Allowed

Karur Vysya Bank v. S Siva Kumar

DRT8 Apr 2026OA/168/2023

Case brief

AI extract

What is this about?

This Debt Recovery Tribunal allowed an original application filed by Karur Vysya Bank to recover a vehicle loan of Rs. 23.20 lakhs from two respondents. The court found the bank's claim proved based on sanctioned loan documents, promissory notes, and hypothecation agreements filed. Interest was awarded excluding penal interest on penalty.

What did the court decide?

Defendants directed to pay Rs. 23,20,351/- with interest at 9.95% p.a. with half-yearly rests within one month. Authority to sell mortgaged properties if dues remain unpaid.

Karur Vysya Bank versus S Siva Kumar — Contract and Commercial Disputes | DRT (2026)

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OA No. 168/2023

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 08^TH DAY OF APRIL, 2026 PRESENT: SEEMA SINHA, [PR. DISTRICT & SESSIONS JUDGE – Retd] PRESIDING OFFICER

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OA No.168/2023

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Between

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The Karur Vysya Bank Limited, Rep. by its Senior Manager, RS.No.170/9, Asset Recovery Branch, Mattuthavani-Melur Road, Near Mattuthavani Bus Stand, Madurai – 625 107.

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---Applicant Bank

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And

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Mr. S. Siva Kumar, S/o.Mr. Singaram, No.7/15B2, Kollaingkadu, Valaiyapatti, Ponnamaravathi, Pudukottai-622 411

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Also residing at

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Mr. S. Siva Kumar, S/o.Mr. Singaram, No.13, 10^th Cross Win Nagar, Kattur Post, Tiruchirapalli - 620019.

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Mr. M.Mathivanan, S/o. Mr. Manickam, No.34, Vadukanathan Road, Ponnamaravathi, Pudukkottai 622 407. ---Defendants

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Page 1 of 6

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OA No. 168/2023

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Counsel for the Applicant Bank : M/s Mr. P. Madhan Alexandar,

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P. Priyadharshini, S. Dhanapandian.

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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 02.01.2023 to recover from the Defendants a sum of Rs. 23,20,351/-, with interest at the rate of 9.95% p.a. with monthly rests plus 3% penal interest in respect of Vehicle 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 defendants borrowed the loan facilities & operated the accounts with Ponnamaravathi Branch. Due to default of the defendants in repayment, now the accounts were transferred to Asset Recovery Branch, Madurai for purpose of Recovery. The defendants approached the Applicant Bank for availing Vehicle loan for their business purpose. The Applicant Bank has also sanctioned the said loan for a sum of Rs.20,00,000/-.

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In consideration of the said loan, the letter of sanction along with terms & conditions were communicated to the 1" defendant by the applicant bank through its sanction letter dt.23.03.18 and the same was duly accepted by the 1 defendant by counter signing the same on 23.03.18. In consideration of the said loan, the 1^st defendant has executed a Demand Promissory Note on 23.03.18 for a sum of Rs.20,00,000/- in favour of the Applicant Bank with interest at the rate of 10.75% p.a with monthly rest.

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In consideration of the said Loan, the 1^st defendant executed a Hypothecation of Motor Vehicle Agreement dt.23.03. for a sum of Rs.20,00,000/- (Vide Acc No. 1738 743 0000 00027) in favour of the Applicant Bank by hypothecating the vehicle which are fully described in the 'A' Schedule hereunder and by agreeing to repay the loan amount in 60 monthly installments of Rs.43,235.50 with interest & cost in favour of the applicant Bank.

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Page 2 of 6

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OA No. 168/2023

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Further the 1^st Defendant promised to repay the loan amount with compound interest at the rate of 10.75% per annum with monthly rest or at such other rates as may be revised by the applicant 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 agreed to stand as continuing guarantor for the repayment of the said loan and executed an Agreement of Guarantee dt.23.03.18 in favour of the Applicant Bank. The 1^st defendant has executed revival letter on 11.02.21 in favour of the Applicant Bank. The defendants have not repaid the loans as agreed and promised by them. Thus the defendants have committed default in repaying the loan amount with interest & costs. As per the books of account maintained by the Applicant Bank, the defendants have to pay a sum of Rs.23,20,351/- as on 31.12.22. 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.

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Hence, the Applicant Bank has filed the OA for recovery of a sum of Rs. 23,20,351/-, with interest at the rate of 9.95% p.a. with monthly rests plus 3% penal interest in respect of Vehicle 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
1.	23.03.18	Sanction letter along with terms & conditions countersigned by the 1^stdefendant in favour of the applicant bank	Ex.No.A-01
2.	23.03.18	Demand Promissory Note executed by the 1^st defendant in favour of the applicant bank	Ex.No.A-02
3.	23.03.18	Hypothecation of motor vehicle Agreement executed by 1^stdefendant in favour of the applicant bank	Ex.No.A-03
4.	23.03.18	Agreement of Guarantee executed by the 2^nd defendantin favourofthe applicant bank	Ex.No.A-04
5.	11.02.21	Revival letter executed by 1^stdefendant in favourofthe applicant bank	Ex.No.A-05
6.	-	Statement of Accounts maintained by the applicant bank in regular course and conduct of the business.	Ex.No.A-06
7.	18.04.18	Certificate of Registration for Vehicle bearing Registration No.TN-81-W-5152	Ex.No.A-07

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Page 3 of 6

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OA No. 168/2023

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SCHEDULE PROPERTY

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'A' SCHEDULE HYPOTHECATED GOODS

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Tata Truck LPK 1618 10 Cum BS4 TIPPER bearing registration TN-81W-5152 & Bearing Chassis No.MAT449058JAC05785 & Engine No.81B84459839 parked at No.7/15B2, Kollaingkadu, Valaiyapatti, Ponnamaravathi, Pudukottai - 622 411 and also at No.13, 10^th Cross Win Nagar, Kattur Post, Tiruchirapalli - 620019.

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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 are 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. S. Dhandapani, who is the Chief Manager of the Applicant Bank.

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He has stated in his affidavit that the defendants have availed Vehicle 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 signed by the defendants at the time of sanctioning the loan amount, which have been marked as exhibits No.A-01 to A-07 in support of its claim in the OA.

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The Sanction letter along with terms & conditions countersigned by the 1^st defendant in favour of the applicant bank has been marked as Ex.No.A-01, Demand Promissory Note executed by the 1^st defendant in favour of the applicant bank has been marked as Ex.No.A-02, Hypothecation of motor vehicle Agreement executed by 1^st defendant in favour of the applicant bank has been marked as Ex.No.A-03, Agreement of Guarantee executed by the 2^nd defendant in favour of the applicant bank has been marked as Ex.No.A-04, Revival letter executed by 1^st defendant in favour of the applicant bank has been marked as Ex.No.A-05, Statement of Accounts maintained by the applicant bank in regular course and conduct of the business has been marked as Ex.No.A-06, Certificate of Registration for Vehicle bearing Registration No. TN-81-W-5152 has been marked as Ex.No.A-07. 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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Page 4 of 6

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OA No. 168/2023

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As the Defendants remained ex-parte, the claim of the Applicant Bank is neither disproved nor dislodged and goes on record as proved. Accordingly a cumulative analysis of both the Proof Affidavit and documents marked by the Applicant Bank would prove the claim of the Applicant Bank in the OA.

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So far the claim of interest is concerned, it is a well settled Law that the Tribunal has got powers to award pendente lite interest in view of the Judgment of the Hon’ble Supreme Court in N.M. Veerapa Vs Canara Bank (reported in AIR 98(1), 1101 & in Central bank of India Vs Ravindra and OS (AIR, 2001(1), 3095).

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So far the penal interest is concerned Hon'ble supreme court stated in the said judgement as followed " Though interest can be capitalised on the anology that the interest falling due on the accrued date and remaining unpaid, partakes the character of amount advanced on that date, yet penal interest, which is charged by way of penalty for non payment, cannot be capitalized. Further interest, i.e interest on interest, whether simple, compound or penal, cannot be claimed on the amount of penal interest. Penal interest cannot be capitalized. It will be opposed to public policy ".

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Therefore, this Original Application is allowed . The Applicant Bank is entitled for a final order on the following lines:-

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The Applicant Bank is entitled to recover from the Defendants, a sum of Rs. 23,20,351/-, with interest at the rate of 9.95% p.a. with half yearly rests in respect of Vehicle Loan from the date of filing of Application till the date of realization with cost. Accordingly, it is hereby

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ORDERED

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(a) That the Defendants are directed to pay jointly/severally a sum of Rs. 23,20,351/-, with interest at the rate of 9.95% p.a. with half yearly rests in respect of Vehicle 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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Page 5 of 6

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OA No. 168/2023

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(c) If the sale proceeds are not sufficient, after defraying the expenses of such sale, for the payment of all such amounts, the defendants are jointly/severally liable to pay the amount of such deficiency with interest mentioned above until realization.

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(d) Any amount remitted during the course of this proceedings shall be given due credit, to the loan account of the defendants.

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(e) Recovery Certificate be prepared, as per the directions given above, and issue accordingly. A copy of the order is to be communicated to the parties concerned, immediately.

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(f) It is further ordered that the Applicant Bank shall file cost memo within a period of one month from the date of receipt of this order, so as to prepare the recovery certificate with cost for the Vehicle 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. Sharmila, LDC taken down, transcribed, typed by her, corrected and pronounced by me in the Open Court in this the 08^th April 2026.

Sd/-

(SEEMA SINHA)

PRESIDING OFFICER

Uploaded on 20.04.2026

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Karur Vysya Bank v. S Siva Kumar

Case brief

What is this about?

What did the court decide?

Karur Vysya Bank v. S Siva Kumar

Case brief

What is this about?

What did the court decide?

What the court decided

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