Allowed

Punjab National Bank (United Bank of India) v. M/s Rps Agencies

DRT15 Apr 2026OA/135/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an Original Application filed by Punjab National Bank to recover a sum of approx Rs. 1.06 crore with interest from M/s RPS Agencies and Mrs. R. Subbulakshmi under RDB Act Section 19(1), directing the sale of hypothecated properties if necessary.

What did the court decide?

Directing respondents to pay Rs.1,06,08,572.49 plus interest at 11.25% p.a. with half-yearly rests; authorising sale of hypothecated properties for recovery of dues.

Punjab National Bank (United Bank of India) versus M/s Rps… — Consumer Protection | DRT (2026)

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OA No. 135/2022

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 15^TH DAY OF APRIL, 2026 PRESENT: SEEMA SINHA,

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

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OA No.135/2022

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Between

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Punjab National Bank, Beemanagar Branch, 43, Heber Road, Beemanagar, Trichy – 620 001. Rep. By its Branch Manager.

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---Applicant Bank

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And

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M/s RPS Agencies, Mrs. R. Subbulakshmi, 33, 8^th Main Road, Ganesh Nagar, Ellakudi, Tiruchirapalli – 620 019.

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Also at:

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M/s RPS Agencies, Godown No.7, 528, Ambalapuram, Kathivaripatti, Po.Vadavalam – 622 044, Pudukottai District.

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Page 1 of 6

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OA No. 135/2022

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Mrs. R. Subbulakshmi, W/o Ramaiah, 33, 8^th Main Road, Ganesh Nagar, Ellakudi, Tiruchirapalli – 620 019. ---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 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 16.11.2021 to recover from the Defendants a sum of Rs.1,06,08,572.49p together with interest at the rate of 11.25% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Cash Credit facility 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 1^st defendant is a proprietor firm represented by its proprietor trading in organic rice and food products. The 2nd defendant herein has approached for Cash Credit facilities (Hypothecation) for their business, under CGTMSE guarantee. The applicant bank sanctioned Rs.90,00,000/as cash credit (Hypothecation) loan on 15.07.2019 on execution of necessary loan documents.

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The defendants has executed Demand Promissory Note for Rs.90,00,000/- dated 15.07.2019 in favour of the applicant to repay the same with interest at the rate of 11.25% p.a on monthly rest and also executed hypothecation agreement on 15.07.2019 in favour of the applicant.

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Page 2 of 6

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OA No. 135/2022

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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 and the loan account became irregular in spite of so many reminders made to them. The loan account has become Non Performing Assets on 31.03.2021.

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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.1,06,08,572.49p together with interest at the rate of 11.25% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Cash Credit facility 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	15.07.2019	Loan Application	Ex. No. A-01
2	15.07.2019	Sanction Letter	Ex. No. A-02
3	15.07.2019	Demand PromissoryNote	Ex. No. A-03
4	15.07.2019	Hypothecation of Goods	Ex. No. A-04
5	15.07.2019	Hypothecation of Debts and Movable Assets	Ex. No. A-05
6	15.07.2019	Hypothecation Agreement	Ex. No. A-06
7	02.03.2019	Rental Agreement	Ex. No. A-07
8	—	CGTMSE Guarantee Application	Ex. No. A-08
9	—	Statement of Accounts	Ex. No. A-09

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SCHEDULE OF PROPERTY

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(HYPOTHECATION PROPERTY)

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Goods, Book Debts plant and Machinery

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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

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Page 3 of 6

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OA No. 135/2022

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Applicant, I find that the Applicant Bank, in order to prove its claim, has filed Proof Affidavit executed by one Mr. Manjunath Venkatagiri, who is the Chief Manager of the Applicant Bank.

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He has stated in his affidavit that the defendants has availed Cash Credit Facility 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, Demand Promissory Note has been marked as Ex. No. A-03, Hypothecation of Goods has been marked as Ex. No. A-04, Hypothecation of Debts and Movable Assets has been marked as Ex. No. A-05, Hypothecation Agreement has been marked as Ex. No. A-06, Rental Agreement has been marked as Ex. No. A-07, CGTMSE Guarantee Application 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, 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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Page 4 of 6

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OA No. 135/2022

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The Applicant Bank is entitled to recover from the Defendants, a sum of Rs.1,06,08,572.49p together with interest at the rate of 11.25% p.a. with half yearly rests in respect of Cash Credit facility 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.1,06,08,572.49p together with interest at the rate of 11.25% p.a. with half yearly rests in respect of Cash Credit facility 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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(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

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Page 5 of 6

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OA No. 135/2022

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prepare the recovery certificate with cost for the Cash Credit Facility 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 April, 2026.

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Sd/-

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(SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 30.04.26

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Punjab National Bank (United Bank of India) v. M/s Rps Agencies

Case brief

What is this about?

What did the court decide?

Punjab National Bank (United Bank of India) v. M/s Rps Agencies

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

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Cases cited

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