Appeal against DRT order denying interest. Tribunal held loan was for existing flat, not construction, and sale price fault finding was incorrect. Bank entitled to interest.
Order setting aside denial of interest modified; bank entitled to 9.35% p.a. from OA filing till 28.8.2020, 6% thereafter.
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IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI
Dated the 11th day of December, 2024
PRESENT: HON’BLE MR. JUSTICE G. CHANDRASEKHARAN CHAIRPERSON
RA 41/2022
(arising out of OA 150/2017 on the file of DRT-III, Chennai)
Between
State Bank of India, Retail Assets Central Processing Centre, Rep. by its Asst. General Manager, New No.4/952 & 4/952A, 3rd Floor, Rajiv Gandhi Salai, Perungudi, Chennai 600 096. Presently migrated to SARB, Rep. by its City Case Officer, Montieth Road, Egmore, Chennai 8. And Mr. S. Suresh Kumar, S/o Mr. Sriramulu, 10/22, VelleswaranThottam, 1st Street, R.K. Nagar, Chennai 600 028.
…..Appellant
…..Respondent
Counsel for appellant bank : M/s M.L. Ganesh & S. Arun Kumar Counsel for Respondent : None.
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ORDER
with monthly rests from the date of filing of OA till the date of realization and costs.
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rate of 9.35% p.a. from the date of filing of the OA till the date of realization of the amount. The reason is stated in paragraph 7 of the order that there is no pleading by the bank with regard to disbursal of loan vis-a-vis the stage of construction of apartment. It is only stated that Rs.30.00 lakhs was realized by sale of mortgaged house property when the bank has funded an amount Rs.48.22 lakhs and filed OA for recovery of Rs.51,15,180.21p, that bank could not establish its actions for sale of mortgaged property at much lesser price than the amount sanctioned. Therefore, the Tribunal did not grant any further interest on the balance amount and said observation is absolutely incorrect.
loan was advanced for a sum Rs.48,22,000/- for purchase of a flat and mortgage
by deposit of title deed was created over the flat admeasuring 1025 sq.ft. It is
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specifically mentioned in the application that respondent availed housing loan from applicant bank and executed loan security documents for the outstanding due payable and created equitable mortgage by way of deposit of title deeds on 16.10.2025.
of loan availed, mortgage created, rate of interest on the loan amount, etc.
lakhs is not correct and denial of interest on this ground is not legal. Therefore,
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this Tribunal is of the view that Appellant bank is entitled for an interest at 9.35% p.a. with monthly rests on Rs.21,15,180.21p from the date of application till date of the order i.e., 28.8.2020 and at 6% p.a. (simple) from the date of the order i.e., from 28.8.2020 till recovery of the amount. The order of the Ld. Presiding Officer with regard to denial of interest is set aside and modified as above.
the date of the order i.e., 28.8.2020 and at 6% p.a. (Simple) from the date of the
order till date of realization of the amount.
[Dictated to Steno(SN), transcribed by him, corrected, signed and pronounced by me in open court, this 11th December, 2024)
Sd/-
(JUSTICE G. CHANDRASEKHARAN) CHAIRPERSON
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2 issues framed by the court
Whether the appellant bank is entitled to interest at the contractual rate on the outstanding balance while it stood in possession of the mortgaged property under SARFAESI Act.
Whether the debt recovery tribunal's observation regarding lack of pleading regarding disbursement vis-a-vis construction stage was correct given the loan was for purchase of an existing flat.
2 provisions across 1 enactments
State Bank of India
S. Suresh Kumar
G. Chadrasekharan
As recorded by the court registry
25 orders share this CNR
Judgements on the same questions, provisions and authorities, from every court
