Allowed

City Union Bank Limited v. Ramasubbu

DRT3 Jul 2026OA/514/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed an application filed by City Union Bank Ltd. to recover a secured sum of nearly 49 lakhs along with interest from the defendants who had defaulted on term loans and FITL loans. The court accepted the bank's documentary evidence as the defendants were absent.

What did the court decide?

Direction to pay Rs.48,95,290.74 p with interest; liberty to sell mortgaged properties; joint and several liability for deficiency; preparation of Recovery Certificate.

City Union Bank Limited versus Ramasubbu — Contract and Commercial Disputes | DRT (2026)

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OA No. 514/2023

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 03^rd DAY OF JULY, 2026 PRESENT: SEEMA SINHA,

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

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OA No.514/2023

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Between

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City Union Bank Ltd., Kovilpatti Branch, No.794, Main Road, Near Sathya Bhama Theatre, Kovilpatti- 628 501 Rep. by its Branch Manager. ---Applicant Bank

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And

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Mr..S.K.Ramasubbu, S/o M.S.Kandasamy, Prop. Of M/s. Sri Murugan Match Industries, No.1/159, Subba Naicker Nagar, Koppampatti, Kovilpatti, Tuticorin- 628 720

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Also at

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No.159/1, Koppampatti, Kovilpatti, Tuticorin- 628 720

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Also at

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No.1/158, Minor Subbanaicker Nagar, Koppampatti, Kovilpatti, Tuticorin- 628 720

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Mrs. R.Santha W/o.S.K.Ramasubbu,

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Page 1 of 11

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OA No. 514/2023

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No.159/1, Koppampatti, Kovilpatti, Tuticorin- 628 720

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Also at

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No.1/158, Minor Subbanaicker Nagar, Koppampatti, Kovilpatti, Tuticorin- 628 720 ---- Defendants

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Counsel for the Applicant Bank : M/s VS. Karthi & N. Azhagammal

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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 27.06.2023 to recover from the Defendants a sum of Rs.48,95,290.74p i.e., i) Rs.11,11,983.46p together with interest at the rate of 11.75% p.a. plus penal interest at the rate of 2 % p.a. in respect of Term loan I ii) Rs.33,43,313.42p together with interest at the rate of 11.75% p.a. plus penal interest at the rate of 2 % p.a. in respect of Term loan II and iii) Rs.4,39,993.86p together with interest at the rate of 11.75% p.a. plus penal interest at the rate of 2 % p.a. in respect of FITL 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 1st Defendant is proprietor and carrying on manufacture of Splints & Veneers & matches business in the name and style of M/s. Sri Murugan Match Industries for which they have applied and availed working capital Term Loan for business enhancement on 22.12.2020 to the tune of Rs. 10,00,000/-& Rs.30,00,000/(RS.40,00,000/-) vide Loan Account Nos.501812080077209 (Term Loan I) & 501812080077210(Term Loan II). Additionally the 1^st defendant had applied and availed FITL EMI Restructure

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Page 2 of 11

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OA No. 514/2023

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loan on 18/11/2021 to the tune of Rs.4,00,000/- Vide Loan Account No.501812080082025. The 2^nd defendant who is wife of the 1^st defendant and have agreed to stand as guarantors for the loans borrowed by the 1^st defendant and its purposes of business enhancement. Thus joint liability has been emerged lawfully.

¶29

The 1^st defendant have 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. Thus this O.A described property are absolutely mortgaged to the applicant bank as sole charge created in favour of the applicant bank. The defendants have agreed to pay interest at the rate of 10% respectively for the 3 loans along with 2% penal interest or such other rates that may be revised by the applicant bank. The Applicant Bank is entitled to claim interest at contractual rate. As the defendants have agreed for all the terms and conditions, for which the defendants have executed the proper loan documents such as loan application , consent letter, guarantee agreement and demand promissory note in favour of the bank and also executed the Registered Memorandum of Deposit of title deed on 28/07/2015 vide doc.no.1136/2015 and also executed Registered Memorandum of Extension of Equitable mortgage by way of deposit of title deeds on 18.08.2016 vide doc.no.1240/2016, Registered Memorandum of Extension of Equitable mortgage by way of deposit of title deeds on 10.05.2018 vide doc.no.740/2018, Registered Memorandum of Extension of Equitable mortgage by way of deposit of title deeds on 19.12.2020 vide doc.no.1589/2020 executed by defendants in favour of the applicant bank towards the loan amount.

¶30

During the year 2021 the limits were renewed for Rs.44.40 Lakhs and the defendants had executed relevant documents. But the defendants defaulted in repayments and was consequently declared as Non-Performing Assets on 23.01.2023 and thereafter bank has proceeded with SARFAESI Act proceedings for recovery of their dues of Rs.48,95,290.74p as on 05.05.2023 from and out of his properties which were secured towards the debts/liability.

¶31

Hence, the Applicant Bank has filed the OA for recovery of a sum of Rs.48,95,290.74p i.e., i) Rs.11,11,983.46p together with interest at the rate of 11.75% p.a. plus penal interest at the rate of 2 % p.a. in respect of Term loan I ii) Rs.33,43,313.42p together with interest at the rate of 11.75% p.a. plus penal interest at the rate of 2 % p.a. in respect of Term loan II and iii) Rs.4,39,993.86p together with interest at the rate of 11.75% p.a. plus penal interest at the rate of 2 % p.a. in respect of FITL loan from the date of filing of Application till the date of realization with cost.

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Page 3 of 11

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OA No. 514/2023

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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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List of Documents

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Sl. No.	Date	Particulars	Exhibit No.
1.	15.12.2020	Sanction Ticket for Three Loans	Ex. No. A-01
2.	15.12.2020	Sanction Letter for Three Loans	Ex. No. A-02
3.	22.12.2020	Loan Application-cum-Undertaking	Ex. No. A-03
4.	22.12.2020	Demand Promissory Note – Rs. 10,00,000/-	Ex. No. A-04
5.	22.12.2020	Acknowledge Letter from Borrower	Ex. No. A-05
6.	22.12.2020	Request Letter from Borrower	Ex. No. A-06
7.	22.12.2020	Undertaking Letter from Borrower	Ex. No. A-07
8.	22.12.2020	^{Consent Letter to be Executed by} Borrowers/Guarantors	Ex. No. A-08
9.	22.12.2020	^{Consent Letter of the Borrowers &} Guarantors	Ex. No. A-09
10.	22.12.2020	Guarantee Agreement	Ex. No. A-10
11.	22.12.2020	EBLR Interest Letter	Ex. No. A-11
12.	22.12.2020	Loan Application-cum-Undertaking	Ex. No. A-12
13.	22.12.2020	Demand Promissory Note – Rs. 30,00,000/-	Ex. No. A-13
14.	22.12.2020	Acknowledge Letter from Borrower	Ex. No. A-14
15.	22.12.2020	Request Letter from Borrower	Ex. No. A-15
16.	22.12.2020	Undertaking Letter from Borrower	Ex. No. A-16
17.	22.12.2020	^{Consent Letter to be Executed by} Borrowers/Guarantors	Ex. No. A-17
18.	22.12.2020	^{Consent Letter of the Borrowers &} Guarantors	Ex. No. A-18
19.	22.12.2020	Guarantee Agreement	Ex. No. A-19
20.	22.12.2020	EBLR Interest Letter	Ex. No. A-20
21.	^18.11.2021	^{Sanction Ticket}	Ex. No. A-21
22.	^18.11.2021	^{Loan application cum undertaking}	Ex. No. A-22

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Page 4 of 11

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OA No. 514/2023

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23.	^18.11.2021	^{Demand Promissory Note – Rs.10,00,000/-}	Ex. No. A-23
24.	18.11.2021	Acknowledge Letter from Borrower	Ex. No. A-24
25.	18.11.2021	Request Letter from Borrower	Ex. No. A-25
26.	18.11.2021	Undertaking Letter from Borrower	Ex. No. A-26
27.	18.11.2021	^{Consent Letter to be Executed by} Borrowers/Guarantors	Ex. No. A-27
28.	18.11.2021	^{Consent Letter of the Borrowers &} Guarantors	Ex. No. A-28
29.	18.11.2021	Guarantee Agreement	Ex. No. A-29
30.	18.11.2021	EBLR Interest Letter	Ex. No. A-30
31.	28.07.2015	^{Memorandum of Deposit of Title Deeds vide} Doc. No. 1136/2015	Ex. No. A-31
		Memorandum of Extension of Equitable
32.	18.08.2016	Mortgage by Way of Deposit of Title Deeds videDoc. No. 1240/2016	Ex. No. A-32
33.	10.05.2018	Memorandum of Extension of Equitable Mortgage by Way of Deposit of Title Deeds videDoc. No. 740/2018	Ex. No. A-33
34.	19.12.2020	Memorandum of Extension of Equitable Mortgage by Way of Deposit of Title Deeds videDoc. No. 1589/2020	Ex. No. A-34
35.	04.06.2015	"A" Register	Ex. No. A-35
36.	09.07.2002	^{Registered Sale Deed vide Doc. No.} 341/2002	Ex. No. A-36
37.	10.07.2014	Patta	Ex. No. A-37
38.	17.07.2015	Adangal	Ex. No. A-38
39.	25.04.2015	Tax Receipt	Ex. No. A-39
40.	-----------	Approval Plan	Ex. No. A-40
41.	06.05.2014	Encumbrance Certificate (EC No. 1563/2014) for the period 01.01.1980 to 31.12.1986 (7years)	Ex. No. A-41
		Encumbrance Certificate (EC No.
42.	05.06.2015	1046/2015) for the period 01.01.1987 to 04.06.2015 (29 years)	Ex. No. A-42
43.	04.06.2015	"A" Register	Ex. No. A-43
44.	23.12.2008	Patta	Ex. No. A-44
45.	^09.02.2009	^{Registered sale deed vide doc.no.133/2009}	Ex. No. A-45
46.	01.02.2018	Patta	Ex. No. A-46
47.	01.02.2018	Adangal	Ex. No. A-47

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Page 5 of 11

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OA No. 514/2023

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48. 21.09.2017	FMB Sketch	Ex. No. A-48
49. 29.06.2011	"A" Register	Ex. No. A-49
50. 01.02.2018	Kist Receipt	Ex. No. A-50
51. 05.05.2023	^{Statement of Accounts (Vide A/c. No.} 501812080077209)	Ex. No. A-51
52. 05.05.2023	^{Statement of Accounts (Vide A/c. No.} 501812080077210)	Ex. No. A-52
53. 05.05.2023	^{Statement of Accounts (Vide A/c. No.} 501812080082025)	Ex. No. A-53

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SCHEDULE “A”

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Name of the Title Holders Mr. S.K. Ramasubbu

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Item No.1

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Registration District of Palayamkottai, Sub Registration circle of Kadamboor, Koppampatti Village U.D.R. New Survey No.66/9B for which sub division survey number 66/9B2 in which building D.No.1/159, to the extent of 37 cents out of 1.60 acre bounded as:

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North by : Land held by the Subbanaicker East by : South – North pathway West by : Land held by the Subbanaicker South by : East – West pathway

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Extent:

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Northern Portion Measuring:

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East West : 8½ feet North South : 19’ feet

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Southern Portion Measuring:

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East West : 10’ feet

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North South : 21’ feet in total 371.50 sq.ft., within this northern side previously titled house measuring East West : 8’ ½ feet North South : 19’ feet and on the Southern side previously titled house measuring East West : 10’ feet

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Page 6 of 11

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OA No. 514/2023

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North South : 14’ feet and it is presently modified as a single RCC Roofed Concrete house building.

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Item No.2

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Land Property situated at S.No.66/9A to the extent of 0.03.00, Hec = 86.50 cents, Koppampatti Village, Kayathar Taluk, Thoothukudi District.

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North : Land belongs to Poiyalithatha and Chennapa Nayacker South : V. Suppanayacker Vagaiyara Land East: South – North Vandipathai West : Land belongs to P. Chennaiyan Nayacker

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Item No.3

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Land property situated at S.No.66/9C to the extent of 0.07.50 , Hec = 18 cent of land and out of which undivided ½ share 9 cents, Koppampatti Village, Kayathar Taluk, Thoothukudi.

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North : V. Suppanayacker Vagaiyara Land South : S.K. Ramasubbu Land East : South North Vandi pathai West : V. Suppanayacker Vagaiyara Land.

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SCHEDULE “B”

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Hypothecation of stocks and book debts

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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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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. S. Ramasubramanian, who is the Manager of the Applicant Bank.

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Page 7 of 11

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OA No. 514/2023

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He has stated in his affidavit that the defendants has availed Term Loans and FITL 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 signed by the defendants at the time of sanctioning the loan amount, which have been marked as exhibits No.A-01 to A-53 in support of its claim in the OA.

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I scrutinized the document filed by the applicant bank and I find that the Sanction Ticket for Three Loans dated 15.12.2020 was marked as Ex. No. A-01; the Sanction Letter for Three Loans dated 15.12.2020 was marked as Ex. No. A-02 ; the Loan Application-cum-Undertaking dated 22.12.2020 was marked as Ex. No. A-03; the Demand Promissory Note for Rs.10,00,000/dated 22.12.2020 was marked as Ex. No. A-04 ; the Acknowledge Letter from Borrower dated 22.12.2020 was marked as Ex. No. A-05; the Request Letter from Borrower dated 22.12.2020 was marked as Ex. No. A-06; the Undertaking Letter from Borrower dated 22.12.2020 was marked as Ex. No. A-07; the Consent Letter to be Executed by Borrowers/Guarantors dated 22.12.2020 was marked as Ex. No. A-08; the Consent Letter of the Borrowers & Guarantors dated 22.12.2020 was marked as Ex. No. A-09; the Guarantee Agreement dated 22.12.2020 was marked as Ex. No. A-10; and the EBLR Interest Letter dated 22.12.2020 was marked as Ex. No. A-11 . The Loan Application-cum-Undertaking dated 22.12.2020 was marked as Ex. No. A-12; the Demand Promissory Note for Rs.30,00,000/- dated 22.12.2020 was marked as Ex. No. A-13 ; the Acknowledge Letter from Borrower dated 22.12.2020 was marked as Ex. No. A-14 ; the Request Letter from Borrower dated 22.12.2020 was marked as Ex. No. A-15 ; the Undertaking Letter from Borrower dated 22.12.2020 was marked as Ex. No. A-16 ; the Consent Letter to be Executed by Borrowers/Guarantors dated 22.12.2020 was marked as Ex. No. A-17; the Consent Letter of the Borrowers & Guarantors dated 22.12.2020 was marked as Ex. No. A-18; the Guarantee Agreement dated 22.12.2020 was marked as Ex. No. A-19; and the EBLR Interest Letter dated 22.12.2020 was marked as Ex. No. A-20 .

¶72

Further I find that the Sanction Ticket dated 18.11.2021 was marked as Ex. No. A-21; the Loan Application-cum-Undertaking dated 18.11.2021 was marked as Ex. No. A-22 ; the Demand Promissory Note for Rs.10,00,000/dated 18.11.2021 was marked as Ex. No. A-23 ; the Acknowledge Letter from Borrower dated 18.11.2021 was marked as Ex. No. A-24; the Request Letter from Borrower dated 18.11.2021 was marked as Ex. No. A-25; the Undertaking Letter from Borrower dated 18.11.2021 was marked as Ex. No. A-26; the Consent Letter to be Executed by Borrowers/Guarantors dated 18.11.2021 was marked as Ex. No. A-27 ; the Consent Letter of the Borrowers & Guarantors dated 18.11.2021 was marked as Ex. No. A-28; the Guarantee Agreement dated 18.11.2021 was marked as Ex. No. A-29; and the EBLR

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Page 8 of 11

¶74

OA No. 514/2023

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Interest Letter dated 18.11.2021 was marked as Ex. No. A-30 , the Memorandum of Deposit of Title Deeds vide Doc. No.1136/2015 dated 28.07.2015 was marked as Ex. No. A-31; the Memorandum of Extension of Equitable Mortgage by Way of Deposit of Title Deeds vide Doc. No.1240/2016 dated 18.08.2016 was marked as Ex. No. A-32; the Memorandum of Extension of Equitable Mortgage by Way of Deposit of Title Deeds vide Doc. No.740/2018 dated 10.05.2018 was marked as Ex. No. A-33; the Memorandum of Extension of Equitable Mortgage by Way of Deposit of Title Deeds vide Doc. No.1589/2020 dated 19.12.2020 was marked as Ex. No. A- 34; the "A" Register dated 04.06.2015 was marked as Ex. No. A-35; the Registered Sale Deed vide Doc. No.341/2002 dated 09.07.2002 was marked as Ex. No. A-36; the Patta dated 10.07.2014 was marked as Ex. No. A-37; the Adangal dated 17.07.2015 was marked as Ex. No. A-38 ; and the Tax Receipt dated 25.04.2015 was marked as Ex. No. A-39 .

¶76

And also I find that the Approval Plan was marked as Ex. No. A-40; the Encumbrance Certificate (EC No.1563/2014) for the period from 01.01.1980 to 31.12.1986 dated 06.05.2014 was marked as Ex. No. A-41 ; the Encumbrance Certificate (EC No.1046/2015) for the period from 01.01.1987 to 04.06.2015 dated 05.06.2015 was marked as Ex. No. A-42; the "A" Register dated 04.06.2015 was marked as Ex. No. A-43; the Patta dated 23.12.2008 was marked as Ex. No. A-44; the Registered Sale Deed vide Doc. No.133/2009 dated 09.02.2009 was marked as Ex. No. A-45 ; the Patta dated 01.02.2018 was marked as Ex. No. A-46; the Adangal dated 01.02.2018 was marked as Ex. No. A-47; the FMB Sketch dated 21.09.2017 was marked as Ex. No. A-48; the "A" Register dated 29.06.2011 was marked as Ex. No. A-49; the Kist Receipt dated 01.02.2018 was marked as Ex. No. A-50; the Statement of Accounts pertaining to A/c. No.501812080077209 dated 05.05.2023 was marked as Ex. No. A-51; the Statement of Accounts pertaining to A/c. No.501812080077210 dated 05.05.2023 was marked as Ex. No. A-52; and the Statement of Accounts pertaining to A/c. No.501812080082025 dated 05.05.2023 was marked as Ex. No. A-53 . So the averments of the applicant as well as the statement of the pleading have been corroborated by the above mentioned documents.

¶77

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.

¶78

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

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Page 9 of 11

¶80

OA No. 514/2023

¶81

(reported in AIR 98(1), 1101 & in Central bank of India Vs Ravindra and OS (AIR, 2001(1), 3095).

¶82

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 ".

¶83

Therefore, this Original Application is allowed . The Applicant Bank is entitled for a final order on the following lines:-

¶84

The Applicant Bank is entitled to recover from the Defendants, a sum of Rs.48,95,290.74p i.e., i) Rs.11,11,983.46p together with interest at the rate of 11.75% p.a. in respect of Term loan I ii) Rs.33,43,313.42p together with interest at the rate of 11.75% p.a. in respect of Term loan II & iii) Rs.4,39,993.86p together with interest at the rate of 11.75% p.a. in respect of FITL loan from the date of filing of Application till the date of realization with cost. Accordingly, it is hereby

¶85

ORDERED

¶86

(a) That the Defendants are directed to pay jointly/severally a sum of Rs.48,95,290.74p i.e., i) Rs.11,11,983.46p together with interest at the rate of 11.75% p.a. in respect of Term loan I ii) Rs.33,43,313.42p together with interest at the rate of 11.75% p.a. in respect of Term loan II & iii) Rs.4,39,993.86p together with interest at the rate of 11.75% p.a. in respect of FITL 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.

¶87

(b) In case of default of payment by the above mentioned Defendants, the Applicant Bank is at liberty to sell the movable / immovable properties more fully described in Schedule of the original application for appropriation

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Page 10 of 11

¶89

OA No. 514/2023

¶90

of sale proceeds towards the satisfaction of amount due to the Applicant Bank.

¶91

(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 jointly/severally liable to pay the amount of such deficiency with interest mentioned above until realization.

¶92

(d) Any amount remitted during the course of this proceedings shall be given due credit, to the loan account of the defendants.

¶93

(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.

¶94

(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 Term loans and FITL 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.

¶95

Dictated to P N, taken down, transcribed, typed by him, corrected and pronounced by me in the Open Court in this the 03^rd July, 2026.

¶96

Sd/-

¶97

(SEEMA SINHA) PRESIDING OFFICER

¶98

Uploaded on 20.07.26

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Page 11 of 11

City Union Bank Limited v. Ramasubbu

Case brief

What is this about?

What did the court decide?

City Union Bank Limited v. Ramasubbu

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

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