Allowed

State Bank of India v. M Madhavan

DRT25 Mar 2026OA/94/2023

Case brief

AI extract

What is this about?

Allowed an application for issuance of a Recovery Certificate for a home loan default. Tribunal confirmed the loan liability and awarded recovery along with statutory interest and selling of schedule properties.

What did the court decide?

Recovery Certificate issued for Rs.1,07,26,019/- plus 9% p.a. interest; authority permitted to sell schedule properties; respondent personally liable for shortfall.

State Bank of India versus M Madhavan — Banking and Recovery | DRT (2026)

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BEFORE THE DEBTS RECOVERY TRIBUNAL –II AT CHENNAI

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Dated this 25^th day of March, 2026

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PRESENT: SHRI SHARANG DHAR UPADHYAY PRESIDING OFFICER

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OA No.94 of 2023

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State Bank of India Retail Assets Centralized Processing Centre No.388, Velacherry Main Road Satheesh Paradise, First Floor Selaiyur, Chennai – 600 073 Represented by its Deputy Manager …Applicant

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Versus

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M. Madhavan S/o Mr. Kanniya Naidu Muthaya No.78-A, Sri Lakshmi Nagar Main Road Sri Devi Kuppam, Valasaravakkam Chennai – 600 087

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Also residing at Flat No. B-5, B-Block, Second Floor Plot No.6, Sastri Nagar, 1^st Main Road Koyambedu Village, Aminjikarai Taluk Chennai – 600 107 …Defendant

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Counsels on Record / Appeared

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Counsel for Applicant Bank : M/s Suresh Law Associates Defendant ex-parte on 04.10.2023

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FINAL ORDER

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This application is filed by the applicant bank under Section 19(1) of

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Recovery of Debts and Bankruptcy Act, 1993 against the defendant

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seeking issuance of a Recovery Certificate for recovery of an aggregate

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sum of Rs.1,07,26,019/- comprising a sum of Rs.1,06,00,894/- together with interest at the rate of 7.65% per annum with monthly rests being the amount due under Housing Loan account and a sum of Rs.1,25,125/together with interest at the rate of 7.65% per annum with monthly rests being the amount due under SBI Suraksha Loan from the date of the application till the date of realisation along with costs of the application and for sale of schedule mentioned properties.

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The subject matter of the case is the Home Loan availed by the defendant from the Applicant Bank.

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It is the case of the applicant that the defendant approached the applicant bank for grant of home loan by submitting loan application dated 12.12.2018 and considering the said request the applicant bank sanctioned a loan of Rs.87,30,000/- on 29.12.2018. It is also the case of the applicant that the defendant executed Arrangement Letter, Memorandum of Loan Agreement and Agreement to mortgage on 29.12.2018 in favour of the applicant.

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It is also the case of the applicant that at the request of the defendant the applicant also sanctioned a SBI Suraksha Loan of Rs.1,71,416/- on 29.12.2018 and the applicant executed an agreement for additional loan on 29.12.2018.

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It is the further case of the applicant that the defendant deposited the title deeds of the schedule mentioned property with the applicant with an intention to create equitable mortgage over the same and confirmed the same by executing Memorandum of Deposit of Title deeds dated 31.12.2018 registered as Doc. No.5382/2018, SRO Anna Nagar.

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It is also the case of the applicant that the defendant was highly irregular in repayment and failed to regularize the loan account despite repeated demands and hence the loan account was classified as NPA on 14.09.2019. It is further stated that the applicant thereafter issued a demand notice dated 17.09.2019 under Section 13(2) of the SARFAESI Act calling upon the defendant to clear the outstanding dues but the defendant did not come forward to clear the dues. Hence the present OA is filed for recovery of its dues.

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Summons was taken out to the defendant and was served by way of substituted service. As the defendant was absent continuously and as there was no representation for the defendants on 04.10.2023, they were set ex-parte on that day. Applicant Bank filed Proof Affidavit along with 14 documents, which were marked as Ex. A-1 to A-14 on 01.04.2024. The Ld. Counsel for Applicant Bank made his submissions on 27.10.2025 and thereafter the matter stood till this date for passing final orders.

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The following issues arise for consideration in the matter: -

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(a) Whether the applicant had succeeded in proving the liability of the defendants?

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(b) What order as to cost of the proceedings need be passed?

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These issues are considered together.

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Heard the Ld. Counsel for the applicant, perused the OA averments and the record placed before the Tribunal.

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The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-14 along with the proof affidavit. The documents produced in evidence are all found admissible. The proof affidavit of the applicant bank remained unchallenged and rebutted. Therefore, on careful consideration of proof affidavit along with exhibits filed on behalf of the applicant bank, besides the material placed before the Tribunal, the Tribunal is satisfied that the applicant bank has successfully proved the OA claim against the defendant. Further, the statement of accounts in respect of the loan account produced and certified under the Banker‟s Book Evidence Act, clearly indicates that the amount claimed by the applicant is due from the defendants. It is clear from the statement of accounts that penal interest is not capitalized.

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In view of the foregoing, it is clearly evident that the application filed by the applicant bank is well within the period of limitation and this Tribunal possesses the territorial and pecuniary jurisdiction to entertain this OA.

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In view of the fact that the loan facility availed by the defendant is a home loan and the applicant has claimed interest at contractual rate till the date of filing of the OA, this Tribunal is of the view that the pendente lite interest can be awarded at reduced rates.

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In view of the afore mentioned discussions, the only conclusion this Tribunal can draw is that the applicant had clearly proved the disbursement of the loan, which the applicant is entitled to realize. Hence, OA is disposed off in the following manner: -

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(a) OA No.94 of 2023 stands allowed.

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(b) Applicant is permitted to realize an aggregate sum of Rs.1,07,26,019/- with further interest @9% per annum (simple) from the date of filing of the application till the date of realization in full, from the defendant after deducting all the amounts received / realized by them during the pendency of OA and also by selling the schedule property and other assets of the defendant.

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(c) If the sale proceeds are not found sufficient to cover the amount due and payable to the Applicant Bank, the defendant is personally liable for all such amounts due as ordered above.

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(d) Applicant is permitted to realize cost of the proceedings and shall file cost memo within 15 days from the date of receipt of the copy of the order.

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(e) The Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of this final order.

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Communicate a copy of the order to the parties concerned in terms of Section 19(21)(i) of the RDB Act, read with Rule 16 of DRT (Procedure) Rules, 1993.

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Sd/-

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(SHARANG DHAR UPADHYAY ) PRESIDING OFFICER DRT-II, CHENNAI

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(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 25^th day of March, 2026)

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EXHIBITS MARKED BY APPLICANT BANK

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S. No.	Date	Description of Documents	Exhibit Nos.
1.	12.12.2018	Loan application by defendant	A-1
2.	29.12.2018	Appraisal cum control report	A-2
3.	29.12.2018	Arrangement letter	A-3
4.	29.12.2018	Memorandum of Loan Agreement for home loan granted to public.	A-4

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S. No.	Date	Description of Documents	Exhibit Nos.
5.	29.12.2018	Agreement to mortgage	A-5
6.	31.12.2018	Memorandum relating to deposit of title deeds – Doc. No.5382/2018, SRO, Anna Nagar.	A-6
7.	31.12.2018	Construction Agreement entered between D. Santhosh and P.M. Madhavan – Doc. No.5380/2018, SRO, Anna Nagar	A-7
8.	31.12.2018	Sale deed executed by N. Dhandapani and other Power Agent M. Vedamurthy in favor of P.M. Madavan- Doc. No.5381 of 2018, SRO, Anna Nagar	A-8
9.		SBI Suraksha Loan Application	A-9
10.		Sanction Letter	A-10
11.		Agreement for Additional Loan	A-11
12.		Statement of Accounts along with certificates under Bankers‟ Book Evidence Act.	A-12
13.	17.09.2019	Notice issued under Section 13(2) of SARFAESI Act.

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Sd/- (SHARANG DHAR UPADHYAY ) PRESIDING OFFICER DRT-II, CHENNAI

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DESCRIPTION OF PROPERTY

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SCHEDULE – A

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All that piece and parcel of vacant land measuring an extent of 6000 square feet bearing Plot No.6, Part, Door No.21, Sastry Street, Koyambedu, Chennai –

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600107, comprised in Old Survey No.160/3 Part, Town Survey Nos.5/1, 5/2, 5/3, 8/1, 8/2 Block No.60 of Koyambedu Village, Chennai District.

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Bounded on the

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North by	:	Plot No.15
South by	:	Land allotted to Mrs. M. Sivarani
East by	:	Plot No.5 & 20 feet road
West by	:	Plot No.7

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Admeasuring

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East to West on the Northern side : 75 feet East to West on the Southern side : 75 feet North to South on the Eastern side : 80 feet North to South on the Western side : 80 feet

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In all admeasuring 6000 square feet lying within the Registration District of Chennai Central and Sub Registration District of Anna Nagar

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SCHEDULE ‘B’

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424 Square feet undivided share out of Schedule „A‟ land measuring 6000 square feet.

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SCHEDULE ‘C’

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Flat No. B5 in “B” Block at Second Floor measuring 950 square feet super plinth area (inclusive of common areas and common shares)

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Sd/-

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(SHARANG DHAR UPADHYAY ) PRESIDING OFFICER DRT-II, CHENNAI

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State Bank of India v. M Madhavan

Case brief

What is this about?

What did the court decide?

State Bank of India v. M Madhavan

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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Case details

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