PRAGATHI KRISHNA GRAMIN BANK vs MR. ASHOK YDAVA AND ANR. on 29 September 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 due for seeking issuance of Recovery Certificate against the defendants for Rs.29,71,383/- (Rupees Twenty Nine Lakh Seventy One Thousand Three Hundred Eighty Three only), due in an pledge loan/warehouse loan of Rs.20,00,000/- alleged to have been availed by the defendants from erstwhile Pragati Gramin Bank, which later got amalgamated with the applicant bank.

2. It is the case of the applicant bank that, the above-mentioned credit facility for Rs.19,90,000/- was availed by the defendants by pledging 2850 bags of JJL Sona Paddy stored in a godown situated in Schedule ‘A’ property. It is also contended that the apart from the execution of the loan documents, pledged over the paddy of 2850 bags is created. It is also contended that 1st defendant had also agreed to offer ‘B’ schedule property as a collateral security to the said facility.

3. It is the case of the applicant bank that, despite availing the facility, agreeing to fulfill their commitment to repay the same without default, the defendants failed to repay the same forcing the applicant to sell off the stock of paddy and credit the sale proceeds to the loan account. In view of the above scenario the applicant seeks for issuance of the Recovery Certificate for the amount outstanding in the loan account to allow the same to be recovered by proceeding against the defendant and also against the schedule ‘B’ property.

4. Summons were taken out, the defendant No.1 has filed written statement, admitting the availment of the facility and also the case of the applicant as to the pledging of the 2850 bags of JJL Sona Paddy. In respect of the sale of the paddy, it is contended that the sale is conducted in collusion with the commission agent in an improper manner. The defendant had also produced the Assessed Marked value filed for the particular period. It is also case of the 1st defendant that, the particulars of the sale of paddy and realization of the paddy is not disclosed to the defendant, despite, the defendant approaching the applicant necessary applications. The 1st defendant is also disputing the rate of interest charged and also contends that if the price of the paddy is to be calculated at the rate which according to the applicant prevailing at the time an amount of Rs.2,96,854/- is refundable from the applicant bank to the 1st defendant. In the written statement, the defendant had also put forth a prayer for direction to the applicant bank to refund the so claimed excess amount of Rs.2,96,854/- to the 1st defendant.

5. The 2nd defendant has filed the written statement inter alia contending that, the application filed by the applicant bank is far away from the truth and the same is to be dismissed on that ground, rest of the contention of the written statement of the 2nd defendant is verbatim reproduction that has been put forth by the 1st defendant in his written statement.

6. The applicant had let in their evidence by filing their Proof Affidavit reiterating the contention of the TA and producing the loan documents which got marked as Exhibits A3 to A14. The defendants also filed their defense evidence by filing their respective proof of affidavit in terms of the contention taken in the written statement.

7. Heard the applicant, despite granting sufficient adjournments there is no representation for the defendants continuously and hence the defendants’ side taken as heard.

8. The following issues arise for consideration in this matter: i) Whether the applicant had proved their claim based on the documents they relied upon and produced in the TA? ii) Whether the defendants case that the pledged paddy were sold in price too low in relation to the availing marked price at that time and thereby causing any damage to the defendants is to be accepted?

iii) What order are to be passed? Since all these issues are interrelated, the same are gone into and decided together.

9. The applicant had produced the loan documents which evidences the disbursement of the credit facility in lieu of the security of paddy of 2850 bags of JJL Sona paddy. Even otherwise, the defendants herein does not dispute any of the loan documents and the case of the applicant as to be pledge of 2850 bags of paddy. The only contention by the defendants is that the paddy was sold at a low price and to substantiate the above contention the defendants have produced the assessed marked value of the paddy for the relevant period issued by the Agricultural produce market committee. Apart from filing a proof affidavit in lieu of the contention taken in the written statement no steps were taken by the defendants to bring on record anything about the nature and the grade of 2850 bags of paddy sold by the bank in distress. The assessed marked value can have bearing only if 2850 bags of paddy which was pledged with the applicant bank is of the same quality. It is to be noted that, in the present case, the bank was forced to sell the pledged item only as the defendants failed to make the repayment as agreed upon. Had there been the paddy is a good quality, it is beyond doubt that the defendants would come forward sell it and pay back to the applicant bank. In the absence of any evidence as to the quality of the paddy which the bank had sold in distress, this Tribunal is of the view that, the case of the defendant that, the defendant as to the market value of the paddy at the relevant period is having no bearing as to the facts of the case and cannot be accepted as the basis for disallowing the case of the applicant.

10. In contra, the applicant had let in evidence in terms of the OA claim and had produced the statement of accounts, is clear that the amount realized by selling the paddy properly given credited. Having failed in raising their little finger when the bank was attempting to sell the pledged articles, which admittedly is kept not in the bank premises, the defendants cannot turn back and say that the bank had illegally and clandestinely sold the pledged articles, which too lower price. This Tribunal cannot lost it sight to the fact that despite creating security by pledging over the paddy, the defendant had not made any bonafide attempt to sell of the paddy and pay back the amount.

11. In view of the admission from the part of the defendant about the availment of the facility and creation of mortgage as well as pledge over the paddy and the documents produced in evidence by the applicant, this Tribunal of the view that the applicant had successfully proved the case as put forth in the TA. In respect of the written statement filed by the defendant, it is seen that despite raising a contention that they are entitled for refund of Rs.2,96,854/- from the applicant bank, no proper counter claim or set off is raised by paying the sufficient fee, which itself evidences that the said defense is taken without any bonafides. In view of the above this Tribunal is the opinion that the applicant is entitled to get the TA allowed in their favour, as they had proved the disbursement of the facility, defaults occurred in the loan account and the liability of the defendants to pay the amount. However, in view of the fact that, the facilities are availed against the pledge of paddy apart from other security and the TA relates to 2012, this Tribunal is of the view that, the pendentalite and future interest has to be awarded at the rate of 6.00% p.a. (simple).

12. 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.

13. In the result, TA.No.1586/2017 stands allowed,

i) The applicant is allowed to recovery an aggregate sum of Rs.29,71,383/- (Rupees Twenty Nine Lakh Seventy One Thousand Three Hundred Eighty Three only) with further interest of 6.00% p.a.(simple) from the date of filing OA till the realization from defendants, after giving credit to all the amount recovered and received during the pendency of the OA and allowed the same to be recovered by proceeding against schedule properties. The schedule properties to the OA be the schedule properties 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 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 proceeding 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 29th Day of September 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 A3 Loan application dated 20.05.2009 A4 Sanction memorandum dated 20.05.2009 A5 Pronote dated 20.05.2009 for Rs.19,90,000/- with a Take Delivery letter to DPN A6 Produce loan agreement (General) dated 31.05.2009 A7 letter of Co-obligation dated 20.05.2009 A8 letter of pledge dated 20.05.2009 A9 Simple mortgage deed dated 15.09.2010 A10 Godown/Building on Lease Agreement dated 20.05.2009

A11 RTC of Sy.No.40 of Kardakal Village A12 Translated copy of RTC of Sy.No.40 A13 Demand notice dated 19.08.2011 A13 Translated copy of Demand notice dated 19.08.2011 A14 Certified account extract

Sd/- (T. RAJESH) PRESIDING OFFICER