Allowed

Canara Bank v. Moorthy

DRT9 Dec 2025OA/168/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an Original Application filed by Canara Bank for recovery of dues amounting to Rs. 25,83,047.88 along with interest and costs against L. Moorthy, who had defaulted on a home loan sanctioned for a truck. A Recovery Certificate was directed to be issued.

What did the court decide?

Recovery of Principal Rs. 25,83,047.88 along with interest @ 9.30% p.a. and penal interest @ 2% p.a., and costs. Direction to issue Recovery Certificate and liberty to sell respondent's other assets.

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

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O.A. No. 168 of 2022

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09.12.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 09^th day of December, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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ORIGINAL APPLICATION No. 168 of 2022

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Canara Bank, Rep. by its Branch Manager, No. 541/108, Hospital Road, Ethiraj Nagar, Ariyalur, Tamil Nadu – 621 704. ….Applicant -Vs-

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L. Moorthy, Son of Lakshmanan, No. 347, Melatheru, Jaminkolathur, Udayarpalayam Post, Ariyalur – 4. …. Defendant

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Counsels on record / appeared:

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Counsel for Applicant : M/s. P. Chitra Devi

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Defendant was set ex-parte on 03.08.2022

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: - FINAL ORDER - :

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This Original Application is filed on 18.12.2021 by the Applicant

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Bank under Section 19 of Recovery of Debts and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendant for recovery of a total sum of Rs.25,83,047.88p (Rupees Twenty Five Lakhs Eighty Three Thousand Forty Seven and Eighty Eight Paise only) repayable due in respect of Home Loan (Account No. 2627740020520) together with further interest @ 9.30 % p.a. with monthly rests and penal interest @ 2% p.a. from the date of Application till the date of realization in full and

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O.A. No. 168 of 2022

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09.12.2025

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for costs of this Original Application.

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Brief Facts of the case:

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The Applicant submits that the application is filed within the period of limitation as prescribed under Section 24 of the Recovery of Debts and Bankruptcy Act, 1993, and the subject recovery claim falls within the jurisdiction of this Tribunal.

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It is the case of the Applicant Bank that the Defendant had approached the Applicant Bank for loan to augment his transport business in the name of the Defendant during February 2015, seeking sanction of a sum of Rs 24,50,000/- towards purchase of AMW Truck Model 2518 TP ZF,

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and after initial discussion the Defendant shared his status and repayment capacity. Considering the same, the Applicant had sanctioned the loan to the tune of Rs. 24,50,000/- to the Defendant on 12.05.2015.

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It is submitted that the defendant had submitted the following documents with applicant bank at the time of availing the loan:

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i) Work Order issued favouring the Defendant by V.G.S. Transport, Tiruchirapalli, for the period from 05/01/2015 to 31/01/2018;

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ii) Proforma Invoice dated 29/01/2015, issued favouring the Defendant by Apollo Motors, Virudhachalam - 05, for AMW Truck Model 2518 TP ZF;

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iii) Cash Receipt dated 22/01/2015, issued by Apollo Motors,

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O.A. No. 168 of 2022

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09.12.2025

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Puduchisy, favoring the Defendant;

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iv) Aadhar Card of the Defendant;

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v) PAN Card of the Defendant;

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vi) Voter Identity Card of the Defendant;

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vii) House Tax Receipt of the Defendant;

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viii) Family Card of the 2nd Defendant issued by Civil Supplies & Consumer Protection Department;

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ix) Projected balance sheet for the period 2014-2020, as certified by his Chartered Accountant;

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x) Income Tax Return for the Assessment year 2014-2015, of the Defendant;

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xi) Income Tax Memo for the Assessment year 2014-2015 of the Defendant;

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xii) Income Tax Return of the Defendant for the Assessment year 2014-2015;

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xiii) Income & Expenditure Account of the Defendant for the year ending March 2014;

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xiv) Balance Sheet for the year ending March 2014 period of the Defendant;

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xv) Projected Income & Expenditure for the period ending March 2015 shared by the Defendant:

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xvi) Projected balance sheet for the period ending March 2015 shared by the Defendant;

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O.A. No. 168 of 2022

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xvii) Loan Application form (Transport Operators) submitted by the Defendant on 20/02/2015;

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xviii) Letter of Hypothecation dated 26/02/2015, executed by the Defendant;

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xix) Form 29 of the Motor Vehicles Act, executed by the Defendant;

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xx) Form 30 of the Motor Vehicles Act, executed by the Defendant on;

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xxi) Form 35 of the Motor Vehicles Act, executed by the Defendant on;

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xxii) Acknowledgement of the sanction order by the Defendant dated 26/02/2015;

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xxiii) Goods Carriage Permit issued by the Transport Department favouring the Defendant dated 31.03.2015;

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xxiv) Acknowledgment of Debt/Security on 12/05/2017, executed by the Defendant;

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The Applicant Bank further submits that that the Defendant had utilized the above sanctioned loan amount fully, but had committed chronic default in repayment, the loan account had become irregular and consequently was declared as Non-Performing Asset (NPA) on 27.02.2020 in terms of RBI guidelines. The Applicant had issued Recall Notice dated to the Defendant. However, the Defendant did not pay the due amount and failed to regularize the loan account.

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O.A. No. 168 of 2022

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09.12.2025

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It is submitted by the applicant bank that time and again, the applicant bank had drawn the Defendant’ attention to adhere to not only to the terms of the Agreement but also to the Deed of Hypothecation to regularize his loan account, yet the Defendant continued to act in an indifferent manner thereby constraining the Applicant to seize the impugned vehicle i.e., subject matter of loan availed from the Applicant. After following the due process, the Applicant had sold the hypothecated vehicle in a public auction on 02-06-2021 and the hypothecated vehicle could fetch only a sum of Rs. 7,05,000/-, which was duly credited to the borrower’s loan account.

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The Defendant had agreed to pay the interest at 9.30% p.a., as per the loan documents The Applicant Bank has not debited the interest rests from the date of accounts becoming NPA in view of the directions of the RBI, regarding income recognition and assets classifications of loan accounts, under which if an account is running irregular for more than 90 days, it has to be classified as Non-Performing asset. This however does not relieve the Defendant from their liability to pay the principal and interest amount. As per the said stipulations, the present rate of interest payable on the Over Draft facility by the Defendants is 9.30% p.a., together with penal interest of 2%. since they have defaulted in making the loan amount in time. As defendants did not come forward to repay the dues, despite repeated reminders and demands, the present Original

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O.A. No. 168 of 2022

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09.12.2025

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Application (OA) has been filed by the applicant bank for recovery of its dues from the defendant.

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After the filing of the OA, summons was sent to the sole defendant through Registered Post with Acknowledgment Due, which was duly served to the defendant. When OA was taken up on 03.08.2022 even after giving sufficient time, there was no appearance or representation from the defendant. Hence, the defendant was placed ex-parte on 03.08.2022.

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Heard the submissions of Applicant Bank and perused the records.

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To prove the case of the Applicant Bank, Sh. J. Rajkumar, Branch Manager of the Applicant Bank, has filed his Affidavit by way of evidence and same was considered as evidence of AW-1 and list of documents

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came to be marked as Ex. A-1 to A-24 . As the Defendant remained exparte, the OA claim remains unchallenged. There is no contra evidence available on record to repudiate the claim of the Applicant Bank.

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With regard to the amount advanced, the interest applied, the conduct and operations in the account and the default committed, this Tribunal comes to the conclusion that the applicant bank is entitled for a final order on the following terms:

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: O R D E R :

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The OA is allowed with costs,

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O.A. No. 168 of 2022

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09.12.2025

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(a) The applicant bank is allowed to recover from the defendant for recovery of a total sum of Rs.25,83,047.88p (Rupees Twenty Five Lakhs Eighty Three Thousand Forty Seven and Eighty Eight Paise only) repayable due in respect of Home Loan (Account No. 2627740020520) together with further interest @ 9.30 % p.a. with monthly rests and penal interest @ 2% p.a. from the date of Application till the date of realization in full along with costs of this application.

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(b) The applicant bank is at liberty to sell the personal assets of the Defendant (both movable and immovable) to recover the balance dues as required under law for which the Defendant to disclose to the Tribunal particulars of other properties or assets owned by the Defendant.

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(c) The applicant bank shall file the latest memo of calculation of OA amount together with interest, costs etc., to be paid by the Defendant duly considering the amounts, if any, paid by the Defendant and/or amount realized by sale of assets etc., during the intervening period after the filing of the OA, enabling the Registry to prepare Recovery Certificate for the amount to be paid by Defendant to the applicant bank.

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(f) The applicant bank shall file memo of costs within ten days from the date of receipt of this final order.

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(g) Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of the final order.

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O.A. No. 168 of 2022

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09.12.2025

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12. A copy of this order be communicated to the parties concerned.

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Sd/(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

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(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this the 09^th

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day of December, 2025)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sh. J. Rajkumar, Branch Manager representing the Applicant Bank

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Exhibits on the part of the Applicant:

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Sl. No.	Date	Description of Documents	Exhibit No.
1.	05.01.2015	Work Order issued favouring the defendant by V.G.S. Transport, Trichirapalli for the period 05.01.2025 –31.01.2018.	A-1
2.	29.01.2015	Proforma Invoice issued favouring the defendant by Apollo Motors, Virudhachalam – 05 for AMW Truck Model 2518 TP ZF.	A-2
3.	22.01.2025	^{Cash Receipt issued by Apollo Motors,} PUducherry, favouring the defendant	A-3
4.		Aadhar Card of the defendant	A-4
5.		PAN Card of the defendant	A-5
6.		Voter Identity card of the defendant	A-6
7.		Driving License of the defendant	A-7
8.		Family Card issued by the Civil Supplies & Consumer Protection Department, in the name of the defendant	A-8
9.		House Tax Receipt of the defendant	A-9
10.		Projected balance sheet submitted by the defendant for the period 2014- 2020	A-10

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O.A. No. 168 of 2022

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09.12.2025

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		Income Tax Return submitted by the
11.		defendant for the Assessment year 2014-2015	A-11
		Income Tax Memo for the Assessment
12.		year 2014-2015 furnished by the defendant	A-12
13.		Balance Sheet submitted by the defendant for the year ending March 2014	A-13
14.	20.02.2015	Loan Application form (Transport Operators) submitted by the defendant.	A-14
15.	26.02.2015	^{Deed of Hypothecation executed by the} defendant	A-15
16.		Form-29 Motor Vehicles Act, executed by the defendant	A-16
17.		Form-30 Motor Vehicles Act, executed by the defendant	A-17
18.		Form-35 Motor Vehicles Act, executed by the defendant	A-18
19.	26.02.2015	^{Sanction Order acknowledged by the} defendant	A-19
20.	31.03.2015	Goods carriage permit issued by the Transport Department for the impugned vehicle.	A-20
21.	12.05.2017	^{Acknowledgment} of Debt/Security executed by the defendant	A-21
22.	12.10.2021	^{Legal Notice issued by the applicant} bank to the defendants	A-22
23.	--	Acknowledgment Card of the defendant	A-23
	26.02.2015	Statement of accounts of the
24.	to 15.12.2022	defendant’s loan account and Memorandum of Interest	A-24

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Witness Examined for the Defendant

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-Nil-

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List of Documents Exhibited for the Defendant :

-Nil –

:-SCHEDULE-:

-Nil-

Sd/- (S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

Canara Bank v. Moorthy

Case brief

What is this about?

What did the court decide?

Canara Bank v. Moorthy

Case brief

What is this about?

What did the court decide?

What the court decided

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