Allowed

Canara Bank v. a Francis

DRT26 Dec 2025OA/116/2023

Case brief

AI extract

What is this about?

In this Original Application, the Debts Recovery Tribunal allowed Canara Bank's claim for recovery of a housing loan default, finding the claim proved through documents and proof affidavit. The bank is directed to recover the principal sum with interest. The perquisite of capitalizing penal interest was noted as not allowable. The bank is entitled to sell mortgaged properties.

What did the court decide?

Direct recovery of Rs.52,09,909/- plus interest at 10.20% p.a. with sale of mortgaged properties for appropriation of proceeds if payment defaults.

Canara Bank versus a Francis — Contract and Commercial Disputes | DRT (2025)

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OA No. 116/2023

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 26^TH DAY OF DECEMBER, 2025 PRESENT: SEEMA SINHA,

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[PR. DISTRICT & SESSIONS JUDGE – Retd] PRESIDING OFFICER

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OA No.116/2023

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Between

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Canara Bank, Retail Assets Hub, H.O, City Towers, #1, Royal Rd, Tiruchirapalli – 620 001. Rep. By its Divisional Manager.

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---Applicant Bank

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And

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Mr. A. Francis,

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S/o Arputham, No.4/146F, Main Road, Manthurai, Lalgudi Taluk, Trichy – 621 703.

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Mrs. Jean Fleming Rose,

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W/o Francis, No.4/146F, Main Road, Manthurai, Lalgudi Taluk, Trichy – 621 703. ---Defendants

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Counsel for the Applicant Bank : M/s C. Deepak, M. Vengatesh,

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M. Chandra Sekar, S. Nowsath Ali.

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Page 1 of 7

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OA No. 116/2023

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This Original Application was heard and fixed for passing final order before me in the presence of the above said Advocate for Applicant Bank and the Defendants having been set ex-parte and upon hearing the arguments of Counsel for Applicant Bank and upon perusing the material available on the records and having stood over for consideration till this day, this Tribunal delivered the following:

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JUDGEMENT

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1 . This Application has been filed under Sec.19 (1) of the "The Recovery of Debts due to Banks and Financial Institutions Act, 1993" now amended as The Recovery of Debts and Bankruptcy Act, 1993 by the Applicant Bank on 12.12.2022 to recover from the Defendants a sum of Rs.52,09,909/together with interest at the rate of 10.20% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Housing Loan from the date of filing of Application till the date of realization with cost and by sale of mortgaged/hypothecated properties, more fully described in Schedules of the application.

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2 . The brief averments of the application filed by the Applicant Bank are as follows:-

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The Defendant approached the Applicant for availing Housing Loan and the applicant had sanctioned the Loan to the tune of Rs.57,70,000/- as Housing Loan on 30.5.2014 with the Rate of Interest fixed at 11.45% of Repayment EMI in Rs.67,222/- X 180 EMIS (180 - 3months). During the repayment holiday period the interest to be recovered as when due.

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In consideration of loan facilities the defendant had executed the Housing Loan Agreement on 30.5.2014 and the 2^nd defendant had executed a Guarantee Covering Letter along with Guarantee Agreement and agreed to be the guarantor for the loan availed by 1^st Defendant and the 1^st defendant had executed the Registered Memorandum of Deposit of Title Deeds Doc No. 2026/2014 on 7.8.2014.

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After receiving the loan amount, the Defendants was not regular in repaying the loan and consequently defaulted in repayment as promised to the Applicant. The Applicant was insisting for repayment of loan amount and Defendants have been giving one reason or other to evade from repaying and the Loan has become NPA on 30.12.2021. The defendant did not adhere to the terms of repayment despite demands. In spite of several demands made by the Applicant, the defendant failed and neglected to settle the amount.

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Page 2 of 7

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OA No. 116/2023

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The defendant did not adhere to the terms of repayment. The defendant has executed the Memorandum of Deposit of Title Deeds in favor of the Applicant in the year 2014 and thereby acknowledged their liability due and payable to the Applicant. The defendants made several promises, but they failed to keep up their promises.

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Despite repeated demands and reminders, made by the Applicant Bank, the Defendants have failed and neglected to repay and adjust their liability. Hence, the Applicant Bank has filed the OA for recovery of a sum of Rs.52,09,909/- together with interest at the rate of 10.20% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Housing Loan from the date of filing of Application till the date of realization with cost.

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The Applicant Bank has submitted the following documents in support its claim in the OA, which are as follows:

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S. No.	Date		Description of document	Exhibits
1.	30.05.2014	Sanction		Ex.No.A-01
2.	30.05.2014	HousingLo	an Agreement	Ex.No.A-02
3.	30.05.2014	Guarantee Guarantee	Covering Letter along with Agreement of Jean FlemingRose	Ex.No.A-03
4.	22.07.2014	Registered Mr.A.Franc	Sale Deed in favour of is Doc No. 1981/2014	Ex.No.A-04
5.	07.08.2014	Registered Deeds Doc	Memorandum of Deposit of Title No.2026/2014	Ex.No.A-05
6.	---	Statement applicant conduct of	Accounts of Maintained by the bank in regular course and business	Ex.No.A-06

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"A" SCHEDULE-MORTGAGED PROPERTIES

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Item No.1

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Tiruchirapalli District - Srirangam Sub. Regn. District - Srirangam Taluk Melur Revenue Village - Srirangam Municipal Ward 1 Block 39 T.S.No. 1294 Total extent Ac.17-28 Cents - In this - T.S.No. 1294/1A1 Ac.630 Cents In this Site admeasuring 472 feet east-west on the north, 496 feet north-south on the east, 493 feet east-west on the south and 491 feet northsouth on the west Bounded on the north by common area handed over to the Municipal Corporation in T.S.No. 1294 part, on the east by road handed over to Municipal Corporation in T.S.No. 1294 part, on the south by eastwest Municipal Road in T.S.No.1295 and on the west by Municipal Compost site (now Tahsildar quarters) - Total area-2,38,294 Sq. ft

Page 3 of 7

OA No. 116/2023

Item No.2

In the property described in Schedule A above, the western portion measuring Acre.2.73-½ Cents or 1.19,147 Sq. ft. Bounded on the north by common area handed over to the Municipal Corporation in T.S.No. 1294 part, on the east by eastern portion of the property retained by the Vendors, on the south by east-west Municipal Road in T.S.No. 1295 and on the west by Municipal Compost site (now Tahsildar quarters).

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Item No.3

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In the property described in Schedule B above, an undivided interest in land of 0.717% equivalent in value to 855 Sq.ft. (79.43 Sq.Mts.) for the tenement sufficient to support Block A, Flat D having a plinth area 1710 Sq.ft., on the Second Floor of the Building "PRIYA'S SUDHARSNA" constructed in the property described in Schedule B above.

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The property lies within the limits of Tiruchirapalli City Corporation in Melur Road.

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3 . On the other hand, Notices were issued to Defendants and since from the beginning of the case, there was no representation on behalf of the Defendants. Hence, Defendants were set ex-parte.

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4. Now the main point for consideration before me is as to whether the Applicant has been able to prove his case on his own leg?

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Having gone through the affidavit of the applicant and the documents filed by them and also considering the submission of the counsel for the Applicant, I find that the Applicant Bank, in order to prove its claim, has filed Proof Affidavit executed by one Mr. T. Balanagarajan, who is the Divisional Manager of the Applicant Bank.

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He has stated in his affidavit that the defendants has availed Housing Loan from the Applicant Bank, but they failed to pay the outstanding loan amount, hence he has filed the case. The applicant bank has also filed the documents given by the defendants at the time of sanctioning the loan amount, which have been marked as exhibits No.A-01 to A-06 in support of its claim in the OA.

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The Sanction has been marked as Ex.No.A-01, Housing Loan Agreement has been marked as Ex.No.A-02, Guarantee Covering Letter

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Page 4 of 7

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OA No. 116/2023

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along with Guarantee Agreement of Jean Fleming Rose has been marked as Ex.No.A-03, Registered Sale Deed in favour of Mr.A.Francis Doc No. 1981/2014 has been marked as Ex.No.A-04, Registered Memorandum of Deposit of Title Deeds Doc No. 2026/2014 has been marked as Ex.No.A-05, Statement Accounts of Maintained by the applicant bank in regular course and conduct of business has been marked as Ex.No.A-06. So the averments of the applicant as well as the statement of the pleading have been corroborated by the above mentioned documents.

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As the Defendants remained ex-parte, the claim of the Applicant Bank is neither disproved nor dislodged and goes on record as proved. Accordingly a cumulative analysis of both the Proof Affidavit and documents marked by the Applicant Bank would prove the claim of the Applicant Bank in the OA.

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So far the claim of interest is concerned, it is a well settled Law that the Tribunal has got powers to award pendente lite interest in view of the Judgment of the Hon’ble Supreme Court in N.M. Veerapa Vs Canara Bank (reported in AIR 98(1), 1101 & in Central bank of India Vs Ravindra and OS (AIR, 2001(1), 3095).

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So far the penal interest is concerned Hon'ble supreme court stated in the said judgement as followed " Though interest can be capitalised on the anology that the interest falling due on the accrued date and remaining unpaid, partakes the character of amount advanced on that date, yet penal interest, which is charged by way of penalty for non payment, cannot be capitalized. Further interest, i.e interest on interest, whether simple, compound or penal, cannot be claimed on the amount of penal interest. Penal interest cannot be capitalized. It will be opposed to public policy ".

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Therefore, this Original Application is allowed . The Applicant Bank is entitled for a final order on the following lines:-

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The Applicant Bank is entitled to recover from the Defendants, a sum of Rs.52,09,909/- together with interest at the rate of 10.20% p.a. with half yearly rests in respect of Housing Loan from the date of filing of Application till the date of realization with cost. Accordingly, it is hereby

Page 5 of 7

OA No. 116/2023

ORDERED

(a) That the Defendants are directed to pay jointly/severally a sum of Rs.52,09,909/- together with interest at the rate of 10.20% p.a. with half yearly rests in respect of Housing Loan from the date of filing of Application till the date of realization with cost within one month from the date of receipt of this order.

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(b) In case of default of payment by the above mentioned Defendants, the Applicant Bank is at liberty to sell the movable / immovable properties more fully described in Schedule of the original application for appropriation of sale proceeds towards the satisfaction of amount due to the Applicant Bank.

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(c) If the sale proceeds are not sufficient, after defraying the expenses of such sale, for the payment of all such amounts, the defendants are jointly/severally liable to pay the amount of such deficiency with interest mentioned above until realization.

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(d) Any amount remitted during the course of this proceedings shall be given due credit, to the loan account of the defendants.

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(e) Recovery Certificate be prepared, as per the directions given above, and issue accordingly. A copy of the order is to be communicated to the parties concerned, immediately.

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Page 6 of 7

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OA No. 116/2023

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(f) It is further ordered that the Applicant Bank shall file cost memo within a period of one month from the date of receipt of this order, so as to prepare the recovery certificate with cost for the Housing loan and the Recovery Officer is also directed to proceed with the matter in accordance with law. In case, cost memo is not filed before said period of one month, Recovery Certificate will be prepared with available records.

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Dictated to T.P, taken down, transcribed, typed by her, corrected and pronounced by me in the Open Court in this the 26^th December, 2025.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 05.01.26

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Page 7 of 7

Canara Bank v. a Francis

Case brief

What is this about?

What did the court decide?

Canara Bank v. a Francis

Case brief

What is this about?

What did the court decide?

What the court decided

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