Allowed

State Bank of India v. M.S. Shekhar Babu

DRT13 Oct 2025OA/60/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed an application for a recovery certificate filed by a bank against a loan defaulting defendant. The bank proved the loan liability via unchallenged documents and bank statements. The court permitted realization of the principal with 7% pendente lite interest and authorization to sell mortgaged properties.

What did the court decide?

Recovery Certificate issued for Rs. 84,30,660/- with 7% interest per annum; authority granted to sell schedule properties; costs awarded.

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

¶1

BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

¶2

Dated this 13^th day of October, 2025

¶3

PRESENT: SHRI SHARANG DHAR UPADHYAY PRESIDING OFFICER

¶4

OA No. 60 of 2023

¶5

State Bank of India Retail Assets Centralized Processing Centre No.16, Whannels Road First Floor, Egmore Chennai – 600 009 Rep. by its Chief Manager …Applicant

¶6

Versus

¶7

M.S. Shekhar Babu S/o Mr. Srinivasan No.5, 1^st Floor, Thiruveethi Amman Koil Street Mangadu, Chennai – 600 056

¶8

…Defendant

¶9

Counsels on Record / Appeared

¶10

Counsel for Applicant Bank : M/s M. Suresh Defendants ex-parte on 08.09.2023

¶11

FINAL ORDER

¶12

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 an aggregate sum of Rs.84,30,660/- comprising a sum of Rs.78,70,425/- with further interest at the rate of 7.40% per annum with monthly rests being the amount due under Housing Loan Account and a sum of Rs.5,60,235/- with

¶13

further interest at the rate of 7.05% per annum with monthly rests being the amount due under SBI Suraksha Loan Account from the date of the application till the date of realisation along with costs of the application and for selling the schedule mentioned properties.

¶14

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

¶15

It is the case of the applicant that the defendant approached the applicant for grant of housing loan by submitting Loan application dated 13.03.2021 and considering the said request the applicant vide sanction dated 27.3.2021 sanctioned housing loan of Rs.75,00,000/- to the defendant repayable in installments of Rs.54,219/- per month. It is also the case of the applicant that the defendant executed various loan and security documents in favour of the applicant on 27.03.2021. Further, at the request of the defendant the applicant had also sanctioned SBI Suraksha Loan of Rs.4,81,000/- vide its sanction dated 28.03.2021.

¶16

It is also the case of the applicant that the defendant deposited the title deeds of the property more fully described in the schedule to the OA on 27.03.2021 with an intention to create equitable mortgage over the same and confirmed the same by executing Memorandum of Deposit of Title

¶17

deeds dated 30.03.2021 registered as Doc. No. 4465/2021 on the file of SRO, Chengalpat.

¶18

It is the further case of the applicant that the defendant having availed the loan defaulted in repayments and failed to regularize the loan account despite repeated demands and requests and hence the applicant bank classified the loan account as NPA on 15.02.2022. As the defendant did not come forward to the outstanding dues, the applicant invoked the provisions of the SARFAESI Act and issued the demand notice on 22.02.2022 under Section 13(2) of the Act. 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.

¶19

Summons was taken out to the defendant and the same returned unserved and hence was served notice by way of substituted service by causing paper publication. As there was no representation on behalf of the defendant continuously and on 08.09.2023 the defendant was called absent and placed ex-parte on that day. Applicant Bank filed Proof Affidavit along with 11 documents, which were marked as Ex. A-1 to A-11 on 06.05.2024, however, Exhibit A-5 and A-7 are marked subject to proof. The Ld. Counsel for Applicant Bank made his submissions on 25.09.2025 and thereafter the matter stood till this date for passing final orders.

¶20

The following issues arise for consideration in the matter: -

¶21

(a) Whether the applicant had succeeded in proving the liability of the defendant?

¶22

(b) What order as to cost of the proceedings need be passed?

¶23

These issues are considered together.

¶24

Heard the Ld. Counsel for the applicant, perused the OA averments and the record placed before the Tribunal.

¶25

The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-11 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.

¶26

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.

¶27

In view of the fact that the loan facility availed by the defendant 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 penal interest is rejected.

¶28

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: -

¶29

(a) OA No.60 of 2023 stands allowed.

¶30

(b) Applicant is permitted to realize a sum of Rs.84,30,660/- 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.

¶31

¶32

(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.

¶33

(e) The Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of this final order.

¶34

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.

¶35

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

¶36

(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 13^th day of October, 2025)

¶37

EXHIBITS MARKED BY APPLICANT BANK

¶38

S. No.	Date	Description of Documents	Exhibit Nos.
1.	13.3.2022	Loan Application	A-1
2.	27.3.2021	Sanction Letter	A-2
3.	27.3.2021	Arrangement Letter executed by the defendant	A-3
4.	27.3.2021	Memorandum of Loan Agreement for Home Loan granted to Publicexecuted by the defendant.	A-4
5.	30.3.2021	Memorandum Relating to Deposit of Title Deeds (Doc. No. 4465/2021) executed by the defendant.	A-5

¶39

S. No.	Date	Description of Documents	Exhibit Nos.
6.	18.1.2021	Sale Agreement entered between Mrs. S.Radha and Mr. M.S. Shekhar Babu	A-6
7.	29.3.2021	Sale Deed executed by Mrs. S.Radha infavour of Mr. M.S. Shekhar Babu (Doc. No. 4464/2021)	A-7
8.	28.3.2021	Agreement for Additional Loan granted to Existing Home Loan Borrowers for Insurance Premium Amountexecuted by defendant	A-8
9.	27.3.2021to 3.6.2022	Statement of Account and Certificate Under Banker’s Book Evidence Act,	A-9
10.	28.3.2021 to 28.6.2022	Statement of Account and Certificate Under Banker’s Book Evidence Act,1891	A-10
11.	22.2.2022	Demand notice under Section 13(2) of the SARFAESI Act issued by the applicant bank and returned cover.	A-11

¶40

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

¶41

DESCRIPTION OF PROPERTY

¶42

All that piece and parcel of land being house site bearing Plot No.12-B, situated in Rail Nagar, Ninnakarai village, Kattankolathur, Chingleput district and

¶43

bearing Survey No.395/1A1A8, and

¶44

Bounded on the

¶45

North by	:	Plot No.13 and Survey No.395/1A1A7
South By	:	Road
East by	:	Plot No.12A and Survey No.394/4
West by	:	Plot bearing Survey No.368

¶46

Measuring:

¶47

East to West on the Northern Side : 30’ East to West on the Southern Side : 42’ North to South on the Eastern Side : 70’ North to South on the Western Side : 70’

¶48

An extent of 2800 Sq. ft. land with building situated within the Sub Registration District of Chengalpattu, SRO, Joint II together with all easements and privileges appurtenant or belonging thereto.

¶49

Sd/-

¶50

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

State Bank of India v. M.S. Shekhar Babu

Case brief

What is this about?

What did the court decide?

State Bank of India v. M.S. Shekhar Babu

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

State Bank of India versus S. Sonaraj

State Bank of India versus Mrs. Mahalakshmi J

Union Bank of India versus K. Rani

Ms Ans Industries versus State Bank of India

R Rajalakshmi versus Icici Bank Limited

Canara Bank versus M/s Worldizen Goods