Allowed

Canara Bank v. Veeramani

DRT18 Sept 2025OA/352/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the Original Application filed by Canara Bank for recovery of a housing loan default. Relying on affidavits and documents, it directed respondents to pay the principal sum along with interest and granted power to sell mortgaged properties if payment is not made within one month.

What did the court decide?

Directed respondents to pay Rs.23,46,973/- with interest within one month; authorized sale of mortgaged properties for deficiency.

Canara Bank versus Veeramani — Banking and Recovery | DRT (2025)

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OA No. 352/2023

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 18^TH DAY OF SEPTEMBER, 2025 PRESENT: SEEMA SINHA,

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

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OA No.352/2023

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Between

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Canara Bank, No.7/3A, A.P.V. Complex, Opp.to Old Bus Stand, Puluganoorani Road, Virudhunagar – 626 001. Rep. By its Chief Manager.

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---Applicant Bank

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And

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Mr. K. Veeramani,

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S/o Karuppasamy,

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D.No.1/59, North Street, Sankaralingapuram Village & Post, Virudhunagar – 626 119.

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Mr. K. Vijaya Kumar, S/o Karuppasamy,

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D.No.1/59, North Street, Sankaralingapuram Village & Post, Virudhunagar – 626 119.

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Mr. N. Vignesh Kumar, S/o Narayanasamy, D.No.1/60, North Street, Sankaralingapuram Village & Post, Virudhunagar – 626 119. ---Defendants

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Counsel for the Applicant Bank : M/s P. Madhan Alexandar

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Page 1 of 6

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OA No. 352/2023

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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 07.03.2023 to recover from the Defendants a sum of Rs.23,46,973/together with interest at the rate of 9.65% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Housing 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 defendants approached the Applicant Bank for availing Housing Loan. After due consideration, the Applicant Bank accepted the request of the defendants and sanctioned the Housing Loan of Rs. 19,00,000/- after executing necessary documents in favour of the Applicant Bank. D-1 & D-2 had executed a term Loan Agreement dt.05.06.2018 for a sum of Rs.19,00,000/- in favour of the applicant bank containing various terms & conditions and by agreeing to repay the loan amount in 234 monthly installments of Rs.16,711/-. Further the D-1 & D-2 promised to repay the loan amount with compound interest at the rate of 8.45%p.a with monthly rests or at such other rates as may be revised by the applicant bank from time to time with penal interest at the rate of 2%p.a. in case of default. The D-3 agreed to stand as Guarantor for the repayment of the loan with interest & costs thereon and executed Agreement of Guarantee along with guarantee covering letter dt.05.06.18 in favour of the Applicant bank from time to time.

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D-1 offered his property which is fully mentioned in the Schedule hereunder as security and thereby he has deposited his Title Deeds on 29.05.18 with the Applicant Bank pertaining to his property. D-1 executed a Registered Memorandum of Deposit of Title Deeds dt. 30.05.18 pertaining to the said property in favour of the Applicant bank. By admitting & acknowledging the liabilities the defendants had made payment on 29.04.20 & 04.03.21. After availing the loan, defendants were not regular in the

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Page 2 of 6

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OA No. 352/2023

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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.23,46,973/- together with interest at the rate of 9.65% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Housing 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.	05.06.18	Housing Loan Agreement executed by 1^st& 2^nddefendant in favour of the Applicant bank	Ex.No.A-01
2.	05.06.18	Agreement of Guarantee along with covering letter executed by 3^rddefendant in favour of the Applicant bank	Ex.No.A-02
3.	30.05.18	Registered memorandum of deposit of Title deeds executed by the 1^stdefendant in favour of the Applicant bank(Doc.No.1285/18)	Ex.No.A-03
4.	----	Statement of Accounts maintained by the Applicant bank in regular course and conduct ofthe business	Ex.No.A-04

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SCHEDULE OF MORTGAGED PROPERTY

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(Property belonging to 1^st defendant vide Annexure-II for the Title deeds)

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Virudhunagar District, Virudhunagar Registration district, Virudhunagar Joint No.I Sub Registry, Sankaralingapuram Village hamlet of Ondipulinaickanur Village, a land measuring East-West 67 ½ feet both on the Northern & Southern sides and North – South 38 ¾ feet both on the Eastern & Western sides totaling 2615.5/8 Sq.ft or 6 cents comprised in Old RS.No.897/1C corresponding to new RS.No.897/1C1 & building constructed thereon bearing Door.No.63 within the following boundaries

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On the North	: Property belonging to Veerarajan
On the East	: Property belonging to Mallaiya Chettiyar & North-South
	Pathway
On the South	: Property belonging to Maha Ganapathy
On the West	: Property belonging to K.M.K. Somasundaram

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Page 3 of 6

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OA No. 352/2023

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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. Arumbaka Francis, who is the Chief Manager of the Applicant Bank.

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He has stated in his affidavit that the defendants has availed Housing 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-04 in support of its claim in the OA.

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The Housing Loan Agreement executed by 1st & 2nd defendant in favour of the Applicant bank has been marked as Ex.No.A-01, Agreement of Guarantee along with covering letter executed by 3rd defendant in favour of the Applicant bank has been marked as Ex.No.A-02, Registered memorandum of deposit of Title deeds executed by the 1st defendant in favour of the Applicant bank (Doc.No.1285/18) has been marked as Ex.No.A-03, Statement of Accounts maintained by the Applicant bank in regular course and conduct of the business has been marked as Ex.No.A-04. 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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Page 4 of 6

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OA No. 352/2023

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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.23,46,973/- together with interest at the rate of 9.65% p.a. with half yearly rests in respect of Housing 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.23,46,973/- together with interest at the rate of 9.65% p.a. with half yearly rests in respect of Housing 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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Page 5 of 6

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OA No. 352/2023

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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 Housing 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 18^th September, 2025.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 19.11.2025

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Page 6 of 6

Canara Bank v. Veeramani

Case brief

What is this about?

What did the court decide?

Canara Bank v. Veeramani

Case brief

What is this about?

What did the court decide?

What the court decided

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