Allowed

M/s. Indian Overseas Bank v. Mr. P. Ragupathy

DRT26 Aug 2025OA/295/2023

Case brief

AI extract

What is this about?

DRT-II Chennai allowed an Original Application filed by a bank for issuance of a Recovery Certificate. The Tribunal found the loan disbursement and default proved, reduced pendency interest to 8% simple, and permitted recovery from the schedule property or defendant's personal assets.

What did the court decide?

Recovery Certificate issued for Rs.53,21,148.84 plus interest @8% per annum simple from filing date; property to be sold if insufficient.

M/s. Indian Overseas Bank versus Mr. P. Ragupathy — Banking and Recovery | DRT (2025)

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IN THE DEBT RECOVERY TRIBUNAL –II CHENNAI

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Dated this 26^th day of August, 2025

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PRESENT: SHRI SHARANG DHAR UPADHYAY

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PRESIDING OFFICER

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OA.No.295 of 2023

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M/s. Indian Overseas Bank Arumbakkam Branch No.1063, E.V.R.Periyar High Road Arumbakkam, Chennai – 600 106 Rep. by Branch Manager

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…Applicant

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Versus

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Mr. P. Ragupathy S/o Palamalai No.A19/17, Thiruvika Square MMDA, A Block, Arumbakkam Chennai – 600 106

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Mrs.Madhar Fathima W/o. P. Ragupathy No.A19/17, Thiruvika Square MMDA, A Block, Arumbakkam Chennai – 600 106 …Defendants

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Counsel on Record / Appeared

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Counsel for Applicant : Mr. N.K.S. Rukmangathan Defendants ex-parte on 08.12.2023

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FINAL ORDER

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The Application is filed under Section 19 (1) of the Recovery of Debts And Bankruptcy Act, 1993 seeking for issuance of a Recovery Certificate for a sum of Rs.53,21,148.84p together with interest @8.15% p.a. with monthly rests plus 2% penal interest from the date of the OA

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till the date of realization and also to recover the said amount by way of

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sale of schedule mentioned property.

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It is the case of the applicant that the defendants approached the applicant bank for financial assistance to the extent of Rs.32,00,000/under Subha Gruha Scheme and the applicant bank considering the said request sanctioned a said sum of Rs.32,00,000/- under Subha Gruha Housing Loan Scheme on 11.02.2016 for purchase of a residential flat more fully described in the schedule to the OA.

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It is also the case of the applicant that the defendants executed the loan and security documents on 16.02.2016. It is the further case of the applicant that the defendants deposited the title deeds of the property with the applicant bank on 20.01.2016 with an intention to create equitable mortgage over the same and confirmed the same by executing Memorandum of Deposit of Title deeds dated 2.5.2016 registered as Doc. No.4765/2016, SRO, Guduvanchery.

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It is the further case of the applicant that the defendants defaulted in repayment and failed to regularize the loan account despite repeated demands and hence the loan account was classified as NPA on 31.03.2018. It is stated that the defendants executed revival letters on 14.02.2019 and 04.02.2022.

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It is also the case of the applicant that the applicant invoked the provisions of SARFAESI Act and issued the demand notice under

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Section 13(2) on 18.05.2018 calling upon the defendants to pay a sum of Rs.39,14,175/- as on 16.05.2018, however, the defendants did not come forward to clear the outstanding dues, hence the present OA is filed for recovery of its dues.

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Summons was taken out to the defendants and the same was returned unserved and hence the defendants were served with notice by way of substituted service by causing paper publication. As there was no representation on behalf of the defendants continuously and on 08.12.2023 the defendants were called absent and placed ex-parte on that day. Applicant Bank filed Proof Affidavit along with 17 documents, which were marked as Ex. A-1 to A-17 on 22.05.2024. The Ld. Counsel for Applicant Bank made his submissions on 07.08.2025 and thereafter the matter stood till this date for passing final orders.

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The following issues arise for consideration in the matter: -

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(a) Whether the applicant had succeeded in proving the liability of the defendants?

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(b) What order as to cost of the proceedings need be passed?

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These issues are considered together.

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Heard the Ld. Counsel for the applicant, perused the OA averments and the record placed before the Tribunal.

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The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-17 along with the proof affidavit. The documents produced in evidence are all found admissible. The proof affidavit of the applicant bank remained unchallenged and rebutted. Therefore, on careful consideration of proof affidavit along with exhibits filed on behalf of the applicant bank, besides the material placed before the Tribunal, the Tribunal is satisfied that the applicant bank has successfully proved the OA claim against the defendants. Further, the statement of accounts in respect of the loan account produced and certified under the Banker’s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendants. It is clear from the statement of accounts that penal interest is not capitalized.

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In view of the foregoing, it is clearly evident that the application filed by the applicant bank is well within the period of limitation and this Tribunal possesses the territorial and pecuniary jurisdiction to entertain this OA.

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In view of the fact that the loan facility availed by the defendants is a housing loan and the applicant has claimed interest at contractual rate till the date of filing of the OA, this Tribunal is of the view that the pendente lite interest can be awarded at reduced rates and prayer for grant of penal interest is rejected.

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In view of the afore mentioned discussions, the only conclusion this Tribunal can draw is that the applicant had clearly proved the disbursement of the loan, which the applicant is entitled to realize. Hence, OA is disposed off in the following manner: -

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(a) OA No.295 of 2023 stands allowed.

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(b) Applicant is permitted to realize an aggregate sum of Rs.53,21,148.84p with further interest @8% per annum (simple) from the date of filing of the application till the date of realization in full, from the defendants jointly and severally after deducting all the amounts received / realized by them during the pendency of OA and also by selling the schedule property and other assets of the defendants.

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(c) If the sale proceeds are not found sufficient to cover the amount due and payable to the Applicant Bank, the defendants are personally liable for all such amounts due as ordered above.

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(d) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 15 days from the date of receipt of the copy of the order.

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

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Communicate a copy of the order to the parties concerned in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

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Sd/- (SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

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(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 26^th day of August, 2025)

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EXHIBITS MARKED BY APPLICANT BANK

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S. No.	Date	Description of documents	Exhibit No.
1.	11.02.2016	Sanction Letter issued by the applicant bank	A-1
2.	16.02.2016	Demand Promissory Note executed by defendants	A-2
3.	16.02.2016	Undertaking Letter by defendants	A-3
4,	16.02.2016	Housing Loan (Term Loan Agreement) executed by defendants	A-4
5.	02.05.2016	Letter regarding Deposit of Title Deeds by defendants	A-5
6.	28.09.2015	Sale Agreement between the vendor and the 1^stdefendant	A-6
7.	23.02.2016	Construction Agreement between M/s Sonex Builders with the 1^stdefendant – Doc. No.3009/2016	A-7
8.	02.05.2016	Sale Deed in favour of the 1^stdefendant - Doc.No.4764/2016 of SRO, Guduvanchery	A-8
9.	02.05.2016	Memorandum relating to Deposit of Title Deeds Doc.No.4765/16	A-9
10.	14.02.2019	Revival Letter by the 1^stDefendant	A-10
11.	14.02.2019	Revival Letter by the 2^ndDefendant	A-11

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12.	04.02.2022	Revival Letter by the 1^stDefendant	A-12
13.	04.02.2022	Revival Letter by the 2^ndDefendant	A-13
14.	18.05.2018	SARFAESI Notice issued by the applicant	A-14
15.		Returned Covers	A-15
16.	04.05.2016	Encumbrance Certificate No.5336	A-16
17.		Statement of Account	A-17

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Sd/- (SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

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DESCRIPTION OF PROPERTY

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All that part and parcel of the property bearing Flat No.F-1, First Floor, measuring area of 915 Sq. ft. at Plot No.17, MG Nagar VI, Aathanur Village, Kundrathur Panchayat Union, Sriperumbudur Taluk, Kancheepuram District comprised in S.No.376/6C1, 376/6C2, 376/6C3 & 376/6B1 of Aathanur Village, Sriperumbudur Taluk, Kancheepuram District along with 318 Sq. ft. of UDS in 1593 Sq. ft., of land, and bounded on the

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North by : 23 Feet Road, South by : Land in Survey No.375/6B5, East by : 23 Feet Road West by : Vacant land and

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lying within the Registration District of South Chennai and Sub-Registration District of Guduvanchery.

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Sd/- (SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

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M/s. Indian Overseas Bank v. Mr. P. Ragupathy

Case brief

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M/s. Indian Overseas Bank v. Mr. P. Ragupathy

Case brief

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