Allowed

Canara Bank v. K Vijayalakshmi

DRT2 Apr 2026OA/11/2022

Case brief

AI extract

What is this about?

The Tribunal allowed Canara Bank's Original Application for recovery of an agricultural loan of approx. Rs. 21.5 lakhs plus cost against Mrs. K. Vijayalakshmi, who was tried ex-parte. The court directed repayment with 6% simple interest per annum, adjusting for Supreme Court rulings against capitalizing penal interest.

What did the court decide?

Defendant directed to pay Rs.21,49,740.50 plus simple interest at 6% p.a. from date of filing. Liberty to sell mortgaged properties on default. Recovery Certificate to be prepared.

Canara Bank versus K Vijayalakshmi — Banking and Recovery | DRT (2026)

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OA No. 11/2022

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 02^ND DAY OF APRIL, 2026 PRESENT: SEEMA SINHA,

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

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OA No.11/2022

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Between

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Canara Bank, Chekkanoorani Branch, Madurai District. Rep. By its Senior Manager. ---Applicant Bank

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And

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Mrs. K. Vijayalakshmi, W/o Kalaichelvan, No.11A, Muthuramalinga Thevar Street, Kalimuthu Nagar, Arasaradi, Madurai – 625 016. ---Defendants

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Counsel for the Applicant Bank : M/s VS. Karthi Associates

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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 Defendant 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 26.03.2021 to recover from the Defendant a sum of Rs.21,49,740.50p together with interest at the rate of 12.95% p.a. plus penal interest at the

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OA No. 11/2022

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rate of 2%p.a. in respect of Agricultural 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 defendant has applied and availed the Agricultural loan on 28/01/2014 to the tune of Rs. 10,00,000/- vide (Loan Account No.1366862000013) for the purpose of Poultry Unit. The defendant agreed to pay interest at the rate of 12.95% at such other rates as may be revised by the bank from time to time. For which, the defendant had executed proper documents in favour of the applicant bank like Composite Loan Agreement on 28/01/2014, Letter Evidencing Execution of Documents on 28/01/2014, Acknowledgement of Debt and Security on 14/12/2016 and 30/09/2019. The defendant had agreed to abide by all the terms and conditions of the Applicant Bank. Since the defendant had agreed for all the terms and conditions, the applicant bank had sanctioned the loan of Rs.10,00,000/-on 28/01/2014, for which the defendant have executed the Acknowledgement of Debt and Security dated 14/12/2016 and 30/09/2019 towards the loan amount and the details of loan documents are given below:-

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AGRICULTURAL LOAN (Loan Account No.1366862000013)

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1.Common Application cum Appraisal Form For Credit Facilities for Agricultural loan - Rs. 10,00,000/-

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2.Sanction Memorandum

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3.Composite Loan Agreement

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4.Letter of Request for waving insurance for goods under lien to the bank

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Letter Evidencing Execution of Documents (Letter Evidencing Deposit of Title Deeds)

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Acknowledgement of Debt and Security dated 14/12/2016

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Acknowledgement of Debt and Security dated 30/09/2019

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In anent to the facilities availed by the Defendant, there is due of Rs.21,49,740.50p as on 01/02/2021, wherein, the defendant have defaulted

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OA No. 11/2022

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in repayments, and was consequently declared as non-performing asset by the bank. The Loans and interest at applicable rates are also agreed by way of above documents. As per the RBI guidelines, the rate of interest, the bank is charging the interest, for which the defendants have jointly and severally executed the documents in favour of the bank. The defendant had deposited the original title deeds of the schedule of property with the intent to create mortgage of property towards the advances availed by them.

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Thus the Defendant have availed the loan and executed the necessary documents in favour of the Bank. The defendants have agreed to repay the loan and interest severally. The defendants also agreed to pay interest at the rate at applicable rates for each loan or at such other rates as may be revised by the bank from time to time. As the defendant agreed for all the terms and conditions, the applicant bank had sanctioned the above said loan.

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By availing the loan the defendant have agreed to repay the loan amounts in due period with interest as and when due. The defendant is liable to repay the loan with interest and cost from and through her belongings and immovable properties of defendant is more fully described in Schedule "A" here under by Applicant bank.

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For availing the loans by the defendant, the defendant had deposited the original title deeds of the property more fully described in Schedule "A" here under with Applicant bank and executed the Letter Evidencing Deposit of title deeds on 27.01.2014 with an intention to create equitable mortgage.

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Despite repeated demands and reminders, made by the Applicant Bank, the Defendant have failed and neglected to repay and adjust her liability. Hence, the Applicant Bank has filed the OA for recovery of a sum of Rs.21,49,740.50p together with interest at the rate of 12.95% p.a. plus penal interest at the rate of 2%p.a. in respect of Agricultural 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
		Common Application cum Appraisal Form	Ex.No.A-01
1	28/01/2014	for Credit Facilities for Agricultural Loan ₹10,00,000
2	28/01/2014	Sanction Memorandum	Ex.No.A-02

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OA No. 11/2022

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3	28/01/2014	Composite Loan Agreement	Ex.No.A-03
4	28/01/2014	Letter of Request for Waiving Insurance for Goods under Lien to the Bank	Ex.No.A-04
5	27/01/2014	Letter Evidencing Deposit of Title Deeds	Ex.No.A-05
6	28/01/2014	Letter Evidencing Execution of Documents	Ex.No.A-06
7	14/12/2016	Acknowledgement of Debt and Security	Ex.No.A-07
8	30/09/2019	Acknowledgement of Debt and Security	Ex.No.A-08
		Registered Sale Deed executed by A.C.	Ex.No.A-09
9	12/10/1978	Krishnan in favour of A. Subramaniyan, S. Sekaran, S. Arunbose, S. Jegadishbose (Doc.No.3106/1978)
10	13/11/1978	Registered Sale Deed executed by A. Subramaniyan, S. Sekaran, S. Arunbose, S. Jegadishbose in favour of K. Mayakkal (Doc.No.3418/1978)	Ex.No.A-10
		Registered Will Deed executed by K.	Ex.No.A-11
11	31/08/1995	Mayakkal in favour of K. Vijayalakshmi (Doc.No.43/1995)
12	27/08/2009	Death Certificate of K. Mayakkal	Ex.No.A-12
13	24/01/2013	Property Tax Receipt – K. Vijayalakshmi	Ex.No.A-13
14	23/06/1980	Building Plan	Ex.No.A-14
15	26/12/2013	EC for period 01/01/1978 to 31/12/1985 (EC No.10288/2013)	Ex.No.A-15
16	20/12/2013	EC for period 01/01/1986 to 30/06/1988 (EC No.10289/2013)	Ex.No.A-16
17	23/12/2013	EC for period 01/07/1988 to 18/12/2013 (EC No.9642/2013)	Ex.No.A-17
18	03/05/2017	Reminder Notice issued to Defendant with Proof of Service	Ex.No.A-18
19	12/02/2021	Statement of Accounts (Loan Account No.1366862000013)	Ex.No.A-19

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OA No. 11/2022

SCHEDULE "А"

DESCRIPTION OF PROPERTIES

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In Madurai District, Thallakulam Sub Dist, Madurai Town Survey Ward No:10, at present Madurai Corporation Ward No.14, Sellur Muthaiah Chettiar Padithurai Road, T.S.No. 1403/1, 2 cents, Door No.1A, house etc.,

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Boundaries:

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North : T.S.No.1403/1, Site sold by A.Subramaniyan Vagaiyara East : T.S.No. 1403/1, Site of Thavasi Thevar South : 20 feet East West public road West : T.S.No.1403/1, Site of A.Chokkalinga Thevar

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Within this, site measuring East West northern side 25 feet 10 inches, southern side 25 feet, 2 inches, South North western side 34 feet 1 inch and eastern side 34 feet 4 inches. In this pucca house with upstairs with super structures, door, doorway, window, electric connection & fitting motor bore well etc.,

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3 . On the other hand, Notices were issued to Defendant and since from the beginning of the case, there was no representation on behalf of the Defendant. Hence, Defendant was 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. Akkini Raja, who is the Manager of the Applicant Bank.

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He has stated in his affidavit that the defendant has availed Agricultural Loan from the Applicant Bank, but she failed to pay the outstanding loan amount, hence he has filed the case. The applicant bank has also filed the documents given by the defendant at the time of sanctioning the loan amount, which have been marked as exhibits No.A-01 to A-19 in support of its claim in the OA.

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The Xerox copy of Common Application cum Appraisal Form for Credit Facilities for Agricultural Loan ₹ 10,00,000 has been marked as Ex.No.A-01, Sanction Memorandum has been marked as Ex.No.A-02, Composite Loan

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OA No. 11/2022

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Agreement has been marked as Ex.No.A-03, Letter of Request for Waiving Insurance for Goods under Lien to the Bank has been marked as Ex.No.A04, Letter Evidencing Deposit of Title Deeds has been marked as Ex.No.A05, Letter Evidencing Execution of Documents has been marked as Ex.No.A06, Acknowledgement of Debt and Security dated 14/12/2016 has been marked as Ex.No.A-07, Acknowledgement of Debt and Security dated 30/09/2019 has been marked as Ex.No.A-08, Registered Sale Deed dated 12/10/1978 executed by A.C. Krishnan in favour of A. Subramaniyan, S. Sekaran, S. Arunbose and S. Jegadishbose vide Doc.No.3106/1978 has been marked as Ex.No.A-09, Registered Sale Deed dated 13/11/1978 executed by A. Subramaniyan, S. Sekaran, S. Arunbose and S. Jegadishbose in favour of K. Mayakkal vide Doc.No.3418/1978 has been marked as Ex.No.A-10.

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The Registered Will Deed dated 31/08/1995 executed by K. Mayakkal in favour of K. Vijayalakshmi vide Doc.No.43/1995 has been marked as Ex.No.A-11, Death Certificate of K. Mayakkal has been marked as Ex.No.A12, Property Tax Receipt in the name of K. Vijayalakshmi has been marked as Ex.No.A-13, Building Plan dated 23/06/1980 has been marked as Ex.No.A-14, Encumbrance Certificate for the period from 01/01/1978 to 31/12/1985 vide EC No.10288/2013 has been marked as Ex.No.A-15, Encumbrance Certificate for the period from 01/01/1986 to 30/06/1988 vide EC No.10289/2013 has been marked as Ex.No.A-16, Encumbrance Certificate for the period from 01/07/1988 to 18/12/2013 vide EC No.9642/2013 has been marked as Ex.No.A-17, Reminder Notice dated 03/05/2017 issued to the defendant along with proof of service has been marked as Ex.No.A-18, Statement of Accounts dated 12/02/2021 pertaining to Loan Account No.1366862000013 has been marked as Ex.No.A-19. 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 Defendant 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

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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 . Since this is an Agricultural loan 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 Defendant, a sum of Rs.21,49,740.50p together with simple interest at the rate of 6% p.a. in respect of Agricultural 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 Defendant is directed to pay personally for a sum of Rs.21,49,740.50p together with simple interest at the rate of 6% p.a. in respect of Agricultural 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 Defendant, 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 defendant is personally 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 defendant.

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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 Agricultural 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 02^nd April, 2026.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 16.04.26

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Canara Bank v. K Vijayalakshmi

Case brief

What is this about?

What did the court decide?

Canara Bank v. K Vijayalakshmi

Case brief

What is this about?

What did the court decide?

What the court decided

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