Allowed

Canara Bank v. P Murugan

DRT18 Feb 2026OA/323/2022

Case brief

AI extract

What is this about?

In this original application for recovery of dues, the Debt Recovery Tribunal allowed the claim of the applicant bank against a defaulting borrower based on documentary evidence filed, as the respondent appeared ex-parte. The court directed the respondent to pay the principal sum along with interest.

What did the court decide?

The respondent was directed to pay Rs. 31,34,158.06 with interest at 14.25% p.a. within one month or face sale of mortgaged properties to satisfy the debt.

Canara Bank versus P Murugan — Contract and Commercial Disputes | DRT (2026)

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OA No. 323/2022

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 18^TH DAY OF FEBRUARY, 2026 PRESENT: SEEMA SINHA,

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

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OA No.323/2022

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Between

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Canara Bank, Sholavandan Branch, Madurai District Rep. By its Branch Manager. ---Applicant Bank

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And

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Mr. P. Murugan, S/o Palusamy, Prop. M/s. Selvi Agency No.6/2/240, Market Feeder Road, Padasalai Thoppu, Sholavandan, Vadipatti (TK), Madurai District. ---Defendant

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Counsel for the Applicant Bank : M/s VS Karthi Associates

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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. 323/2022

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on 22.02.2022 to recover from the Defendant a sum of Rs.31,34,158.06p together with interest at the rate of 14.25% p.a. plus penal interest at the rate of 2%p.a. in respect of Canara Trade Open Cash Credit 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 had applied and availed for Canara Trade OCC Loan to the tune of Rs. 10,00,000/- on 29.03.2012 and also the defendant has been applied and availed additional Canara Trade OCC limit to the tune of Rs.15,00,000/- on 13.08.2015 vide Loan Account no.0958897010377. The defendant agreed to deposit the original title deeds of his property more fully described in Schedule "A" hereunder and to create an equitable mortgage as security for the due repayment of the loans. The defendant agreed to pay interest at the rate of 14.25%p.a or such other rates that may be revised by the applicant bank. As the defendant had agreed for all the terms and conditions, For which the defendant had executed the proper documents in favour of the bank towards the loan amount, the details of loan documents are :

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Canara Trade OCC Loan (Loan Account No.1019285010428)
1. Certificate of Loan paper obtained Rs. 10,00,000/-
2. Sanction Memorandum Rs. 10,00,000/-
3. PronoteRs. 10,00,000/-
4. Cash Credit Agreement-Rs. 10,00,000/-
5. Letter of Renewal Rs. 10,00,000/-
6. Certificate of Loan paper obtained Rs.15,00,000/-
7. Sanction Memorandum - Rs. 15,00,000/-
8. Loan Application
9. Appraisal Memorandum
10. Pronote- Rs. 15,00,000/-
11. Cash Credit agreement-Rs. 15,00,000/-
12. Request for overdraft facilities

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OA No. 323/2022

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13. Letter of Renewal
14. Particulars of irregular Accounts
15. Acknowledgment of Debt and Securities on 27.02. 03.07.2021	2015,	17.07.20	18 &
16. Registered Memorandum of Deposit of doc.no.639/2012	Title	Deeds	vide
17. Supplemental Memorandum of Deposit of doc.no.1710/2015	Title	Deeds	vide
18. Statement of accounts

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Thus the Defendant had availed the loan and executed the necessary documents in favour of the Bank. The defendant had agreed to repay the loan and interest severally. The defendant was also agreed to pay interest at the rate of 14.25% as applicable rates 2% for each loan or at such other rates as may be revised by the bank from time to time. As the defendant agreed for all the terms and conditions, the applicant bank had sanctioned the above said loan

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The defendant had deposited the original title deeds of the property more fully described in Schedule "A" here under with Applicant bank and executed the registered Memorandum of Deposit of title deeds on 20.03.2012 vide Doc.No.639/2012 and also executed the registered Memorandum of Deposit of title deeds on 03.08.2015 vide Doc.No.1710/2015 with an intention to create equitable mortgage

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After availing the loan, defendants were not regular in the matter of repayment. The defendant made several promises, but he failed to keep up his promises. Despite repeated demands and reminders, made by the Applicant Bank, the Defendant have failed and neglected to repay and adjust his liability.

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Hence, the Applicant Bank has filed the OA for recovery of a sum of Rs.31,34,158.06p together with interest at the rate of 14.25% p.a. plus penal interest at the rate of 2%p.a. in respect of Canara Trade Open Cash Credit 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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OA No. 323/2022

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SI.	Date	Description of document	Exhibit
No
1	29.03.201 2	Certificate of Loan paper obtained Rs. 10,00,000/-	Ex.No.A-01
2	29.03.201 2	Sanction Memorandum Rs. 10,00,000/-	Ex.No.A-02
3	29.03.201 2	PronoteRs. 10,00,000/-	Ex.No.A-03
4	29.03.201 2	Cash Credit Agreement – Rs. 10,00,000/-	Ex.No.A-04
5	----	Letter of Renewal – Rs. 10,00,000/-	Ex.No.A-05
6	13.08.201 5	Certificate of Loan paper obtained Rs. 15,00,000/-	Ex.No.A-06
7	----	Sanction Memorandum – Rs. 15,00,000/-	Ex.No.A-07
8	13.08.201 5	Loan Application	Ex.No.A-08
9	13.08.201 5	Appraisal Memorandum	Ex.No.A-09
10	13.08.201 5	Pronote – Rs. 15,00,000/-	Ex.No.A-10
11	13.08.201 5	Cash Credit agreement – Rs. 15,00,000/-	Ex.No.A-11
12	13.08.201 5	Request for overdraft facilities	Ex.No.A-12
13	13.08.201 5	Letter of Renewal	Ex.No.A-13
14	09.10.201 7	Particulars of irregular Accounts	Ex.No.A-14
15	27.02.201 5	Acknowledgment of Debt and Security	Ex.No.A-15
16	17.07.201 8	Acknowledgment of Debt and Security	Ex.No.A-16
17	03.07.202 1	Acknowledgment of Debt and Security	Ex.No.A-17
18	20.03.201 2	Registered Memorandum of Deposit of Title Deeds vide doc.no. 639/2012	Ex.No.A-18
19	03.08.201 5	Supplemental Memorandum of Deposit of Title Deeds vide doc.no. 1710/2015	Ex.No.A-19
20	15.04.200 2	Sale deed executed by Krishna Iyer Trust representing by its managing trustee S. Sethurathinam in favour of P. Murugan vide doc.no. 582/2002	Ex.No.A-20
21	09.05.200	Sale Deed executed byP. Murugan in favour	Ex.No.A-21

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OA No. 323/2022

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	8	of his brother P. Moorthyvide doc.no. 777/2008
22	01.02.201 0	Sale Deed executed by Shri Malayalam Krishnaiyar Charities, represented by its Managing Trustee S. Sethurathinam in favour of R.Palusamyvide doc.no.212/2010	Ex.No.A-22
23	17.05.201 0	Cancellation of Sale Deed executed by P. Murugan in favour of P. Moorthy vide doc.no. 1737/2010	Ex.No.A-23
24	10.08.200 0	Decree in O.S. No. 921/1997 passed by the Principal Sub Judge, Madurai	Ex.No.A-24
25	24.03.200 0	Patta Pass Book	Ex.No.A-25
26	13.02.200 7	Adangal	Ex.No.A-26
27	03.06.200 2	Order passed by Executive OfficerSholavandan Town PanchayatPanchayat Transferring Property tax registryto the name of P. Murugan	Ex.No.A-27
28	19.12.200 6	Property tax receipt	Ex.No.A-28
29	24.01.200 7	Property tax receipt	Ex.No.A-29
30	26.02.201 0	Property tax receipt	Ex.No.A-30
31	09.03.201 0	Property tax receipt	Ex.No.A-31
32	25.01.200 7	EC No. 76/2007 period from 01.01.1975 to 31.12.1986	Ex.No.A-32
33	25.01.200 7	EC No. 75/2007 Period from 01.01.1987 to 24.01.2007	Ex.No.A-33
34	24.05.201 0	EC No. 790/2010 Period from 01.01.2007 to 23.05.2010	Ex.No.A-34
35	11.05.200 7	EC No. 517/2007 Period from 26.01.2007 to 10.05.2007	Ex.No.A-35
36	02.08.201 1	EC No. 1279/2011 Period from 24.05.2010 to 01.08.2011	Ex.No.A-36
37	16.02.201 2	EC No. 352/2012 Period from 24.05.2010 to 15.02.2012	Ex.No.A-37
38	21.03.201 2	EC No. 624/2012 Period from 01.01.2012 to 20.03.2012	Ex.No.A-38
39	27.07.201 5	EC No. 2713/2015 Period from 01.01.2007 to 26.07.2015	Ex.No.A-39

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OA No. 323/2022

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40	01.12.202	Statement of Account (Vide Loan Account No.	Ex.No.A-40
	1	1019285010428)

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SCHEDULE "A"

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DESCRIPTION OF PROPERTIES

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Madurai South Registration District, Sholavandan Sub District, Vadipatti Taluk, Soalikurichi Village, Market Road Comprised in R.S.No.139/1 in Plot No.22A & 23C in Door No.6-2-240 & 245 measuring 3373½ Sq.ft within the following boundaries:-

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North	:	Plot Nos.21, 22 & 23B
South	:	Property of Krishnarayar Trust
East	:	Vaikkal
West	:	Property of Krishnarayar Trust

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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. A. Bhuvaneswari, who is the Manager of the Applicant Bank.

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She has stated in her affidavit that the defendant has availed Canara Trade Open Cash Credit 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 given by the defendant at the time of sanctioning the loan amount, which have been marked as exhibits No.A-01 to A-40 in support of its claim in the OA.

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The Certificate of Loan paper obtained Rs. 10,00,000/- has been marked as Ex.No.A-01, Sanction Memorandum Rs. 10,00,000/- has been marked as Ex.No.A-02, Pronote Rs.10,00,000/- has been marked as Ex.No.A-03, Cash Credit Agreement Rs. 10,00,000/- has been marked as Ex.No.A-04, Letter of Renewal Rs. 10,00,000/- has been marked as Ex.No.A05, Certificate of Loan paper obtained Rs. 15,00,000/- has been marked as Ex.No.A-06, Sanction Memorandum – Rs. 15,00,000/- has been marked as Ex.No.A-07, Loan Application has been marked as Ex.No.A-08, Appraisal

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OA No. 323/2022

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Memorandum has been marked as Ex.No.A-09, Pronote – Rs. 15,00,000/has been marked as Ex.No.A-10.

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The Cash Credit agreement – Rs. 15,00,000/- has been marked as Ex.No.A-11, Request for overdraft facilities has been marked as Ex.No.A-12, Letter of Renewal has been marked as Ex.No.A-13, Particulars of irregular Accounts has been marked as Ex.No.A-14, Acknowledgment of Debt and Security has been marked as Ex.No.A-15, Acknowledgment of Debt and Security has been marked as Ex.No.A-16, Acknowledgment of Debt and Security has been marked as Ex.No.A-17, Registered Memorandum of Deposit of Title Deeds vide doc.no. 639/2012 has been marked as Ex.No.A18, Supplemental Memorandum of Deposit of Title Deeds vide doc.no. 1710/2015 has been marked as Ex.No.A-19, Sale deed executed by Krishna Iyer Trust representing by its managing trustee S. Sethurathinam in favour of P. Murugan vide doc.no. 582/2002 has been marked as Ex.No.A-20.

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The Sale Deed executed by P. Murugan in favour of his brother P. Moorthy vide doc.no. 777/2008 has been marked as Ex.No.A-21, Sale Deed executed by Shri Malayalam Krishnaiyar Charities, represented by its Managing Trustee S. Sethurathinam in favour of R.Palusamy vide doc.no.212/2010 has been marked as Ex.No.A-22, Cancellation of Sale Deed executed by P. Murugan in favour of P. Moorthy vide doc.no. 1737/2010 has been marked as Ex.No.A-23, Decree in O.S. No. 921/1997 passed by the Principal Sub Judge, Madurai has been marked as Ex.No.A24, Patta Pass Book has been marked as Ex.No.A-25, Adangal has been marked as Ex.No.A-26, Order passed by Executive OfficerSholavandan Town PanchayatPanchayat Transferring Property tax registry to the name of P. Murugan has been marked as Ex.No.A-27, Property tax receipt-1 has been marked as Ex.No.A-28, Property tax receipt-2 has been marked as Ex.No.A29, Property tax receipt-3 has been marked as Ex.No.A-30.

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The Property tax receipt-4 has been marked as Ex.No.A-31, EC No. 76/2007 period from 01.01.1975 to 31.12.1986 has been marked as Ex.No.A-32, EC No. 75/2007 Period from 01.01.1987 to 24.01.2007 has been marked as Ex.No.A-33, EC No. 790/2010 Period from 01.01.2007 to 23.05.2010 has been marked as Ex.No.A-34, EC No. 517/2007 Period from 26.01.2007 to 10.05.2007 has been marked as Ex.No.A-35, EC No. 1279/2011 Period from 24.05.2010 to 01.08.2011 has been marked as Ex.No.A-36, EC No. 352/2012 Period from 24.05.2010 to 15.02.2012 has been marked as Ex.No.A-37, EC No. 624/2012 Period from 01.01.2012 to 20.03.2012 has been marked as Ex.No.A-38, EC No. 2713/2015 Period from 01.01.2007 to 26.07.2015 has been marked as Ex.No.A-39, Statement of Account (Vide Loan Account No. 1019285010428) has been marked as

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OA No. 323/2022

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Ex.No.A-40. 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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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 sum of Rs.31,34,158.06p together with interest at the rate of 14.25% p.a. in respect of Canara Trade Open Cash Credit 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 sum of Rs.31,34,158.06p together with interest at the rate of 14.25% p.a. in respect of Canara Trade Open Cash Credit 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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OA No. 323/2022

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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 Canara Trade Open cash Credit 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 18^th February, 2026.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 26.02.2026

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Canara Bank v. P Murugan

Case brief

What is this about?

What did the court decide?

Canara Bank v. P Murugan

Case brief

What is this about?

What did the court decide?

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