Allowed

Punjab National Bank v. Sarvesh

DRT15 Dec 2025OA/743/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an original application filed by Punjab National Bank to recover an outstanding term loan of Rs. 37,96,048. The court confirmed the bank's documentary evidence, rejected the defendants' non-appearance as a bar to recovery, and directed payment with interest and sale of mortgaged properties upon default.

What did the court decide?

Respondents directed to pay Rs. 37,96,048 with interest at 12.50% p.a.; liberty granted to sell mortgaged properties upon default.

Punjab National Bank versus Sarvesh — Banking and Recovery | DRT (2025)

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OA No. 743/2022

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 15^TH DAY OF DECEMBER, 2025 PRESENT: SEEMA SINHA,

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

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OA No.743/2022

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Between

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Punjab National Bank, Circle SASTRA Trichy, Circle Office, Kailasapuram, Trichy 620 014. Rep. By its Chief Manager. ---Applicant Bank

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And

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Mr. M. Sarvesh, S/o Muthappa, No.1/16, Masinayakanpalli, Panchakshipuram, Hosur Taluk, Krishnagiri - 635110.

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Mrs. Sujatha, W/o Nagaraju, No. 3/48-4, Teachers Colony, Belathur, Hosur Taluk, Krishnagiri - 635103. ---Defendants

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Counsel for the Applicant Bank : M/s S. Balasubramanian, T.M. Subramanian, M. Sundaraj.

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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

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OA No. 743/2022

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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 03.10.2022 to recover from the Defendants a sum of Rs.37,96,048/together with interest at the rate of 12.50% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Term 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 availed a Term Loan for a sum of Rs.40,00,000/- from the applicant bank. The defendants executed necessary documents in favour of the Applicant bank for the Term loan availed by them. In addition to that, the defendants had 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, the defendants also executed memorandum of deposit of title deeds on 30.05.2015 as Document No.5493/2015, SRO Thenkanikottai. Further defendants agreed to repay the loan with interest at the rate of 12.50%p.a and also agreed to pay penal interest at the rate of 2%p.a. in case of default.

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The 1^st defendant had executed Balance of security confirmation on 16.05.2017 and 06.05.2020 and thereby he acknowledge their liability. 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 initiated SARFAESI proceedings against the defendants which is pending for its execution.

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In spite of repeated reminders, the defendant failed to repay the loan amount. Hence the applicant has issued demand notice dated on 23.01.2020 to the defendants to call upon to pay the outstanding amount. The SARFAESI Notices were duly served to the defendants.

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Despite repeated demands, 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.37,96,048/- together with interest at the rate of 12.50% p.a. with

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OA No. 743/2022

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monthly rests plus penal interest at the rate of 2%p.a. in respect of Term 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.	23.09.2015	Loan Application	Ex.No.A-01
2.	----	Sanction letter	Ex.No.A-02
3.	06.10.2015	Hypothecation Agreement	Ex.No.A-03
4.	06.10.2015	Deed of Guarantee	Ex.No.A-04
5.	----	Mortgage deed	Ex.No.A-05
6.	30.10.2015	MOD Doc.No.5493/2015	Ex.No.A-06
7.	16.05.2017	Balance and securityConfirmation Letter	Ex.No.A-07
8.	06.05.2020	Balance and securityConfirmation Letter	Ex.No.A-08
9.	---	Statement of accounts	Ex.No.A-09

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SCHEDULE OF PROPERTY

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Mortgaged Property

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In Panchakshipuram village of Hosur Taluk and attached to Denkanikotta sub Registration District, Krishnagiri Registration District, of Krishnagiri District, and also attached to the village panchayath limits of (Panchakshipuram) Masinayakanapalli and union council of Hosur Survey Number 453Dry Ext.Hec. 1.31.0, Assessment Rs.6.50np., (In Ac.3.24 Cents) out of this an extent of Ac.1.00 and situated within the following boundaries:

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On the Eastern Side : Land belonging to Shobha On the Western Side : Approach Road On the Northern Side : Land belonging to Sujatha, On the Southern Side : Land belonging to Muthappa,

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In witness whereof the Mortgagor /s has/have set his /her. their hands this day, month and year first above written.

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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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OA No. 743/2022

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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 has availed 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-09 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, Hypothecation Agreement has been marked as Ex.No.A-03, Deed of Guarantee has been marked as Ex.No.A-04, Mortgage deed has been marked as Ex.No.A-05, MOD Doc.No.5493/2015 has been marked as Ex.No.A-06, Balance and security Confirmation Letter has been marked as Ex.No.A-07, another Balance and security Confirmation Letter has been marked as Ex.No.A-08, Statement of accounts has been marked as Ex.No.A-09. 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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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,

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OA No. 743/2022

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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.37,96,048/- together with interest at the rate of 12.50% p.a. with half yearly rests in respect of Term 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 for a sum of Rs.37,96,048/- together with interest at the rate of 12.50% p.a. with half yearly rests in respect of Term 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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OA No. 743/2022

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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 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 15^th December, 2025.

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Sd/-

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(SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 19.12.25

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Punjab National Bank v. Sarvesh

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. Sarvesh

Case brief

What is this about?

What did the court decide?

What the court decided

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