Allowed

Canara Bank v. v Murphin John

DRT18 Dec 2025OA/749/2022

Case brief

AI extract

What is this about?

The DRAT allowed the bank's application for recovery of a housing loan default. Citing Supreme Court precedents, the court denied capitalization of penal interest but granted the principal amount with interest until realization, permitting sale of mortgaged properties.

What did the court decide?

Directing respondents to pay Rs.20,00,806.78 with interest at 7.55% p.a. granting liberty to sell mortgaged properties if payment is not made.

Canara Bank versus v Murphin John — Contract and Commercial Disputes | DRT (2025)

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OA No. 749/2022

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 18^TH DAY OF DECEMBER, 2025 PRESENT: SEEMA SINHA, [PR. DISTRICT & SESSIONS JUDGE – Retd] PRESIDING OFFICER

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OA No.749/2022

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Between

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Canara Bank, Thuckalay Branch, P. B. No. 21/37-L 1^st floor, Vasantham main road, Thuckalay – 629 175, Kanyakumari District Rep. By its Senior Manager. ---Applicant Bank

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And

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Mr. V. Murphin John, S/o Varghees, 2-148, Pulluvilai, Veeyannoor P. O. Kanyakumari District – 629177.

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Mr. V. John Bruno, S/o Varghees, 2-148, Pulluvilai, Veeyannoor P. O. Kanyakumari District – 629177. ---Defendants

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Counsel for the Applicant Bank : M/s C. Deepak, M. Vengatesh,

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S. Nowsath Ali, M. Chandrasekar.

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Page 1 of 6

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OA No. 749/2022

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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 27.10.2022 to recover from the Defendants a sum of Rs.20,00,806.78p together with interest at the rate of 7.55% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Housing 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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Both defendants approached the Applicant Bank to avail Housing loan for a sum of Rs.15,00,000/- on 12.09.2016. After due consideration, the Applicant Bank accepted the request of the defendants and sanctioned the Housing Loan after executing necessary documents on 17.09.2016 in favour of the Applicant Bank. Further, Defendants agreed to repay the loan together with interest at the rate of 9.55% p.a. of repayment in 180 EMI of Rs.15,710/- 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. The defendant had executed the Housing loan Agreement on 22.09.2016 and the defendant had executed the Acknowledgement of Debt and Security on 28.01.2019 and also executed the Registered Memorandum of Deposit of Title deeds Doc.No.1951/2016 on 19.09.2016. 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. Thus the loan account has become NPA on 01.04.2021.

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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 sum of Rs.20,00,806.78p together with interest at the rate of 7.55% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Housing Loan from the date of filing of Application till the date of realization with cost.

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Page 2 of 6

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OA No. 749/2022

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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.	12.09.2016	Loan Application	Ex.No.A-01
2.	17.09.2016	Sanction Memorandum	Ex.No.A-02
3.	22.09.2016	HousingLoan Agreement	Ex.No.A-03
4.	28.01.2019	Acknowledgement of Debt and security	Ex.No.A-04
5.	19.01.2012	Registered Sale Deed in favour of Murphin John Doc.No.427/2012	Ex.No.A-05
6.	23.09.2015	Registered Settlement Deed in favour of Murphin John Doc No.2061/2015	Ex.No.A-06
7.	19.09.2016	Registered Memorandum of Deposit of Title Deeds Doc No. 1951/2016	Ex.No.A-07
8.		Statement of Accounts Maintained by the applicant bank in regular course and conduct of business	Ex.No.A-08

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A SCHEDULE -Mortgaged Properties

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ITEM No.1

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State : TamilNadu Regn. District : Kanyakumari Regn. Sub District : Verkizhambi Taluk : Kalkulam Village : Veyyanoor (Now Veyyanoor B) Old. Sy. No. : 1494 Resurvey No. : 20/18C Extent : 2 cents 750 Sq.links

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Boundaries

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East - Property of Pankiraj West - Property of John Puruno South - Property of Nadarajan Asari North - Property of Mr. Vargese.

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ITEM No.2

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State : TamilNadu Regn. District : Kanyakumari

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Page 3 of 6

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OA No. 749/2022

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Regn. Sub District : Verkizhambi Taluk : Kalkulam Village : Veyyanoor (Now Veyyanoor B) Old. Sy. No. : 1494 Resurvey No. : 20/18A and 20/4 Extent : 4 cents 250 Sq.links

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Boundaries

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East - Property of Lawrence son of Pankiraj West - Property of John Puruno South - Property of Murphin John North - Road.

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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. G. V. R. Mohan, who is the Chief Manager of the Applicant Bank.

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He has stated in his affidavit that the defendants has availed Housing 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 Memorandum has been marked as Ex.No.A-02, Housing Loan Agreement has been marked as Ex.No.A-03, Acknowledgement of Debt and security has been marked as Ex.No.A-04, Registered Sale Deed in favour of Murphin John Doc.No.427/2012 has been marked as Ex.No.A-05, Registered Settlement Deed in favour of Murphin John Doc No. 2061/2015 has been marked as Ex.No.A-06, Registered Memorandum of Deposit of Title Deeds Doc No. 1951/2016 has been marked as Ex.No.A-07, Statement of Accounts Maintained by the applicant bank in regular course and conduct of business

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Page 4 of 6

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OA No. 749/2022

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has been marked as Ex.No.A-08. 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, 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.20,00,806.78p together with interest at the rate of 7.55% p.a. with half yearly rests in respect of Housing 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 a sum of Rs.20,00,806.78p together with interest at the rate of 7.55% p.a. with half yearly rests in respect of Housing 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

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Page 5 of 6

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OA No. 749/2022

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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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(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 Housing 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 P.S, taken down, transcribed, typed by her, corrected and pronounced by me in the Open Court in this the 18^th December, 2025.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 26.12.2025

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Canara Bank v. v Murphin John

Case brief

What is this about?

What did the court decide?

Canara Bank v. v Murphin John

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Cases cited

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