UNION BANK OF INDIA vs M.K HABEEB MUHAMMED on 22 January 2026

1. M.K.Habeeb Muhammed, S/o.Muhammed Kassim, Nooraniya Manzil, Pandakasala, Market Road, Kattakada P.O., Thiruvananthapuram District, Pin - 695 527, Kerala State.

2. Ramla Beevi Habeeb Muhammed,

W/o.M.K.Habeeb Muhammed, Nooraniya Manzil, Pandakasala, Market Road, Kattakada P.O., Thiruvananthapuram District, Pin - 695 527, Kerala State.

3. D.G.Jyothi Suresh, W/o.Late Suresh Kumar, Sarada Mandiram, Kattayakode (P.O.), Kattakada, Thiruvananthapuram District, Kerala State.

4. Miss.Suchitra, D/o.Late Suresh Kumar, Sarada Mandiram, Kattayakode (P.O.), Kattakada,

Thiruvananthapuram District, Kerala State. Represented by her mother and guardian, D.G.Jyothi Suresh, W/o.Late Suresh Kumar, Sarada Mandiram, Kattayakode (P.O.), Kattakada, Thiruvananthapuram District.

…Defendants

This Original Application having been heard on 16.12.2025 in the presence of Advocate Sri.Nidhi Sam John 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.15,44,519/- due under housing loan account together with future interest thereon @7.50% per annum with monthly rests from defendants 1 to 3 jointly and severally and by sale of the OA schedule property. Facts of the case:

2. The applicant is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its head office at Mumbai and its NRI branch at Thiruvananthapuram.

3. According to the applicant bank, defendants 3 and 4 entered into a sale agreement dated 25.10.2005 for sale of the schedule property to the 2nd defendant, who is the wife of the 1st defendant. For the said purpose, defendants 1 and 2 applied for a housing loan of Rs.14 lakhs which was sanctioned by the applicant bank on 30.11.2005. Defendants 1 and 2 executed demand promissory note for Rs.14 lakhs and housing loan agreement agreeing to repay the loan within a period of 120 months. Towards collateral security for the loan, the 3rd defendant on her behalf and on behalf of the 4th defendant along with defendants 1 and 2 had deposited title deeds and other related documents in respect of the schedule property and the applicant bank had drawn a memorandum of deposit of title deeds on 30.11.2005. The defendants 3 and 4 obtained an order dated 02.11.2005 in O.P.(G & W) No.448/2005 from the Additional District Court, Thiruvananthapuram appointing the 3rd defendant as guardian of minor 4th defendant and permission was granted to sell the OA schedule property.

4. It is averred in the OA that after sanctioning the loan, the applicant released Rs.2 lakhs on 30.11.2005 to defendants 1 and 2 and issued an account payee pay order for Rs.11.50 lakhs to the 3rd defendant on 01.12.2005 who in turn encashed the same through her savings bank account No.90970 maintained with Canara Bank, Cantonment Branch on 03.12.2005. But the defendants did not produce the sale deed after registration as promised though the entire loan amount was released. Hence the applicant issued a lawyer notice to the defendants on 04.04.2007 calling upon them to produce the sale deed and regularize the loan account. As they neither produced the sale deed nor repaid the loan, applicant bank filed the OA claiming the following reliefs:

(i) To recover the sum of Rs.15,44,519/- together with pendente lite and post-decree interest thereon from defendants 1 to 3 jointly and severally and by sale of the OA schedule property;

(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.

5. The defendants 1 and 2 entered appearance and sought adjournment for filing written statement but they did not file the same despite time granted and remained absent from the proceeding. Hence they were declared exparte on 23.02.2016.

Written statement

6. The 3rd defendant filed written statement contending inter alia that the schedule property belonged to deceased Suresh Kumar and after his death, defendants 3 and 4 inherited the property being his legal heirs. Due to financial constraints, the 3rd defendant decided to sell the property and thus she entered into an agreement for sale with the 2nd defendant, who is the wife of the 1st defendant, for a total consideration of Rs.15 lakhs and received Rs.5 lakhs as advance amount. Subsequent to the agreement of sale, defendants 1 and 2 approached the 3rd defendant for the original documents of the property to get permission from the court to alienate the share of the minor 4th defendant aged 9 years. Believing their words, the 3rd defendant gave all the documents relating to the property to defendants 1 and 2. The defendants 3 and 4 have never gone to the applicant bank and expressed their willingness to mortgage the property. It is true that these defendants entered into an agreement for sale with the 2nd defendant. The 3rd defendant never encashed the pay order as alleged by the bank and she came to know about the encashment of pay order through her account only on 29.09.2006 when she visited the branch to withdraw the amount deposited by her at the time of opening the account. She is not liable to pay any amount as claimed in the OA and hence the OA may be dismissed against her.

7. The court guardian of minor 4th defendant filed written statement claiming that a minor is incapable of entering into a mortgage and hence the mortgage is invalid with regard to the rights of the minor. In O.P.(G & W) No.448/2005, the District Court has granted permission to sell the property and has not given any consent to create encumbrance on the property. Hence the applicant has no right to proceed against the minor’s share in the schedule property and the OA may be dismissed against this defendant.

8. The 4th defendant has filed IA No.1843/2015 on 16.07.2015 praying to record her attaining the age of majority on 15.08.2014 by adducing copy of SSLC certificate as Annexure-A1 and Aadhar card as Annexure-A2 which was allowed vide order dated 23.02.2016. Proof Affidavit:

9. In order to establish the claim on behalf of the applicant bank, one Mr.V.Venugopalan Nair, Senior Manager has filed proof affidavit and produced the loan documents marked as Exhibits A1 to A21. The availing of the housing loan by defendants 1 and 2 is well established from the documents placed by the applicant bank. Counter proof affidavit

10. The 3rd defendant filed counter proof affidavit claiming that the property belongs to her and her minor daughter and they have not mortgaged the property. She has no knowledge about sanctioning of loan and release of Rs.2 lakhs and the pay order for Rs.11.50 lakhs as averred in the proof affidavit. When she approached defendants 1 and 2 and asked about the cheating committed in collusion with the applicant bank and the misappropriation of Rs.11.50 lakhs, they agreed to pay the balance amount and purchase the property. Since these defendants refused to act as agreed, she sent a letter dated 21.11.2006 to the applicant bank’s Regional Office. In response to the same, the applicant bank sent a letter dated 16.12.2006 requesting to execute the sale deed and to advice the 1st defendant to deposit the title deed. Then she filed a compliant before the Judicial First Class Magistrate Court-III, Thiruvananthapuram in CMP No.1627/2007 against V.Venugopalan Nair, Manager of the applicant bank as well as defendants 1 and 2. From the documents produced therein, it is seen that Rs.11.50 lakhs was transferred to her account from the

SB account of the 1st defendant and hence there is no debt existing between the bank and this defendant. The 3rd defendant prayed to dismiss the OA with costs.

11. As the 4th defendant has not filed any counter proof affidavit within the stipulated time, 15 days’ time was granted from 23.02.2016 as last chance to file counter proof affidavit along with documents. But she filed a counter proof affidavit on 11.05.2016 without any application to accept the same and hence the same was not taken on record.

12. From the respective case of the applicant and defendants 3 and 4, the following points are emerged for adjudication:

(i) Whether any valid mortgage has been created by defendants 3 and 4 in respect of the subject matter property?

(ii) Whether the applicant is entitled to get the relief as claimed in this case?

FINDINGS:

Point Nos.(i) & (ii): 13.1 For the sake of convenience, both the points, being interlinked with each other, are taken up together for adjudication. In the course of argument, learned counsel for the applicant submitted that defendants 3 and 4 had entered into an agreement for sale with the 2nd defendant on 25.10.2005 in respect of subject matter property and to purchase the same, defendants 1 and 2 availed a housing loan of Rs.14 lakhs from the applicant bank on 30.11.2005. It is submitted that while availing the loan, defendants 1 and 2 had executed demand promissory note and loan agreement in favour of the bank and the 3rd defendant on her behalf and on behalf of her minor daughter, the 4th defendant herein deposited sale deed No.1624/1993 of Vellanadu SRO as well as related documents in respect of the subject matter property with the NRI Branch, Thiruvananthapuram with the intention to create mortgage and executed memorandum of deposit of title deeds dated 30.11.2005. 13.2 The learned counsel for the applicant bank would further contend that though the applicant had released the entire loan amount of Rs.14 lakhs, the defendants did not produce the sale deed after registration and defendants 1 and 2 have not repaid the loan. It is emphatically contended that since the 3rd defendant had deposited her title deed and other related documents for her behalf and on behalf of her minor daughter/4th defendant and executed memorandum of deposit of title deeds,

valid mortgage subsists over the subject matter property and the bank has every right to proceed against the same to recover the outstanding loan amount. 14.1 Per contra, it is the case of the 3rd defendant that the subject matter property originally belonged to her husband Suresh, who died due to kidney failure. In order to clear the existing debts, she decided to sell the property, which is inherited by her and her minor daughter from their predecessor Mr.Suresh, and entered into an agreement for sale with the 2nd defendant. It is reiterated that since the 4th defendant is a minor, defendants 1 and 2 approached the 3rd defendant seeking original title deeds of the subject matter property citing the reason that the said documents are required to get permission from the court for alienating the share of the minor 4th defendant. Believing their words, she handed over all the documents relating to her property. It is alleged that the bank manager of the applicant along with defendants 1 and 2 had colluded and filed O.P.(G & W) No.448/2005 before the District Court, Thiruvananthapuram and the court granted permission only to sell the minor’s share in the property and not to create any encumbrance on the same. 14.2 It is the further case of the 3rd defendant that defendants 1 and 2 demanded blank cheque leaves as security for the advance amount given for purchasing the property and she was compelled to open a bank account with Canara Bank, Cantonment Branch on 22.11.2005 (A/c No.90970) and thereafter the 1st defendant obtained two signed blank cheque leaves bearing Nos.630911 and 630912 from the 3rd defendant with malafide intention. It is claimed that by using cheque No.630911, the 1st defendant had withdrawn Rs.11.50 lakhs covered under pay order No.4353 from her account and she never encashed the same. In the above circumstance, she filed complaint bearing CMP No.1627/2007 before the Judicial First Class Magistrate Court-III, Thiruvananthapuram against the Manager of the bank and defendants 1 and 2. It is also claimed that the leading newspapers reported several deceits done by defendants 1 and 2 against various persons including the 3rd defendant to grab away their valuable properties. It is the definite case of the 3rd defendant that she or the 4th defendant had never gone to the applicant bank to create any mortgage nor executed any loan documents to secure the loan transaction. Hence the applicant bank cannot proceed against defendants 3 and 4 and their property to recover the loan availed by defendants 1 and 2.

15. On careful evaluation of the submissions and the available materials, it appears that considering the agreement for sale dated 25.10.2005 marked as Ext.A11 executed by the 3rd defendant for herself and on behalf of the 4th defendant in favour of the 2nd defendant, the applicant bank granted a housing loan of Rs.14 lakhs to defendants 1 and 2 to purchase the subject matter property viz., 1.62 Ares (4 cents) of land in Re-Sy.No.50/1/1 of Perumkulam Village, Nedumangad Taluk, Thiruvananthapuram District. It is the admitted case of the applicant that they had advanced the housing loan of Rs.14 lakhs to defendants 1 and 2 for the specific purpose of purchasing the subject matter property from defendants 3 and 4. It is also conceded that after availing the loan, the 2nd defendant, who is the proposed buyer as per Ext.A11 sale agreement, did not produce any sale deed as promised though the entire loan amount was disbursed to the borrowers. As such, no equitable mortgage by deposit of title deeds was created by the 2nd defendant over the subject matter property.

16. It is claimed by the applicant that defendants 1, 2 and 3 had created valid mortgage over the subject matter property and hence they are entitled to proceed against the same to recover the amount due under the housing loan account. To support such contention, the applicant is relying on Ext.A4 sale deed No.1624/1993 dated 23.06.1993 of Vellanadu SRO in the name of late Suresh Kumar and its prior deed i.e., certified copy of sale deed No.2705/1980 dated 29.08.1980 of Kattakkada SRO marked as Ext.A5 and memorandum dated 30.11.2005 marked as Ext.A3. On perusal of Ext.A3 memorandum produced by the applicant bank, it could be discerned that the said document was prepared by the applicant bank itself and the same was signed by its Senior Manager and Accountant and not the defendants. At the top of Ext.A3 memorandum, it is mentioned that “RUMLA HABEEB, HABEEB MOHAMMED AND D.G.JYOTHI had called on us on the 29 Day of November 2005 and deposited with us the undermentioned title deeds, documents and writings pertaining to his/their/firm’s immovable property in respect of 1.80 Are …..”. The applicant has not offered any explanation as to how defendants 1 and 2 can deposit the title deeds which apparently do not belong to them.

17. If the 3rd defendant is the mortgagor as claimed by the applicant bank, she ought to have executed some documents evidencing the creation of mortgage. However, no scrap of evidence was adduced by the applicant bank to corroborate their contention that the 3rd defendant or her minor daughter had created valid mortgage over the subject matter property to secure the housing loan availed by defendants 1 and 2. None of the loan documents were executed by defendants 3 and 4. Further, the 1st Addl. District Court, Thiruvananthapuram vide Ext.A12 order dated 02.11.2005 in O.P.(G & W) No.448/2005 had appointed the 3rd defendant as guardian of minor 4th defendant and permitted her only to sell the property for a consideration of Rs.15 lakhs and no permission was granted to create any encumbrance over the same. The account statement relating to the subject loan marked as Ext.A18 does not show any debit entry relating to issuance of any pay order to the 3rd defendant. The allegation of fraud and forgery cannot be delved at depth by the Tribunal while adjudicating an application filed under S.19 of the Recovery of Debts and Bankruptcy Act, 1993.

18. In the above backdrop, the Tribunal without any shadow of doubt holds that there is no valid mortgage over the subject matter property and Exts.A4 and A5 sale deeds which the applicant is holding are prior deeds of the property and hence the applicant is not entitled to proceed against the same; and defendants 3 and 4 are liable to be exonerated from the liability arising out of the subject housing loan availed by defendants 1 and 2. The applicant can proceed against defendants 1 and 2 to recover the outstanding loan amount. Point Nos.(i) and (ii) are answered accordingly.

19. Considering the amount advanced, interest applied and chronic default committed, I am of the view that the applicant bank is entitled to get pendente lite and post decree interest @7.50% per annum with monthly rests as claimed in the OA.

20. 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.15,44,519/- (Rupees fifteen lakhs forty four thousand five hundred and nineteen only) due under the housing loan account from defendants 1 and 2 and their assets;

(ii) pendente lite and post-decree interest @7.50% per annum with monthly rests on the sum of Rs.15,44,519/- (Rupees fifteen lakhs forty four thousand five hundred and nineteen only) from 20.07.2007 till realization from defendants 1 and 2 and their assets; and

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

21. The applicant shall return sale deed No.1624/1993 dated 23.06.1993 marked as Ext.A4 and sale deed No.2705/1980 dated 29.08.1980 marked as Ext.A5 to defendants 3 and 4 within fifteen days from today.

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

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

24. 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.V.Venugopalan Nair, Senior Manager of the applicant bank.

Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 30.11.2005 Demand promissory note for Rs.14 lakhs executed by defendants 1 and 2. A2 30.11.2005 Housing loan agreement executed by defendants 1 and 2. A3 30.11.2005 Memorandum prepared by the applicant bank. A4 23.06.1993 Sale deed No.1624/1993 of Vellanadu SRO. A5 29.08.1980 Certified copy of sale deed No.2705/1980 of Kattakkada SRO. A6 20.09.2005 Encumbrance certificate issued by Vellanadu SRO. A7 19.09.2005 Encumbrance certificate issued by Kattakkada SRO. A8 27.09.2005 Possession certificate issued by Perumkulam Village Office. A9 27.09.2005 Location certificate issued by Perumkulam Village Office. A10 05.09.2005 Tax receipt issued by Perumkulam Village Office. A11 25.10.2005 Sale agreement executed by defendants 3 and 4 in favour of the 2nd defendant. A12 02.11.2005 Notary attested copy of order in O.P.(G & W) No.448/2005 of the 1st Additional District Court, Thiruvananthapuram. A13 04.04.2007 Copy of lawyer notice issued to defendants 1 and

2. A14 07.04.2007 Acknowledgement card signed by the 2nd defendant.

A15 04.04.2007 Copy of lawyer notice issued to defendants 3 and

4. A16 11.04.2007 Postal acknowledgement card signed by the 3rd defendant. A17 … Reply to the lawyer notice sent by the 3rd defendant through her lawyer. A18 25.06.2007 Certified copy of the statement of account relating to the housing loan. A19 23.06.2007 Statement showing the accrued interest under Ext.A18 account. A20 29.05.1991 Photocopy of power of attorney executed by the applicant bank in favour of AW1. A21 01.12.2005 Copy of pay order No.4352 for Rs.11.50 lakhs.

Defendants’ Exhibits – Nil

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.78/2016 (OA NO.138/2007)

Between

Union Bank of India, NRI Branch, First Floor, Union Bank Bhavan, Statue Junction, M.G.Road, Thiruvananthapuram. …Applicant

And

M.K.Habeeb Muhammed, S/o.Muhammed Kassim, Nooraniya Manzil, Pandakasala, Market Road, Kattakada P.O., Thiruvananthapuram District, Pin-695 527, Kerala State & 3 others. ...Defendants

F I N A L O R D E R