Allowed

Tamilnad Mercantile Bank Limited v. S Antony

DRT21 Apr 2026OA/211/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal, Madurai, allowed an application filed by Tamilnad Mercantile Bank Limited to recover Rs.48,13,311.59 with interest and penal interest from borrowers and guarantors without personal hearing due to ex-parte proceedings. The court directed the sale of mortgaged/hypothecated properties if necessary.

What did the court decide?

Recovery of sum of Rs.48,13,311.59 with interest at 12.05% p.a. and penal interest of 2% p.a. from defendants; liberty to sell movable/immovable properties for realization.

Tamilnad Mercantile Bank Limited versus S Antony — Execution and Attachment | DRT (2026)

¶1

OA No. 211/2023

¶2

Fair Order

¶3

IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 21^ST DAY OF APRIL, 2026 PRESENT: SEEMA SINHA,

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

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OA No.211/2023

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Between

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Tamilnad Mercantile Bank Limited, Paramakudi Branch, Upper Ground Floor, No.8/110A-1, No.73/2,74,77/1B1, Bhagavathisingh Road, Paramakudi Ramanathapuram District. Rep. By its Branch Manager. ---Applicant Bank

¶8

And

¶9

Mr. S. Antony, S/o. Sesuraj, 21/2C, Kanchiyendal Road, Paramakudi, Ramanathapuram-623 707.

¶10

Mr. A. Devadoss, S/o Arputham, 1/56, Melakavanoor, Paramakudi, Ramanathapuram – 623 707. ---Defendants

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Counsel for the Applicant Bank : M/s T. Thevan

¶12

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:

Page 1 of 11

OA No. 211/2023

JUDGEMENT

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 13.03.2023 to recover from the Defendants 1 & 2 a sum of Rs.48,13,311.59p together with interest at the rate of 12.05% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Cash Credit 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.

¶17

2 . The brief averments of the application filed by the Applicant Bank are as follows:-

¶18

The 1^st defendant is a proprietorship concern running a business in the name and style of M/s Matha Bio Fuels and having his office at 21/2C, Kanchiyendal Road, Paramakudi, Ramanathapuram District - 623 707.

¶19

OVER DRAFT LOAN TO A LIMIT OF Rs.35,00,000/- AVAILED BY 1^st DEFENDANT:

¶20

The 1^st defendant approached the applicant bank and sought Cash Credit Loan to a limit of Rs.35,00,000/- to meet out his working capital. The applicant bank after considering the request of the 1^st defendant, applicant bank has sanctioned the Over Draft Loan to a limit of Rs.35,00,000/ on 18.05.2019

¶21

The 1^st defendant herein on being sanctioned with Cash Credit Loan to a limit of Rs.35,00,000/- duly executed the necessary documents on 18.062019 i.e., Letter Request to Avail, Sanctioned Intimation letter, Demand Promissory Note, Waiver presentment, DPN Take Delivery letter, Letter of continue security, Letter of undertaking not to avail such credit account with any other Bank, Consent for disclosure, Agreement for demand cash credit hypothecation of movable properties, Free access, Proprietary declaration, Letter of hypothecation of book debts, Letter of free access, Proprietary declaration letter, Consent letter, Power of attorney.

¶22

The 2nd defendant the guarantor for the Cash Credit Loan account and he has executed the necessary documents on 18.05.2019 i.e., Guarantee Covering Letter, Undertaking Letter to Keep The Security Intact in Case of Mortgage of Immovable Property/Property, Letter of consent for disclosure, Guarantee agreement.

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Page 2 of 11

¶24

OA No. 211/2023

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CASH CERDIT LOAN TO A LIMIT OF Rs.45,00,000/- AVAILED BY IST DEFENDANT:

¶26

The 1^st defendant approached the applicant bank and request to enhance the Cash Credit Loan to a limit of Rs.45,00,000/- to meet out his working capital. The applicant bank after considering the request of the 1^st defendant, the applicant bank has sanctioned Cash Credit Loan to a limit of Rs.45,00,000/ on 17.06.2019

¶27

The 1^st defendant herein on being sanctioned with Cash Credit Loan to a limit of Rs.45,00,000/- duly executed the necessary documents on 17.06.2019 i.e., Request to avail the loan, Sanctioned Intimation letter, Demand Promissory Note, Waiver presentment, DPN Take Delivery letter, Letter of undertaking not to avail such credit account with any other Bank, Consent for disclosure, OD continuity letter, Agreement for demand cash credit hypothecation of movable properties, Letter of hypothecation of book debts, Letter of free access, Proprietary declaration letter, Consent letter, Power of attorney

¶28

The 2nd defendant as guarantor for the Cash Credit Loan account and he has executed the necessary documents on 17.06.2019 i.e., Guarantee Covering Letter, Consent Letter, Undertaking Letter to Keep The Security Intact in Case of Mortgage of Immovable Property, Letter consenting to disclosure executed, Guarantee Agreement.

¶29

RENEWAL OF CASH CREDIT LOAN:

¶30

The 1^st defendant approached the applicant bank and requested to renew the Cash Credit Loan to a limit of Rs.45,00,000/- on 05.10.2020. The applicant bank after considering the request of the 1^st defendant, the applicant bank has renewed the said Cash Credit Loan to a limit of Rs.45,00,000/ on 05.10.2020

¶31

The 2^nd defendant as guarantor for the Cash Credit loan account and he has executed the necessary documents on 05.10.2020 i.e., Undertaking Letter to Keep The Security Intact in Case of Mortgage of Immovable Property

¶32

The defendants No.1 & 2 have executed revival letter dated 05.10.2020 in favour of the applicant bank and admitting and acknowledging their liability. Further the 1^st defendant executed Balance confirmation letter dated 20.04.2022

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Page 3 of 11

¶34

OA No. 211/2023

¶35

MORTGAGE CREATED BY THE 2^ND DEFENDANT:-

¶36

The 2^nd Defendant who consented to offer as security of his property at the first instance in a sum of Rs.35,00,000/- availed by the 1^st defendant. The 2^nd defendant had deposited his Title deeds with the applicant bank on 20.01.2018 with an intention to create an equitable mortgage thereon and he had executed memorandum of deposit of title deeds dated 30.01.2018 in favour of the Applicant Bank and it was registered as Doc.no.503/2018 before Sub- Registrar, Paramakudi, Ramanathapuram District as described in A schedule hereunder. The 2^nd defendant had extended his earlier mortgage for the enhanced Cash credit facility of Rs.45,00,000/- and he had executed supplemental memorandum of deposit of title deeds dated 17.06.2019 in favour of the Applicant Bank and it was registered as Doc.no.2726/2019.

¶37

The 2^nd defendant extended his equitable mortgage so as to cover the renewed credit facility of Rs.45,00,000/- and he had executed mortgage extension letter dated 05.10.2020 in favour of the applicant bank.

¶38

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. Hence, the applicant bank sent various notice to the defendants and requested them to repay the loan accounts. But even after repeated request of the applicant's bank, the defendants have not taken any steps to discharge the loan accounts. Thus the loan account was declared as Non Performing Account on 31.05.2021.

¶39

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.48,13,311.59p together with interest at the rate of 12.05% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Cash Credit Loan from the date of filing of Application till the date of realization with cost.

¶40

The Applicant Bank has submitted the following documents in support its claim in the OA, which are as follows:

¶41

S. No.	Date	Description of document	Exhibits
1	18.05.2019	Letter Request to Avail	Ex.No.A-01
2	18.05.2019	Sanctioned Intimation letter	Ex.No.A-02
3	18.05.2019	Demand PromissoryNote	Ex.No.A-03

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Page 4 of 11

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OA No. 211/2023

¶44

4	18.05.2019	DPN Take Deliveryletter	Ex.No.A-04
5	18.05.2019	Waiverpresentment	Ex.No.A-05
6	18.05.2019	Letter of continue security	Ex.No.A-06
7	18.05.2019	Letter of undertaking not to avail such credit account with anyother Bank	Ex.No.A-07
8	18.05.2019	Consent for disclosure	Ex.No.A-08
9	18.05.2019	Agreement for demand cash credit A hypothecation of movableproperties	Ex.No.A-09
10	18.05.2019	Free access	Ex.No.A-10
11	18.05.2019	Proprietarydeclaration	Ex.No.A-11
12	18.05.2019	Letter of hypothecation of book debts	Ex.No.A-12
13	18.05.2019	Consent letter	Ex.No.A-13
14	18.05.2019	Power of attorney	Ex.No.A-14
15	18.05.2019	Guarantee CoveringLetter	Ex.No.A-15
16	18.05.2019	Undertaking Letter to Keep the Security Intact in Case of Mortgage of Immovable Property/Property	Ex.No.A-16
17	18.05.2019	Letter of consent for disclosure	Ex.No.A-17
18	18.05.2019	Guarantee agreement	Ex.No.A-18
19	17.06.2019	Request to avail the loan	Ex.No.A-19
20	17.06.2019	Sanction Intimation letter	Ex.No.A-20
21	17.06.2019	Demand PromissoryNote	Ex.No.A-21
22	17.06.2019	Waiverpresentment	Ex.No.A-22
23	17.06.2019	DPN Take Deliveryletter	Ex.No.A-23
24	17.06.2019	Letter of undertaking not to avail such credit account with anyother Bank	Ex.No.A-24
25	17.06.2019	Consent for disclosure	Ex.No.A-25
26	17.06.2019	OD continuityletter	Ex.No.A-26
27	17.06.2019	Agreement for demand cash credit hypothecation of movableproperties	Ex.No.A-27
28	17.06.2019	Letter of hypothecation of book debts	Ex.No.A-28
29	17.06.2019	Letter of free access	Ex.No.A-29
30	17.06.2019	Proprietarydeclaration letter	Ex.No.A-30
31	17.06.2019	Power of attorney	Ex.No.A-31
32	17.06.2019	Guarantee CoveringLetter	Ex.No.A-32
33	17.06.2019	Consent letter	Ex.No.A-33
34	17.06.2019	Undertaking Letter to Keep the Security Intact in Case of Mortgage of Immovable Property/Property	Ex.No.A-34
35	17.06.2019	Letter consentingto disclosure executed	Ex.No.A-35
36	17.06.2019	Guarantee agreement	Ex.No.A-36
37	05.10.2020	Requisition letter	Ex.No.A-37
38	13.08.2020	Sanction Intimation letter	Ex.No.A-38
39	05.10.2020	Letter of continue security	Ex.No.A-39

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Page 5 of 11

¶46

OA No. 211/2023

¶47

40	05.10.2020	Authorization letter	Ex.No.A-40
41	05.10.2020	Undertaking Letter to Keep the Security Intact in Case of Mortgage of Immovable Property/Property	Ex.No.A-41
42	05.10.2020	Revival letter	Ex.No.A-42
43	20.04.2022	Balance Confirmation letter	Ex.No.A-43
44	30.01.2018	Memorandum of deposit of title deed Doc.No.503/2018	Ex.No.A-44
45	17.06.2019	Supplemental memorandum of deposit of title deed Doc.No.2726/2019	Ex.No.A-45
46	21.03.2014	Original Sale deed executed by Santhiyagu in favourof DevadossvideDoc.No.1970/2014	Ex.No.A-46
47	17.04.2015	Xerox copyof Death certificate of Vedamuthu	Ex.No.A-47
48	05.10.2017	Xerox copy of Legal heir certificate of VedamuthuBuildingPlanapproval	Ex.No.A-48
49	---	BuildingPlan Approval	Ex.No.A-49
50	02.05.2017	House tax receipt No.35401	Ex.No.A-50
51	23.09.2017	A-Register issued byVAO	Ex.No.A-51
52	23.09.2017	Legal heir certificate of Mr. santhiyagu issued byVAO	Ex.No.A-52
53	23.09.2023	Patta in the name of Devadoss	Ex.No.A-53
54	05.10.2017	Consent deed executed by Arokiyamery and 3 othersin favourof Devadoss	Ex.No.A-54
55	05.10.2017	Consent deed executed by Aalismery Arokiyameryin favour of Devadoss	Ex.No.A-55
56	27.05.2017	Encumbrance certificate No.3979	Ex.No.A-56
57	----	Statement of accounts	Ex.No.A-57

¶48

SCHEDULE-A

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Item No.1

¶50

In Ramanathapuram District, Sivagangai Registration District, Paramakudi Sub-registration District, In Paramakudi Taluk, S. Kavanoor Group, In Melakavanoor Village, A dry land with an extent of 0.50.0 hectare tha is 1 acre 23 1/2 cents situated at S.No.21/2C comprised under patta No.2650 including the shed bearing D.No.1/190 built by tata sheet

¶51

within boundaries:

¶52

East : Dry	land of Joseph,
West : Dry	land of A. Soosai Rethinam
North : Dry	land purchased by Devadoss
South : Dry	land of Sandiyagammal

Page 6 of 11

OA No. 211/2023

SCHEDULE-B

Hypothecation of Stocks & Receivables

¶57

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.

¶58

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?

¶59

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. V. Raj kanna, who is the Branch Manager of the Applicant Bank.

¶60

He has stated in his affidavit that the defendants has availed Cash credit 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-57 in support of its claim in the OA.

¶61

The Letter Request to Avail has been marked as Ex.No.A-01, Sanctioned Intimation letter has been marked as Ex.No.A-02, Demand Promissory Note has been marked as Ex.No.A-03, DPN Take Delivery letter has been marked as Ex.No.A-04, Waiver presentment has been marked as Ex.No.A-05, Letter of continue security has been marked as Ex.No.A-06, Letter of undertaking not to avail such credit account with any other Bank has been marked as Ex.No.A-07, Consent for disclosure has been marked as Ex.No.A-08, Agreement for demand cash credit A hypothecation of movable properties has been marked as Ex.No.A-09, Free access has been marked as Ex.No.A-10.

¶62

The Proprietary declaration has been marked as Ex.No.A-11, Letter of hypothecation of book debts has been marked as Ex.No.A-12, Consent letter has been marked as Ex.No.A-13, Power of attorney has been marked as Ex.No.A-14, Guarantee Covering Letter has been marked as Ex.No.A-15, Undertaking Letter to Keep the Security Intact in Case of Mortgage of Immovable Property/Property has been marked as Ex.No.A-16, Letter of consent for disclosure has been marked as Ex.No.A-17, Guarantee agreement has been marked as Ex.No.A-18, Request to avail the loan has

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Page 7 of 11

¶64

OA No. 211/2023

¶65

been marked as Ex.No.A-19,Sanction Intimation letter has been marked as Ex.No.A-20.

¶66

The Demand Promissory Note has been marked as Ex.No.A-21, Waiver presentment has been marked as Ex.No.A-22, DPN Take Delivery letter has been marked as Ex.No.A-23, Letter of undertaking not to avail such credit account with any other Bank has been marked as Ex.No.A-24, Consent for disclosure has been marked as Ex.No.A-25, OD continuity letter has been marked as Ex.No.A-26, Agreement for demand cash credit hypothecation of movable properties has been marked as Ex.No.A-27, Letter of hypothecation of book debts has been marked as Ex.No.A-28, Letter of free access has been marked as Ex.No.A-29, Proprietary declaration letter has been marked as Ex.No.A-30.

¶67

The Power of attorney has been marked as Ex.No.A-31, Guarantee Covering Letter has been marked as Ex.No.A-32, Consent letter has been marked as Ex.No.A-33, Undertaking Letter to Keep the Security Intact in Case of Mortgage of Immovable Property/Property has been marked as Ex.No.A-34, Letter consenting to disclosure executed has been marked as Ex.No.A-35, Guarantee agreement has been marked as Ex.No.A-36, Requisition letter has been marked as Ex.No.A-37, Sanction Intimation letter has been marked as Ex.No.A-38, Letter of continue security has been marked as Ex.No.A-39, Authorization letter has been marked as Ex.No.A-40.

¶68

The Undertaking Letter to Keep the Security Intact in Case of Mortgage of Immovable Property/Property has been marked as Ex.No.A-41, Revival letter has been marked as Ex.No.A-42, Balance Confirmation letter has been marked as Ex.No.A-43, Memorandum of deposit of title deed Doc.No.503/2018 has been marked as Ex.No.A-44, Supplemental memorandum of deposit of title deed Doc.No.2726/2019 has been marked as Ex.No.A-45, Original Sale deed executed by Santhiyagu in favour of Devadoss vide Doc.No.1970/2014 has been marked as Ex.No.A-46, Xerox copy of Death certificate of Vedamuthu has been marked as Ex.No.A-47, Xerox copy of Legal heir certificate of Vedamuthu has been marked as Ex.No.A-48, Building Plan Approval has been marked as Ex.No.A-49, House tax receipt No.35401 has been marked as Ex.No.A-50.

¶69

The A-Register issued by VAO has been marked as Ex.No.A-51, Legal heir certificate of Mr. santhiyagu issued by VAO has been marked as Ex.No.A-52, Patta in the name of Devadoss has been marked as Ex.No.A-53, Consent deed executed by Arokiyamery and 3 others in favour of Devadoss has been marked as Ex.No.A-54, Consent deed executed by Aalismery Arokiyamery in favour of Devadoss has been marked as Ex.No.A-55, Encumbrance certificate No.3979 has been marked as Ex.No.A-56,

¶70

Page 8 of 11

¶71

OA No. 211/2023

¶72

Statement of accounts has been marked as Ex.No.A-57. So the averments of the applicant as well as the statement of the pleading have been corroborated by the above mentioned documents.

¶73

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.

¶74

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).

¶75

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 ".

¶76

Therefore, this Original Application is allowed . The Applicant

¶77

Bank is entitled for a final order on the following lines:-

¶78

The Applicant Bank is entitled to recover from the Defendants 1 & 2, a sum of Rs.48,13,311.59p together with interest at the rate of 12.05% p.a. with half yearly rests in respect of Cash Credit Loan from the date of filing of Application till the date of realization with cost. Accordingly, it is hereby

Page 9 of 11

OA No. 211/2023

ORDERED

(a) That the Defendants 1 & 2 are directed to pay jointly/severally a sum of Rs.48,13,311.59p together with interest at the rate of 12.05% p.a. with half yearly rests in respect of Cash Credit 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.

¶83

(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.

¶84

(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.

¶85

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

¶86

(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.

¶87

Page 10 of 11

¶88

OA No. 211/2023

¶89

(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 Cash Credit 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.

¶90

Dictated to T.P, taken down, transcribed, typed by her, corrected and pronounced by me in the Open Court in this the 21^st April, 2026.

¶91

Sd/- (SEEMA SINHA) PRESIDING OFFICER

¶92

Uploaded on 05.05.26

¶93

Page 11 of 11

Tamilnad Mercantile Bank Limited v. S Antony

Case brief

What is this about?

What did the court decide?

Tamilnad Mercantile Bank Limited v. S Antony

Case brief

What is this about?

What did the court decide?

What the court decided

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