Mls Central Bank of India versus S.M. John Stephen (alias)

This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 against the defendants’seeking issuance of a Recovery Certificate for recovery of a sum of Rs.88,18,084/- with further interest at the rate of 8.70% per annum with monthly rests plus 2% overdue interest from the date of the application till the date of realisation along with costs of the application and for sale of schedule mentioned properties.

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The subject matter of the case is the Housing Loan availed by the defendants from the Applicant Bank.

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It is the case of the applicant that the 1^st defendant approached the applicant bank by his application dated 24.02.2014 for grant of loan for purchasing the house, more fully described in the schedule to the OA and the applicant considering the said request vide its sanction dated 03.03.2014 sanctioned a housing loan of Rs.72,80,000/-.

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It is also the case of the applicant bank that the 1^st defendant executed the loan and security documents on 03.03.2014 and the defendants 2 and 3

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2

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executed guarantee agreements on 03.03.2014 thereby guaranteeing due repayment of the credit facility availed by the 1^st defendant.

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It is the further case of the applicant bank that the 1^st defendant purchased the schedule mentioned property from one V.E. Dilli Batcha by a sale deed dated 03.03.2014 registered as Doc. No.776/2014, SRO, Sembium and the 1^st defendant created equitable mortgage over the same in favour of the applicant bank by executing Memorandum of Deposit of Title deeds dated 03.03.2014 registered as Doc. No.777/2014, SRO, Sembium.

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It is also the case of the applicant bank that the 1^st defendant defaulted in repayment and hence the loan account was classified as NPA on 30.05.2019 and as no payment was forthcoming the applicant bank issued a legal notice dated 20.06.2022, which notices were returned unserved.

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Despite the said notice 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 defendant and the same was returned unserved and hence were served notice by way of substituted service causing paper publication. As there was no representation on behalf of the defendants continuously and on 22.08.2023the defendants were called absent and placed ex-parte on that day. Applicant Bank filed Proof Affidavit along with 14 documents, which were marked as Ex. A-1 to A-14on

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14.06.2024. The Ld. Counsel for Applicant Bank made his submissions on 21.08.2025 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-14 along with the proof affidavit. The documents produced in evidence are all found admissible. The proof affidavit of the applicant bank remained unchallenged and unrebutted. 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

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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.

¶40

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 award of overdue interest is rejected.

¶41

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.59 of 2023 stands allowed.

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(b) Applicant is permitted to realize a sum of Rs.88,18,084/- 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 /

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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 22^nd day of September, 2025)

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EXHIBITS MARKED BY APPLICANT BANK

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S.	Date	Description of Documents	Exhibit
No.			Nos.
1.	24.02.2014	Loan Application by defendants	A-1

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2.	03.03.2014	Sanction letter issued by the applicant bank	A-2
3.	03.03.2014	Loan Agreement executed by defendants	A-3
4.	03.03.2014	Form of guarantee for advances and credits executed by the 2^nddefendant.	A-4
5.	03.03.2014	Form of guarantee for advances and credits executed by the 3^rddefendant.	A-5
6.	03.03.2014	Sale deed Doc. No.776/2014	A-6
7.	03.03.2014	Memorandum of Deposit of Title deeds – Doc. No.777/2014.	A-7
8.	07.12.2019	Valuation report	A-8
9.	20.06.2022	Legal Notice issued by the applicant	A-9
10.		Returned cover of the 1^st defendant (Palayamkottai address)	A-10
11.		Returned cover of the 1^stdefendant (schedule of property address)	A-11
12.		Returned cover of the 2^nddefendant	A-12
13.		Returned cover of the 3^rddefendant	A-13
14.		Statement of accounts along with certificates under Bankers’ Book Evidence Act.	A-14

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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 piece and parcel of house, ground and premises in the plot No.128,

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Gowthamar Street, Ramana Nagar, Perambur, Chennai – 600 011, comprised in

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Old Survey No.37/1, 35 & 35, New Survey No.37 Part, as per patta (Patta C.A.

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No. 1452/2002/2003) comprised in Survey No.372, T.S. No.37, Block No.9 of

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Sembium Village, Purasawalkam – Perambur Taluk, Chennai District measuring

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an extent of 1190 sq. ft. and

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Bounded on the

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North by	: S.S.V. Koil Street
South by	: Remaining plot of Mr. K.N. Sivashankaran
East by	: Gowthamar Street
West by	: Plot No.127

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Situated within the Sub Registration District of Sembium and Registration District of North Chennai.

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Sd/-

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

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Mls Central Bank of India v. S.M. John Stephen (alias)

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Mls Central Bank of India v. S.M. John Stephen (alias)

Case brief

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