Allowed

Canara Bank v. a Nagarajan

DRT8 May 2026OA/118/2022

Case brief

AI extract

What is this about?

The applicant bank filed an original application under Section 19(1) of the RDB Act, 1993 to recover loans and interest from two corporate entities. The defendants were absent. The tribunal accepted the bank's proof affidavit and documentary evidence as uncontradicted and allowed the application, directing payment of the total claimed amount with interest.

What did the court decide?

Directing respondents to pay jointly and severally a total sum of Rs. 1,04,45,273.82 with interest at 9.65% to 9.85% p.a. with half-yearly rests, and authorizing sale of mortgaged properties in defaul

Canara Bank versus a Nagarajan — Banking and Recovery | DRT (2026)

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OA No. 118/2022

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 08^TH DAY OF MAY, 2026 PRESENT: SEEMA SINHA,

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

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OA No.118/2022

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Between

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Canara Bank, Karaikudi-Il Branch, Karaikudi, Sivagangai District Rep. By its Branch Manager.

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---Applicant Bank

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And

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Mr. A. Nagarajan, Prop. M/s. Naphees Cornices and Interior Decorators, S/o Arumugam, Kundrakudi Main Road, Near TPCL, Patharakudi, Karaikudi, Sivagangai – 630 001.

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Also at:

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Mr. A. Nagarajan, Prop. M/s. Naphees Cornices and Interior Decorators, S/o Arumugam, D.No.191/2, Sri Ragavendira Nagar, Karaikudi, Sivagangai District – 630 001.

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OA No. 118/2022

Also at:

Mr. A. Nagarajan, Prop. M/s. Naphees Cornices and Interior Decorators, S/o Arumugam, D.No.308A, Chinna Matur, I Mathur, Illupukudi Post, Karaikudi Taluk, Sivagangai District – 630 202.

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Mrs. N. Kalpana, Prop. M/s. Naphees Enterprises, W/o A. Nagarajan, No.2, Siva Sakthi Bhavanam, Taluk Office Main Road, Karaikudi, Sivagangai District – 630 003.

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Also at:

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Mrs. N. Kalpana, Prop. M/s. Naphees Enterprises, W/o A. Nagarajan, D.No.191/2, Sri Ragavendira Nagar, Karaikudi, Sivagangai District – 630 001.

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Also at:

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Mrs. N. Kalpana, Prop. M/s. Naphees Enterprises, W/o A. Nagarajan, D.No.308A, Chinna Matur, I Mathur, Illupukudi Post, Karaikudi Taluk, Sivagangai District – 630 202. ---Defendants

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Counsel for the Applicant Bank : M/s R. Pandivel

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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. 118/2022

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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 28.09.2021 to recover from the Defendants a total sum of Rs.1,04,45,273.82p i.e.,

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(i) Rs.24,89,597.16p together with interest at the rate of 9.80% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Overdraft Facility of 1^st defendant

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(ii) Rs.10,74,530.68p together with interest at the rate of 8.90% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Term Loan-I of 1^st defendant

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(iii) Rs.28,21,339.82p together with interest at the rate of 8.75% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Term Loan – II of 1^st defendant

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(iv) Rs.31,02,124.10p together with interest at the rate of 9.65% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Overdraft facility of 2^nd defendant

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(v) Rs.9,57,682.06p together with interest at the rate of 9.85% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Term Loan of 2^nd defendant 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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M/s.Naphees Cornices and Interior Decorators

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Overdraft Facility

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In consideration of the above said overdraft Facility, the 1^st defendant executed a "Terms & conditions with regard to Overdraft Facility" on 11.05.17 containing various terms & conditions in favour of the Applicant Bank as security for repayment of the said overdraft facility with interest & cost. The 1^st defendant executed a Demand promissory Note on 11.05.17 for a sum of Rs.49,00,000/- in favour of the Applicant Bank promising to repay the loan amount on demand with compound interest at the rate of l0% per annum with monthly rest or at such other rate as may be revised by the bank from time to time.

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OA No. 118/2022

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The 1^st defendant also executed a composite Hypothecation Agreement on 11.05.17 for sum of Rs.49,00,000/- by hypothecating the goods which are fully described in the 'A' Schedule hereunder. Further the 1^st defendant promised to repay the loan amount with compound interest at the rate of l0% per annum with monthly rest or at such other rates as may be revised by the bank from time to time with penal interest at the rate of 2% per annum in case of default.

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At the request of the 1^st defendant the applicant bank has restructured the limit of Rs.49,00,000/- into Overdraft Facility of Rs.24,00,000/- and Term Loan-I of Rs.25,00,000.

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The Applicant Bank submits that in consideration of the above said restructured overdraft Facility, the 1^st defendant executed a composite Hypothecation Agreement on 29.02.20 for a sum of Rs.24,00,000/- by hypothecating the goods which are fully described in the ‘A' Schedule hereunder. Further the 1^st defendant promised to repay the loan amount with compound interest at the rate of 11.15% per annum with monthly rest or at such other rates as may be revised by the bank from time to time with penal interest at the rate of 2% per annum in case of default. The 1^st defendant by admitting & acknowledging his liabilities made payments from 2015 to 202l.

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Term Loan-I

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In consideration of the above said Term Loan-I, the 1^st defendant executed a Composite Hypothecation Agreement on 11.05.17 for a sum of Rs.11,78,000/- by hypothecating the goods which are fully described in the 'A' Schedule hereunder. Further the 1^st defendant promised to repay the loan amount in 120 monthly installment of Rs.16,744. 59p with compound interest at the rate of l0.25% per annum with monthly rest or at such other rates as may be revised by the bank from time to time with penal interest at the rate of 2% per annum in case of default. The 1^st defendant had availed the above said Term Loan-I as shown in the Statement of Accounts maintained by the Applicant Bank in regular course and conduct of the business. The 1^st defendant by admitting & acknowledging his liabilities made payments from 2018 to 2021.

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Term Loan-II

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In consideration of the restructured Term Loan-II for a sum of Rs.25,00,000/-, the 1^st defendant executed an Articles of Agreement on 28.02.20 by hypothecating the goods which are fully described in the 'A' Schedule hereunder. Further the 1^st defendant promised to repay the loan

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OA No. 118/2022

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amount in 117 monthly installment of Rs.32,737/- with compound interest at the rate of 8.75% per annum with monthly rest or at such other rates as may be revised by the bank from time to time with penal interest at the rate of 2% per annum in case of default. The 1^st defendant had availed the above said Term Loan-II as shown in the Statement of Accounts maintained by the Applicant Bank in regular course and conduct of the business.

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M/s.Naphess Enterprises

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Overdraft Facility

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In consideration of the above said Overdraft Facility, the 2^nd defendant executed a "Terms & Conditions with regard to Overdraft Facility" on 11.09.18 containing various terms & conditions in favour of the Applicant Bank as security for repayment of the said overdraft facility with interest & cost. The 2^nd defendant executed a Demand Promissory Note on 11.09.18 for a sum of Rs.40,00,000/- in favour of the Applicant Bank promising to repay the loan amount on demand with compound interest at the rate of 10.30% per annum with monthly rest or at such other rate as may be revised by the bank from time to time

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The 2^nd defendant executed a Composite Hypothecation Agreement on 11.09.18 by hypothecating the goods which are fully described in the 'A' Schedule hereunder. Further the 1^st defendant promised to repay the loan amount with compound interest at the rate of 10.30% per annum with monthly rest or at such other rates as may be revised by the bank from time to time with penal interest at the rate of 2% per annum in case of default. The 1^st defendant agreed to stand as Continuing Guarantor for the repayment of the said loan with interest & costs thereon and executed Agreement of Continuing Guarantee dt.11.09.18 in favour of the Applicant Bank.

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At the request of the 2^nd defendant, the applicant bank has restructured the Overdraft Facility and reduced the limit from Rs.40,00,000 to Rs.30,00,000/-. In consideration of the restructured Overdraft Facility, the 2^nd defendant executed a "Terms & Conditions with regard to Overdraft Facility" on26.03.20 containing various terms & conditions in favour of the Applicant Bank as security for repayment of the said overdraft facility with interest & cost. The 2^nd defendant executed a Demand Promissory Note on 26.03.20 for a sum Rs.30,00,000/- in favour of the Applicant Bank promising to repay the loan amount on demand with compound interest at the rate of 9.65% per annum with monthly rest or at such other rate as may be revised by the bank from time to time. The 2nd defendant executed a Composite Hypothecation Agreement on 26.03.20 by hypothecating the

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goods which are fully described in the 'A' Schedule hereunder. Further the 2nd defendant promised to repay the loan amount with compound interest at the rate of 9.65% per annum with monthly rest or at such other rates as may be revised by the bank from time to time with penal interest at the rate of 2% per annum in case of default.

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The 2nd defendant has availed the above said Overdraft Facility as shown in the Statement of Accounts maintained by the Applicant Bank in regular course and conduct of the business. The 2^nd defendant by admitting & acknowledging his liabilities made payments from 201 6 to 2021.

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Term Loan

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The 2nd defendant executed an Articles of Agreement on 24.03.20 by hypothecating the goods which are fully described in the 'A' Schedule hereunder. Further the 2nd defendant promised to repay the loan amount in 35 monthly installments of Rs.33,836/- with compound interest at the rate of 9.85% per annum with monthly rest or at such other rates as may be revised by the bank from time to time with penal interest at the rate of 2% per annum in case of default. The 2nd defendant had availed the above said Term Loan as shown in the Statement of Accounts maintained by the Applicant Bank in regular course and conduct of the business.

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Common to all Loans & facilities

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In consideration of the above said loans & facilities, the 1^st defendant offered his properties which are fully mentioned in the 'B' Schedule hereunder as Security and thereby the 1^st defendant deposited/re-deposited his Title Deeds on 22.06.11 & I1.09.18 with the applicant bank pertaining to said properties, with an intention to create an Equitable Mortgage over the said properties and by confirming the same the 1^st defendant executed Registered Memorandum of Deposit of Title Deeds on 22.06.11, 22.07.16, 07.05.18 & 11.09.18 in favour of the Applicant Bank. The original title deeds & other documents deposited by the 1^st defendant with regard to "B" Schedule Mortgage property with an intention to create an equitable mortgage

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The defendants have not repaid the said loan as agreed and promised by them. Thus he has committed default in repaying the loan amount. Hence the applicant bank issued Demand Notices dt.18.06.21 to the defendants. Despite the said notices & repeated demands made by the Applicant Bank the defendants did not take any sincere steps to discharge the loan.

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OA No. 118/2022

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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 total sum of Rs.1,04,45,273.82p i.e.,

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(i) Rs.24,89,597.16p together with interest at the rate of 9.80% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Overdraft Facility of 1^st defendant

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(ii) Rs.10,74,530.68p together with interest at the rate of 8.90% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Term Loan-I of 1^st defendant

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(iii) Rs.28,21,339.82p together with interest at the rate of 8.75% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Term Loan – II of 1^st defendant

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(iv) Rs.31,02,124.10p together with interest at the rate of 9.65% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Overdraft facility of 2^nd defendant

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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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List of Documents Loan Documents

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M/s.Naphees Cornices and Interior Decorators Overdraft Facility & Term Loan-I

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S. No.	Date	Description of document	Exhibits
1	01.05.2017	Letter of Request for Overdraft Facility executed by the 1st defendant in favour of the applicant bank	Ex.No.A-01
2	11.05.2017	Demand Promissory Note executed by the 1st defendant in favour of the applicant bank	Ex.No.A-02
3	11.05.2017	Composite Hypothecation Agreement executed by the 1st defendant in favour of the applicant bank for Overdraft Facility & Term Loan-I	Ex.No.A-03
4	29.02.2020	Composite Hypothecation Agreement executed by the 1st defendant in favour of the applicant bank	Ex.No.A-04

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		Statement of Accounts maintained by the
5	29.02.2020	applicant bank in the regular course & conduct of business towards Overdraft Facility	Ex.No.A-05
		Statement of Accounts maintained by the
6	29.02.2020	applicant bank in the regular course &	Ex.No.A-06
		conduct of business towards Term Loan-I

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Term Loan-II

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7	28.02.2020	Articles of Agreement executed by the 1st defendant in favour of the applicant bank	Ex.No.A-07
		Original Statement of Accounts maintained
8	28.02.2020	by the applicant bank in the regular course	Ex.No.A-08
		& conduct of business

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M/s.Naphess Enterprises

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Overdraft Facility

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		Letter of Request for Overdraft Facility
9	11.09.2018	executed by the 2nd defendant in favour of the applicant bank	Ex.No.A-09
		Demand Promissory Note executed by the
10	11.09.2018	2nd defendant in favour of the applicant bank	Ex.No.A-10
		Composite Hypothecation Agreement
11	11.09.2018	executed by the 2nd defendant in favour of the applicant bank	Ex.No.A-11
12	11.09.2018	Agreement of Guarantee executed by the 1st defendant in favour of the applicant bank	Ex.No.A-12
		Letter of Request for Overdraft Facility
13	26.03.2020	executed by the 2nd defendant in favour of the applicant bank	Ex.No.A-13
		Demand Promissory Note executed by the
14	26.03.2020	2nd defendant in favour of the applicant bank	Ex.No.A-14
		Composite Hypothecation Agreement
15	26.03.2020	executed by the 2nd defendant in favour of the applicant bank	Ex.No.A-15
		Statement of Accounts maintained by the
16	24.03.2020	applicant bank in the regular course & conduct of business towards Term Loan	Ex.No.A-16

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Term Loan-II

17	24.03.2020	Articles of Agreement executed by the 2nd defendant in favour of the applicant bank	Ex.No.A-17
		Statement of Accounts maintained by the
18	24.03.2020	applicant bank in the regular course & conduct of business	Ex.No.A-18

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Common to all loans & facilities

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19	22.06.2011	Registered Memorandum of Deposit of Title Deeds executed by the 1st defendant in favourofthe applicant bank	Ex.No.A-19
		Registered Supplemental Memorandum of
20	22.07.2016	Deposit of Title Deeds executed by the 1st defendantin favouroftheapplicant bank	Ex.No.A-20
		Registered Supplemental Memorandum of
21	07.05.2018	Deposit of Title Deeds executed by the 1st defendant in favour of the applicant bank	Ex.No.A-21
22	11.09.2018	Registered Memorandum of Deposit of Title Deeds executed by the 1st defendant in favour of the applicant bank	Ex.No.A-22
23	18.06.2021	Demand Notice issued by the applicant bank to the defendants	Ex.No.A-23
24	18.06.2021	Demand Notice issued by the applicant bank to the defendants	Ex.No.A-24
		Notification No. GSR 155(E) dated
25	04.03.2020	04.03.2020 of Government of India published in Extraordinary GazetteNo.133	Ex.No.A-25

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List of Documents

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Annexure - I

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Title deeds deposited by 1" defendant with regard to Item No.l of 'B' Schedule Mortgage Properties

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26	31.07.1975	Proceedings of District Revenue Officer, Ramanathapuram	Ex.No.B-26
27	08.09.1997	Extract of Chitta for Fasli 1407 issued by VAO, Managiri-Sukkanendhal Village standing in the name of Subramanian & another	Ex.No.B-27
28	23.05.1997	Kist receipt issued by VAO, Managiri- Sukkanendhal Village standing in the name of Subramanian & another	Ex.No.B-28
29	16.06.1997	Registered Sale Deed executed by Subramanian & another in favour of Ragavan	^Ex.No.B-29

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		& others(Doc.No.1969/1997)
30	14.10.1997	Proceedings of Commissioner, Kallal Panchayat	Ex.No.B-30
31	11.12.2002	Will executed by Subramanian in favour of Muralidharan & others	Ex.No.B-31
32	10.06.2003	Legal Heir Certificate of Subramanian issued byTahsildar, Karaikudi	Ex.No.B-32
		Unregistered Consent Deed executed by
33	----	Chitra & another in favour of Muralidharan & others	Ex.No.B-33
34	23.06.2004	Unregistered Memorandum of Partition Deed entered into between Ragavan & others	Ex.No.B-34
		Registered Sale Deed executed by Power
35	23.06.2006	Agent Sevugan in favour of Nagarajan (Doc.No.2898/06)	Ex.No.B-35
		Registered Sale Deed executed by Power
36	23.06.2006	Agent Sevugan in favour of Nagarajan (Doc.No.2898/06)	Ex.No.B-36
		House Tax Receipt for the year 2008-09
37	26.03.2009	issued by Patharakudi Panchayat standing in the name of Nagarajan	Ex.No.B-37

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List of Documents

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Annexure - II

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Title deeds deposited by 1" defendant with regard to Item No.2 of 'B' Schedule Mortgage Properties

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38	31.07.1975	Proceedings of District Revenue Officer, Ramanathapuram	Ex.No.A-38
39	08.09.1997	Extract of Chitta for Fasli 1407 issued by VAO, Managiri-Sukkanendhal Village standing in the name of Subramanian & another	Ex.No.A-39
40	23.05.1997	Kist receipt issued by VAO, Karaikudi Managiri-Sukkanendhal Village standing in the name of Subramanian & another	Ex.No.A-40
41	16.06.1997	Registered Sale Deed executed by Subramanian & another in favour of Ragavan & others(Doc.No.1969/97)	Ex.No.A-41
42	14.10.1997	Proceedings of Commissioner, Kallal Panchayat	Ex.No.A-42
43	11.12.2002	Registered Will executed by Subramanian in favour of Muralidharan & others	Ex.No.A-43

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44	21.02.2002	Legal Heir Certificate of Subramanian issued byTahsildar, Karaikudi	Ex.No.A-44
45	—	Unregistered Consent Deed executed by Chitra & another in favour of Muralidharan & others	Ex.No.A-45
46	23.06.2004	Unregistered Memorandum of Partition Deed entered into between Ragavan & others	Ex.No.A-46
47	06.02.2012	Registered Settlement Deed executed by Muralidharan & another in favour of Anandan(Doc.No.998/12)	Ex.No.A-47
48	19.01.2015	Registered Sale Deed executed by Anandan in favour of Nagarajan(Doc.No.194/15)	Ex.No.A-48
49	19.01.2015	Registered Sale Deed executed by Anandan in favour of Nagarajan(Doc.No.194/15)	Ex.No.A-49

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List of Documents

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Annexure - III

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Title deeds deposited by 1" defendant with regard to Item No.3 of 'B' Schedule Mortgage Properties

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S. No.	Date	Particulars	Exhibits
50	31.07.1975	Proceedings of District Revenue Officer, Ramanathapuram	Ex.No.A-50
51	08.09.1997	Extract of Chitta for Fasli 1407 issued by VAO, Managiri-Sukkanendhal Village standing in the name of Subramanian & another	Ex.No.A-51
52	23.05.1997	Kist receipt issued by VAO, Karaikudi Managiri-Sukkanendhal Village standing in the name of Subramanian & another	Ex.No.A-52
53	16.06.1997	Registered Sale Deed executed by Subramanian & another in favour of Ragavan & another(Doc.No.1969/97)	Ex.No.A-53
54	14.10.1997	Proceedings of Commissioner, Kallal Panchayat	Ex.No.A-54
55	11.12.2002	Registered Will executed by Subramanian in favour of Muralidharan & others	Ex.No.A-55
56	21.02.2002	Legal Heir Certificate of Subramanian issued byTahsildar, Karaikudi	Ex.No.A-56
57	—	Unregistered Consent Deed executed by Chitra & another in favour of Muralidharan & others	Ex.No.A-57

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58	23.06.2004	Unregistered Memorandum of Partition Deed entered into between Ragavan & others	Ex.No.A-58
59	19.03.2012	Registered Release Deed executed by Ragavan & others in favour of Kalyani (Doc.No.2580/12)	Ex.No.A-59
60	23.12.2013	Registered Sale Deed executed by Kalyani in favour of Antonysamy (Doc.No.8533/13)	Ex.No.A-60
61	22.01.2015	Registered Sale Deed executed by Antonysamy in favour of Nagarajan (Doc.No.365/15)	Ex.No.A-61
62	22.01.2015	Registered Sale Deed executed by Antonysamy in favour of Nagarajan (Doc.No.365/15)	Ex.No.A-62

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List of Documents

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Annexure - IV

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Title deeds deposited by 1" defendant with regard to Item No.4 of 'B' Schedule Mortgage Properties

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S. No.	Date	Particulars	Exhibits
63	31.07.1975	Proceedings of District Revenue Officer, Ramanathapuram	Ex.No.A-63
64	08.09.1997	Extract of Chitta for Fasli 1407 issued by VAO, Managiri-Sukkanendhal Village standing in the name of Subramanian & another	Ex.No.A-64
65	23.05.1997	Kist receipt issued by VAO, Karaikudi Managiri-Sukkanendhal Village standing in the name of Subramanian & another	Ex.No.A-65
66	16.06.1997	Registered Sale Deed executed by Subramanian & another in favour of Ragavan & others (Doc.No.1969/97)	Ex.No.A-66
67	14.10.1997	Proceedings of Commissioner, Kallal Panchayat	Ex.No.A-67
68	11.12.2002	Registered Will executed by Subramanian in favour of Muralidharan & others	Ex.No.A-68
69	21.02.2002	Legal Heir Certificate of Subramanian issued by Tahsildar, Karaikudi	Ex.No.A-69

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70	—	Unregistered Consent Deed executed by Chitra & another in favour of Muralidharan & others	Ex.No.A-70
71	23.06.2004	Unregistered Memorandum of Partition Deed entered into between Ragavan & others	Ex.No.A-71
72	06.02.2012	Registered Settlement Deed executed by Muralidharan & another in favour of Ragavan & others (Doc.No.998/12)	Ex.No.A-72
73	09.07.2015	Registered Sale Deed executed by Anandhan in favour of Nagarajan (Doc.No.3713/15)	Ex.No.A-73
74	09.07.2015	Registered Sale Deed executed by Anandhan in favour of Nagarajan (Doc.No.3713/15)	Ex.No.A-74

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Schedule of Properties "A" Schedule - Hypothecated Goods

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Item No.l

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Stocks of all goods & materials etc, all stored & kept at Kundrakudi Main Road, Near TCPL, Patharakudi, Karaikudi, Sivagangai District-630 001 and No.2, Siva Sakthi Bhavanam, Taluk Office Main Road, Karaikudi, Sivagangai District-630 003

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Item No.2

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All Book Debts, Outstandings, Money Receivables, Claims and Bills due and owing to the 1^st defendant

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"B" Schedule of Mortgage Properties

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Item No.1 (Property belonging to I't Defendant Vide Annexure - I for Title Deeds)

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i) a house site in Plot No.l4 measuring East-West 35 feet both on the Northern & Southern sides and North-South 60 feet both on the Eastern &

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Western sides totaling 2100 Sq.ft comprised in S.No.l9l/2 within the following boundaries:

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On the East : Plot No.13 On the West : Plot No.l5 On the South : Plot No.2l On the North : 20 feet width Road

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ii) a house site in Plot No.15 measuring East-West 35 feet both on the Northern & Southern sides and North-South 60 feet both on the Eastern & Western sides totaling 2100 Sq.ft comprised in S.No.l9l/2 within the following boundaries:

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On the East : Plot No.14 On the West : PlotNos.l6 & 17 On the South : Plot No.20 On the North : 20 feet width Road

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iii) a house site in Plot No.l9 measuring East-West 60 feet both on the Northern & Southern sides and North-South 30 feet both on the Eastern & Western sides totaling 1800 Sq.ft comprised in S.No.191/2 within the following boundaries:

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On the East : Plot No.20 On the North : Plot No.18 On the South : 20 feet width Road On the West : 20 feet width Road

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iv) a house site in Plot No.20 measuring East-West 35 feet both on the Northern & Southern sides and North-South 60 feet both on the Eastern & Western sides totaling 2100 Sq,ft comprised in S.No.191/2 within the following boundaries:

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On the East : Plot No.2l On the West : Plot Nos.18 & 19 On the South : 20 feet width Road On the North : Plot No.15

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All the plots totaling 8,100 Sq.ft and building construct thereon bearing Door No.304/A. All above plots now comprised in New S.No.19l/3A1A

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Item No.2 (Property belonging to I't Defendant Vide Annexure - II for Title Deeds)

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OA No. 118/2022

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Sivagangai District, Karaikudi Registration District, Karaikudi Joint No.II Sub Registration District, Karaikudi Taluk, Padharakudi panchayat, Managiri-Sukkanendhal Group, Padharakudi Village, a land measuring 3 acres 68 cents comprised in S.No.l91/1 and another land measuring 4 acres 32 cents comprised in S.No.191/2 both totaling 8 acres which was divided into various house plots under the name & style of "Sri Ragavanandha Nagar" out of which; a house site in Plot No. 16 measuring East-West 60 feet both on the Northern & Southern sides and North-South 30 feet both on the Eastern & Western sides totaling 1800 Sq.ft comprised in S.No.19l/2 corresponding to new S.No.191/3A1A and buildings constructed thereon bearing Door No.304/A within the following boundaries:

¶142

On the North : East-West 20 feet width Road On the South : Plot No.17 On the East : Plot No.12 On the West : North-South 20 feet width Road

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Item No.3 (Property belonging to 1't Defendant Vide Annexure - III for Title Deeds)

¶144

Sivagangai District, Karaikudi Registration District, Karaikudi Joint No.II Sub Registration District, Karaikudi Taluk, Padharakudi Panchayat, Managiri-Sukkanendhal Group, Padharakudi Village, a land measuring 3 acres 68 cents comprised in S.No.191/1 and another land measuring 4 acres 32 cents comprised in S.No.191/2 both totaling 8 acres which was divided into various house plots under the name & style of "Sri Ragavanandha Nagar" out of which; a house site in Plot No.l7 measuring 1800 Sq.ft comprised in S.No.19l/2 corresponding to new S.No.l9l/3AlA and buildings constructed thereon bearing Door No.304/A within the following boundaries:

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On the North : Plot No.l6 On the South : Plot No.18 On the East : Plot No.l5 On the West : North-South 20 feet width Road

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Item No.4 (Properfy belonging to I't Defendant Vide Annexure - IV for Title Deeds)

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OA No. 118/2022

32 cents comprised in S.No.191/2 both totaling 8 acres was divided into various house plots under the name & style of "Sri Ragavanandha Nagar,' out of which; a house site in Plot No.56 as per Sri Ragavanandha Layout Plan corresponding Plot No.8 as per Commissioner approval bearing No.A6/5076/97 measuring East-West 60 feet both on the Northern & Southern sides and North-South 35 feet both on the Eastern & Western sides totaling 2100 Sq.ft comprised in S.No.191/2 corresponding to new S.No.191/7 within the following boundaries:

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On the North : Plot No.57 On the South : Plot No.55 On the East : North-South 20 feet width Road On the West : Plot No.68

¶152

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. J. Rajavel, who is the Senior Manager of the Applicant Bank.

¶155

He has stated in his affidavit that the defendant M/s Naphees Cornices and Interior Decorators has availed Overdraft Facility, Term Loan-I, Term Loan-II and the defendant M/s Naphees Enterprises has availed Overdraft facility and 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-74 in support of its claim in the OA.

¶156

The Letter of Request for Overdraft Facility executed by the 1st defendant in favour of the applicant bank has been marked as Ex.No.A-01, Demand Promissory Note executed by the 1st defendant in favour of the applicant bank has been marked as Ex.No.A-02, Composite Hypothecation Agreement executed by the 1st defendant in favour of the applicant bank for Overdraft Facility & Term Loan-I has been marked as Ex.No.A-03, Composite Hypothecation Agreement executed by the 1st defendant in favour of the applicant bank has been marked as Ex.No.A-04, Statement of

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Accounts maintained by the applicant bank in the regular course & conduct of business towards Overdraft Facility has been marked as Ex.No.A-05, Statement of Accounts maintained by the applicant bank in the regular course & conduct of business towards Term Loan-I has been marked as Ex.No.A-06, Articles of Agreement executed by the 1st defendant in favour of the applicant bank has been marked as Ex.No.A-07, Original Statement of Accounts maintained by the applicant bank in the regular course & conduct of business has been marked as Ex.No.A-08, Letter of Request for Overdraft Facility executed by the 2nd defendant in favour of the applicant bank has been marked as Ex.No.A-09, Demand Promissory Note executed by the 2nd defendant in favour of the applicant bank has been marked as Ex.No.A-10.

¶160

The Composite Hypothecation Agreement executed by the 2nd defendant in favour of the applicant bank has been marked as Ex.No.A-11, Agreement of Guarantee executed by the 1st defendant in favour of the applicant bank has been marked as Ex.No.A-12, Letter of Request for Overdraft Facility executed by the 2nd defendant in favour of the applicant bank has been marked as Ex.No.A-13, Demand Promissory Note executed by the 2nd defendant in favour of the applicant bank has been marked as Ex.No.A-14, Composite Hypothecation Agreement executed by the 2nd defendant in favour of the applicant bank has been marked as Ex.No.A-15, Statement of Accounts maintained by the applicant bank in the regular course & conduct of business towards Term Loan has been marked as Ex.No.A-16, Articles of Agreement executed by the 2nd defendant in favour of the applicant bank has been marked as Ex.No.A-17, Statement of Accounts maintained by the applicant bank in the regular course & conduct of business has been marked as Ex.No.A-18, Registered Memorandum of Deposit of Title Deeds executed by the 1st defendant in favour of the applicant bank has been marked as Ex.No.A-19, Registered Supplemental Memorandum of Deposit of Title Deeds executed by the 1st defendant in favour of the applicant bank has been marked as Ex.No.A-20.

¶161

The Registered Supplemental Memorandum of Deposit of Title Deeds executed by the 1st defendant in favour of the applicant bank has been marked as Ex.No.A-21, Registered Memorandum of Deposit of Title Deeds executed by the 1st defendant in favour of the applicant bank has been marked as Ex.No.A-22, Demand Notice issued by the applicant bank to the defendants has been marked as Ex.No.A-23, Demand Notice issued by the applicant bank to the defendants has been marked as Ex.No.A-24, Notification No. GSR 155(E) dated 04.03.2020 of Government of India published in Extraordinary Gazette No.133 has been marked as Ex.No.A-25, Proceedings of District Revenue Officer, Ramanathapuram has been marked as Ex.No.A-26, Extract of Chitta for Fasli 1407 issued by VAO, ManagiriSukkanendhal Village standing in the name of Subramanian & another has

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been marked as Ex.No.A-27, Kist receipt issued by VAO, Karaikudi Managiri-Sukkanendhal Village standing in the name of Subramanian & another has been marked as Ex.No.A-28, Registered Sale Deed executed by Subramanian & another in favour of Ragavan & others (Doc.No.1969/97) has been marked as Ex.No.A-29, Proceedings of Commissioner, Kallal Panchayat has been marked as Ex.No.A-30.

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The Registered Will executed by Subramanian in favour of Muralidharan & others has been marked as Ex.No.A-31, Legal Heir Certificate of Subramanian issued by Tahsildar, Karaikudi has been marked as Ex.No.A-32, Unregistered Consent Deed executed by Chitra & another in favour of Muralidharan & others has been marked as Ex.No.A-33, Unregistered Memorandum of Partition Deed entered into between Ragavan & others has been marked as Ex.No.A-34, Registered Settlement Deed executed by Muralidharan & another in favour of Ragavan & others (Doc.No.998/12) has been marked as Ex.No.A-35, Registered Sale Deed executed by Anandhan in favour of Nagarajan (Doc.No.3713/15) has been marked as Ex.No.A-36, Registered Sale Deed executed by Anandhan in favour of Nagarajan (Doc.No.3713/15) has been marked as Ex.No.A-37, Proceedings of District Revenue Officer, Ramanathapuram has been marked as Ex.No.A-38, Extract of Chitta for Fasli 1407 issued by VAO, ManagiriSukkanendhal Village standing in the name of Subramanian & another has been marked as Ex.No.A-39, Kist receipt issued by VAO, Karaikudi Managiri-Sukkanendhal Village standing in the name of Subramanian & another has been marked as Ex.No.A-40.

¶166

The Registered Sale Deed executed by Subramanian & another in favour of Ragavan & others (Doc.No.1969/97) has been marked as Ex.No.A41, Proceedings of Commissioner, Kallal Panchayat has been marked as Ex.No.A-42, Registered Will executed by Subramanian in favour of Muralidharan & others has been marked as Ex.No.A-43, Legal Heir Certificate of Subramanian issued by Tahsildar, Karaikudi has been marked as Ex.No.A-44, Unregistered Consent Deed executed by Chitra & another in favour of Muralidharan & others has been marked as Ex.No.A-45, Unregistered Memorandum of Partition Deed entered into between Ragavan & others has been marked as Ex.No.A-46, Registered Settlement Deed executed by Muralidharan & another in favour of Ragavan & others (Doc.No.998/12) has been marked as Ex.No.A-47, Registered Sale Deed executed by Anandan in favour of Nagarajan (Doc.No.3713/15) has been marked as Ex.No.A-48, Registered Sale Deed executed by Anandan in favour of Nagarajan (Doc.No.3713/15) has been marked as Ex.No.A-49, Proceedings of District Revenue Officer, Ramanathapuram has been marked as Ex.No.A-50.

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OA No. 118/2022

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The Extract of Chitta for Fasli 1407 issued by VAO, ManagiriSukkanendhal Village standing in the name of Subramanian & another has been marked as Ex.No.A-51, Kist receipt issued by VAO, Karaikudi Managiri-Sukkanendhal Village standing in the name of Subramanian & another has been marked as Ex.No.A-52, Registered Sale Deed executed by Subramanian & another in favour of Ragavan & others (Doc.No.1969/97) has been marked as Ex.No.A-53, Proceedings of Commissioner, Kallal Panchayat has been marked as Ex.No.A-54, Registered Will executed by Subramanian in favour of Muralidharan & others has been marked as Ex.No.A-55, Legal Heir Certificate of Subramanian issued by Tahsildar, Karaikudi has been marked as Ex.No.A-56, Unregistered Consent Deed executed by Chitra & another in favour of Muralidharan & others has been marked as Ex.No.A-57, Unregistered Memorandum of Partition Deed entered into between Ragavan & others has been marked as Ex.No.A-58, Registered Settlement Deed executed by Muralidharan & another in favour of Ragavan & others (Doc.No.998/12) has been marked as Ex.No.A-59, Registered Sale Deed executed by Anandhan in favour of Nagarajan (Doc.No.3713/15) has been marked as Ex.No.A-60.

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The Registered Sale Deed executed by Anandhan in favour of Nagarajan (Doc.No.3713/15) has been marked as Ex.No.A-61, Registered Sale Deed executed by Anandhan in favour of Nagarajan (Doc.No.3713/15) has been marked as Ex.No.A-62, Proceedings of District Revenue Officer, Ramanathapuram has been marked as Ex.No.A-63, Extract of Chitta for Fasli 1407 issued by VAO, Managiri-Sukkanendhal Village standing in the name of Subramanian & another has been marked as Ex.No.A-64, Kist receipt issued by VAO, Karaikudi Managiri-Sukkanendhal Village standing in the name of Subramanian & another has been marked as Ex.No.A-65, Registered Sale Deed executed by Subramanian & another in favour of Ragavan & others (Doc.No.1969/97) has been marked as Ex.No.A-66, Proceedings of Commissioner, Kallal Panchayat has been marked as Ex.No.A-67, Registered Will executed by Subramanian in favour of Muralidharan & others has been marked as Ex.No.A-68, Legal Heir Certificate of Subramanian issued by Tahsildar, Karaikudi has been marked as Ex.No.A-69, Unregistered Consent Deed executed by Chitra & another in favour of Muralidharan & others has been marked as Ex.No.A-70.

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The Unregistered Memorandum of Partition Deed entered into between Ragavan & others has been marked as Ex.No.A-71, Registered Settlement Deed executed by Muralidharan & another in favour of Ragavan & others (Doc.No.998/12) has been marked as Ex.No.A-72, Registered Sale Deed executed by Anandhan in favour of Nagarajan (Doc.No.3713/15) has been marked as Ex.No.A-73, Registered Sale Deed executed by Anandhan in favour of Nagarajan (Doc.No.3713/15) has been marked as Ex.No.A-74. So

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OA No. 118/2022

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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 pJudgment 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

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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 total sum of Rs.1,04,45,273.82p i.e.,

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(i) Rs.24,89,597.16p together with interest at the rate of 9.80% p.a. with half yearly rests in respect of Overdraft Facility of 1^st defendant

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(ii) Rs.10,74,530.68p together with interest at the rate of 8.90% p.a. with half yearly rests in respect of Term Loan-I of 1^st defendant

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(iii) Rs.28,21,339.82p together with interest at the rate of 8.75% p.a. with half yearly rests in respect of Term Loan – II of 1^st defendant

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(iv) Rs.31,02,124.10p together with interest at the rate of 9.65% p.a. with half yearly rests in respect of Overdraft facility of 2^nd defendant

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(v) Rs.9,57,682.06p together with interest at the rate of 9.85% p.a. with half yearly rests in respect of Term Loan of 2^nd defendant from the date of filing of Application till the date of realization with cost. Accordingly, it is hereby

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OA No. 118/2022

ORDERED

(a) That the Defendants are directed to pay jointly/severally a total sum of Rs.1,04,45,273.82p i.e.,

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(i) Rs.24,89,597.16p together with interest at the rate of 9.80% p.a. with half yearly rests in respect of Overdraft Facility of 1^st defendant

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(ii) Rs.10,74,530.68p together with interest at the rate of 8.90% p.a. with half yearly rests in respect of Term Loan-I of 1^st defendant

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(iii) Rs.28,21,339.82p together with interest at the rate of 8.75% p.a. with half yearly rests in respect of Term Loan – II of 1^st defendant

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(iv) Rs.31,02,124.10p together with interest at the rate of 9.65% p.a. with half yearly rests in respect of Overdraft facility of 2^nd defendant

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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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(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 Overdraft Facility, Term Loan-I, Term Loan-II of M/s Naphees Cornices and Interior Decorators and Overdraft facility and Term Loan of M/s Naphees Enterprises 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 08^th May, 2026.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 19.05.26

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Canara Bank v. a Nagarajan

Case brief

What is this about?

What did the court decide?

Canara Bank v. a Nagarajan

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

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