Allowed

State Bank of India v. Eswaramurthy

DRT17 Dec 2025OA/125/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the Original Application filed by State Bank of India. The Tribunal confirmed the loan documents, default status, and security deposit of title deeds. It ordered the recovery of the principal amount along with interest, including a specific direction on the treatment of penal interest. A sale of mortgaged properties was authorised in case of default.

What did the court decide?

Directing respondents to pay total sum of Rs.31,51,261/- including interest and costs. Authorising sale of mortgaged properties if default persists.

State Bank of India versus Eswaramurthy — Contract and Commercial Disputes | DRT (2025)

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OA No. 125/2023

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 17^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.125/2023

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Between

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State Bank of India, Stressed Assets Recovery Branch, 1^st Floor, No.8, Dr. Ambedkar Road, Madurai - 625 020, Rep. By its Branch Manager.

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---Applicant Bank

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And

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Mr. Eswaramurthy,

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S/o Paramasivan,

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239, Kamarajapuram,

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Tirupur Road, Dharapuram-638656,

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Tiruppur District.

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Mr. P. Ravichandran, S/o Paramasivam, 239, Kamarajapuram, Tirupur Road, Dharapuram - 638656, Tiruppur District. ---Defendants

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Counsel for the Applicant Bank : M/s P. Pethu Rajesh

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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

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OA No. 125/2023

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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 08.12.2022 to recover from the Defendants a total sum of Rs.31,51,261/i.e. (i) Rs.30,56,252/- together with interest at the rate of 7.90% p.a. with penal interest at the rate of 2%p.a. in respect of Home Loan (ii) Rs.95,009/- together with interest at the rate of 7.90% p.a. with penal interest at the rate of 2%p.a. in respect of funding of Home Loan Insurance cover 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 Defendants herein applied for Home Loan from the State Bank of India, Palani Branch, Palani. The request of the Defendants were accepted and a Hoam Loan to the tune of Rs.23,50,000-/- was sanctioned to the Defendants on 19.06.2017 and the Loan Account Number is 36982734914. At the time of availing the loan facility, the Defendants opted for Insurance premium and hence along with the said loan amount, a fresh loan towards Funding of Home Loan Insurance Cover was granted to the Defendants for a sum of Rs.76,500/-. The total loan amount (Home Loan + SBI Life Premium) come to Rs.24,26,500-/-. Both the facilities availed is a term loan. The said facilities were granted by the State Bank of India, Palani Branch, Palani..

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In this regard an Arrangement Letter was executed on 19.06.2017 by the defendants. The rate of interest at the time of availing the said facility is 8.4% with the penal interest of 2% in case if there is any default in repayment of principal and interest as agreed. The monthly installment agreed to repay is Rs. 18,789-/- and the repayment commences from 19.08.2017. Along with the Arrangement Letter, the Defendants also agreed to execute a Memorandum of Loan Agreement for Home Loan Grante to the Public on 19.06.2017 and agreed for the terms and conditions imposed on the same. On the same day the Defendants executed an undertaking affidavit and undertook for the terms and conditions stated in it.

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As a security for the said facilities availed, the 1^st Defendant executed a Registered Memorandum of Deposit of Title Deeds dated 24.07.2017 registered before the Sub-Registrar, Dharapuram in Document No.3754 of

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OA No. 125/2023

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2017 and thereby deposited the original title deeds in favour of the Applicant Bank and Mortgage the property mentioned in the schedule. In this regard the 1^st Defendant also executed a letter dated 20.06.2017, to confirm that he had deposited the Title Deed on 19.06.2017. The schedule mentioned property originally belongs to Seibunnisha W/oMuthu Mohammed by an Assignment granted by the Thasidhar, Dharapuram vide his proceedings dated Na.Ka.No.5947/90 Aaa2.

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Later, the said Seibunnisha executed a registered Settlement Deed dated 18.01.2008 in favour of M. Mohammed Shaiha and M. Mohamed Sabiq which came to be registered as a document in Doc.No.190 of 2008 on the file of the Sub-Registrar, Dharapuram. Patta was granted in the name of said M.Mohammed Shaiha and M. Mohamed Sabiq. Later the said M.Mohammed Shaiha and M. Mohamed Sabiq sold the schedule mentioned property in favour of the 1^st Defendant registered Sale Deed dated 16.02.2017, registered as a document in Doc.No.673 of 2017 on the file of the Sub-Registrar, Dharapuram. The Extract taken from Town Survey Field Register Dharapuram Municipality issued by the Commissioner of Dharapuram Municipality would confirm that the possession of the property is with the said Seibunnisha. The 1^st Defendant after purchasing the schedule mentioned property, applied for the plan approval for building construction in the schedule mentioned property on 11.05.2017 and the same was allowed by the Commissioner, Dharapuram Municipality on 11.05.2017.

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After availing the loan, defendants were not regular in the matter of repayment. The defendants made several promises, but they failed to keep up their promises. Despite repeated demands and reminders, made by the Applicant Bank, the Defendants have failed and neglected to repay and adjust their liability. Thus, the accounts became Non Performing Asset on 08.10.2020.

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Left with no other option, State Bank of India, Palani Branch issued a Demand Notice under Section 13(2) of the SARFAESI Act on 30.09.2019 claiming a sum of Rs.27,03,876/- as on 20.09.2019 for both the loan facilities availed by the Defendants. Following the Demand Notice a Possession Notice was issued on 08.01.2020 to the Defendants and the same was published in New Indian Express English News Paper on 14.01.2020 and in Dinamani Tamil News Paper on 14.01.2020. After issuance of the Possession Notice as stated above, the accounts stated above was migrated to the Applicant Bank for the purpose of recovery.

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OA No. 125/2023

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Hence, the Applicant Bank has filed the OA for recovery of a total sum of Rs.31,51,261/- i.e. (i) Rs.30,56,252/- together with interest at the rate of 7.90% p.a. with penal interest at the rate of 2%p.a. in respect of Home Loan (ii) Rs.95,009/- together with interest at the rate of 7.90% p.a. with penal interest at the rate of 2%p.a. in respect of funding of Home Loan Insurance cover 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.	05.06.1990	Schedule mentioned property originally 1 belongs to Seibunnisha W/o. Muthu Mohammed by an Assignment granted by the Thasidhar, Dharapuram vide his proceedings dated Na.Ka.No.5947/90 Aaa2	Ex.No.A-01
2.	18.01.2008	Seibunnisha executed a registered Settlement Deed in favour of M.Mohammed Shaiha and M.Mohamed Sabiq which came to be registered as a document in Doc.No.190 of 2008 on the file of the Sub-Registrar, Dharapuram. Patta was granted in the name of said M.Mohammed Shaiha and M.Mohamed Sabiq	Ex.No.A-02
3.	16.02.2017	M.Mohammed Shaiha and M.Mohamed Sabiq sold the schedule mentioned property in favour of the 1st Defendant - P.Eswaramurthy through a registered Sale Deed, registered as a document in Doc.No.673 of 2017 on the file of the Sub- Registrar, Dharapuram	Ex.No.A-03
4.	27.08.2014	Manai Vari Thoraya Patta stands in the name of Muthu Mohamed	Ex.No.A-04
5.	15.03.2017	The Extract taken from Town Survey Field Register Dharapuram Municipality issued by the Commissioner of Dhrapuram Municipality confirm that the possession of thepropertyis with the said Seibunnisha	Ex.No.A-05
6.	11.05.2017	The 1st Defendant after purchasing the schedule mentioned property, applied for the plan approval for building construction in the schedule mentioned property and the same was allowed by the Commissioner,	Ex.No.A-06

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OA No. 125/2023

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		Dharapuram Municipality
7.	19.06.2017	Arrangement Letter executed by the Defendants in favour of the SBI Branch for HousingLoan	Ex.No.A-07
8.	19.06.2017	Memorandum of Loan Agreement for Home Loan granted to Public executed by the Defendants in favour of the SBI Palani Branch	Ex.No.A-08
9.	19.06.2017	Affidavit of undertaking executed by the Defendants in favour of SBI Palani Branch	Ex.No.A-09
10.	20.06.2017	Letter executed by the 1st Defendant in favour of SBI, Palani Branch confirming the deposite oftitle deed on 19.06.2017	Ex.No.A-10
11.	24.07.2017	Memorandum relating to Deposit of Title Deeds executed by the 1st Defedant in favour of SBI, Palani Branch which came to be registered as a Document in DOC.No.3754 of 2017 on the file of the Sub Registrar, Dharapuram	Ex.No.A-11
12.	07.11.2022	Statement of Account for the Housing Loan in Loan Account No.36982734914	Ex.No.A-12
13.	07.11.2022	Statement of Account in Loan Account Fund of Home Loan No.36982759269 Insurance Cover	Ex.No.A-13

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DESCRIPTION OF PROPERTIES

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SCHEDULE

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Tirupur Registrar, Dharapuram Sub Registration, Dharapuram Taluk, Dharapuram Municipal Revenue Ward No.4, Block No.13, Municipal Election Ward No.1, Kamarajapuram Cross Street - 2, Tax Assessment No.498, Door No.119/e (Old Door No.58) T.S.No.48 p.h.0.01.25.0. (Old T.S.No.48/5/14). In this land measuring 1345 Square Feet (125 Square Meter)

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Bounded by

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East west pathway in the north T.No.No.53 in the South T.S.No.49 in the East T.S.No.47 in the West

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Measuring

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East West 271/2 Feet (8.4m) in the South East West 27½ Feet (8.3m) in the North

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OA No. 125/2023

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South North 41½ Feet (12.6 m) in the West South North 41½ Feet (12.6 m) in the east

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with right in the tiled roofed building built on 700 Square Feet with right in the rooms and vacant space thereon, with right in electric service connection No.361-016-81 and electric meter and its deposit thereon, with right in the bath room, toilet thereon, with right in all the walls around the property thereon, with right in the East West pathway on the Northern Side thereon, with mamool pathway and easmentary rights and other rights thereon as per the document.

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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. C. Abhinav Bothra, who is the Chief Manager of the Applicant Bank.

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He has stated in his affidavit that the defendants has availed Home Loan and funding of Home Loan Insurance cover 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-13 in support of its claim in the OA.

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The Schedule mentioned property originally belongs to Seibunnisha W/o. Muthu Mohammed by an Assignment granted by the Thasidhar, Dharapuram vide his proceedings dated Na.Ka.No.5947/90 Aaa2 has been marked as Ex.No.A-01, Seibunnisha executed a registered Settlement Deed in favour of M.Mohammed Shaiha and M.Mohamed Sabiq which came to be registered as a document in Doc.No.190 of 2008 on the file of the SubRegistrar, Dharapuram. Patta was granted in the name of said M.Mohammed Shaiha and M.Mohamed Sabiq has been marked as Ex.No.A02, M.Mohammed Shaiha and M.Mohamed Sabiq sold the schedule mentioned property in favour of the 1^st Defendant - P.Eswaramurthy through a registered Sale Deed, registered as a document in Doc.No.673 of 2017 on the file of the Sub-Registrar, Dharapuram has been marked as Ex.No.A-03, Manai Vari Thoraya Patta stands in the name of Muthu

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OA No. 125/2023

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Mohamed has been marked as Ex.No.A-04, The Extract taken from Town Survey Field Register Dharapuram Municipality issued by the Commissioner of Dhrapuram Municipality confirm that the possession of the property is with the said Seibunnisha has been marked as Ex.No.A-05, The 1st Defendant after purchasing the schedule mentioned property, applied for the plan approval for building construction in the schedule mentioned property and the same was allowed by the Commissioner, Dharapuram Municipality has been marked as Ex.No.A-06, Arrangement Letter executed by the Defendants in favour of the SBI Branch for Housing Loan has been marked as Ex.No.A-07, Memorandum of Loan Agreement for Home Loan granted to Public executed by the Defendants in favour of the SBI Palani Branch has been marked as Ex.No.A-08, Affidavit of undertaking executed by the Defendants in favour of SBI Palani Branch has been marked as Ex.No.A-09, Letter executed by the 1st Defendant in favour of SBI, Palani Branch confirming the deposite of title deed on 19.06.2017 has been marked as Ex.No.A-10.

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The Memorandum relating to Deposit of Title Deeds executed by the 1st Defedant in favour of SBI, Palani Branch which came to be registered as a Document in DOC.No.3754 of 2017 on the file of the Sub Registrar, Dharapuram has been marked as Ex.No.A-11, Statement of Account for the Housing Loan in Loan Account No.36982734914 has been marked as Ex.No.A-12, Statement of Account in Loan Account Fund of Home Loan No.36982759269 Insurance Cover has been marked as Ex.No.A-13. 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,

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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 total sum of Rs.31,51,261/- i.e. (i) Rs.30,56,252/- together with interest at the rate of 7.90% p.a. in respect of Home Loan (ii) Rs.95,009/- together with interest at the rate of 7.90% p.a. in respect of funding of Home Loan Insurance cover from the date of filing of Application till the date of realization with cost. Accordingly, it is hereby

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ORDERED

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(a) That the Defendants are directed to pay jointly/severally a total sum of Rs.31,51,261/- i.e. (i) Rs.30,56,252/- together with interest at the rate of 7.90% p.a. in respect of Home Loan (ii) Rs.95,009/- together with interest at the rate of 7.90% p.a. in respect of funding of Home Loan Insurance cover 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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OA No. 125/2023

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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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(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 Home Loan and funding of Home Loan Insurance cover 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 17^th December, 2025.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 26.12.25

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State Bank of India v. Eswaramurthy

Case brief

What is this about?

What did the court decide?

State Bank of India v. Eswaramurthy

Case brief

What is this about?

What did the court decide?

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