KARNATAKA BANK LIMITED vs JAGADISH .B & ORS on 18 July 2025

FINAL ORDER

1. 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.35,14,436/- (Rupees Thirty Five Lakh Fourteen Thousand Four Hundred and Thirty Six only) with further interest thereon from the date of filing the Application till realization.

2. It is the case of the applicant that, the defendant No.1, 2 Late Kempamma, Late Smt. Kadamma and Five sisters of the 1st defendant availed Term loan of Rs.11.44 lakhs for Development of Farm Land and Construction of Areca processing unit, Labour Quarters, Godown and purchase of Drip Irrigation Equipment and Rs.5,25,000/- for maintenance of crops on 24.01.2001.

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3. The deceased co-borrower and defendants have executed necessary loan documents in favour of the applicant bank as security for the due repayment of the loans, interest, cost and charges. The deceased borrower had also Mortgage Deed dated 29.01.2001.

4. It is further contended that, despite availing the credit facilities, agreeing to service the loan account promptly and regularly, the defendants failed in complying the same, resulting in defaults 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. Despite, service of summons on the defendants, they failed to appear, resulting the defendants No.1, 3 to 6 and defendant No.2 (a to f) being set exparte on 26.07.2024.

7. The applicant let in evidence through AW-1, who filed Proof Affidavit reiterating the contentions taken in the OA and also 5 TA/1004/2017

produced Exhibits A3 to A38 and got the same marked in evidence.

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 facility 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 are 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. Since the OA claim is arrived at by calculating agreed rate of interest, penal interest/default interest, which this Tribunal considers as on the higher side, pendentalite and future interest is awarded at fixed rate.

13. In the result, TA.No.1004/2017 stands allowed,

i) The applicant is allowed to recover an aggregate sum of Rs.33,53,950/- (Rupees Thirty Three Lakh Fifty Three Thousand Nine Hundred and Fifty only) with further interest of 6.00% p.a.(simple) from the date of filing OA till the realization, from the defendant Nos.1,3,4 & 5 and defendants No.2(a) to (f) to the extent of their inheritance of any estate from the deceased borrower Late Kempamma, after giving credit to all the amounts recovered and received during the pendency of the OA allowed the same to be recovered by proceeding against defendants jointly, severally and personally and also by proceeding against the 7 TA/1004/2017

schedule property. The schedule property to the OA be the schedule property to the Recovery Certificate.

ii) The applicant bank is allowed cost of the proceeding which applicant to file cost memo within 7 days from the date of receipt of the order.

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

iv) Interim Application pending, if any, stands disposed of with 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 the Stenographer (PR), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 18th Day of July 2025].

Sd/- (T. RAJESH) PRESIDING OFFICER

ANNEXURES WITNESSES EXAMINED FOR THE APPLICANT BANK: AW-1: Sri. Devavrath Mopur, Senior Branch Manager of the applicant bank.

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Exhibits on the part of the Applicant: Annexure Particulars A1 Affidavit Evidence A2 List of documents A3 Sanction order dated 24.01.2001 from the applicant bank relating to Term loan of Rs.11.44 lakh A4 Term Loan Agreement dated 29.01.2001 for Rs.11.44 lakhs executed by 1st defendant and others in favour of the bank. A5 Hypothecation Agreement dated 29.01.2001 executed by 1st defendant and others in favour of the bank. A6 Letter of Authority dated 29.01.2001 executed by defendant No.1 in favour of bank A7 Death certificated dated 13.03.2019 of Sushila K Shetty A8 Family tree of Surendra Shetty A9 Acknowledgement of debt dated 30.07.2019 A10 Legal notice dated 07.02.2022 A11, A12 & A13 Postal acknowledgement of defendant Nos.1, 2 and 3 A14 Statement of loan account

Sd/- (T. RAJESH) PRESIDING OFFICER