Allowed

Punjab National Bank v. R Selvi

DRT10 Aug 2026OA/16/2025

Case brief

AI extract

What is this about?

DRT allowed an OA filed by Punjab National Bank for recovery of an outstanding housing loan of Rs.20,22,891/- plus interest from two defendants who failed to repay the loan. The Tribunal confirmed the documents and held that penalty interest could not be capitalized.

What did the court decide?

The defendants were directed to pay Rs.20,22,891/- with interest at 9.40% p.a. and the recovery officer was directed to sell properties if payment is not made.

Punjab National Bank versus R Selvi — Banking and Recovery | DRT (2026)

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OA No. 16/2025

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 10^th DAY OF AUGUST, 2026 PRESENT: SEEMA SINHA, [PR. DISTRICT & SESSIONS JUDGE – Retd] PRESIDING OFFICER

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OA No.16/2025

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Between

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Punjab National Bank, ARM Branch, Kailasapuram, Trichy- 620 014 Rep. by its Chief Manager. ---Applicant Bank

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And

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Mrs.R.Selvi, W/o.A.Ravichandiran, No.3/45B, Kotta theru, Poomudaiyan Kudikadu, Thular, Sendurai Taluk, Ariyalur- 621 719

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Mr.A.Ravichandiran, S/o.Arumugam, No.3/45B, Kotta theru, Poomudaiyan Kudikadu, Thular, Sendurai Taluk, Ariyalur- 621 719 ---- Defendants

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Counsel for the Applicant Bank : M/s K.Ramesh & M.Sundaraj

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This Original Application was heard and fixed for passing final order before me in the presence of the above said Advocate for Applicant Bank and the Defendants having been set ex-parte and upon hearing the arguments of Counsel for Applicant Bank and upon perusing the material available on the

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Page 1 of 6

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OA No. 16/2025

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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 09.12.2024 to recover from the Defendants a sum of Rs.20,22,891/- together with further interest at the rate of 9.40 % 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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The Applicant Bank submits that the defendants have availed Housing Loan for a sum of Rs.15,00,000/-. The defendants executed necessary loan documents in favour of the Applicant. In addition to that, the defendants have also deposited the original title deeds this immovable property with the applicant bank as security for the due repayment of loan availed by him. Further, the defendants has executed memorandum of deposit of title deeds on 23.06.2016 in Document No. 1445/2016, SRO Sendurai, Ariyalur District. The following is the details of loan availed by the defendants.

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S.No	^{Nature of Loan & Account} Number	Loan Amount	Rate of Interest	Outstanding Amount as on 31.08.2024
1	Housing Loan 170200NC00000681	Rs.15,00,000/-	^{9.40% p.a. +} 2% P.I.	Rs.20,22,891/-

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Further the applicant submits that as per the accounts of the applicant maintained in the name of the defendants kept in regular course of business and as certified under the Bankers Book of Evidence Act as on 31.08.2024 for a sum of Rs.20,22,891/- has become due and they are liable to pay the said amounts with further interest till repayment.

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The defendants though had availed the entire sanctioned limits under the said facilities, the defendants have failed to repay the loan as per the sanction , as agreed, despite the repeated demands and reminders made by

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Page 2 of 6

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OA No. 16/2025

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the Applicant Bank. The Defendants have not paid the due amount. The borrower’s loan account turned into NPA on 31.05.2021.

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In spite of repeated reminders, the defendant failed to repay the loan amount. Hence, the Applicant Bank has filed the OA for recovery of a sum of Rs.20,22,891/- together with further interest at the rate of 9.40 % 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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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

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Sl. No.	Date	Particulars	Exhibit No.
1.	-----	Loan Application	Ex. No. A-01
2.	20.09.2016	Sanction Letter	Ex. No. A-02
3.	20.09.2016	Agreement for Housing Loan	Ex. No. A-03
4.	23.06.2016	MOD in Doc No. 1445/2016	Ex. No. A-04
5.	-----	Statement of Accounts	Ex. No. A-05

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SCHEDULE Mortgaged Property

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In Ariyalur Registration District, In Sendurai Sub-Registration District, In Ariyalur Revenue District, In Sendurai Taluk, Thalavai (South) Madhura Nagar Village, Hamlet of R.S.484/2B - Vacant site RCC Roof house in 0.04. 1/2 cents out of 0.57.5 Hectares. Electricity Service No.337 Door No.5/78.

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Boundaries for Ist Item South of Veethi

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West of Veethi East of Sekar House North of Kolanji House

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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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Page 3 of 6

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OA No. 16/2025

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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. Manjunath Venkatagiri , who is the Chief Manager of the Applicant Bank.

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He has stated in his affidavit that the defendants have availed Housing Loan from the Applicant Bank, but they failed to pay the outstanding loan amount, hence she has filed the case. The applicant bank has also filed the documents signed by the defendants at the time of sanctioning the loan amount, which have been marked as exhibits No.A-01 to A-05 in support of its claim in the OA.

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I scrutinized the document filed by the applicant bank and I find that The documents relied upon are as follows: (1) Loan Application, marked as Ex. No. A-01; (2) Sanction Letter dated 20.09.2016, marked as Ex. No. A-02; (3) Agreement for Housing Loan dated 20.09.2016, marked as Ex. No. A-03; (4) MOD in Document No. 1445/2016 dated 23.06.2016, marked as Ex. No. A-04; and (5) Statement of Accounts, marked as Ex. No. A-05. 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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Page 4 of 6

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OA No. 16/2025

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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.20,22,891/- together with interest at the rate of 9.40 % 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 D-1 & D-2 are directed to pay jointly/severally a sum of Rs.20,22,891/- together with interest at the rate of 9.40 % 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 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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Page 5 of 6

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OA No. 16/2025

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(d) Any amount remitted during the course of this proceedings shall be

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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 N, taken down, transcribed, typed by him, corrected and pronounced by me in the Open Court in this the 10^th August, 2026.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 18.08.2026

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Punjab National Bank v. R Selvi

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. R Selvi

Case brief

What is this about?

What did the court decide?

What the court decided

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