FEDERAL BANK vs K.S SHAJI on 22 January 2026

1. K.S.Shaji,

S/o.late Suseelan,

Koncherry Bhavan,

Mayithara P.O.,

Cherthala.

2. Selvarani Shaji,

W/o.K.S.Shaji,

Koncherry Bhavan,

Mayithara P.O.,

Cherthala.

3. Vivek Koncherry,

S/o.K.S.Shaji,

Koncherry Bhavan,

Mayithara P.O.,

Cherthala.

…Defendants

This Original Application having been heard on 19.01.2026 in the presence of Advocate Ms.Arya Satheesh for the applicant bank and Advocate Sri.T.K.Vipindas for defendants 1 and 2 and stood over to this day for consideration, the Tribunal delivered the following: F I N A L O R D E R

This Original Application has been filed under S.19(1) of the Recovery of Debts and Bankruptcy Act, 1993 for recovery of a sum of Rs.26,03,075.50 due under federal mortgage loan account together with future interest on the sum of Rs.25,46,989.50 @19.75% per annum and penal interest @2% per annum from the defendants jointly and severally and by sale of the schedule properties. Facts of the case:

2. The applicant is a banking company registered under the Companies Act, 1956 having its registered office at Alwaye and one of its branches at Cherthala, Alappuzha District.

3. The 1st defendant availed a mortgage loan of Rs.25 lakhs from the applicant bank on 30.08.2006 and the 2nd defendant is the co-obligant to the said loan. The 3rd defendant stood as guarantor for the loan. To secure the loan, the 3rd defendant created equitable mortgage over the schedule properties and executed letter dated 17.07.2008 confirming the deposit of title deeds with the applicant bank. The defendants acknowledged the liability under the loan account by executing balance confirmation letter dated 17.07.2008 but they have not repaid the loan. Though the defendants were requested to regularize the loan account, they did not repay the outstanding dues. Hence the applicant was constrained to file the OA claiming the following reliefs:

(i) To recover a sum of Rs.26,03,075.50 together with pendente lite and post-decree interest on the sum of Rs.25,46,989.50 from the defendants jointly and severally and by sale of the schedule properties;

(ii) To recover the costs, charges and expenses from the defendants;

(iii) To issue Recovery Certificate to the Recovery Officer with a direction to recover the amount and pay it to the applicant bank.

4. The defendants 1 and 2 filed reply statement denying the averments and execution of the loan documents and sought to dismiss the OA with costs.

5. The 3rd defendant neither appeared nor was he represented and hence he was set exparte on 22.11.2011.

Proof Affidavit:

6. To establish the claim on behalf of the applicant bank, one Mr.Joy K.Pai and Mr.Varghese John, Chief Managers of the applicant have filed proof affidavit and additional proof affidavit respectively and produced the loan documents marked as Exhibits A1 to A12. The averment of the defendants regarding non- execution of the loan documents is negated by the applicant by adducing evidence.

7. In the additional proof affidavit filed by the applicant, it is averred that the 1st defendant availed a gold loan by pledging 2105 grams of gold ornaments. Since the said loan was defaulted, the applicant initiated steps for recovery of the same and sold the gold ornaments in public auction on 24.06.2014 and the sale proceeds after tax was Rs.47,40,703/-. After closing the gold loan account amounting to Rs.38,18,063/-, balance amount of Rs.9,22,640/- was credited in the subject loan account on 24.06.2014.

8. The defendants 1 and 2 did not file counter proof affidavit nor adduced any documentary evidence despite sufficient opportunity granted and hence the chance of filing counter proof affidavit stood closed on 08.12.2015.

9. Heard submissions and perused the materials on record. The sole question arises for consideration is whether the applicant is entitled to get any relief as claimed in the OA?

10. On perusal of records, it could be discerned that defendants 1 and 2 availed a mortgage loan of Rs.25 lakhs after executing Ext.A1 demand promissory note, Ext.A2 security delivery letter, Ext.A3 agreement for loan in favour of the applicant bank. The 3rd defendant had executed Ext.A4 guarantee agreement to secure repayment of the outstanding loan amount. Further, it could be seen that the 3rd defendant had created mortgage over the schedule properties by deposit of title deeds with the applicant bank and executed letter dated 17.07.2008 confirming the creation of mortgage which is evident from the documents marked as Exts.A5 to A7. The defendants had also executed Ext.A8 and A9 balance confirmation letters acknowledging the liability under the subject loan account.

11. The defendants 1 and 2 have not produced any material to buttress their contentions and to refute the claim of the applicant bank. The availing of the loan and creation of mortgage charge over the schedule properties are well established from the documents placed by the applicant bank. An amount of Rs.26,03,075.50 is outstanding in the loan account as on 13.07.2011, which is clearly established from the account statement marked as Ext.A10. In view of the foregoing reason, the contentions raised by defendants 1 and 2 are unsustainable and the applicant is entitled to get the claim made in this case.

12. Considering the amount advanced, interest and penal interest applied and default committed, I am of the view that the applicant bank is entitled to get pendente lite and post-decree interest @12% per annum on the sum of Rs.25,45,142.50 [i.e., after excluding the penal interest of Rs.57,933/- (Rs.56,086/- + Rs.1,847/-) from the OA claim amount of Rs.26,03,075.50], which is reasonable in the facts and circumstances of the case.

13. The applicant bank, therefore, is entitled to get a final order on the following lines: In the result, the applicant bank is given a final order allowing it to recover:

(i) the sum of Rs.26,03,075.50 (Rupees twenty six lakhs three thousand seventy five and Paise fifty only) due under the federal mortgage loan account, less the sum of Rs.9,22,640/- (Rupees nine lakhs twenty two thousand six hundred and forty only) recovered by the applicant bank on 24.06.2014, from the defendants jointly and severally and by sale of the schedule properties;

(ii) pendente lite and post-decree interest @12% per annum on the sum of Rs.25,45,142.50 (Rupees twenty five lakhs forty five thousand one hundred and forty two and Paise fifty only) from 14.07.2011 till realization, less the sum of Rs.9,22,640/- (Rupees nine lakhs twenty two thousand six hundred and forty only) recovered by the applicant bank on 24.06.2014, from the defendants jointly and severally and by sale of the schedule properties; and

(iii) costs and expenses borne by it for realization of the loan from the defendants.

14. The schedule to the OA shall be appended to this final order.

15. The applicant bank shall file memo of costs within ten days from the date of this final order.

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

17. Communicate copy of this order to both parties as provided in R.16 r/w R.2(c) of the Debts Recovery Tribunal (Procedure) Rules, 1993. (Dictated to my PA, corrected and pronounced by me in the open Tribunal on this the 22nd day of January, 2026)

[SOVAN KUMAR DASH] PRESIDING OFFICER

A P P E N D I X Witness for Applicant: AW1: Sri.Joy K.Paul, Chief Manager of the applicant bank. AW2: Sri.Varghese John, Chief Manager of the applicant bank. Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 30.08.2006 Demand promissory note for Rs.25 lakhs executed by defendants 1 and 2. A2 30.08.2006 Security delivery letter executed by defendants 1 and 2. A3 30.08.2006 Agreement for mortgage loan executed by defendants 1 and 2. A4 16.07.2008 Agreement for guarantee executed by the 3rd defendant. A5 17.07.2008 Letter executed by the 3rd defendant confirming the deposit of title deeds with the applicant bank. A6

18.12.2006 Sale deed No.1893/2006 of Puthanambalam SRO. A7

24.11.2006 Sale deed No.1789/2006 of Puthanambalam SRO. A8

17.07.2008 Letter executed by defendants 1 and 2 confirming the balance outstanding under the loan account. A9

17.07.2008 Letter executed by defendants 1 and 3 confirming the balance outstanding under the loan account. A10 … Certified copy of the statement of account relating to the federal mortgage loan. A11 14.07.2011 Statement showing the penal interest charged in the loan account. A12 14.07.2011 Certificate showing the rate of interest applied in the loan account from time to time.

Defendants’ Exhibits – Nil PRESIDING OFFICER

PRESIDING OFFICER

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

Dated the 22nd January, 2026

TA No.357/2016 (OA No.300/2011)

Between

The Federal Bank Ltd., Cherthala Branch, Alleppey District. …Applicant

And

K.S.Shaji, S/o.late Suseelan, Koncherry Bhavan, Mayithara P.O., Cherthala & 2 others.

...Defendants

F I N A L O R D E R