Allowed

Bank of Baroda v. Lakshmi Praba C

DRT12 Nov 2025OA/327/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the Original Application filed by Bank of Baroda to recover Rs. 58,07,576.59 along with simple interest. The court observed that the bank substantiated its claim with documentary evidence under RDBA 1993. Regarding interest, the Tribunal applied the Supreme Court ruling that penal interest cannot be capitalized. An order directed repayment and sale of mortgaged properties in c

What did the court decide?

Recovery of Rs. 58,07,576.59 with simple interest at 6% p.a. from the date of application, with liberty to sell mortgaged properties on default.

Bank of Baroda versus Lakshmi Praba C — Banking and Recovery | DRT (2025)

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OA No. 327/2023

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 12^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.327/2023

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Between

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Bank of Baroda, Dindigul Branch, Church Complex, Near Municipal Office, K N Hospital Road, Dindigul – 624 001. Rep. By its Branch Manager.

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---Applicant Bank

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And

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Mrs. C. Lakshmi Praba,

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W/o S. Saravanan, D.No.2/111, Matha Nagar, Pillaiyar Natham, Pithalaipatti, Begampur, Dindigul – 624 002.

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Also at:

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Mrs. C. Lakshmi Praba, W/o S. Saravanan, Plot. No. 21, Dolphin Nagar, Chettinaickenpatti, Dindigul District – 624 004.

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OA No. 327/2023

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Mr. S. Saravanan,

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S/o Soundarajan, D.No.2/111, Matha Nagar, Pillaiyar Natham, Pithalaipatti, Begampur, Dindigul – 624 002.

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Also at:

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Mr. S. Saravanan, S/o Soundarajan, Plot. No. 21, Dolphin Nagar, Chettinaickenpatti, Dindigul District – 624 004. ---Defendants

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Counsel for the Applicant Bank : M/s V. Kasirajan

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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 26.04.2023 to recover from the Defendants a sum of Rs.58,07,576.59p together with interest at the rate of 12.85% p.a. (including penal interest 2%p.a.) with monthly rests in respect of 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 defendant No.1 approached the applicant bank, to develop her agricultural business. On application of the defendant No.1, the applicant bank sanctioned a term loan, for a sum of Rs.40,00,000/-, on condition of execution of necessary documents in favour of the applicant bank. The defendant No.1 agreed to repay the principal amount a sum of

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OA No. 327/2023

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Rs.40,00,000/- with accrued interest at the rate of 3.20% per annum above the Vijaya Bank's MCLR per annum which is at present 8.55% per annum of the applicant bank with minimum of 11.75% per annum compounded at monthly rest or at such rest and such interest being added to the balance outstanding dues on the last working day of every month and the said interest if unpaid will become part of the amount advanced (i.e. the principal amount as mentioned above) and bears interest at the same rate. Further, the defendant No.1 agreed to pay higher and revised rate of interest on going rate of the applicant along with other commission, insurance premium, expenses, charges ete. The loan amount is repayable in 18 equated half yearly consecutive installment, and first installment commencing from 31.08.2019. Further, the applicant is entitled to recall any time, the entire loan or balance thereof as the case may be, incase of default of payment of any installment or violation of the terms and conditions of sanction. The defendants have agreed to pay 2% additional interest in case of default. As evidence and cover, for the said term loan a sum of Rs.40,00,000/-, the defendant No.1 executed the following documents at Dindigul dated 04.08.2018 infavour of the applicant viz.,

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i. DEMAND PROMISSORY NOTE for a sum of Rs.40,00,000/-agreeing to repay the same at the rate of 3.20% per annum above the Vijaya Bank's MCLR per annum which is at present 8.55% per annum of the applicant bank with minimum of 11.75% per annum compounded at monthly rest or at such rest.

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ii. LOAN AGREEMENT CUM HYPOTHECATION DEED FOR PRIORITY/NON PRIORITY SECTOR ADVANCES

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Defendant No.2 in consideration of applicant granting aforesaid Term loan to the defendant No.1 after knowing all the terms and conditions of the said Term loan a sum of Rs.40,00,000/-, agreed to stand as guarantor for all the amounts due from the defendant No.1 to the applicant and to that effect, the defendant No.2 executed Letter of Guarantee dated 04.08.2018 in favour of the applicant bank.

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The defendant No.1 with an intention to create security for the entire outstanding amount due for the aforesaid Term loan from the defendant No.1 to the applicant bank on 31.08.2018 has deposited the original title deeds of her properties described hereunder in 'schedule' with the applicant bank, at the following viz.,

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(a) Pudhupatti Village, Dindigul East Taluk in Dindigul District

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(b) Marampadi Village, Vedasandur Taluk, in Dindigul District

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OA No. 327/2023

and executed memorandum of deposit of title deeds dated 08.10.2018 was duly registered as document No. 2903 of 2018. Hence, a valid equitable mortgage was created over the under mentioned schedule of properties infavour of the mortgagee in respect of the entire outstanding amount due from the aforesaid term loan availed and to be availed by her. The defendant Nos. 1 and 2 have availed the above said term loan as per the statement of accounts filed along with the plaint and it may be read as part and parcel of the plaint. Their account No is 75060600001348 (E-Vijaya bank A/c No.302707351000096). The defendant No.1 has admitted and acknowledged her liability and executed letters of acknowledgement of liability on 08.07.2021.

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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. Hence, the Applicant Bank has filed the OA for recovery of a sum of Rs.58,07,576.59p together with interest at the rate of 12.85% p.a. (including penal interest 2%p.a.) with monthly rests in respect of 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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S. No.	Date	Description of document	Exhibits
1.	04.08.2018	Original Demand Promissory Note for a sum of Rs.40,00,000/- executed by the defendant No.1 in favour of the applicant bank	Ex.No.A-01
2.	04.08.2018	Original Letter of Repayment executed by the defendant No.1 in favour of the applicant bank	Ex.No.A-02
3.	04.08.2018	Original Loan agreement cum hypothecation deed for priority / non priority sector advances executed by defendant No.1 in favour of applicant bank	Ex.No.A-03
4.	04.08.2018	Original Letter of guarantee executed by defendantNo.2in favourof applicant bank	Ex.No.A-04
5.	20.07.2018	Original Sale deed(2006/2018)	Ex.No.A-05
6.	09.07.2018	Original Sale deed(1520/2018)	Ex.No.A-06

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OA No. 327/2023

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7.	17.07.2018	Original Sale deed(1443/2018)	Ex.No.A-07
8.	08.10.2018	Original Memorandum of deposit of title deed executed by Mrs.C.Lakshmi Praba (i.e., D-1) in favour of M/s.Vijaya Bank. (Doc.No.2903/2018)	Ex.No.A-08
9.	08.07.2021	Original Letter of acknowledgement of liability executed by defendant No.2 in favour of applicant bank	Ex.No.A-09
10.	10.04.2023	Extract copyof statement of accounts	Ex.No.A-10
11.	26.04.2023	Extract copyof Memorandum of Interest	Ex.No.A-11

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SCHEDULE OF PROPERTY

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Item No.1 (Evaluated Price - Rs.24,50,000/-)

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Dindigul Registration District, Sanarpatti sub registrar office, Dindigul East Taluk, Pudupatti village

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S.No.499/1B the land measuring Hec.0.28.0 in 69 cents. Boundaries

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East : Land in S.No.499/2 West : Land belongs to Andiappan Pillai & others South : Land belongs to Lakshmanan Pillai & others North : Land belongs to Lakshmi Ammal & others

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S.No.499/1 in New S.No.499/1A the land measuring Hec 0.87.5 in Acres and cents 16. Boundaries

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East : Land belongs to Malaiandi pillai West : South- North Cart pathway South : Land belongs to Thirumal & others North : Land belongs to Muthukamatchi Pillai

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S.No.499/2 the Land measuring in 2 Acres and 5 cents Boundaries

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East : Land belongs to Sonaimuthu Pillai West : PuramPokku Pathway South : Land belongs to Perumal Krishna Pillai North : Land belongs to Muthukamatchi

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Item No.2 (Evaluated Price - Rs.24,20,000/-)

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Palani Registration District, Vedasandur Sub Registrar office, Vedasandur Taluk, Marampadi village

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OA No. 327/2023

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S.No.898/1, the Land measuring Hec 0.42.0 in 1 Acres and 4 cents Boundaries

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East : Land in S.No.898/2 belongs to Veeramuniandi West : Land in S.Nos.890, 891/4 belongs to Sundaram & ors and Arokiasamy South : Land in S.No.898/5 belongs to Veeramuniandi North : S.No.894 Purampugal Cart Pathway

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S.No.898/3A in the Land measuring Hec 0.94.5 in Acres 2 and Cents 33 Boundaries:

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East : Land belongs to Nirajan Giridharan in S.No.898/3B West : Land in S.No.898/2.5 belongs to Veeramuniandi South : Land belongs to Simon and Rajalakshmi in S.No.899/3, 900/2 North : S.No. 894 Purampugal Cart Pathway

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S.No.898/5 the Land measuring in Hec 0.41.50 in 1 Acres and 3 cents Boundaries:

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East : Land belongs to Veeramuniandi in S.No.898/1 West : Land in S.No.890 belongs to Sundaram & others South : Land belongs to T.S.M.Augustin in S.No.899/1 North : Land belongs to veeramuniandi in S.No.898/1

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The land includes well, 3HP electric motor and usual pathway rights..

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Item No.3 (Evaluated Price - Rs.22,70,000/-)

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Karur Registration District, Edaiyapatti west village, Kadavur panchayat, Kadavur Taluk, Tharagampatti Sub Registrar office.

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S.No.250/2 the Land measuring Hec 0.20.5 in 50.1/2 cents boundaries:

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East : S.No.250/11 land belongs to Periakkal West : Land in S.No.250/8 South : Land in S.No.250/3 North : Land in S.No.250/1

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S.No.250/4 the land measuring in Hec 0.53.0 in 1 Acres and cents 31 cents boundaries:

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East : Land in S.No.250/7

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OA No. 327/2023

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West : Land in S.No.250/5,9 South : Land in S.No.250/6 North : Land in S.No.250/9,3,11

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S.No 259/1 in the Land measuring Hec 1.01.50 in Acres 2 and cents 51 boundaries

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East : Land belongs to Nallathambi S/o.Pitchaimuthu West : Land Manickam Pillai & others South : Land belongs to Periasamy & Sanga Pillai North : Land belongs to Kanniappa Pillai

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S.No.261/10, the land measuring 1 Hec 0.41.0-1 Acre and 1 Cents Boundaries:

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East : Land belongs to Veeramalai & Ponnusamy West : Land Periasamy & Sanga Pillai South : Land belongs to Veeramalai & Ponnusamy North : Common Pathway Well in abovesaid survey number

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well in above Said Survey Number

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The well includes 5HP electric motor

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The land includes all usual pathway rights.

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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 Mrs. B. Tara, who is the Branch Manager of the Applicant Bank.

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She has stated in her affidavit that the defendants has availed 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

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OA No. 327/2023

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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 Original Demand Promissory Note for a sum of Rs.40,00,000/executed by the defendant No.1 in favour of the applicant bank has been marked as Ex.No.A-01, Original Letter of Repayment executed by the defendant No.1 in favour of the applicant bank has been marked as Ex.No.A-02, Original Loan agreement cum hypothecation deed for priority / non priority sector advances executed by defendant No.1 in favour of applicant bank has been marked as Ex.No.A-03, Original Letter of guarantee executed by defendant No.2 in favour of applicant bank has been marked as Ex.No.A-04, Original Sale deed (2006/2018) has been marked as Ex.No.A05, Original Sale deed (1520/2018) has been marked as Ex.No.A-06, Original Sale deed (1443/2018) has been marked as Ex.No.A-07,, Original Memorandum of deposit of title deed executed by Mrs. C. Lakshmi Praba (i.e., D-1) in favour of M/s.Vijaya Bank. (Doc.No.2903/2018) has been marked as Ex.No.A-08, Original Letter of acknowledgement of liability executed by defendant No.2 in favour of applicant bank has been marked as Ex.No.A-09, Extract copy of statement of accounts has been marked as Ex.No.A-10, Extract copy of Memorandum of Interest 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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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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OA No. 327/2023

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Therefore, this Original Application is allowed. Since this is an Agricultural loan 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.58,07,576.59p together with simple interest at the rate of 6% p.a. in respect of 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.58,07,576.59p together with simple interest at the rate of 6% p.a. in respect of 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 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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OA No. 327/2023

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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 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 12^th November, 2025.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 25.11.2025

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Bank of Baroda v. Lakshmi Praba C

Case brief

What is this about?

What did the court decide?

Bank of Baroda v. Lakshmi Praba C

Case brief

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