Allowed

State Bank of India v. M. Shanmugam

DRT17 Dec 2025OA/394/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the application for issuance of a Recovery Certificate after finding the applicant bank proved its claim for a housing loan default. Interest was awarded at a reduced rate of 7% per annum.

What did the court decide?

Issuance of Recovery Certificate for Rs.32,56,236.42 plus interest at 7% per annum; permission to sell schedule property for recovery.

State Bank of India versus M. Shanmugam — Banking and Recovery | DRT (2025)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 17^th day of December, 2025

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PRESENT: SHRI SHARANG DHAR UPADHYAY PRESIDING OFFICER

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OA No.394 of 2022

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State Bank of India Rep. by its Chief Manager Retail Asset Central Processing Center – Chennai No.16, 1^st Floor, Whannels Road Egmore, Chennai – 600 008

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…Applicant

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Versus

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M. Shanmugam S/o Manogaran Plot No.3, Flat No.S1, 2^nd Floor Block No.5, Bharath Nagar Menambedu, Ambattur Chennai – 600 053

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Also at

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No.53/93, Ward, Vedi Kottai 1^st Cross Papparpatti (TP), Dharmapuri

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Also at No.3058, 12^th Cross, 8^th Main Road Kumara Swami Layout Bangalore – 560 078

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Also at UNFI Media No.81, Mathu Art Studio Chikkalasandra, Uttarahalli Bangalore – 560 061 …Defendant

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Counsels on Record / Appeared

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Counsel for Applicant Bank Mr. S. Balu Defendant ex-parte on 26.05.2023

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FINAL ORDER

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This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 against the defendant seeking issuance of a Recovery Certificate for recovery of a sum of Rs.32,56,236.42p with further interest at the rate of 7.25% per annum with monthly rests from the date of the application till the date of realisation along with costs of the application and for sale of schedule mentioned property.

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The subject matter of the case is the housing loan availed by the defendant from the Applicant Bank.

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It is the case of the applicant that the defendant approached the applicant bank for grant of housing loan vide application dated 01.08.2016 and considering the said request the applicant vide its sanction letter dated 26.08.2016 sanctioned a loan of Rs.27,90,000/- repayable in 324 equated monthly installments of Rs.23,652/- commencing from 10.10.2016 to 10.10.2043.

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It is also the case of the applicant that the defendant executed various loan and security documents on 31.08.2016. It is stated that the defendant also deposited the title deeds of the schedule mentioned property with the

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applicant bank with an intention to create equitable mortgage over the same and confirmed the same by executing Memorandum of Deposit of Title deeds dated 5.12.2016.

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It is also the case of the applicant bank that the defendant defaulted in repayment and hence the loan account was classified as NPA on 16.12.2021and as no payment was forthcoming the applicant bank invoked the provisions of the SARFAESI Act and issued the demand notice dated 29.12.2021. Despite the said notice the defendant 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 defendant returned unserved and hence was served by way of substituted service by causing paper publication. As there was no representation on behalf of the defendant continuously and on 26.05.2023 the defendant was called absent and placed ex-parte on that day. Applicant Bank filed Proof Affidavit along with 13 documents, which were marked as Ex. A-1 to A-13 on 05.02.2024. The Ld. Counsel for Applicant Bank made his submissions on 31.10.2025 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 defendant?

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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-13 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 defendant. 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 defendant. 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 defendant is anhousingloan 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.

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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.394 of 2022 stands allowed.

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(b) Applicant is permitted to realize a sum of Rs.32,56,236.42p with further interest @7% per annum (simple) from the date of filing of the application till the date of realization in full, from the defendant 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 defendant.

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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 defendant is 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/-

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(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 17^th day of December, 2025)

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EXHIBITS MARKED BY APPLICANT BANK

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S. No.	Date	Description of Documents	Exhibit Nos.
1.	01.08.2016	Housing Loan Application.	A-1
2.	26.08.2016	Sanction Letter	A-2
3.	31.08.2016	Arrangement Letter	A-3
4.	31.08.2016	Memorandum of Loan Agreement for housing loan.	A-4
5.	31.08.2016	Agreement of Mortgage	A-5
6.	31.08.2016	Affidavit	A-6

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7. 31.08.2016	Deed of Undertaking	A-7
8. 05.12.2016	Memorandum of Deposit of Title deeds	A-8
9. 05.12.2016	Confirmation Letter	A-9
10. 31.08.2016	Sale deed–Doc. No.10255 of 2015	A-10
11. 11.07.2016	Construction Agreement	A-11
12. 29.12.2021	Notice issued under Section 13(2) of the SARFAESI Act	A-12
13.	Statement of Accounts along with certificate under Bankers’Book Evidence Act	A-13

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Sd/-

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

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DESCRIPTION OF PROPERTY

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SCHEDULE A

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All that piece and parcel or vacant land, situated at old Village No.53, New village No. 20, Menambedu Village, comprised in survey No. 11/1A, as per town Survey register No. TK8A/5631/1422, Dated 06-05-2013, ward C, Block No.5, Town survey No. 15/2, in Bharath Nagar bearing Plot No. 3, measuring an extent of 2770 Sq.ft., at presently 2035 Sq.ft., Ambattur Taluk, Thiruvallur District, within the limits of Chennai corporation Zone – 7, and bounded on the:

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North by - Plot No.4 South by - Plot No. 1 & 2 East by - 24 feet wide road. West by - Land and House

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Measuring:-

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East west on Northern side : 35 + 9 feet

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East to west on the Southern side : 40 + 25.6 feet

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North to south on eastern side : 40 feet

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North south on Western side : 41 feet

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And In all admeasuring presently an extent of 2035 Sq.ft., within the Registration District of North Chennai, and Sub – Registration District of Ambattur.

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SCHEDULE B

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412 Sq.ft., of undivided share of land out of schedule – ‘A’ mentioned Property.

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SCHEDULE C

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Flat bearing No. S1, measuring 803 sq. ft., (inclusive of proportionate undivided share in common areas), in second floor ( marked in Annexure1)

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

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State Bank of India v. M. Shanmugam

Case brief

What is this about?

What did the court decide?

State Bank of India v. M. Shanmugam

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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Case details

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