KARNATAKA GRAMIN BANK vs SRI. SHARANAPPA on 28 February 2025

FINAL ORDER

1. The present Transfer Application in (short) TA 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.63,70,300/- (Rupees Sixty Three Lakh Seventy Thousand and Three Hundred Only) with further interest thereon from the date of filing the Application till realization from the Defendants.

2. It is the case of the applicant that, the first defendant on the co-obligation of second and third defendants approached the then Pragati Gramin Bank, which later amalgamated with the applicant to availed Pledge loan/Warehouse loan/Produce loan of Rs.50,00,000/- by pledging 7200 bags of Sona Masuri Paddy, more fully described in the schedule.

3. It is also the case of the applicant that, in view of the above financed the amount, the defendants have executed necessary loan documents and executed Simple Mortgage Deed dated 29.11.2010.

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4. It is further contended that, despite availing the credit facility, agreed 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.

5. 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.

6. After the filing of the OA, Summons sent to the Defendants through Registered Post with Acknowledgment Due and the summons were duly served on the Defendants. Defendant No.1 to 3 entered appearance through Counsel by filing vakalath, and filed written statement. Further, the defendants have filed IA.No.1796/2015, a petition to cross examine the applicant’s evidence, the said IA was initially allowed on 03.05.2016. However, the defendants failed to cross examine the applicant’s evidence and the case was posted for further hearing on main application. The defendant subsequently set exparte on 11.09.2024 as they failed to appear on subsequent posting dates.

7. The applicant let in evidence through AW-1, who filed Proof Affidavit reiterating the contentions taken in the OA and also produced Exhibits A3 to A20 and got the same marked in evidence.

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8. 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.

9. The following issues arise for consideration in this matter: i) Whether the applicant had succeeded in proving the OA claim as against the defendants? ii) What order are to be passed?

Both these issues are gone into and decided together.

10. 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 facilities as stated in the OA, creation of security interest as claimed by the applicant bank and the defaults committed in the account. The liability of the defendants and the claim of the amount due is also proved by the above documents. The claim of the applicant is well within the limitation.

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11. Hence in view of the above finding which cover both the issues raised in this manner, this Tribunal is of the view that OA is liable to be allowed.

12. Taking into consideration the facts 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 interest of 8.00% (simple).

13. In the result, TA.No.1594/2017 stands allowed,

i) The applicant is allowed to recovery an aggregate sum of Rs.63,70,300/- (Rupees Sixty Three Lakh Seventy Thousand and Three Hundred only) with further interest of 8.00% p.a.(simple) from the date of filing TA till the realization, after giving credit to all the amounts recovered and received during the pendency of the TA and allowed the same to be recovered by proceeding against schedule properties. The property schedule to the TA be the schedule to the Recovery Certificate.

ii) If the sale proceeds are not found sufficient to cover the amount due and payable to the applicant bank, the 6 TA/1594/2017

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

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.

iv) The Recovery Certificate to be drawn in terms of this order and transferred to Recovery for execution.

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 the Stenographer (PR), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 28th Day of February 2025]. Sd/- (T. RAJESH) PRESIDING OFFICER

DRT-II, BENGALURU

ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Sri. Ramesh K, Branch Manager of the applicant bank. Exhibits on the part of the Applicant: Annexure Particulars A1 Applicant Evidence A2 List of Documents

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A3 Loan Application dated 06.01.2010. A4 Pronote dated 06.01.2010 for Rs.50,00,000/- with a Take Delivery Letter to DPN. A5 Produce Loan Agreement (General) dated 06.01.2010 A6 Letter of Co-obligation dated 06.01.2010 of

A7 Letter of Co-obligation dated 06.01.2010 of Defendant No.3. A8

6. Undertaking letter dated 06.01.2010 taken from the borrower regarding notice of variations in the rates of interest on Loan/Advances. A9 Letter of Pledge dated 06.01.2010. A10 Godown/Building on Lease Agreement dated 06.01.2010. A11 Simple Mortgage Deed dated 29.11.2010 executed by Defendant No.3. A12 Letter dated 23.09.2010 given by Defendant No.

3. A13 Link Letter dated 30.11.2010 executed by

A14

12. Demand notice dated 20.10.2010. A15

13. Translated copy of Demand Notice dated 20.10.2010. A16 Demand notice dated 08.04.2011. A17 Translated copy of Demand Notice dated 08.04.2011. A18 Demand notice dated 19.08.2011.

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A19 Translated copy of Demand Notice dated 19.08.2011. A20 Certified Account Extract

Sd/- (T. RAJESH) PRESIDING OFFICER

DRT-II, BENGALURU