Debt Recovery Tribunal allowed an application filed by Punjab National Bank to recover an outstanding agricultural cash credit loan of Rs.32,05,481 along with simple interest at 6% p.a. and costs, as the defendant appeared ex-parte.
Directed the defendant to personally pay Rs.32,05,481 with simple interest at 6% p.a. within one month.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
OA No. 637/2023
Fair Order
IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 24th DAY OF JUNE, 2026 PRESENT: SEEMA SINHA,
[PR. DISTRICT & SESSIONS JUDGE – Retd] PRESIDING OFFICER
OA No.637/2023
Between
Punjab National Bank, Circle SASTRA Trichy, Circle Office, Kailasapuram, Trichy – 620 014 Rep. by its Chief Manager. ---Applicant Bank
And
Keezha Theru, Nagathi, Thiruvaiyaru Thanjavur – 613 205 ---- Defendant
Counsel for the Applicant Bank : M/s S Balasubramanian , T M Subramanian , M Sundaraj & B Iswarya
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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OA No. 637/2023
JUDGEMENT
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 Defendant a sum of Rs.32,05,481/-together with interest at the rate of 7 % p.a. with monthly rests plus penal interest at the rate of 2 % p.a. in respect of Cash Credit 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.
2 . The brief averments of the application filed by the Applicant Bank are as follows:-
The defendant approached the Applicant Bank for availing Cash Credit Loan. And the defendant has availed Cash Credit Hypothecation loan for a sum of Rs.10,00,000/-. The defendant executed necessary loan documents in favor of the applicant bank. The following is the detail of each cash credit loan availed by the defendant.
| S. No. |
Nature of Loan & Account Number |
Loan Amount |
Interest Rate |
Outstanding Amount (as on 31.03.2023) |
|---|---|---|---|---|
| 1 | Cash Credit Loan 0482008800001311 |
Rs.10,00,000 |
7% p.a. + 2% P.I. |
Rs.32,05,481/- |
Further the applicant submits that 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 31.03.2023 for a sum of Rs.32,05,481/- has became due and they are liable to pay the said amounts with further interest till repayment.
The defendants have committed default in repaying the loan amount with interest & costs. Despite repeated demands made by the Applicant Bank the defendants did not take any sincere steps to discharge the loan.
Hence, the Applicant Bank has filed the OA for recovery of a sum of Rs.32,05,481/-together with interest at the rate of 7 % p.a. with monthly rests plus penal interest at the rate of 2 %p.a. in respect of Cash Credit loan from the date of filing of Application till the date of realization with cost.
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. 637/2023
List of Documents
| Sl. No. |
Date | Particulars | Exhibit No. |
|---|---|---|---|
| 1 | 21.09.2011 | Loan Application | Ex. No. A-01 |
| 2 | 21.09.2011 | Letter of sanction | Ex. No. A-02 |
| 3 | 21.09.2011 | Hypothecation Agreement | Ex. No. A-03 |
| 4 | 19.09.2014 | Balance and security confirmation Letter | Ex. No. A-04 |
| 5 | 14.09.2017 | Balance and security confirmation Letter | Ex. No. A-05 |
| 6 | 15.09.2020 | Balance and security confirmation Letter | Ex. No. A-06 |
| 7 | - | Statement of Accounts | Ex. No. A-07 |
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.
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?
He has stated in his affidavit that the defendants has availed agriculture cash credit 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 defendant at the time of sanctioning the loan amount, which have been marked as exhibits No.A-01 to A-07 in support of its claim in the OA.
I scrutinized the document filed by the applicant bank and I find that the Applicant relies upon the following documents in support of its claim: the Loan Application dated 21.09.2011 is marked as Ex. No. A-01 ; the Letter of Sanction dated 21.09.2011 is marked as Ex. No. A-02 ; the Hypothecation Agreement dated 21.09.2011 is marked as Ex. No. A-03 ; the Balance and Security Confirmation Letter dated 19.09.2014 is marked as Ex. No. A-04 ;
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OA No. 637/2023
the Balance and Security Confirmation Letter dated 14.09.2017 is marked as Ex. No. A-05 ; the Balance and Security Confirmation Letter dated 15.09.2020 is marked as Ex. No. A-06 ; and the Statement of Accounts is marked as Ex. No. A-07 . So the averments of the applicant as well as the statement of the pleading have been corroborated by the above mentioned documents.
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.
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).
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 ".
Therefore, this Original Application is allowed . Since the defendant has availed the loan for agriculture purpose the Applicant Bank is entitled for a final order on the following lines:-
The Applicant Bank is entitled to recover from the Defendant, a sum of Rs.32,05,481/-together with simple interest at the rate of 6 % p.a. in respect of Agricultural Cash Credit 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. 637/2023
(a) That the Defendant is directed to pay personally a sum of Rs.32,05,481/-together with simple interest at the rate of 6 % p.a. in respect of Agricultural Cash Credit 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.
(b) Any amount remitted during the course of this proceedings shall be given due credit, to the loan account of the defendants.
(c) 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.
(d) 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 Cash Credit 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.
Dictated to P N, taken down, transcribed, typed by him, corrected and pronounced by me in the Open Court in this the 24th June, 2026.
Sd/-
(SEEMA SINHA) PRESIDING OFFICER
Uploaded on 04.07.26
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2 issues framed by the court
Whether the Applicant Bank has proved its claim for recovery of the loan amount with interest and costs.
The extent to which the Tribunal can award pendente lite interest and penal interest on an agricultural cash credit loan.
Colour shows how this judgement treated each authority
N.M. Veerapa Vs Canara BankRelied on¶38
AIR 98(1), 1101
Central bank of India Vs Ravindra and OSRelied on¶38
AIR, 2001(1), 3095 · Who else cites this
2 provisions across 2 enactments
Punjab National Bank
Mr. G. Kaliyamurthy
SEEMA SINHA
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
