Allowed

State Bank of India v. Prathapsingh

DRT20 Mar 2026TA/1104/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application filed by State Bank of India for recovery of outstanding dues from borrowers and a guarantor. The Tribunal accepted the bank's certified statements of account as evidence, rejecting defendants' denials due to lack of contra-proof.

What did the court decide?

Recovery of Rs. 51,84,074.73 (principal, interest, and penal charges) from defendants jointly and severally; liberty to sell mortgaged/other assets if payment fails.

State Bank of India versus Prathapsingh — Contract and Commercial Disputes | DRT (2026)

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T.A. No. 1104 of 2023

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20.03.2026

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 20^th day of March, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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TRANSFERRED APPLICATION No. 1104 of 2023

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(Originally filed before DRT- II, Chennai as OA 210/2020 and thereafter transferred to this Tribunal and renumbered as TA No.1104 of 2023)

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State Bank of India ARM Branch, Chennai 44, 1^st Floor, Eldams Road, Teynampet, Chennai 600 018 Rep. by its Manager & Case Officer

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.….Applicant

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-Vs-

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Mr. R. Prathapsingh S/o. Mr.Robinson No.210, C Block, 2^nd Floor, Sidarth Dakshin Apartments, Near Water Tank, Iyencheri Main Road, Urapakkam 600 321

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Mr.Nalinranjan S/o. Mr. Snthony Pillai, No.1841, 7^th Cross Street, West Shenoy Nagar, Near Police Booth, Chennai 600 030. ……Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s. E.Kumar

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Counsel for Defendants : M/s.K.Dilli Babu & K. Shyam Sundar

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: - FINAL ORDER - :

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This original application is filed on 09.03.2020 by the applicant bank under Section 19 of Recovery of Debts and Bankruptcy Act, 1993 (formerly Recovery of Debts Due to Banks and Financial Institutions Act, 1993) against the defendants 1 & 2, jointly and severally for recovery of a total

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sum of Rs.51,84,074.73p (Rupees Fifty One Lakhs Eighty Four Thousand and Seventy Four and Seventy Three Paise only) due in respect of two loans viz., a sum of Rs.50,42,534.73p due in respect of Housing Loan -A/c No.34378029915 and a sum of Rs.1,41,540/- due in respect of A/c No.34417554455 repayable together with interest @ 9.20% p.a. compounded with monthly rests along with penal interest at 2% p.a. from the date of Application till the date of realization in full, for sale of schedule mentioned immovable property and for costs of this OA.

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Originally, this Application was filed before DRT-II, Chennai, assigned OA No.210 of 202020, and thereafter in pursuance to the notification from Ministry of Finance, DFS dated 17.07.2023, OA No.210 of 2020 stood transferred to this Tribunal and renumbered as TA No.1104 of 2023.

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Brief Facts of the case:

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The Applicant submits that the application is filed within the period of limitation as prescribed under Section-24 of the Recovery of Debts and Bankruptcy Act, 1993, and the subject recovery claim falls within the jurisdiction of this Tribunal.

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It is the case of the applicant bank that the 1^st defendant is the Borrower cum Mortgagor and 2^nd defendant is the Guarantor for the loan availed by 1^st defendant. The defendants have approached the RACPC Ayyapanthangal branch of the applicant bank seeking financial assistance, by submitting Loan application dated 10.10.2014 for Housing Loan for purchase of the residential flat.

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It is submitted by the applicant bank that considering the said request, the applicant bank had sanctioned a sum of Rs.35,20,000/- vide Letter of arrangement dated 11.11.2014 under the Home Loan for the residential property as mentioned in the schedule. The loan was repayable in equated monthly instalments of Rs.31,364/- each.

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The Applicant submits that the defendants executed the following documents in favour of applicant bank:

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a. Memorandum of Loan Agreement for Home Load granted to Public dated 11.11.2014.

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b. Deed of Undertaking dated 11.11.2014 executed by 1^st defendant.

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c. Precondition letter dated 11.11.2014 executed by 1^st defendant.

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d. Agreement of Mortgage dated 11.11.2014 executed by the 1^st defendant.

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e. Guarantee Agreement dated 11.11.2014 executed by the 2^nd defendant.

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f. Confirmation Letter of (EM of Borrowers Property) confirming the deposit of title deeds dated 06.12.2014 executed by the 1^st defendant.

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The applicant further submits that at the time of creation of the mortgage, the 1^st defendant deposited the following documents with the applicant bank:

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a. Sale Deed dated 13.11.2014 registered as Doc.No.7981/2014 with

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DRO Neelankarai executed by Mr.Nalinranjan in favour of Mr.Prathapsingh.

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b. Rectification Deed dated 17.11.2014 Registered as Document No.8114/2014 with SRO Neelankarai executed by Mr.S.P.Rajghiri, Proprietor of Ms.Radha Constructions and Estates in favour of Mr.Prathapsingh.

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It is submitted that the 1^st defendant also mortgaged the Schedule mentioned property and executed the Confirmation Letter dated 06.12.2014, by way of deposit of title deeds to secure the loan availed from the bank and also availed Insurance Loan for the purchased property for an amount of Rs.1,57,420/- on 22.11.2014 and the defendants remitted a sum of Rs.9,000/- on 01.09.2018 being the last remittance made by them which is not sufficient to regularize the loan amount.

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The applicant submits that subsequent to availing of loan, the defendants did not keep up their promise repayment of loan despite repeated requests by the applicant bank. Consequently, the loan account was classified as NPA on 30.09.2018. The Applicant Bank recalled the entire loan amount by issuance of Demand Notice on 08.11.2018 and the account was transferred to the ARM Branch and the legal proceedings initiated thereon. By virtue of the Judgement delivered by the Hon’ble Supreme Court in “Transcore Case” reported in “AIR (SC) – 2007 – 0 – 712” declaring that the simultaneous proceedings is permissible, the applicant bank reserves its rights to proceed simultaneously and to inform the Tribunal by filing a suitable memo/ amendment of this application

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pursuant to the action initiated if any at a later date under SARFAESI Act and Rules, 2002.

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The Applicant bank also submits that in spite of the above the defendants have not paid the amounts due to the bank. Hence, the present Original Application (OA) has been filed by the applicant bank for recovery of its dues from the defendants.

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After the filing of the OA, summons were sent to defendant through Registered Post with Acknowledgment Due, which returned unserved with postal endorsement as “door locked” in respect of D-1 while summons to D-2 was duly served. However, the defendants entered appearance and filed Vakalath and Written Statement.

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Written/Reply Statement filed by the defendants:

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The defendants 1 and 2 denied the averments made in the application except those that are specifically admitted therein. The respondent admits that the applicant’s branch of RACPC, Ayyappanthangal had sanctioned a Housing Loan of Rs.35,20,000/- on 11.11.2014 and the same was repayable as monthly instalments of Rs.31,364/-. But the said RACPC Ayyappanthangal Branch of S.B.I has remitted a sum of Rs.31,68,000/only on 18.11.2014 and hence the loan amount for the A/C No.34378029915 is Rs.31,68,000/- and not Rs.35,20,000 as alleged in the application.

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It is contended by the defendants that they have periodically paid a sum of Rs.31,364/- per month as E.M.I. and in all totally a sum of

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Rs.35,99,119/- towards loan Account Number: 34378029915 was paid to the applicant towards Principal and interest, which reflects in the statement of account filed by the applicant/Bank in this case. The applicant is claiming exorbitant interest, interest on interest and charges such as legal expenses etc., which is objected by the defendants which is against RBI guidelines.

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It is further contended that the application in page (iii) under the head of “limitation” reveals that on 14.03.2017, the defendants made a remittance of Rs.31,364/- made in the loan Account and hence the application is made within the period of limitation, but whereas in page V of the application in para 11, the applicant states that the defendants remitted a sum of Rs.9,000/- on 01.09.2018 being the last remittance made by the defendants is denied.

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The 1^st defendant submitted that he availed insurance loan for purchase of property for an amount of Rs.1,57,420/- on 22.11.2014 under the A/c No.34417554455 and denied that Rs.1,41,540/- is due towards the said account as on 08.03.2020 and the defendants paid a sum of Rs.64,993/- towards the said insurance loan and the remaining amount of Rs.92,427/- above is due to the applicant bank.

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It is further contended that the 1^st defendant is not the owner of property which is mortgaged with the Applicant Bank as on 11.11.2014, but the applicant bank forcibly obtained the agreement for mortgage of the property on 11.11.2014 which is against the law. Only on 13.11.2014 the 1^st defendant purchased the said property from 2^nd defendant. The averments made in para 13 of the application that the defendants though

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availed the loan, did not keep up their promise regarding repayment of loan are denied as false and unbelievable.

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The defendants submit that there is no amount due towards the loan account No.34378029915 as stated and only Rs.92,427/- (Rs.1,57,420/-) is due towards the loan a/c No.34417554455, in which the defendants are ready and willing to repay the same. The defendants prayed that the applicant bank may be directed to return the mortgaged property by cancelling the mortgage deed and also to return all documents relating to the said mortgage property and loan documents. Thus submitting, defendants prayed to dismiss the Original Application, as the defendants are always ready and willing to pay the admitted sum of Rs.92,427/- with future interest if any and thus render justice.

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Heard the submissions of Applicant Bank and perused the record s.

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To prove the case of the Applicant Bank, Sh. Vijaya Kumar, Manager of the Applicant Bank, has filed his Affidavit by way of evidence and same was considered as evidence of AW-1 and list of documents came to be marked as Ex A-1 to A-12 .

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Despite availing sufficient opportunities, the defendants did not choose to file their Counter Proof Affidavit. Hence opportunity to file Counter Proof Affidavit was closed on 10.08.2023. There was no representation on behalf of defendants on 09.01.2026 and 13.01.2026 for arguments. Hence arguments of defendants was also closed on

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The defendants in their written statement have disputed the availing of loan. The applicant bank has produced the Arrangement Letter dated 11.11.2014 issued by applicant bank thereby confirming availing of sum of Rs.35,20,000/- by the defendants, wherein the defendants have affixed their signatures, thereby acknowledging the amounts received from the bank and promising to repay the same with agreed rate of interest. Therefore, the above contention fails.

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It is further contended that the said RACPC Ayyappanthangal Branch of S.B.I has remitted a sum of Rs.31,68,000/- only on 18.11.2014 and hence the loan amount for the A/C No.34378029915 is Rs.31,68,000/- and not Rs.35,20,000 as alleged in the application. On perusal of statement of accounts – Ex A-11, Page No.59 entry shows that Loan amount is Rs.35,20,000/- - 85% disbursement against the debt column it is shown as Rs.31,68,000/-. Hence the allegation of disbursement of Rs.31,68,000/- is as per agreed terms as per Arrangement Letter dated 11.11.2014 only. The availing of loan sanctioned by applicant bank is substantiated by the statement of accounts filed by the applicant bank. After availing the loan by executing various loan and security documents along with the terms and conditions stipulated therein, now the Defendants cannot make a turnaround and make such allegations. Hence the contention fails.

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The further contention of the defendants that they have remitted a sum of Rs.35,99,119/- in respect of loan account and that the applicant

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bank is claiming exorbitant interest, interest on interest and charges such as legal expenses. The contention of the defendants that the applicant bank has charged excess rate of interest is also not established by the defendant and as per the loan documents it is clear that the bank has charged contractual rate as agreed upon by the defendants at the time of availing the loan, after availing the loan the defendants now cannot turn around and say that the interest charged is more, after the default in the loan facilities. As per the agreed terms at the time of availing loan, the applicant bank is entitled for charging penal interest in the event of default in repayment. However, the same has not been compounded as evidenced from the statement of accounts along with certificates under BBE Act produced by the applicant bank, which is not objected to by the defendants by filing contrary evidence.

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It is further denied that a sum of Rs.1,41,540/- due towards the said insurance loan account as on 08.03.2020 as the defendants have paid a sum of Rs.64,993/- towards the said insurance loan and the remaining amount of Rs.92,427/- is only due to the applicant bank. The amounts remitted by the defendants are duly credited on the date of payment as evidenced from the statement of accounts. The contention that a sum of Rs.92,427/- is only due in respect of insurance loan is not supported by any documentary evidence on the side of defendants. Hence, this contention also fails.

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The further contention of the defendants, that the 1^st defendant is not the owner of the property as on 11.11.2014 but the applicant bank

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forcibly obtained the agreement for mortgage of the property on 11.11.2014, whereas only on 13.11.2014 the 1^st defendant purchased the said property from 2^nd defendant, which is against the law. The perusal of documents at Ex A-6, which is Agreement of Mortgage executed by 1^st defendant, relevant clause is extracted as under:

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“……. do hereby undertake so long as I am / we are indebted to the bank to execute by way of primary / collateral security as legal mortgage with or without possession at the option of the bank in favour of the Bank of the immovable properties described in schedule hereto, which belong to me / us absolutely and over which there are no subsisting encumbrances or charges within 14 days of the issue to me / us of a written requisition from the bank calling upon me / us to execute such a mortgage, such mortgage to secure the repayment of all monies due or to become due from me /us to the bank in any account whatsoever.

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I / we do hereby irrevocably appoint the bank my /our attorney to execute in its favour and register such mortgage on failure by me / us to execute the same within the time limited as above and I / we agree to ratify and confirm all acts deeds and things done by the bank in pursuance of this authority” .

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Ex A-8 is the confirmation letter (EM of borrower’s property) dated

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06.12.2014 confirming the deposit of title deeds Doc No.7981 of 2014 dated 13.11.2014 executed by the 1^st defendant. Hence it is evident from records that only after the property was registered in borrower’s name i.e., 1^st defendant, the confirmation letter dated 06.12.2014 has been executed by the 1^st defendant. Hence this contention also fails.

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With regard to the loan amounts due from the Defendants, Applicant Bank has filed the Statement of Loan Accounts as Ex A-11 and Ex.A-12 duly certified under the Bankers Books Evidence Act,1891 containing the details of loan transactions pertaining to the loan account of Defendants. The Defendants have neither pointed out any omission or wrong entry in the certified Statement of Account nor filed any proof or documentary evidence to disprove the entries made the Statement of Accounts. Further, the Defendants failed to explain as to how they are not liable to the claim made in the Application. On the other hand, Applicant bank filed the loan and security documents duly executed by Defendants along with the Terms and Conditions stipulated therein and the Statement of Accounts duly certified under the Bankers Books Evidence Act. Therefore, in the absence of any proof or material evidence produced by Defendants to substantiate their claim, the allegation fails.

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In this regard, this Tribunal places reliance on the decision reported in

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2012(6) SCC 430 A. Vamsathu Madalaya Nandhavana Paripalanai

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Sangam , wherein it was held as under:

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“27. The pleadings must set-forth sufficient factual details to the extent that it reduces the ability to put forward a false or exaggerated claim or defence. The pleadings must inspire confidence and credibility. If false averments, evasive denials or false denials are introduced, then the Court must carefully look into it while deciding a case and insist that those who approach the Court must approach it with clean hands.”

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Thus, in the absence of any such proof or evidence to disprove the

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claim of applicant bank, the allegations made by the Defendants falls to the ground and deserve rejection.

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A perusal of the statement of accounts clearly reveals that the debit and credit entries have been properly made and no contra evidence produced to repudiate the entries made thereunder.

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The applicant bank through its Witness (AW.1), has corroborated the averments made in the OA by marking of documents Ex.A-1 to A-12. There is no contra-evidence available on record to repudiate the claim of the applicant bank regarding the availing of loan, execution of loan and security documents by Defendants and the default committed by them in repaying the loan.

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A careful scrutiny of records makes it clear that present application is filed well within limitation and this Tribunal possesses necessary and proper jurisdiction to entertain and adjudicate the claim. No documentary evidence on the side of defendants are produced or filed to dispute the claim of applicant bank. Hence, it can be concluded that applicant bank has proved its claim against defendants.

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Considering the submissions of both sides and having regard to the amount advanced, documents executed, the conduct and operations in the loan account and the default committed, this Tribunal comes to the conclusion that the applicant bank is entitled to a final order on the following

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terms:-

: O R D E R :

The OA is allowed with costs,

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(a) The applicant bank is allowed to recover from the Defendants 1 and 2 jointly and severally, a sum Rs.51,84,074.73p (Rupees Fifty One Lakhs Eighty Four Thousand and Seventy Four and Seventy Three Paise only) due in respect of two loans viz., a sum of Rs.50,42,534.73p due in respect of Housing Loan -A/c No.34378029915 and a sum of Rs.1,41,540/- due in respect of A/c No.34417554455 repayable together with interest @ 9.20% p.a. compounded with monthly rests along with penal interest at 2% p.a. from the date of Application till the date of realization in full along with costs of this OA.

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(b) In the event of failure of the Defendants to pay the aforesaid amount, the bank is at liberty to recover the amount by sale of the schedule mentioned immovable property more fully detailed in the OA schedule.

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(d) If the sale proceeds of the immovable property is not sufficient to satisfy the dues as ordered above, the applicant bank is at liberty to sell the personal assets of the 1^st and 2^nd Defendants (both movable and immovable) to recover the balance dues as required under law for which the 1^st and 2^nd Defendants to disclose to the

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Tribunal particulars of other properties or assets owned by the Defendants 1 and 2.

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(e) The applicant bank shall file the latest memo of calculation of OA amount together with interest, costs etc., to be paid by the Defendants duly considering the amounts, if any, paid by the Defendant and/or amount realized by sale of assets etc., during the intervening period after the filing of the OA, enabling the Registry to prepare Recovery Certificate for the amount to be paid by Defendants to the applicant bank.

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(f) The applicant bank shall file memo of costs within ten days from the date of receipt of this final order.

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

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A copy of this order be communicated to the parties concerned.

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Sd/(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

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(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this the 20^th day of March, 2026)

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ANNEXURES

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WITNESSES EXAMINED FOR THE APPLICANT BANK :

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AW-1: Sh. Vijayakumar, the Manager representing the Applicant Bank.

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Exhibits on the part of the Applicant:

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Sl. No.	Description of Documents	Exhibit No.
1.	Application Form For Housing Loan Submitted by the defendants dated 10.10.2014.	A-1
2.	Arrangement Letter for Home Loan between Applicant and Defendants duly signed by the defendants dated 11.11.2014	A-2
3.	Memorandum of Loan Agreement for Home Loan Granted to Public between Applicant Bank and 1st defendant Dated 11.11.2014	A-3
4.	Deed of Undertaking executed by the 1st defendant dated 11.11.2014.	A-4
5.	Precondition Letter (Annexure–I) executed by the 1st defendant dated 11.11.2014	A-5
6.	Agreement of Mortgage executed by the 1st defendant dated 11.11.2014.	A-6
7.	Guarantee agreement executed by the 1^stdefendant dated 11.11.2014	A-7
8.	Confirmation Letter (EM of Borrowers Property) confirming the deposit of title deeds executed by the 1st defendant dated 06.12.2014	A-8
9.	Sale deed registered as Doc.No.7981 of 2014 with SRO Neelankarai executed by Mr. Nalinranjan in favour of Mr.Prathapsingh Dated 13.11.2014	A-9
10.	Rectification Deed registered as Doc.No.8114 of 2014 with SRO Neelankarai executed by Mr.S.P.Rajgiri proprietor of Ms.Radha Constructions and Estates in favour of Mr.Prathapsingh Dated 17.11.2014	A-10
11.	Statement of Accounts for A/c.No.34378029915 covering the period from 18.11.2014 to 08.03.2020 dated 08.03.2020	A-11
12.	Statement of Accounts for A/c.No.34417554455 covering the period from 22.11.2014 to 08.03.2020 dated 08.03.2020	A-12

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Witness Examined for the Defendants: -Nil-

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List of Documents Exhibited for the Defendants: -Nil –

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:-SCHEDULE-:

IMMOVABLE PROPERTY

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All that piece and parcel of the residential Flat measuring an extent of 897 Sq.ft bearing Flat No. BS4 – in 2nd Floor, B-Block together with UDS land measuring an extent of 453 Sq.ft out of land measuring an extent of 7830 Sq.ft comprised in S.Nos.58/2A & 58/2B of Palavakkam Village situated at Vai Ko Street, Jai Shankar Nagar, Palavakkam, Chennai – 600 041, Sholinganallur Taluk, Kancheepuram District and land being bounded on:

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North by : Land Comprised in S.No.60/1

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South by : Land Comprised in S.No.58

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East by : Land Comprised in S.No.58/2A West by : Land Comprised in S.No.61

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And Flat No. B-S4 being bounded on:

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North by : Pavement South by : Flat No.BS-1 East by : Pavement West by : Flat No.BS-3

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Situated within the Registration District of South Chennai and SubRegistration District of Neelankarai.