Allowed

Punjab National Bank v. Saritha Ms

DRT26 Mar 2026OA/256/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the Applicant Bank's Original Application for recovery of a total sum of Rs.24,79,935.03 plus interest against the Defendant borrower. The court relied on documentary evidence since the respondent was in ex-parte proceedings. The order approved the claim but held that penal interest cannot be capitalized.

What did the court decide?

Recovery of total sum Rs.24,79,935.03 plus interest at specified rates with half yearly rests to be paid within one month and preparation of Recovery Certificate with cost.

Punjab National Bank versus Saritha Ms — Banking and Recovery | DRT (2026)

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OA No. 256/2023

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 26^TH DAY OF MARCH, 2026 PRESENT: SEEMA SINHA,

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

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OA No.256/2023

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Between

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Punjab National Bank, Circle SASTRA Trichy, Circle Office, Kailasapuram, Trichy – 620 014. Rep. By its Chief Manager. ---Applicant Bank

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And

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M/s M.S. Saritha, ETB No-40/2, Emerald Block, Warners Gems Apartment, Cantonment, Trichy – 620 001. ---Defendant

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Counsel for the Applicant Bank : M/s S. Balasubramanian, T.M.Subramanian, M. Sundaraj, B. Iswarya

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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 Defendant 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

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OA No. 256/2023

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on 03.03.2023 to recover from the Defendant a total sum of Rs.24,79,935.03p i.e.,

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(i) Rs.7,80,883.12p together with interest at the rate of 10.45% p.a. with monthly rests plus penal interest at the rate of 2%.p.a. in respect of Term Loan

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(ii) Rs.13,09,992.91p together with interest at the rate of 10.30% p.a. with monthly rests plus penal interest at the rate of 2%.p.a. in respect of Cash Credit and

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(iii) Rs.3,89,059/- together with interest at the rate of 7.80% p.a. with monthly rests plus penal interest at the rate of 2%.p.a. in respect of Term Loan (WCTL) from the date of filing of Application till the date of realization with cost 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 defendant has availed Term Loan for a sum of Rs. 10,01,000/and availed Cash Credit for a sum of Rs. 10,00,000/-and availed Term Loan (WCTL) for a sum of Rs.3,27,000/- totalling Rs.23,28,000/-. The defendant executed necessary loaning documents in favour of the applicant. The following is the detail of cash credit loan availed by the defendant.

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S.No	Nature of loan & A/c.No	Lean amount	Rate of Interest	Outstanding amount as on 31.12.2022
1	Term Loan 0457001000001141	Rs 10,01,000/	10.45% p.a + 2% P.I	Rs. 7,80,883.12p
2	Cash Credit 045700KU00000147	Rs10,00,000/-	10.30% p.a + 2% P.I	Rs. 3,09,992.91p
3	Term Loan (WCTL) 04570011.00000212	Rs.3,27,000/-	7.80% p.a + 2% P.I	Rs.3,89,059/-
			Total	Rs.24,79,935.03p

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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 31.12.2022 for a sum of

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OA No. 256/2023

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Rs.24,79,935.03/- has became due and they are liable to pay the said amounts with further interest till repayment.

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The defendant failed to pay the loan amount as agreed at the time availing loan and their loan account has became non performing asset. The defendant though availed the entire sanctioned loan and she has not chosen to repay the loan amounts, as agreed, despite the repeated demands and reminders by the Applicant Bank. The Applicant Bank reserves its right under SARFAESI Act against the defendant.

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In spite of repeated the defendant failed to repay the loan amount. Hence the applicant has issued legal notice dated on 10.05.2022 to the defendant call upon to pay the outstanding amount. Despite repeated demands and reminders, made by the Applicant Bank, the Defendants have failed and neglected to repay and adjust their liability.

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Hence, the Applicant Bank has filed the OA for recovery of a total sum of Rs.24,79,935.03p i.e.,

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(i) Rs.7,80,883.12p together with interest at the rate of 10.45% p.a. with monthly rests plus penal interest at the rate of 2%.p.a. in respect of Term Loan

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(ii) Rs.13,09,992.91p together with interest at the rate of 10.30% p.a. with monthly rests plus penal interest at the rate of 2%.p.a. in respect of Cash Credit and

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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	11.05.2017	Loan Application	Ex.No.A-01
2	11.05.2017	Sanction Letter	Ex.No.A-02
3	11.05.2017	Term Loan Agreement	Ex.No.A-03
4	27.06.2018	Loan Application	Ex.No.A-04
5	16.07.2018	Agreement for Cash Credit	Ex.No.A-05
6	03.10.2020	Master Agreement	Ex.No.A-06
7	03.10.2020	Term Loan Agreement -WCTL	Ex.No.A-07
8	16.04.2020	Balance and SecurityConfirmation Letter	Ex.No.A-08
9	08.07.2021	Balance and SecurityConfirmation Letter	Ex.No.A-09
10	----	Statement of Account	Ex.No.A-10

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OA No. 256/2023

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3 . On the other hand, Notices were issued to Defendant and since from the beginning of the case, there was no representation on behalf of the Defendant. Hence, Defendant was 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. Manjunath Venkatagiri, who is the Chief Manager of the Applicant Bank.

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He has stated in his affidavit that the defendant has availed Term Loan, Cash Credit and WCTL from the Applicant Bank, but she failed to pay the outstanding loan amount, hence he has filed the case. The applicant bank has also filed the documents given by the defendant at the time of sanctioning the loan amount, which have been marked as exhibits No.A-01 to A-10 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, Term Loan Agreement has been marked as Ex.No.A-03, Loan Application has been marked as Ex.No.A-04, Agreement for Cash Credit has been marked as Ex.No.A-05, Master Agreement has been marked as Ex.No.A-06, Term Loan Agreement –WCTL has been marked as Ex.No.A-07, Balance and Security Confirmation Letter has been marked as Ex.No.A-08, another Balance and Security Confirmation Letter has been marked as Ex.No.A-09, Statement of Account has been marked as Ex.No.A10. 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 Defendant 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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OA No. 256/2023

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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 Defendant, a total sum of Rs.24,79,935.03p i.e.,

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(i) Rs.7,80,883.12p together with interest at the rate of 10.45% p.a. with half yearly rests in respect of Term Loan

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(ii) Rs.13,09,992.91p together with interest at the rate of 10.30% p.a. with half yearly rests in respect of Cash Credit and

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(iii) Rs.3,89,059/- together with interest at the rate of 7.80% p.a. with half yearly rests in respect of Term Loan (WCTL) 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 Defendant is directed to pay personally a total sum of Rs.24,79,935.03p i.e.,

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(i) Rs.7,80,883.12p together with interest at the rate of 10.45% p.a. with half yearly rests in respect of Term Loan

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(ii) Rs.13,09,992.91p together with interest at the rate of 10.30% p.a. with half yearly rests in respect of Cash Credit and

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OA No. 256/2023

(b) 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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(c) 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 Term loan, Cash Credit and WCTL 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 26^th March, 2026.

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Sd/-

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(SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 04.04.26

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Punjab National Bank v. Saritha Ms

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. Saritha Ms

Case brief

What is this about?

What did the court decide?

What the court decided

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Cases cited

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