CANARA BANK vs LIYAKATH ALI Mrs.PeersabiMrs.FathimaMrsFazidhabiMrsHameedabi on 19 September 2025

: - O R D E R - :

1. The Application was filed before the Debts Recovery Tribunal-I, Bengaluru on 12.12.2014 Under Section 19 (1) of the Recovery of Debt And Bankruptcy Act, 1993 and numbered as OA No. 144/2015, seeking for issuance of a Recovery Certificate for Rs.15,77,998/- (Rupees Fifteen Lakhs Seventy Seven Thousands Nine hundred and Ninety Eight only). Subsequently, owing to bifurcation of jurisdiction vide Government of India Gazette Notification dated 30.01.2017, the Application (OA No.144/2015) was transferred from Debts Recovery Tribunal -I, Bangalore to this Tribunal and renumbered as TA No. 456/2017.

2. The Applicant contends that the 1st defendant approached the applicant bank for Kisan Credit Card Loan – (short duration) to an extent of Rs.65,000/- and availed the same on 18.08.2017 by execution of necessary loan documents including the agreement cum deed of hypothecation. The 1st defendant again in the year 2008, approached the applicant bank for Construction of Farm House loan to an extent of Rs.1,80,000/- and availed the same on various dates from 24.06.2008 to 22.09.2008 by execution of necessary loan documents. The defendants 2 to 5 stood as guarantors for the said loan and also that the defendants executed mortgage deed on 19.06.2008 in respect of properties described in schedule to the TA. The 1st defendant again in the year 2009, approached the applicant bank seeking Farm Machinery loan for purchase of Tractor and Trailer to an extent of Rs.5,12,000/- and availed the same on 11.05.2009 by execution of necessary loan documents. The defendants 2 to 5 stood as guarantors for the said loan and that the defendants also executed mortgage deed on 07.05.2009 in respect of properties described in schedule to the TA. Out of the above loan proceeds, the defendants have purchased the “John Deere” Tractor and Trailer and the same got registered as KA-15 T-6940 before the jurisdictional Regional Transport Officer. The copy of the insurance policy issued by United India Insurance Company reflects the hypothecation of the same in favour of applicant. The defendants have also executed revival letters in respect of above said three loans on 13.10.2012, 02.05.2014 and 12.10.2013 respectively.

3. It is also stated that the above facility was availed after execution of necessary loan documents by defendants obliging themselves to repay the amount promptly and regularly, without fail.

4. The Applicant further contends that after availing the aforesaid facility, the defendants failed to regularize the said loan. The applicant bank has also issued notices on 26.11.2012 and 09.09.2014 calling upon the defendants to regularize the account. Despite availing the credit facilities by obliging to pay back the amount, the defendants failed in compliance of the same and all the efforts of the Applicant to make the defendants pay back the amount failed, forcing the Applicant to file this Application.

5. Summons was taken out and the service of D2 was returned with an endorsement deceased. Subsequently, the applicant bank filed IA No.2552/2021 with the prayer to carry out the consequential amendment of cause title of TA since D2 was dead and her legal representatives are already on record as defendants 1, 3, 4 and 5. Defendants 1,3,4 and 5 were set exparte on 16.09.2025.

6. The Applicant had let in evidence through AW-1, who filed Proof Affidavit reiterating the contentions taken in the TA and also produced Exhibits A3 to A25, got the same marked in evidence.

7. Heard. The following issues arise for consideration in this matter:

i) Whether the applicant succeeded in proving the TA claim as against the Defendants?

ii) If so, to what extent?

Both these issues are gone into and decided together.

8. The Applicant’s evidence remains un-rebutted and hence proved. The documents produced by the Applicant are found to be admissible and are sufficient to prove the TA claim. Hence the Applicant is found to be entitled for the TA claim. The TA claim is made within limitation and there is no capitalization of penal interest.

9. Even though the applicant bank has sought relief as against all the defendants for all the three loans, there is no document evidencing that the defendants 2 to 5 are liable for the Kisan Credit Card loan. Hence, this Tribunal feels that defendants 2 to 5 are not liable in respect of Kisan Credit Card loan. Also, as the applicant has filed IA No.2552/2021 praying for consequential amendment of cause title of TA since D2 was dead and her legal representatives are already on record as defendants 1, 3, 4 and 5, there was no abatement.

10. Even though the applicant bank has stated that D2 to D5 stood as guarantors for the loan availed by D1, no document is produced to prove the same. The defendants 2 to 5 had only executed the mortgage deed. Hence, the liability of D2 to D5 is limited to the extent of mortgage and is limited to mortgaged property.

11. Since the TA claim is arrived at by calculating interest with default interest and that the facilities are availed in respect of Agricultural Loan the pendent lite and future interest is awarded at simple rate that too at reduced rate of 6% p.a. (simple).

12. In view of the above i) TA No.456 of 2017 stands allowed. ii) Applicant is permitted to recover an amount of

(a) Rs.1,32,235/- in Kissan Credit Card Loan A/c. together with interest @6% p.a. (simple) from the date of application till the date of realization from the 1st defendant (b)Rs.2,97,503/- in Construction of Farm House Loan A/c. together with interest @6% p.a. (simple) from the date of application till the date of realization from the defendants 1, 3 to 5 jointly and severally and also by proceeding against schedule property

(c) Rs.11,48,260.47 in Farm Machinery Loan A/c. together with interest @6% p.a. (simple) from the date of application till the date of realisation from the defendants 1, 3 to 5 jointly, and severally and by proceeding against schedule property totaling Rs.15,77,998/- (Rupees Fifteen Lakhs Seventy Seven Thousands Nine Hundred and Ninety Eight only) 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 the schedule mentioned mortgaged properties in respect of the amounts due in Construction of Farm House Loan A/c. & Farm Machinery Loan A/c. and the schedule mentioned hypothecated properties in respect of the amounts due all the loan accounts. The schedule to the TA to be the schedule to the Recovery Certificate. iii) If the sale proceeds are not sufficient to clear the liability, then the 1st Defendant is personally and his other assets are liable to be proceeded against for realization of respective dues. iv) A Recovery Certificate is to be drawn and issued to the Recovery Officer to enable recovery of the dues as per the above terms. v) Interim application pending, if any, stands disposed of in terms of this final order. vi) Applicant is allowed to realize cost of the proceeding for which cost memo is to be filed in 7 days’ time from the date of receipt of the copy of the order.

13. 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 PS, transcribed by him corrected and pronounced by me in the open Court on this the 19th day of September,

Sd./- (T. RAJESH) PRESIDING OFFICER

Applicant Witness:

AW1 –Mr.Shivaraj Kumar Arikatti, Manager, Applicant Bank. Exhibits on the part of the Applicant:

Ext A1

- Evidence Affidavit. Ext A2

- List of documents. Ext A3

- Copy of application-cum-appraisal form for Kisan Credit

Card scheme by D1 dt.18.08.2007. Ext A4

- Copy of the Agreement cum deed of hypothecation for

for Kisan Credit Card dt.18.08.2007. Ext A5

- Copy of application form for Construction of farm house

loan. Ext A6

- Copy of the Agreement cum deed of hypothecation for

for construction of farm house loan dt.24.06.2008. Exts. A7 & A8

- Copies of the mortgage deed along with the

Encumbrance Certificate dt.19.06.2008. Ext A9

- Copy of application form for Farm Machinery Loan

dt.11.05.2019. Ext A10

- Copy of the memorandum of agreement for

Agricultural loans dt.11.05.2009. Ext A11

- Copies of the mortgage deed dt.07.05.2009. Ext A12

- Copy of the Insurance Policy pertaining to the Tractor

as well as Trailer reflecting the hypothecation issued by

United India Insurance Company Limited. Exts. A13 to A15 - Copies of the letter of revivals dt.13.10.2012,

02.05.2014 and 12.10.2013. Exts. A16 to A18 - Copies of the statement of accounts. Exts. A19 to A25 - Copy of the notice dt.26.11.2012 & 09.09.2014 along

with Postal receipt and several postal

acknowledgements.

Witness Examined for the Defendants:

NIL

List of Documents Exhibited for the Defendants :

NIL

Sd./- (T. RAJESH)

PRESIDING OFFICER