Allowed

Indian Bank v. anisha ismath

DRT17 Feb 2026OA/404/2025

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an Original Application filed by Indian Bank to recover approximately Rs.27.48 lakh with interest from Mrs. Anisha Ismath. The court held that the defendant's default was established ex-parte and allowed principal and interest, while noting judicial precedent against capitalizing penal interest.

What did the court decide?

Direction to pay Rs.27,48,337.48 with interest at 10.85% p.a. within one month and issuance of Recovery Certificate.

Indian Bank versus anisha ismath — Banking and Recovery | DRT (2026)

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OA No. 404/2025

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI

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DATED THIS 17^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.404/2025

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Between

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Indian Bank, 01, Pudukottai Main Road, MIET Complex, Gundur, Trichy – 620 007. Rep. By its Branch Manager.

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---Applicant Bank

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And

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Mrs. Anisha Ismath, Prop. M/s Aysha Garments, D/o Mohamed Ibrahim, D.No.188, 3^rd Street, Kollam Main Road, Kattalakudiyiruppu, Tenkasi – 627 813.

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Also at:

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Mrs. Anisha Ismath, D/o Mohamed Ibrahim, Ariya Samaz Building, D.No.4/9-1, Rajapuram Colony, Meenachipuram, Panpoli Post, Sengottai Taluk, Tenkasi – 627 807.

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OA No. 404/2025

Also at:

Mrs. Anisha Ismath, D/o Mohamed Ibrahim, D.No.120, 6^th Sector, 2^nd Cross, Morais City, Gundur, Trichy – 620 007. ---Defendant

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Counsel for the Applicant Bank : M/s R. Pandivel, S. Iniyan Karthik, P. Madhu Nila

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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 13.08.2025 to recover from the Defendant a sum of Rs.27,48,337.48p together with interest at the rate of 10.85% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Cash Credit facility 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 approached the Applicant Bank for availing Cash Credit Facility for her business. The Applicant Bank had also sanctioned the said Cash Credit Facility to the limit of Rs.25,00,000/-. The applicant bank sanctioned the said Cash Credit Facility to the defendant and by accepting the terms & conditions, the defendant counter signed the sanction letter dt.01.02.24.

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In consideration of the Cash Credit Facility, the defendant had executed an Agreement for Open Cash Credit dt. 01.02.24 in favour of the Applicant Bank contains various Terms & conditions by hypothecating the goods. Further the defendant promised to repay the loan amount with compound interest the rate of 11.85% Per annum with monthly rest or at

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Page 2 of 6

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OA No. 404/2025

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such other rates may be revised by the applicant bank from time to time with per interest at the rate of 2% per annum in case of default.

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The defendant had availed the above said Cash Credit Facility as per the particulars mentioned in the Statement of Accounts maintained by the Applicant Bank in the regular course and conduct of business. Now the hypothecated goods are not available and so the applicant bank cannot proceed with the hypothecated goods.

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The defendant had not repaid the said loan as agreed and promised by her. Thus she had committed default in repaying the loan amount. Hence the applicant bank issued Lawyer Notice dt.21.02.25 to the defendant. Even after the said notice the defendant had not repaid the loan. Despite repeated demands made by the Applicant Bank the defendant did not take any sincere steps to discharge the loan.

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Hence, the Applicant Bank has filed the OA for recovery of a sum of Rs.27,48,337.48p together with interest at the rate of 10.85% p.a. with monthly rests plus penal interest at the rate of 2%p.a. in respect of Cash Credit Facility 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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S. No.	Date	Description of document	Exhibits
1	01.02.24	Sanction letter issued by the applicant bank in favour of defendant	Ex.No.A-01
2	01.02.24	Agreement for Open Cash Credit executed by the defendant in favour of the Applicant Bank	Ex.No.A-02
3	21.02.25	Lawyer Notice issued by Applicant Bank to the defendant	Ex.No.A-03
4	----	Statement of Accounts maintained by the applicant bank in the regular Course & conduct of the business	Ex.No.A-04

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Page 3 of 6

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OA No. 404/2025

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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. J. Vignesh, who is the Branch Manager of the Applicant Bank.

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He has stated in his affidavit that the defendant has availed Cash Credit Facility 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-04 in support of its claim in the OA.

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The Sanction letter issued by the applicant bank in favour of defendant has been marked as Ex.No.A-01, Agreement for Open Cash Credit executed by the defendant in favour of the Applicant Bank has been marked as Ex.No.A-02, Lawyer Notice issued by Applicant Bank to the defendant has been marked as Ex.No.A-03, Statement of Accounts maintained by the applicant bank in the regular Course & conduct of the business has been marked as Ex.No.A-04. 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

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Page 4 of 6

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OA No. 404/2025

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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.27,48,337.48p together with interest at the rate of 10.85% p.a. with half yearly rests in respect of Cash Credit facility 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.27,48,337.48p together with interest at the rate of 10.85% p.a. with half yearly rests in respect of Cash Credit facility 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) 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 Cash Credit Facility and the

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Page 5 of 6

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OA No. 404/2025

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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 17^th February, 2026.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 23.02.26

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Indian Bank v. anisha ismath

Case brief

What is this about?

What did the court decide?

Indian Bank v. anisha ismath

Case brief

What is this about?

What did the court decide?

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