Indian Overseas Bank vs S Maheswara Rao on 27 February 2026

FINAL ORDER

1. This application is filed by the applicant bank under Section 19(1) of Recovery of Debts and Bankruptcy Act, 1993 against the defendants’

seeking issuance of a Recovery Certificate for recovery of a sum of Rs.30,68,125.70p together with interest at the rate of 8.60% per annum with monthly rests from the date of the application till the date of realisation along with costs of the application and for sale of schedule mentioned properties.

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

3. It is the case of the applicant that the defendants approached the applicant bank for grant of Subha Gruha loan for construction / acquisition of house / flat by submitted loan application on 21.06.2018 and the applicant considering the said request sanctioned a housing loan of Rs.27,00,000/- to the defendants repayable in 240 equated monthly installments of Rs.23,602/- commencing from 10.11.2018. It is also the case of the applicant that the defendants executed necessary loan and security documents on 10.07.2018. It is the further case of the applicant that the defendants deposited the title deeds of the schedule mentioned properties with the applicant with an intention create equitable mortgage over the same and confirmed the same by executing Memorandum of Deposit of Title deeds dated 16.07.2018 registered as Doc. No.8214 of 2018, SRO, Guduvancheri.

4. It is also the case of the applicant that the defendants were highly irregular in repayment and failed to regularize the loan account despite repeated demands and hence the loan account was classified as NPA on 31.08.2019. It is further stated that the applicant thereafter issued a lawyer notice on 15.12.2021 requesting the defendants to clear the outstanding dues but in vain. It is submitted that the defendants executed revival letter on 20.03.2021. Hence the present OA is filed for recovery of its dues.

5. Summons was taken out to the defendants and were served by way of substituted service. As the defendants were absent continuously and as there was no representation for the defendants on 24.08.2023, they were set ex-parte on that day. Applicant Bank filed Proof Affidavit along with 12 documents, which were marked as Ex. A-1 to A-12 on 26.02.2024, however, Exhibits A-11 was marked subject to proof. The Ld. Counsel for Applicant Bank made his submissions on 09.02.2026 and thereafter the matter stood till this date for passing final orders.

6. The following issues arise for consideration in the matter: - (a) Whether the applicant had succeeded in proving the liability of the defendants?

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

These issues are considered together.

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

8. The evidence of the applicant is led by AW1 who produced the documents Exhibit A-1 to A-12 along with the proof affidavit. The documents produced in evidence are all found admissible. The proof affidavit of the applicant bank remained unchallenged and unrebutted. 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 defendants. 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.

9. 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.

10. 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.

11. 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: - (a) TA No.75 of 2023 stands allowed.

(b) Applicant is permitted to realize a sum of Rs.30,68,125.70p with further interest @9% per annum (simple) from the date of filing of the application till the date of realization in full, from the defendants jointly and severally 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 defendants.

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

(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.

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

12. 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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(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 27th day of February, 2026)

EXHIBITS MARKED BY APPLICANT BANK

S. No. Date Description of Documents Exhibit Nos.

1. 21.06.2018 Application for Term Loan for construction / Acquisition of House / Flat – Subha Gruha A-1

2. 10.07.2018 Sanction Letter A-2

3. 10.07.2018 Revised Demand Promissory Note for Rs.27,00,000/- A-3

4. 10.07.2018 Undertaking letter from new borrowers after instruction of interest linked with MCLR instead of base rate A-4

5. 10.07.2018 Letter of undertaking – Repayment in installments A-5

6. 10.07.2018 Housing Loan – Term Loan Agreement A-6

7. 16.07.2018 Memorandum of Deposit of Title deeds – Doc. No.8214/2018. A-7

S. No. Date Description of Documents Exhibit Nos.

8. 16.07.2018 Sale deed – Doc. No.8213 of 2018 A-8

9. 16.07.2018 Construction Agreement – Doc. No.8212/2018 A-9

10. 20.03.2021 Revival letter by defendants A-10

11. 15.12.2021 Lawyer notice with acknowledgement cards A-11

12. 15.02.2022 Statement of Accounts along with certificates under Bankers’ Book Evidence Act. A-12

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DESCRIPTION OF PROPERTY

SCHEDULE – A Item No.1 All that piece and parcel of vacant land, bearing Plot No.1 measuring an extent of 1898 sq. ft. (i.e., 176.328 Sq. mtrs) situated in the approved layout known as “Abhay Avenue” (The layout approved by the Deputy Director of Town and Country Planning, Chengalpet vide Approval No.LP/DDTCP/2006-265/L.P.191 and also approved by the Executive Officer, Nandhivaram – Guduvancheri Town Panchayat vide approval No.1/2008-09, dated 19.08. 2018) under Patta No.4259, comprised in Survey No.137/2B of No.6, Nandhivaram Village, Chengalpet Taluk, Kancheepuram District and bounded on the North By : Vacant Land measuring 15+27 feet South by

: 23 feet wide road measuring 30 feet East by

: Shop site measuring 46 feet West by

: Plot No.2 measuring 73 feet.

Item No.2

All that piece and parcel of vacant land, bearing Plot No.2 measuring an extent of 258 sq. ft. (i.e., 234.856 Sq. mtrs) situated in the approved layout known as “Abhay Avenue” (The layout approved by the Deputy Director of Town and Country Planning, Chengalpet vide Approval No.LP/DDTCP/2006-265/L.P.191 and also approved by the Executive Officer, Nandhivaram – Guduvancheri Town Panchayat vide approval No.1/2008-09, dated 19.08. 2018) under Patta No.4259, comprised in Survey No.137/2B of No.6, Nandhivaram Village, Chengalpet Taluk, Kancheepuram District and bounded on the North By : Vacant Land measuring 32 feet 6 inchrd South by

: 23 feet wide road measuring 30 feet East by

: Plot No.1 measuring 73 feet West by

: vacant measuring 85 feet 6 inches

Both Item No.1 and 2 situated within the Registration District of South Chennai and the sub-registration district of Guduvancherry and lies within the limits of Nandhivaram Guduvancheri Town Panchayat Schedule –B 440 sq, ft, of undivided share in the land described in the Schedule A hereinabove together with the Flat bearing No.F1, having built-up area pf 850 sq. ft. (inclusive of common areas, stair cases) or thereabouts in First Floor in the building constructed on the schedule A mentioned property hereinabove.

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