Allowed

Punjab National Bank v. M/s. J.P Flour Mill Industries

DRT25 Aug 2025OA/517/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the original application filed by Punjab National Bank to recover a principal sum of approximately Rs. 1.66 crores along with interest from the defendants, finding the proof affidavit and documents sufficiently established the claim.

What did the court decide?

Defendants directed to pay Rs. 1,66,43,962.80 plus interest at 10.60% and 7.65% respectively with half yearly rests from filing date; recovery from sale of mortgaged properties.

Punjab National Bank versus M/s. J.P Flour Mill Industries — Money Laundering | DRT (2025)

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OA No. 517/2022

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 25^TH DAY OF AUGUST, 2025 PRESENT: SEEMA SINHA,

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

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OA No.517/2022

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Between

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Punjab National Bank, Circle SASTRA, Circle Office, 4^th Floor Aparna Towers, 2 & 3 Byepass Road, Madurai – 625 010. Rep. By its Chief Manager. ---Applicant Bank

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And

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M/s J.P. Flour Mill Industries,

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Prop. V. Jeyaprakasam, No.1, Vittaneri,

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Vittaneri Post, Sivagangai – 630 561.

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Mr. V. Jeyaprakasam, S/o Vijayan Servai, No.1/45, Vittaneri Village, Sivagangai – 630 561.

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Mrs. J. Indumathi,

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W/o V. Jeyaprakasam, KPK Enclave, Near Vaairam Vasantham Apartments, Sambakulam, Madurai – 625 007. ---Defendants

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Counsel for the Applicant Bank : M/s S. Balsubramanian

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Page 1 of 6

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OA No. 517/2022

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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 27.05.22 to recover from the Defendants a total sum of Rs.1,66,43,962.80p i.e (i) Rs.1,40,98,119.80p together with interest at the rate of 10.60% p.a. in respect of Overdraft Loan and (ii) Rs.25,45,843/together with interest at the rate of 7.65% p.a. in respect of Term Loan with monthly rests plus penal interest at the rate of 2%p.a. 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 availed Overdraft loan for a sum of Rs.1,51,78,000/and Term loan for a sum of Rs.29,53,000/- totaling Rs.1,81,31,000/- after executing necessary documents in favour of the Applicant Bank. The defendants also deposited the Original title deeds of their immovable property with the applicant bank as security for the due repayment of loan availed by them. Further the 2^nd defendant had executed Memorandum of deposit of Title deeds on 06.12.2019 in document No.3982/2019 SRO Sivagangai Joint 2 and Supplemental Memorandum of deposit of Title deeds on 15.06.2020 in doc.No.1390/2020 SRO, Sivagangai Joint 2. Further, Defendants agreed to repay the Overdraft loan together with interest at the rate of 10.60%p.a. and Term Loan together with interest at the rate of 7.65%p.a. plus penal interest at the rate of 2%p.a. together with costs and charges. Further, defendants also agreed to pay interest as and when it is changed from time to time by the Applicant Bank. 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. Hence, the applicant bank issued Demand notice dt.04.03.2022 to the defendants to pay the outstanding amount.

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Page 2 of 6

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OA No. 517/2022

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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 total sum of Rs.1,66,43,962.80p i.e (i) Rs.1,40,98,119.80p together with interest at the rate of 10.60% p.a. in respect of Overdraft Loan and (ii) Rs.25,45,843/- together with interest at the rate of 7.65% p.a. in respect of Term Loan with monthly rests plus penal interest at the rate of 2%p.a. 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.	---	Loan Application	Ex.No.A-01
2.	24.09.19	Sanction Letter	Ex.No.A-02
3.	27.09.19	Overdraft Agreement	Ex.No.A-03
4.	29.09.19	Agreement of Guarantee	Ex.No.A-04
5.	02.06.20	Sanction Letter	Ex.No.A-05
6.	12.06.20	Agreement for Tem Loan(WCTL)	Ex.No.A-06
7.	12.06.20	Master Agreement	Ex.No.A-07
8.	06.12.19	MOD in Doc.No.3982/2019	Ex.No.A-08
9.	15.06.20	Supplemental MOD in Doc.No. 1390/2020	Ex.No.A-09
10.	28.03.12	Sale Deed Doc.No. 1971/2012	Ex.No.A-10
11.	---	Statement of Accounts	Ex.No.A-11

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SCHEDULE OF PROPERTY Mortgaged Property

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In Sivagangai Registration District, Sivagangai J.S.R.O.No.2, Sivagangai Taluk, Soorakkulam Group, Soorakkulam Village, the land in S.No.282 (Part) measuring an extent of 34.4 Cents equivalent to 1393.87Sq.Meter and in Sivagangai Registration District, Sivagangai J.S.R.O.No.1, Sivagangai Taluk, Paiyur Group, Paiyur Village in S.No.42/3(Part) the land measuring an extent of 1 cent equivalent to 436 Sq.feet totaling 35.4 cents house site and the building constructed thereon. In which the plot No.J-1.

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Bounded on the

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North by : The building in unit J.2 East by : The vacant site of Industrial Estate South by : The building in Unit J.2 West by : North to South Service Road

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Page 3 of 6

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OA No. 517/2022

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And measuring 1^st Thakku East to West on the Northern Side : 166.30 East to West on the Southern Side : 166.30 North to South on the Eastern Side : 93.48 North to South on the Western Side : 93.48

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And the building constructed thereon for an extent of 300Sq.ft and the building constructed thereon with A.C.C Roof for an extent of 900 Sq.feet.

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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. N. Sivagurunathan, who is the Chief Manager of the Applicant Bank.

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He has stated in his affidavit that the defendants availed Overdraft facility and 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 Loan Application has been marked as Ex.No.A-01, Sanction Letter has been marked as Ex.No.A-02, Overdraft Agreement has been marked as Ex.No.A-03, Agreement of Guarantee has been marked as Ex.No.A-04, Sanction Letter has been marked as Ex.No.A-05, Agreement for Tem Loan (WCTL) has been marked as Ex.No.A-06, Master Agreement has been marked as Ex.No.A-07, MOD in Doc.No.3982/2019 has been marked as Ex.No.A-08, Supplemental MOD in Doc.No. 1390/2020 has been marked as Ex.No.A-09, Sale Deed Doc.No. 1971/2012 has been marked as Ex.No.A-10, Statement of Accounts 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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Page 4 of 6

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OA No. 517/2022

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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 total sum of Rs.1,66,43,962.80p i.e (i) Rs.1,40,98,119.80p together with interest at the rate of 10.60% p.a. in respect of Overdraft Loan and (ii) Rs.25,45,843/- together with interest at the rate of 7.65% p.a. in respect of Term Loan with half yearly rests 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 total sum of Rs.1,66,43,962.80p i.e [ (i) Rs.1,40,98,119.80p together with interest at the rate of 10.60% p.a. in respect of Overdraft Loan and (ii) Rs.25,45,843/- together with interest at the rate of 7.65% p.a. in respect of Term Loan ] with half yearly rests 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

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Page 5 of 6

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OA No. 517/2022

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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 Overdraft facility and 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 25^th August, 2025.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 16.09.2025

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Page 6 of 6

Punjab National Bank v. M/s. J.P Flour Mill Industries

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. M/s. J.P Flour Mill Industries

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

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