KARUR VYSYA BANK vs DEEPAK MEHTA & ANR (BHADRAVATHI) on 22 May 2026

: - O R D E R - :

1. This TA is originally filed before the Debt Recovery Tribunal-I, Bangalore which later transferred to this Tribunal and got numbered as above. The application is filed u/s 19 of the Recovery of Debts due to Banks Financial Institution Act 1993(as it was taken) seeking issuance of a Recovery Certificate for Rs.1,65,42,091.61 (Rupees one crore sixty-five lakh forty-two thousand ninety-one and paisa sixty-one only) from 1st defendant, Rs.9,72,033.17 (Rupees nine lakh seventy-two thousand thirty-three and paisa seventeen only) from 1st and 2nd defendants and the total due amount of Rs. 1,75,14,124.78 (Rupees one crore seventy-five lakh fourteen thousand one hundred twenty-four and paisa seventy-eight only) and also allowing the same to be recovered by proceedings against the schedule properties and hypothecated A schedule assets.

2. It is also the case of the applicant that the 1st defendant as the borrower availed, credit facilities. It is contended that the 1st defendant is engaged in the business of purchasing paddy, storing the same in various warehouses for processing and sale, and that, upon such storage, warehouse receipts are issued by the Karnataka State Warehousing Corporation being the owner and custodian of the warehouse.

The Applicant contends that Defendant No.1 approached the Applicant and obtained sanction of the following loan facilities: i. A loan of Rs.58,65,000/- (Rupees Fifty-Eight Lakhs Sixty-Five Thousand only) against pledge of warehouse receipts covering stocks of paddy stored in the godown of Defendant No.1 situated at Machenahalli premises. ii. A term loan of Rs.16,40,000/- (Rupees Sixteen Lakhs Forty Thousand only) for purchase of a Bharat Benz truck costing Rs.20.60 lakhs, for which Defendant No.2 executed a personal guarantee. iii. A loan of Rs.37,00,000/- (Rupees Thirty-Seven Lakhs only) against pledge of warehouse receipts covering stocks of paddy stored in the godown of Defendant No.3 at Machinehalli premises. iv. A loan of Rs.44,00,000/- (Rupees Forty-Four Lakhs only) against pledge of warehouse receipts covering stocks of paddy stored in the godown of Defendant No.3 at Machinehalli premises. v. A loan of Rs.29,50,000/- (Rupees Twenty-Nine Lakhs Fifty Thousand only) against pledge of warehouse receipts covering stocks of paddy stored in the godown of Defendant No.2 at Vinayaka Rice Mills premises, Bhadravathi.

vi. A term loan of Rs.9,50,000/- (Rupees Nine Lakhs Fifty Thousand only), for which Defendant No.2 executed a personal guarantee in favour of the Applicant. and creation of security by way of mortgage over the property described in Schedule ‘C’ property.

3. The Defendants executed the necessary loan documents to secure the credit facilities mentioned above. It is further contended that, though similar credit facilities availed by other family members had also fall in default, separate applications have been filed in respect of the same.

4. It is also the case of the applicant that, despite availing the aforesaid facilities and being liable to make repayment, the 1st defendant, in collusion with the 2nd defendant, defrauded the bank by misappropriating and removing the pledged stock without knowledge of the applicant. It is further contended that the defendants thereby caused wrongful loss to the applicant bank. In the above circumstances, the present application has been filed seeking recovery of the amounts due from the defendants.

5. Defendant No.1 has filed a written statement contending that the amount claimed does not constitute a legally recoverable debt under the provisions of the Act. Defendant No.1 though admits availing the credit facilities; however, contends that the loan documents are not enforceable in law. The statement of accounts produced by the Applicant is also disputed. Apart from the above, Defendant No.1 has further disputed the classification of the account as a Non-Performing Asset (NPA) and the service of the demand notice. Defendant No.2 has filed a memo adopting the written statement filed by Defendant No.1.

6. The 3rd Defendant did not file any written statement in the above proceedings. Further, the Applicant has neither sought nor claimed any relief against Defendant No. 3. Therefore, no cause of action survives against Defendant No. 3 in the present proceedings.

7. The applicant had let in evidence through AW1 who filed proof affidavit in conformity with the pleadings of the OA and got marked the following documents as Ext A1 to A14. Ext.A1- Sanction letter dated 03.09.2013. Ext.A2- Demand promissory note dated 03.09.2013. Ext.A3- Notice given to the 3rd Defendant for making lien on specific goods. Ext.A4- Warehouse receipt bearing No. 375474 dated 03.09.2013. Ext.A5- Confirmation letter. Ext.A6- Sanction communication dated 09.07.2015.

Ext.A7- Term Loan agreement dated 09.07.2015. Ext.A8- Agreement of Guarantee dated 09.07.2015. Ext.A9- Memorandum of deposit of Title Deeds dated 08.07.2015. Ext.A10 to Ext. A14- Extracts of statement of accounts. Though sufficient opportunity is given no defense evidence was adduced.

8. Heard the counsel for both sides the only issue that the arise for consideration is whether the applicant had proved the TA claim and their entitlement to get it recovered.

9. The applicant had produced the sanction memorandum and loan documents evidencing the disbursement and the under taking as given by the defendants showing them obligation to pay back the amount as per its terms. Even otherwise the defendant who had filed the written statement is having no serious dispute as to the above factors. The documents produced by the applicant are all admissible in evidence. The statement of accounts as produced and marked by the applicant evidences the default occurred in the account and that the amount claimed in the TA is outstanding in the account. It is also clear that there is no capitalization of interest.

10. The defendants 1 and 2, though have filed their written statement, failed to adduce evidence in support of their contentions. Despite the case was listed for defence evidence, and sufficient opportunities was given. Hence, this

Tribunal is of the view that the evidence adduced by the applicant remains uncontroverted, and the documents produced by the applicant are admissible in evidence and stand proved.

11. In the evidence affidavit filed by the Applicant, it is contended that the Applicant Bank seized the hypothecated vehicle and sold the same, and the entire outstanding dues in respect of the term loan were recovered after filing of the T.A. Hence, the claim amount pertaining to the term loan availed for purchase of the Bharat Benz truck, amounting to Rs.11,89,128.56 (Rupees eleven lakh eighty-nine thousand one hundred twenty-eight and paisa fifty-six only), stands recovered.

12. On consideration of the above discussions, this Tribunal is convinced that the applicant is entitled to succeed in this TA and is entitled to the relief as sought for, including interest at the rate of 12.00% per annum (simple interest) on the amount dues.

13. In the result

i) TA.80 of 2017 stands allowed

ii) Applicant is entitled to recover total amount of Rs. 1,75,14,124.78 (Rupees one crore seventy-five lakh fourteen thousand one hundred twenty-four and paisa seventy-eight only) out of which an amount of Rs.1,65,42,091.61 (Rupees one crore sixty-five lakh forty-two thousand ninety-one and paisa sixty-one only) with further interest @ 12% (simple) from defendant no.1 and his assets, after giving credit to all the amounts recovered and received during the pendency of this TA including Rs. 11,89,128.56 towards the term loan and Rs.9,72,033.17 (Rupees nine lakh seventy-two thousand thirty-three and paisa seventeen only) from defendants 1 and 2 with further interest at the same rate 12% (simple) from the date of filing of the TA, till realization, after giving credit to all the amounts recovered and received during the pendency of this TA in respective loan accounts. Properties schedule to the TA be the schedule to the Recovery Certificate. iii) The amount as found due is to be recovered by proceedings against schedule mortgage properties and also against hypothecated goods and also by proceedings personally against defendant No.1 and 2 and then other assets. iv) The Applicant failed to seek any relief against Defendant No. 3; hence, Defendant No. 3 does not incur any liability towards the claim amount.

v) The applicant is entailed for cost of this litigation for which cost memo to be filed in 7 days from the date receipt of this order. vi) A Recovery Certificate is to be drawn and issued to the recovery Officer to enable recovery of the as per the above terms. vii) Interim application pending, if any, stands disposed of in terms of this final order.

14. 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 (Procedure) Rules, 1993. (Dictated to PY directly on the Computer, after its transcription, corrected and pronounced by me in the open Court on this the 22nd day of May, 2026).

Sd/-

(T. RAJESH)

PRESIDING OFFICER

Witnesses Examined for the Applicant Bank: AW-1: Shachi Singh, legal officer, of Applicant Bank. Exhibits on the part of the Applicant:

The exhibits have already been referred to and discussed in the body of the order and hence are not repeated herein. Witness Examined for the Defendants:

-Nil - List of Documents Exhibited for the Defendants: -Nil -

Sd/- (T. RAJESH)

PRESIDING OFFICER