loan
A112	12.02.2021	Credit sanction intimation for restructuring repayment schedule repayable in 4yearlyequal installments
A113	12.02.2021	General term loan agreement
A114	12.02.2021	Hypothecation agreement for agricultural advances
A115	12.02.2021	Demand promissory note for the outstanding liability of Rs. 25,08,691/-
A116	12.02.2021	Letter of continuity to on-demand promissory note
A117	12.02.2021	Letter of continuity for equitable mortgage/simple

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OA-78/2025

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		executed by defendant no.1
A118	12.02.2021	Letter of confirmation acknowledging the loan liability executed bydefendant no.1
A119	20.04.2021	SD-23 composite debit balance confirmation letter executed bydefendant no.1
A120	09.08.2023	Demand promissory note for the outstanding liability of Rs. 30,78,017.50/-
A121	09.08.2023	Letter undertaking/fresh promise in case of time barred debts
A122	09.08.2023	SD-23 composite debit balance confirmation letter executed bydefendant no.1
A123	14.03.2024	Statement of accounts for the period from 12.02.2024 to 14.03.2024
A123 a		Consolidated statement
A124	01.05.2024	Legal notice
A125	15.05.2024	Three original postal receipts
A126	-------	Two original postal acknowledgements and one unservedpostal article

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Witness Examined for the Defendants:

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-Nil -

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List of Documents Exhibited for the Defendants:

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-Nil -

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Sd/-

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(T. RAJESH) PRESIDING OFFICER

Union Bank of India v. K v Muniswamy Naidu

Case brief

What is this about?

What did the court decide?

Union Bank of India v. K v Muniswamy Naidu

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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