Allowed

Punjab National Bank v. K Banumathy

DRT3 Aug 2026OA/618/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the bank's original application for recovery of a housing loan. The Tribunal applied precedent to approve pendente lite interest while excluding penal interest capitalization. Upon noting that secured properties were already auctioned, the order directed recovery of the net outstanding balance.

What did the court decide?

Order in favour of bank allowing recovery of outstanding principal Rs. 52,86,004.82 plus interest at 9.45% p.a. (half yearly rests) excluding penal interest; defendants directed to pay within one mont

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

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OA No. 618/2023

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI

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DATED THIS 3^rd DAY OF AUGUST, 2026 PRESENT: SEEMA SINHA,

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

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OA No.618/2023

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Between

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Punjab National Bank (Erstwhile United Bank of India) Circle SASTRA Trichy, Circle Office, Kailasapuram, Trichy-620 014, Represented by its Chief Manager. ---Applicant Bank

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And

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Mrs. K. Banumathy

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D/o. Mr. Kanaguraju Plot No.4, 2^nd Cross Street,

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Indira Nagar, West Extn,

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Garimedu, Puducherry -605 006.

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Mr. R. Kanagaraju, S/o. Ramanathan Plot No.4, 2^nd Cross Street, Indira Nagar, West Extn, Garimedu, Puducherry -605 006.

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Mr. A.V. Manikandan

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S/o. A. Vadivel No.4, 2^nd Cross Street, Indira Nagar, West Extn, Garimedu, Puducherry -605 006. ---Defendants

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Counsel for the Applicant Bank : M/S S. Balasubramanian, T.M. Subramanain, M. Sundaraj, B. Iswarya.

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Page 1 of 6

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OA No. 618/2023

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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 30.08.2023 to recover from the Defendants a sum of Rs.52,86,004.82ps together with interest at the rate of 9.45% p.a. plus 2% P.I with monthly rests in respect of Housing 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 Applicant Bank submits that the defendants has availed Housing Loan for a sum of Rs.54,00,000/-. The defendants executed necessary loaning documents in favour of the Applicant. 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 1^st defendant has executed memorandum of deposit of title deeds on 01.09.2016 in Document No.20459/2016, SRO Puducherry. The following is the detail of loan availed by the defendants.

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S.No.	Nature of loan & Account Number	Loan amount	Rate interest	of	Outstanding amount as on 30.06.2023
1.	Housing Loan	Rs. 54,00,000/-	9.45%	p.a	Rs.
	1242306711357		+2% P.I		52,86,004.82ps

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After availing the loan, defendants were not regular in the matter of repayment. The defendants made several promises, but they failed to keep up their promises. As per the accounts of the applicant maintained in the name of the defendants kept in regular course of business and as certified under the Bankers Book of Evidence Act as on 30.06.2023 for a sum of Rs.52,86,004.82 has became due and are liable to pay the said amounts with further interest till repayment.

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Page 2 of 6

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OA No. 618/2023

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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.52,86,004.82ps together with interest at the rate of 9.45% p.a. plus 2% P.I with monthly rests in respect of Housing Loan from the date of filing of Application till the date of realization with cost.

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During the pendency of the O.A, a memo has been filed on 19.09.2025 by the applicant, stating that the secured assets was sold in E-Auction as scheduled mortgage of property under SARFAESI proceedings for the sum of Rs.53,60,000/- and sale certificate was also issued to the Auction purchaser. Therefore, the said property which was sold in auction sale have to be exonerated from the schedule of the property in the suit. The sale certificate is produced and marked as Ex. No. A-08. The Current Statement of account has been enclosed as on 31.08.2025, the outstanding amount of the borrower is after deducting of Rs.2,87,519.82 as sale proceeds of the Property sold in E-auction. The Current Statement of account is produced and marked as Ex. No. A-09.

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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.		Loan Application	Ex. No. A-01
2.	10.08.2016	Sanction Letter	Ex. No. A-02
3.	12.08.2016	Demand Promissory Note	Ex. No. A-03
4.	12.08.2016	Letter of Lien	Ex. No. A-04
5.	12.08.2016	Agreement Under United Housing Loan Scheme	Ex. No. A-05
6.	12.08.2016	Letter of Guarantee	Ex. No. A-06
7.	—	Statement of Accounts	Ex. No. A-07
8.	06.04.2024	Sale Certificate	Ex. No. A-08
9.	31.08.2025	Current Statement of Account	Ex. No. A-09

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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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Page 3 of 6

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OA No. 618/2023

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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 defendants has availed Housing 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-08 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 Loan Application has been marked as Ex. No. A-01, Sanction Letter has been marked as Ex. No. A-02, Demand Promissory Note has been marked as Ex. No. A-03, Letter of Lien has been marked as Ex. No. A-04, Agreement under United Housing Loan Scheme has been marked as Ex. No. A-05, Letter of Guarantee has been marked as Ex. No. A-06, Statement of Accounts has been marked as Ex. No. A-07, Sale Certificate has been marked as Ex. No. A-08, Current Statement of Account has been marked as Ex. No. A-09. 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 other hand 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 4 of 6

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OA No. 618/2023

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Therefore, this Original Application is allowed . The Applicant

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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, a sum of Rs.52,86,004.82ps together with interest at the rate of 9.45% p.a. with half yearly rests in respect of Housing Loan from the date of filing of Application till the date of sale proceeds (30.01.24)

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and after deducting Rs.53,60,000/- (sale proceeds) from the outstanding amount arrived on 30.01.2024, together with interest at the rate of 9.45%p.a with half yearly rests in respect of Housing Loan from the date of sale proceeds (31.01.24) till the date of realization of cost Accordingly, it is hereby

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ORDERED

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(a) That the Defendants are directed to pay jointly/severally for a sum of Rs.52,86,004.82ps together with interest at the rate of 9.45% p.a. with half yearly rests in respect of Housing Loan from the date of filing of Application till the date of sale proceeds (30.01.24)

Page 5 of 6

OA No. 618/2023

(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 Housing 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 3^rd August, 2026.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 07.08.2026

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Page 6 of 6

Punjab National Bank v. K Banumathy

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. K Banumathy

Case brief

What is this about?

What did the court decide?

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