Allowed

Punjab National Bank v. K Gurusamy

DRT6 Jul 2026OA/422/2024

Case brief

AI extract

What is this about?

The DRT allowed an application by Punjab National Bank for recovery of Rs.60,75,220.16 outstanding on an agricultural loan. The court confirmed the loan details and rejected penal interest, directing simple interest at 6% p.a. from the filing date.

What did the court decide?

Respondent directed to pay Rs.60,75,220.16 with 6% p.a. simple interest; recovery via sale of properties permitted if payment withheld; recovery certificate to be issued.

Punjab National Bank versus K Gurusamy — Banking and Recovery | DRT (2026)

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OA No. 422/2024

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI

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DATED THIS 06^th DAY OF JULY, 2026

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PRESENT: SEEMA SINHA,

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[PR. DISTRICT & SESSIONS JUDGE – Retd]

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PRESIDING OFFICER

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OA No.422/2024

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Between

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Punjab National Bank, (Erstwhile United Bank of India), ARM Branch, Kailasapuram, Trichy – 620 014. Rep. by its Chief Manager ---Applicant Bank

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And

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K. Gurusamy,

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S/o Kuppusamy, Azhagapuram, Udaiyarpalayam, Ariyalur – 608 901. ---Defendant

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Counsel for the Applicant Bank : M/s K. Ramesh & M. Sundaraj.

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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 23.09.2024 to recover from the Defendant a sum of Rs.60,75,220.16ps together subsequent interest at the rate of 14.75% p.a. plus 2% P.I with monthly rests in respect of Agricultural Loan from the date of filing of

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Page 1 of 5

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OA No. 422/2024

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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 availed Agricultural Loan for a sum of Rs.15,30,000/-. The defendant executed Deed of Hypothecation dated 02.01.2014 in favour of the Applicant Bank. In addition to that, the defendants has also deposited the original title deeds this immovable property with the applicant bank as security for the due repayment of loan availed by him. Further, the defendants has executed memorandum of deposit of title deeds on 27.01.2014 in Document No.156/2014, SRO Andimadam, Ariyalur District. The following is the detail of loan availed by the defendant.

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S.No.	Nature of loan &	Loan amount	Rate of	Outstanding
	Account Number		interest	amount as on 31.03.2024
1.	Agricultural Loan 1394305028889	Rs.15,30,000/-	14.75%p.a+ 2%P.1	Rs.60,75,220.16/-

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After availing the loan, defendant was not regular in the matter of repayment. The defendant made several promises, but he failed to keep up his promises. As per the Statement of Account maintained by the bank the Defendant is still liable to pay a sum of Rs.60,75,220.16/- as on 31.03.2024 towards the above said credit facility with subsequent interest from 01.08.2017 along with other charges and expenses.

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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.60,75,220.16ps together with future interest at the rate of 14.75% p.a. plus 2% P.I with monthly rests in respect of Agricultural Loan 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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Page 2 of 5

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OA No. 422/2024

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S. No.	Date	Description of document	Exhibits
1	02.01.2014	Letter of Sanction	Ex.No.A-01
2	02.01.2014	Deed of Hypothecation	Ex.No.A-02
3	19.02.2014	RC Book(OF YACT 19)	Ex.No.A-03
4	27.01.2014	MOD. Doc. No. 156/2014	Ex.No.A-04
5	-	Statement of Accounts	Ex.No.A-05

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SCHEDULE-A

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Hypothecated Vehicles

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Vehicle Registration No. TN61E7750, Class of Vehicle: Tractor (Agriculture), Wheel base: 2040, Engine No.3C35055K13, Chassis No: DF11919K13.

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SCHEDULE-B

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Mortgaged Property

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Ariyalur District, Ariyalur Registration District, Andimadam Sub Registration, Udaiyarpalayam Taluk, Azhagapuram Village the lands comprised in:

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S.No.	S.F.No.	Extent
1	291/2F	0.43.00
2	291/4A	0.51.00
3	326/1A	0.48.50

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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 Agricultural Loan from the Applicant Bank, but he failed to pay the outstanding loan amount, hence he has filed the case. The applicant bank

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Page 3 of 5

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OA No. 422/2024

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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-05 in support of its claim in the OA.

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I perused the documents filed by the Applicant Bank and I find that the Sanction Letter has been marked as Ex. No. A-01, the Deed of Hypothecation has been marked as Ex. No. A-02, RC Book has been marked as Ex. No. A-03, MOD. Doc.No. 156/2014 has been marked as Ex. No. A-04, and the Statement of Accounts has been marked as Ex. No. A-05. 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 otherhand 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 . Since this is an Agricultural Loan 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.60,75,220.16ps together with simple interest at the rate of 6% p.a. in respect of Agricultural Loan from the date of filing of Application till the date of realization with cost. Accordingly, it is hereby

ORDERED

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OA No. 422/2024

(a) That the Defendant is directed to pay personally a sum of Rs.60,75,220.16ps together with simple interest at the rate of 6% p.a. in respect of Agricultural 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 Agricultural 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 6th July, 2026.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 18.07.2026

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Punjab National Bank v. K Gurusamy

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. K Gurusamy

Case brief

What is this about?

What did the court decide?

What the court decided

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