Allowed

State Bank of India v. M/s Gavrans Infra

DRT10 Nov 2025OA/208/2022

Case brief

AI extract

What is this about?

This Tribunal allowed an original application filed by State Bank of India for recovery of Rs.39,70,994.47p consisting of principal, interest, and penal interest from M/s Gavrans Infra and M/s G. Benhur for defaults in cash credit and term loan facilities.

What did the court decide?

Direction to defendants to jointly/severally pay Rs.39,70,994.47p with interest and leave to sell mortgaged/ hypothecated properties for realization.

State Bank of India versus M/s Gavrans Infra — Banking and Recovery | DRT (2025)

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OA No. 208/2022

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 10^TH DAY OF NOVEMBER, 2025 PRESENT: SEEMA SINHA,

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

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OA No.208/2022

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Between

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

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---Applicant Bank

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And

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M/s Gavrans Infra, Prop. G. Benhur, S/o R. George, 13/57, East street, Keezha Asaripallam, Nagercoil – 629 201.

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G. Benhur, S/o R. George, 13/57, East street, Keezha Asaripallam, Nagercoil – 629 201. ---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. 208/2022

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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 21.10.2021 to recover from the Defendants a sum of Rs.3970994.47p i.e., (i) Rs.35,68,094.95p together with interest at the rate of 9.25%p.a. compounded with monthly rests plus penal interest at the rate of 2%p.a. in respect of Cash Credit Facility and (ii) Rs.4,02,899.52p together with interest at the rate of 9.25%p.a. compounded with monthly rests plus penal interest at the rate of 2%p.a. in respect of funded interest Term 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 1^st Defendant herein is the Proprietary concern represented by it Proprietor the 2^nd Defendant herein. The 1^st Defendant is doing Contract Business in the nature of Civil Constructions. The 2^nd Defendant herein is a Civil Engineering Contractor. For doing the said business the 1^st Defendant through its Proprietor the 2^nd Defendant approached the Applicant Bank for availing the following facilities:

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(i) Cash Credit Facility (CC) vide Loan Account No.67380088326

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(ii) Funded Interest Term Loan (FITL) vide Loan Account Number 39608323616.

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Cash Credit Facility (CC)

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The 1^st Defendant through its Proprietor the 2^nd Defendant herein submitted an application for availing a Cash Credit Facility to the Applicant Bank for a sum of Rs.35,00,000/- and applied for Bank Guarantee to the tune of Rs.30,00,000/-. The request of the 2^nd Defendant was accepted by the Applicant Bank and the same was sanctioned on 27.10.2016. The interest for the Cash Credit Facility availed by the 1^st Defendant through its Proprietor the 2^nd Defendant is 12.60% per annum. The Defendants also agreed to pay the revised rate of interest if any as fixed by the Applicant Bank and the other Penal Interest as agreed in case of default in payment of the dues outstanding.

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Page 2 of 9

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OA No. 208/2022

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The Defendant executed a Hypothecation Cum Working Capital Agreement in favour of the Applicant Bank on 21.10.2016. As a security for availing the Cash Credit Facility, the 2^nd Defendant executed a Registered Memorandum of Deposit of Title Deeds dated 21.11.2016 Registered before the Sub Registrar - Selaiyur and thereby created a Equitable Mortgage with the Applicant Bank in respect of the Schedule Mentioned Property.

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The said Cash Credit Facility availed by the 1^st Defendant through its Proprietor was enhanced from Rs.35,00,000/-to Rs.50,00,000/- at the request made by the 1^st Defendant through its Proprietor and the same was confirmed by the Applicant Bank through its Sanction Confirmation letter dated 25.01.2018. The 2^nd Defendant executed a Letter of Confirmation for Creation of Mortgage by Deposit of Title Deeds in favour of the Applicant Bank dated 01.02.2018. Through the said Letter of Confirmation the 2^nd Defendant confirmed that the Property Mortgaged shall stand as security for all the other liabilities and indebtness for the Past, Present and future with the Applicant Bank and he also confirm that the said property mortgaged shall subsist and continue notwithstanding the sanction of new loans, Credit Facilities and account coming into credit or inter changeability of limits or Cancellation of limits with the Applicant Bank.. A letter of Arrangement was signed by the 1^st and 2^nd Defendant for the enhanced Cash Credit Facility along with the Terms and Conditions. The interest for the said enhanced facility is 9.25%p.a. The Defendants agreed to pay the revised rate of interest as when the Applicant Bank revises the same. The Defendants also agreed to pay the Penal interest in case of default in payment.

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The 2nd Defendant executed a Letter of Confirmation for Extension of Mortgage by Deposit of Title Deeds Covering enhanced Limits on 02.02.2018 and thereby extended the Mortgage already existing with the Applicant Bank to the enhanced Cash Credit facility. The 1^st and 2^nd Defendant also executed a Supplemental Agreement of Loan Cum Hypothecation in favour of the Applicant Bank.

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Funded Interest Term Loan Facility (FITL)

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The Defendants are a chronic Defaulters defaulted the Principal Amount through the Cash Credit Facility availed from the Applicant Bank and the interest towards the said Loan Account. As per the Directions of the Reserve Bank of India in respect of COVID 19 restructuring of the account with the Applicant Bank and in order to enable the Defendants in repaying the outstanding in the said facility and to regularize their accounts, the Applicant Bank proposed to transfer the interest accrued in the said facility

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OA No. 208/2022

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as a Funded Interest Term Loan on 01.09.2020 and the same was accepted by the Defendants. The unpaid interest amount to the tune of Rs.4,02,899/was debited from the Defendants Cash Credit Facility Loan Account and the same is Credited to their FITL loan facility on 01.09.2020. The rate of interest for the said facility is 9.25%p.a.

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The Defendant is a Chronic Defaulter, Defaulted in repaying the Principal as well as interest toward the facility availed and failed to service the same. The account became irregular for Non-Payment of interest in cash Credit Account and the same became Non Performing Asset on 23.08.2020. The Applicant Bank for the recovery of the outstanding towards the said Cash Credit Facilities intended to initiate proceedings under SARFAESI Act. On pursuant to the same a Demand Notice under Section 13(2) of the said Act was issued to the Defendants on 09.09.2020 followed by the same a Possession Notice under Section 13(4) of the said Act was issued to the Defendants on 10.12.2020. Challenging the Possession Notice dated 10.12.2020 the Defendants preferred a Application under Section 17 of the SARFAESI Act in SA.No.48 of 2021 before this Hon'ble Tribunal. Along with the said Application the Applicant preferred an application to stay further proceedings of the notice issue under Section 13(4) of the Act. Though and order of Interim Stay was granted by this Hon'ble Tribunal with certain conditions, the conditional order was not complied by the Defendants and the Interim Stay granted was automatically stands vacated for non compliance of the said conditional order.

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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.

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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.39,70,994.47p i.e., (i) Rs.35,68,094.95p together with interest at the rate of 9.25%p.a. compounded with monthly rests plus penal interest at the rate of 2%p.a. in respect of Cash Credit Facility and (ii) Rs.4,02,899.52p together with interest at the rate of 9.25%p.a. compounded with monthly rests plus penal interest at the rate of 2%p.a. in respect of funded interest Term 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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OA No. 208/2022

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S. No.	Date	Description of document	Exhibits
1.	07.09.2009	Sale Deed in favour of the 2^ndDefendant vide Document No.5331 of 2009	Ex.No.A-01
2.	03.10.2012	Sale Deed executed by G.Benhur in favour of Christoper Susilraj vide Document No. 7593 of 2012	Ex.No.A-02
3.	27.10.2016	Sanction Letter for the grant of Cash for a sumof Credit Facility RS.35,00,000/- and Bank Guarantee for a sum of RS.30,00,000/- to the Defendants along with Hypothecation Cum Working Capital Agreement executed by the 1^stand 2^ndDefendants in favour of the Applicant Bank	Ex.No.A-03
4.	21.11.2016	Registered Memorandum of Deposited of Title Deeds executed by the 2^ndDefendant in favouroftheApplicantBank	Ex.No.A-04
5.	25.01.2018	Sanction Confirmation given by the Applicant Bank.01.02.2018	Ex.No.A-05
6.	01.02.2018	Letter of Confirmation for creation of Mortgage byDeposit of TitleDeeds	Ex.No.A-06
7.	02.02.2018	Letter of Confirmation for Extension of Mortgage by Deposit of Title Deed covering enhanced limits executed by the 2nd Defendant in favour of the Applicant Bank	Ex.No.A-07
8.	02.02.2018	Letter of Arrangement signed by the Defendants along with Supplemental Agreement Hypothecation of Loan executed Cum by the Defendants in favour of the Applicant Bank	Ex.No.A-08
9.	12.10.2021	Statement of Account for the Cash Credit Facility Defendants no..67380088326 availed in bythe Account	Ex.No.A-09
10.	12.10.2021	Statement of Account for the Funded Interest Term Loan availed by the Defendants No. 39608323616. in Account	Ex.No.A-10
11.	25.01.2016	Encumbrance Certificate	Ex.No.A-11

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DESCRIPTION OF PROPERTIES

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SCHEDULE - "A"

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Book debts, outstanding, moneys receivables, claims and bills due and owing to the Defendants in the name of the Defendants.

Page 5 of 9

OA No. 208/2022

SCHEDULE - "B"

(Total Property)

All the piece and parcel of Vacant House Site bearing Southern Portion of Plot No.3, measuring an extent of 600 Square Feet, comprised in S.No.370/9A and 370/9B, Patta No.3279, as per Sub-Division S.No.370/24A, Situated at No.39 Vengaivasal Village, Sholinganallur Taluk, Kanchipuram District

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The Building Planning Permit No.1951/10, Lr.No.6867/10, dated 22.10.2010, Commissioner, St. Thomas Mount Panchayat Union @ Chitlapakkam, Chennai - 600064/ Member Secretary, C.M.D.A. 18.10.2010 Ρ.Ρ.Α.No.1951/2010, President, Vengaivasal Panchayath, Chennai-600073

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Bounded on the: (for Undivided 1200 Sq feet)

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North	- Plot No.3 (Part)
South	- 20 Feet Road
East	- 24 Feet Road
West	- Plot No.4

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Measured on the:

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North	- 48 Feet
South	- 48 Feet
East	- 25 Feet
West	- 25 Feet

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The above property is situated within St. Thomas Mount Panchayat Union Limits and within the Registration District of Chennai South and Registration Sub-District of Solaiyur.

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(Property Conveyed)

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600 Square Feet (55.76 Square Meter) Undivided Share of Land out of above stated Total Property.

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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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OA No. 208/2022

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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. A. VijayaKumar, who is the Chief Manager of the Applicant Bank.

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He has stated in his affidavit that the defendants has availed Cash Credit Facility and Funded Interest Term 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-11 in support of its claim in the OA.

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The Sale Deed in favour of the 2^nd Defendant vide Document No.5331 of 2009 has been marked as Ex.No.A-01, Sale Deed executed by G.Benhur in favour of Christoper Susilraj vide Document No. 7593 of 2012 has been marked as Ex.No.A-02, Sanction Letter for the grant of Cash for a sumof Credit Facility RS.35,00,000/- and Bank Guarantee for a sum of RS.30,00,000/- to the Defendants along with Hypothecation Cum Working Capital Agreement executed by the 1st and 2nd Defendants in favour of the Applicant Bank has been marked as Ex.No.A-03, Registered Memorandum of Deposited of Title Deeds executed by the 2^nd Defendant in favour of the Applicant Bank has been marked as Ex.No.A-04, Sanction Confirmation given by the Applicant Bank. 01.02.2018 has been marked as Ex.No.A-05, Letter of Confirmation for creation of Mortgage by Deposit of Title Deeds has been marked as Ex.No.A-06, Letter of Confirmation for Extension of Mortgage by Deposit of Title Deed covering enhanced limits executed by the 2^nd Defendant in favour of the Applicant Bank has been marked as Ex.No.A-07, Letter of Arrangement signed by the Defendants along with Supplemental Agreement Hypothecation of Loan executed Cum by the Defendants in favour of the Applicant Bank has been marked as Ex.No.A-08, Statement of Account for the Cash Credit Facility Defendants no..67380088326 availed in by the Account has been marked as Ex.No.A09, Statement of Account for the Funded Interest Term Loan availed by the Defendants No. 39608323616. in Account has been marked as Ex.No.A-10, Encumbrance Certificate has been marked as Ex.No.A-11. 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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OA No. 208/2022

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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.3970994.47p i.e., (i) Rs.35,68,094.95p together with interest at the rate of 9.25%p.a. with half yearly rests in respect of Cash Credit Facility and (ii) Rs.4,02,899.52p together with interest at the rate of 9.25%p.a. with half yearly rests in respect of funded interest Term Loan 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 sum of Rs.3970994.47p i.e., (i) Rs.35,68,094.95p together with interest at the rate of 9.25%p.a. with half yearly rests in respect of Cash Credit Facility and (ii) Rs.4,02,899.52p together with interest at the rate of 9.25%p.a. with half yearly rests in respect of funded interest Term 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

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OA No. 208/2022

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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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(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 Cash Credit facility and Funded Interest Term 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 10^th November, 2025.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 21.11.2025

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State Bank of India v. M/s Gavrans Infra

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/s Gavrans Infra

Case brief

What is this about?

What did the court decide?

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