UCO BANK vs P.B RAJEEV on 22 January 2026

1. P.B.Rajeev, Proprietor, M/s.Kavukandathil Traders, Kavukandathil Veedu, Vettipuram, Pathanamthitta.

2. Rajee Rajeev, Kavukandathil Veedu, Vettipuram, Pathanamthitta.

3. Sadanandan, Sree Vilasam, Mylapra P.O., Kumbazha North.

…Defendants

This Original Application having been heard on 16.12.2025 in the presence of Advocate Ms.Angel Jacob representing counsel for Advocate Sri.Deepak Joy K. for the applicant bank 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.1,91,573/- and Rs.30,59,533.48 due under housing loan (UCO shelter loan) account and cash credit account respectively together with future interest and costs from defendants 1 and 2 jointly and severally and by sale of ‘A’ and ‘B’ schedule properties. Facts of the case:

2. The 1st defendant is the proprietor of M/s.Kavukandathil Traders which is engaged in the business of wholesale and retail wooden and steel furniture. At the request of defendants 1 and 2, applicant bank sanctioned a housing loan of Rs.7.50 lakhs under UCO shelter scheme as per arrangement letter dated 01.09.2003. As security for the loan, the 1st defendant created equitable mortgage over ‘B’ schedule property by deposit of title deed with the applicant bank. Subsequently, the 1st defendant was sanctioned with a cash credit limit of Rs.7.50 lakhs on 06.07.2004 on the security of hypothecation of

‘A’ schedule property and the said facility was enhanced from time to time and finally enhanced to Rs.30 lakhs on 06.10.2007. The mortgage created over ‘B’ schedule property was extended by the 1st defendant to secure the cash credit limit.

3. Thereafter, the cash credit facility was renewed and an additional ad-hoc cash credit limit of Rs.6 lakhs was sanctioned as per arrangement letter dated 21.02.2009. The 2nd defendant stood as guarantor for the total amount of Rs.36 lakhs and the 3rd defendant executed guarantee agreement for Rs.30 lakhs on 03.12.2009. Further, it is averred that during the subsistence of mortgage, the 1st defendant has transferred ‘B’ schedule property to his father-in-law, the 3rd defendant herein without the knowledge and consent of the bank. After availing the facilities, the defendants failed to repay the dues. Despite legal notice was issued to the defendants recalling the liability, they did not take any step to settle the dues. In such premises, applicant bank was constrained to file the OA claiming the following reliefs:

(i) To recover an aggregate sum of Rs.32,51,106.48 together with pendente lite and post-decree interest thereon from defendants 1 and 2 jointly and severally and by sale of ‘A’ and ‘B’ schedule properties;

(ii) To recover the costs, charges and expenses from defendants 1 and 2;

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

4. All the defendants were duly served with summons. Defendants 1 and 2 entered appearance and sought adjournment for filing written statement but they did not file any written statement and counter proof affidavit despite sufficient opportunity granted and remained absent from the proceeding and hence they were declared exparte on 08.03.2016. The 3rd defendant neither appeared nor was he represented and hence he was declared exparte on 25.01.2013. Proof Affidavit:

5. To establish the claim on behalf of the applicant bank, one Mr.Abhilash M., Senior Manager and Mr.Rajeev P.A., Manager of the applicant have filed proof affidavit and additional proof affidavit respectively and produced the loan documents marked as Exhibits A1 to A39. The proof affidavit and additional proof affidavit filed by AW1 and AW2 and the documents produced in this case are not challenged by the defendants. The availing of the loans is well established from the documents placed by the applicant bank. An aggregate sum of Rs.32,51,106.48 is outstanding in the loan accounts as on 30.06.2011 which is established from the account statements marked as Exts.A33 and A36.

6. In the additional proof affidavit, it is averred that during the pendency of the OA, the borrowers have closed the housing loan account on 02.08.2011 and the following payments were made towards the cash credit account:

Date of payment

Amount

20.09.2011 Rs.1,50,000/- 22.09.2011 Rs.1,00,000/- 10.11.2011 Rs.25,000/- 04.01.2012 Rs.25,000/- 11.04.2012 Rs.1,49,950/- 12.07.2012 Rs.1,50,000/- 01.08.2012 Rs.25,000/- 25.08.2012 Rs.25,000/- 05.09.2012 Rs.4,00,000/- 16.10.2012 Rs.50,000/- 17.10.2012 Rs.25,000/- 07.11.2012 Rs.25,000/- 17.11.2012 Rs.1,25,000/- 07.12.2012 Rs.3,40,000/- 10.12.2012 Rs.60,000/- 15.12.2012 Rs.1,60,000/- 25.03.2013 Rs.50,000/- 17.04.2013 Rs.50,000/- 11.06.2013 Rs.25,000/- 27.07.2013 Rs.10,000/- 13.12.2013 Rs.2,00,000/- 15.01.2014 Rs.4,50,000/- 06.02.2014 Rs.5,00,000/-

24.03.2014 Rs.50,000/- 21.04.2014 Rs.1,00,000/- 23.06.2014 Rs.3,27,064/-

7. It could be inferred from the statement marked Ext.A38 that the applicant has charged a sum of Rs.22,142/- by way of penal interest in the cash credit account. It is well settled that penal interest cannot be capitalized and no interest can be charged on penal interest and hence the applicant bank is not entitled to get any pendente lite and post-decree interest on the aforesaid penal interest of Rs.22,142/- charged in the account.

8. The applicant bank has averred in the OA as well as in the proof affidavit that the 3rd defendant had executed guarantee agreement dated 03.12.2009 marked as Ext.A23 to secure the cash credit limit of Rs.30 lakhs. But no relief is sought against the 3rd defendant and the applicant has not stated any reason for excluding the 3rd defendant. As the applicant did not seek any relief against the 3rd defendant, no order is passed against him. However, purportedly he being the subsequent purchaser of ‘B’ schedule property, this final order would be binding on him as well.

9. Considering the amount advanced, interest and penal interest applied, default committed and substantial repayments effected, 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.30,37,391.48 (i.e., after excluding the penal interest of Rs.22,142/- from the OA claim amount of Rs.30,59,533.48), which is reasonable in the facts and circumstances of the case.

10. 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.30,59,533.48 (Rupees thirty lakhs fifty nine thousand five hundred and thirty three and Paise forty eight only) due under the cash credit account, less the amount received by the applicant bank as stated in paragraph No.6 of the final order, from defendants 1 and 2 and by sale of ‘A’ and ‘B’ schedule properties;

(ii) Pendente lite and post-decree interest @12% per annum on the sum of Rs.30,37,391.48 (Rupees thirty lakhs thirty seven thousand three hundred and ninety one and Paise forty eight only) from 06.07.2011 till realization, less the amount received by the applicant bank as stated in paragraph No.6 of the final order, from defendants 1 and 2 and by sale of ‘A’ and ‘B’ schedule properties; and

(iii) costs and expenses borne by it for realization of the loan from defendants 1 and 2.

11. ‘A’ and ‘B’ schedules to the OA shall be appended to this final order.

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

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

14. 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: Mr.Abhilash M., Senior Manager of the applicant bank. AW2: Mr.Rajeev P.A., Manager of the applicant bank. Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 01.09.2003 Sanction letter for loan under UCO shelter counter signed by the 1st and 2nd defendants. A2 01.09.2003 Loan agreement executed by the 1st and 2nd defendants in favour of the applicant bank. A3 01.09.2003 Demand promissory note for Rs.7,50,000/- executed by the 1st and 2nd defendants in favour of the applicant bank. A4 01.09.2003 Revival letter executed by the 1st and 2nd defendants. A5 06.07.2004 Demand promissory note for Rs.7,50,000/- executed by the 1st defendant as proprietor of Kavukandathil Traders in favour of the applicant bank. A6 06.07.2004 Letter of presentment waiver executed by the 1st defendant as proprietor of Kavukandathil Traders. A7 06.07.2004 Letter of continuity executed by the 1st defendant as proprietor of Kavukandathil Traders for handing over the DP note. A8 06.07.2004 Agreement of hypothecation of goods to secure a demand cash credit executed by the 1st defendant as proprietor of Kavukandathil Traders. A9 30.06.2005 Demand promissory note for Rs.20,00,000/- executed by the 1st defendant as proprietor of Kavukandathil Traders in favour of the applicant bank. A10 30.06.2005 Letter of presentment waiver executed by the 1st defendant as proprietor of Kavukandathil Traders.

A11 30.06.2005 Letter of continuity executed by the 1st defendant as proprietor of Kavukandathil Traders for handing over the DP note. A12 30.06.2005 Agreement of hypothecation of goods to secure a demand cash credit executed by the 1st defendant as proprietor of Kavukandathil Traders. A13 06.10.2007 Sanction letter for enhanced cash credit limit counter signed by the 1st defendant as proprietor of Kavukandathil Traders. A14 11.10.2007 Demand promissory note for Rs.30,00,000/- executed by the 1st defendant as proprietor of Kavukandathil Traders in favour of the applicant bank. A15 11.10.2007 Letter of presentment waiver executed by the 1st defendant as proprietor of Kavukandathil Traders. A16 11.10.2007 Letter of continuity executed by the 1st defendant as proprietor of Kavukandathil Traders for handing over the DP note. A17 11.10.2007 Agreement of hypothecation of goods to secure a demand cash credit executed by the 1st defendant as proprietor of Kavukandathil Traders. A18 11.10.2007 Guarantee agreement executed by the 2nd defendant. A19 21.02.2009 Sanction letter for renewal of cash credit limit and adhoc cash credit limit counter signed by the 1st defendant as proprietor of Kavukandathil Traders. A20 24.02.2009 Demand promissory note for Rs.36,00,000/- executed by the 1st defendant as proprietor of Kavukandathil Traders in favour of the applicant bank. A21 24.02.2009 Agreement of hypothecation of goods to secure a demand cash credit executed by the 1st defendant as proprietor of Kavukandathil Traders. A22 24.02.2009 Guarantee agreement executed by the 2nd defendant. A23 24.02.2009 Guarantee agreement executed by the 3rd defendant.

A24 29.08.2003 Confirmation letter issued by the 1st defendant confirming the deposit of title deeds with respect to item no.1 in schedule B. A25 29.06.2005 Letter of confirmation for confirming the extension of mortgage created by deposit of title deeds issued by the 1st defendant. A26 11.10.2007 Letter of confirmation for confirming the extension of mortgage created by deposit of title deeds issued by the 1st defendant. A26(a) 24.02.2009 Letter of confirmation for confirming the extension of mortgage created by deposit of title deeds issued by the 1st defendant. A27 11.04.2002 Sale Deed No.688/2002 of Pathanamthitta SRO. A28 01.08.2003 Possession certificate no.793/03 issued by the Village Officer, Pathanamthitta. A29 03.03.2006 Sale Deed No.577/2006 of Pathanamthitta SRO. A30 03.12.2009 Communication sent by the 3rd defendant to the applicant bank. A31 30.03.2010 Office copy of the police complaint filed against 1st defendant by the applicant bank. A32 18.06.2010 Office copy of the recall notice issued to the 1st defendant. A33 .. Statement of account with respect to housing loan account maintained by the applicant bank and certified under Banker’s Book Evidence Act. A34 .. Statement showing period and rate of interest applied in the Exhibit A33 account. A35 .. Statement showing the penal interest charged in the Exhibit A33 account. A36 .. Statement of account with respect to cash credit account maintained by the applicant bank and certified under Banker’s Book Evidence Act. A37 .. Statement showing period and rate of interest applied in the Exhibit A36 account. A38 .. Statement showing the penal interest charged in the Exhibit A36 account.

A39 .. Statement showing the remittances made the defendants.

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.1191/2016 (OA NO.281/2011)

Between

UCO Bank, Mallapuzhasherry Branch, Nellikala P.O., Pathanamthitta.

…Applicant

And

P.B.Rajeev, Proprietor, M/s.Kavukandathil Traders, Kavukandathil Veedu, Vettipuram, Pathanamthitta & another.

...Defendants

F I N A L O R D E R