Allowed

State Bank of India v. G.Kaleeshwari Prop of Vr Pharma

DRT13 Jul 2026OA/302/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an Original Application filed by State Bank of India against a defendant for recovery of a defaulted MSME loan along with subsequent interest. The applicant proved its claim via affidavit and loan documents filed during the proceedings.

What did the court decide?

Recovery of Rs. 35,47,356.66 with subsequent interest at 12.75% p.a. with half-yearly rests; liberty to sell properties; recovery certificate to be issued.

State Bank of India versus G.Kaleeshwari Prop of Vr Pharma — Company and Corporate | DRT (2026)

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OA No. 302/2024

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI

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DATED THIS 13^TH DAY OF JULY, 2026

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PRESENT: SEEMA SINHA,

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

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OA No.302/2024

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Between

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State Bank of India Stressed Asset Recovery Branch, No.8, Dr. Ambedkar Road, Vinayaga Nagar Branch Upstairs, Madurai – 625 020. ---Applicant Bank

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And

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G. Kaleeshwari,

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W/o, Ganesan,

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Prop: VR PHARMA

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514/1, VR PHARMA Ramamoorthi Nagar, 1^st Street, Solai Alagupuram, Madurai – 625 011. ---Defendant

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Counsel for the Applicant Bank : M/s C. Deepak, M. Vengatesh,

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M. Chandra Sekar, S. janani.

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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 on 30.03.2024 to recover from the Defendant a sum of Rs.35,47,356.66ps

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Page 1 of 5

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OA No. 302/2024

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together with subsequent interest at the rate of 12.75% p.a. plus 2% penal interest with monthly rests in respect of MSME 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 defendant has approached the applicant for availing the loan like MSME on 29.8.2022 and the same was sanctioned by the applicant to the tune of Rs. 40,00,000/- as an Cash Credit with the Rate of Interest fixed at 11.55% and the defendant has accepted the sanction by executing the Letter of Arrangement on 10.10.2022.

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In consideration of loan facilities that the defendant has executed the Agreement of Loan Cum Hypothecation on 10.10.2022 and the defendant has executed the Guarantee Agreement on 10.10.2022 and the defendant has executed the Revival Letter on 10.10.2022. After availing the loan, defendants were not regular in the matter of repayment. The defendant made several promises, but he failed to keep up the promises. Thus the loan account has become NPA. The total amount due and payable by the defendants to the Plaintiff on the date of filing of the Suit is Rs. 35,47,356.66/- The defendants is liable to pay the above said amount with interest at 14.4% per annum in Account No. 41339728848 (including penal interest at 2% per annum) with compounded monthly rests from the date of Suit till the date of realization.

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The Plaintiff submits that the interest charged is at 12.4% per annum in Account No. 41339728848 with compounded monthly rests. The defendants, as per Contract, is liable to pay 2% penal interest. Thus, as per the present rate of interest provided by the Reserve Bank of India, the Applicant is seeking subsequent interest at 14.4% per annum in Account No. 41339728848 with compounded monthly rests. The Plaintiff is produced computerized Statement of Account maintained by them in the regular course of business per the Bankers Book Evidence Act.

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Despite repeated demands and reminders, made by the Applicant Bank, the Defendant has failed and neglected to repay and adjust their liability. Hence, the Applicant Bank has filed the OA for recovery of a sum of Rs.35,47,356.66ps together with subsequent interest at the rate of 12.75% p.a. plus 2% penal interest with monthly rests in respect of MSME Loan from the date of filing of Application till the date of realization with cost.

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Page 2 of 5

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OA No. 302/2024

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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.	29.08.2022	Application for MSME	Ex. No. A-01
2.	-	Sanction	Ex. No. A-02
3.	10.10.2022	Letter of Arrangement	Ex. No. A-03
4.	10.10.2022	Agreement of Loan Cum Hypothecation	Ex. No. A-04
5.	10.10.2022	Guarantee Agreement	Ex. No. A-05
6.	10.10.2022	Revival Letter	Ex. No. A-06
7.	-	Statement of accounts maintained by applicant bank in regular course and conduct of business	Ex. No. A-07

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SCHEDULE OF PROPERTIES

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"A" SCHEDULE HYPOTHECATION

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Hypothecation of Plant and Machinery Hypothecation of Stock and Receivables

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3 . On the other hand, Notice was 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. Vijayakumar, who is the Chief Manager of the Applicant Bank.

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He has stated in his affidavit that the defendant has availed MSME Loan for pharma business from the Applicant Bank, but he failed to pay the outstanding loan amount, hence he has filed the case. The applicant bank has also filed the documents signed by the defendant 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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Page 3 of 5

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OA No. 302/2024

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I perused the documents filed by the Applicant Bank and I find that the Application for MSME Loan has been marked as Ex. No. A-01, Sanction Letter has been marked as Ex. No. A-02, Letter of Arrangement has been marked as Ex. No. A-03, Agreement of Loan-cum-Hypothecation has been marked as Ex. No. A-04, Guarantee Agreement has been marked as Ex. No. A-05, Revival Letter has been marked as Ex. No. A-06, and Statement of Accounts maintained by the applicant bank in the regular course and conduct of its business 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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On the other hand 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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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 ". However the Applicant Bank has already charged Penal Interest in the loan account of the Defendant before filing of this Original Application.

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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 sum of Rs.35,47,356.66ps together with subsequent interest at the rate of 12.75% p.a. with half yearly rests in respect of MSME Loan from the date of filing of Application till the date of realization with cost. Accordingly, it is hereby

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OA No. 302/2024

ORDERED

(a) That the Defendant is directed to pay personally a sum of Rs.35,47,356.66ps together with subsequent interest at the rate of 12.75% p.a. with half yearly rests in respect of MSME 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 Defendant, 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 defendant is personally 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 defendant.

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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 MSME 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 13^th July, 2026.

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Sd/- (SEEMA SINHA)

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PRESIDING OFFICER

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Uploaded on 22.07.2026

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State Bank of India v. G.Kaleeshwari Prop of Vr Pharma

Case brief

What is this about?

What did the court decide?

State Bank of India v. G.Kaleeshwari Prop of Vr Pharma

Case brief

What is this about?

What did the court decide?

What the court decided

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