Allowed

State Bank of India v. Ramu

DRT14 Jul 2026OA/310/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal examined an Original Application filed by State Bank of India to recover dues of approximately Rs. 43.66 lakhs from the deceased borrower's legal heirs. Being an ex-parte order, the Tribunal found the bank's claim and evidence unrebutted and allowed the recovery claim.

What did the court decide?

Defendants directed to pay Rs. 43,66,834.34 with interest at 12.75% per annum via half-yearly rests on specified accounts, with power to sell hypothecated properties on default.

State Bank of India versus Ramu — Money Laundering | DRT (2026)

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OA No. 310/2024

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 14^th DAY OF JULY, 2026 PRESENT: SEEMA SINHA, [PR. DISTRICT & SESSIONS JUDGE – Retd] PRESIDING OFFICER

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OA No. 310/2024

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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. Rep. by its Chief Manager. --- Applicant Bank

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And

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Mr. Ramu, W/o Late Beemasenan, No. 1/148, 2B, LVP Nagar, Narasingam Main Road, Kadachanendhal, Madurai.

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And also at: No. 336, Therku Theru, Manamadurai, Kattikulam, Puduvayal, Sivagangai – 630 609.

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Ms. Aparna Chavla, D/o Late Beemasenan, No. 1/148, 2B, LVP Nagar, Narasingam Main Road, Kadachanendhal, Madurai.

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And also at: No. 336, Therku Theru, Manamadurai, Kattikulam, Puduvayal, Sivagangai – 630 609.

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Page 1 of 8

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OA No. 310/2024

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Janarthanan, S/o Late Beemasenan,

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No. 1/148, 2B, LVP Nagar, Narasingam Main Road,

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Kadachanendhal, Madurai.

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And also at:

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No. 336, Therku Theru, Manamadurai, Kattikulam,

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Puduvayal, Sivagangai – 630 609.

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Varshan, S/o Late Beemasenan,

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No. 1/148, 2B, LVP Nagar, Narasingam Main Road,

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Kadachanendhal, Madurai.

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And also at:

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No. 336, Therku Theru, Manamadurai, Kattikulam,

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Puduvayal, Sivagangai – 630 609. --- Defendants

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D-2 to D-4 are represented by their Mother / Natural Guardian Mrs. Ramu /D-1

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Counsel for the Applicant Bank : Mr. C. Deepak.

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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 30.03.2024 to recover from the Defendants a total sum of Rs. 43,66,834.34 ps as under:-

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(i) Rs. 29,98,783.34 ps as on 30.12.2023 in A/c No. 41159709340 with subsequent interest at the rate of 12.75% p.a. with monthly rests plus 2% Penal Interest from 01.07.2023 in respect of Cash Credit Loan and

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Page 2 of 8

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OA No. 310/2024

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(ii) Rs. 13,68,051.00 ps as on 27.12.2023 in A/c No. 41159684619 with subsequent interest at the rate of 12.75% p.a. with monthly rests plus 2% Penal Interest from 28.12.2023 in respect of Term Loan

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from the date of realization with cost and by sale of Hypothecated properties, more fully described in Schedule 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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(i) The applicant bank submitted that the One Beemasenan has approached the applicant for availing the loan like micro and small Enterprises on 14.06.2022 and the same was sanctioned by applicant bank to the tune of Rs. 30,00,000/- as Cash Credit and the Rs. 15,00,000/- as Term Loan with the Rate of Interest fixed at 11.40% and the said Beemasenan has accepted the sanction by executing the Letter of Arrangement on 30.07.2022.

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(ii) The applicant bank further submitted that in consideration of loan facilities that the said Beemasenan has executed the Guarantee Agreement and the Agreement of Loan Cum Hypothecation on 30.07.2022.

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(iii) The Applicant bank was insisting for repayment of loan amount and the said Beemaseman have been giving one reason or other to evade from repaying and the Loan has become NPA.

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(iv) The applicant has reliably that the Beemasenan has died leaving behind the present defendants as the Legal heirs. The Defendants for duty bound to repay the Loan availed by their said Beemasenan.

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(v) The Applicant bank further submitted that the defendants did not adhere to the terms of repayment despite demands. In spite of several demands made by the Applicant, the defendants failed and neglected to settle the amount. The defendants did not adhere to the terms of repayment. The defendants who are the legal heirs has to repay the loan availed by the original applicants and to redeem the property.

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(vi) The Applicant bank further submitted that the defendants are liable to pay a sum of Rs. 29,98,783.34ps as on 30-12-2023 in Account No. 41159709340 and Rs. 13,68,051.00 as on 27/12/23 in Account No.:

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Page 3 of 8

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OA No. 310/2024

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41159684619 as per account maintained by the Plaintiff in the regular course of business as per the Bankers Book Evidence Act. The total amount due and payable by the defendants to the Plaintiff on the date of filing of the Suit is Rs. 43,66,834.34ps. The defendants are liable to pay the above said amount with interest at 14.75% per annum in Account No. 41159709340 and at 14.75% per annum in Account No.41159684619 (including penal interest at 2% per annum) with compounded monthly rests from the date of Suit till the date of realization. The applicant bank submitted that the interest charged in the loan account shall not counter run the Directives of Reserve Bank of India. The applicant bank submitted that the interest charged at present the interest rate charged is at 12.75% p.a in Account No. 41159709340 and at 12.75% p.a in Account No.41159684619 with compounded monthly rests. Defendants, as per Contract, are 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 14.75% per annum in Account No. 41159709340 and at 14.75% p.a in Account No.41159684619 with compounded monthly rests. The applicant bank was producing computerized Statement of Account maintained by them in the regular course of business as per the Bankers Book Evidence Act.

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(vii) The defendants failed and neglected to settle the amount and on subsequent dates when the defendants failed and neglected to repay the loan due.

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(viii) 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. 43,66,834.34 ps as under:-

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(i) Rs. 29,98,783.34 ps as on 30.12.2023 in A/c No. 41159709340 with subsequent interest at the rate of 12.75% p.a. with monthly rests plus 2% Penal Interest from 01.07.2023 in respect of Cash Credit Loan and

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(ii) Rs. 13,68,051.00 ps as on 27.12.2023 in A/c No. 41159684619 with subsequent interest at the rate of 12.75% p.a. with monthly rests plus 2% Penal Interest from 28.12.2023 in respect of Term Loan

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from 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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Page 4 of 8

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OA No. 310/2024

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S. No.	Date	Description of document	Exhibits
1.	14.06.2022	Application for MSME	Ex. No. A-01
2.	30.07.2022	Letter of Arrangement	Ex. No. A-02
3.	30.07.2022	Sanction Letter	Ex. No. A-03
4.	30.07.2022	Guarantee Agreement	Ex. No. A-04
5.	06.03.2024	Agreement of Loan cum Hypothecation	Ex. No. A-05
6.	----	Statement of Accounts maintained by the Applicant Bank in regular course and conduct of business	Ex. No. A-06

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SCHEDULE OF PROPERTIES "A" SCHEDULE HYPOTHECATION

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Hypothecation of Plant and Machinery

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Hypothecation of Stock and Receivables

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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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5. 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 defendants have availed Cash Credit Loan and Term 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 Nos. A-01 to A-06 in support of its claim in the OA.

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Page 5 of 8

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OA No. 310/2024

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The Loan application dated 14.06.2022 submitted by Beemasenan has been marked as Ex. No. A-01. The borrower availed the Cash Credit Loan for a sum of Rs. 30,00,000/- and Term Loan for a sum of Rs. 15,00,000/with rate of interest at 11.40%. The Applicant Bank also sanctioned the Cash Credit Loan and Term Loan. The said Beemasenan has accepted the said sanction by executing the Arrangement Letter on 30.07.2022, which has been marked as Ex. No. A-02. In consideration of the said loan facilities, Beemasenan has executed the Guarantee Agreement and the Agreement of Loan cum Hypothecation on 30.07.2022, which have been marked as Ex. No. A-03 & A-04.

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Further, the applicant bank submitted that the Beemasenan has died, leaving behind the present defendants as the legal heirs. The defendants have to repay the loans availed by Beemasenan. The applicant bank submitted the Legal Notice to the defendants on 06.03.2024. The same has been marked as Ex. No. A-05. The Statement of Accounts maintained by the applicant bank in regular course and conduct of business has been marked as Ex. No. A-06.

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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 6 of 8

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OA No. 310/2024

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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, for a sum of Rs. 43,66,834.34 ps as under:-

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(i) Rs. 29,98,783.34 ps with subsequent interest at the rate of 12.75% p.a. with Half Yearly rests in respect of Cash Credit Loan A/c No. 41159709340 and

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(ii) Rs. 13,68,051.00 ps with subsequent interest at the rate of 12.75% p.a. with Half Yearly rests in respect of Term Loan A/c No. 41159684619

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from 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 personally/jointly/severally to

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pay a sum of Rs. 43,66,834.34 ps as under:-

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(i) Rs. 29,98,783.34 ps with subsequent interest at the rate of 12.75% p.a. with Half Yearly rests in respect of Cash Credit Loan A/c No. 41159709340 and

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(ii) Rs. 13,68,051.00 ps with subsequent interest at the rate of 12.75% p.a. with Half Yearly rests in respect of Term Loan A/c No. 41159684619

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from 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 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 personally/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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Page 7 of 8

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OA No. 310/2024

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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 Cash Credit Loan and Term 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 SKP (Typist), taken down, transcribed, typed by her, corrected and pronounced by me in the Open Court in this the 14^th July, 2026.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 21.07.2026

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State Bank of India v. Ramu

Case brief

What is this about?

What did the court decide?

State Bank of India v. Ramu

Case brief

What is this about?

What did the court decide?

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