STATE BANK OF INDIA vs SOCIETY FOR ECONOMIC AND ENVIRONMENTAL DEVELOPMENT on 2 February 2026

1. Society for Economic and Environmental- Development (S.E.E.D), S.L.Puram P.O., Alappuzha – 688 523, Represented by its President and Secretary.

2. K.V.Ramanan, Veliyil House, Muhamma P.O., Alappuzha.

3. P.P.Anandan, Panambil House, S.L.Puram P.O., Alappuzha.

…Defendants

This Original Application having been heard on 15.01.2026 in the presence of Advocate Smt.Uma G. Krishnan, representing counsel for Advocate Sri.Saju N.A. 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.36,71,911/- due under the agricultural term loan account together with future interest thereon @13% per annum with half yearly rests and penal interest @2% per annum from the defendants jointly and severally and their assets. Facts of the case:

2. The applicant is a body corporate incorporated under the State Bank of India (subsidiary Banks) Act, 1959 having its head office at Thiruvananthapuram and one of its branches at Muhamma, Alappuzha.

3. The 1st defendant approached the erstwhile State Bank of Travancore for financial assistance for lending to 50 Self Help Groups. Considering its request, the bank granted an agricultural term loan of Rs.80 lakhs to the 1st defendant which was availed after executing security documents in favour of the bank. The defendants 2 and 3 undertook to repay the loan amount promptly. The defendants executed revival letters dated

04.03.2009 and 05.05.2011 acknowledging the liability but failed to repay the dues. Hence the applicant issued a lawyer notice to the defendants recalling the liability but they did not repay the dues. Hence the applicant was constrained to file the OA claiming the following reliefs:

(i) To recover the sum of Rs.36,71,911/- together with pendente lite and post-decree interest thereon from the defendants jointly and severally and their assets;

(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 filed written statement stating that it is an undisputed fact that the loan amount was taken from the bank to utilize solely for the benefit of Self-Help Groups (SHGs) and no amount was personally used by any of these defendants for their advantage. More than 15 SHGs have committed default in repaying the amount received by them which is the reason for default but they were not impleaded in this case. In document No.2, both parties have agreed that the entire loan should be repaid in 60 EMIs without interest which is deliberately suppressed in the OA. The 1st defendant has collected and repaid altogether Rs.68.55 lakhs and the balance amount of Rs.11.45 lakhs is due to the bank and they are ready to pay the same, provided some installment facility is granted. Proof Affidavit:

5. In order to establish the claim on behalf of the applicant bank, one Mr.Mohanan M., Branch Manager has filed proof affidavit and additional proof affidavit and produced the loan documents marked as Exhibits A1 to A7. The availing of the agricultural term loan is well established from the documents placed by the applicant bank.

6. The defendants filed counter proof affidavit claiming inter alia that at the time of availing the loan for the SHGs, the applicant bank obtained several signatures by stating that it is being collected as part of their mandatory procedural rules. One document produced by the applicant bank would go to show that the entire loan amount should be repaid in 60 EMIs without any interest. In fact, this was the offer made by the bank at the time of disbursing the loan but later they have changed their version and added many other charges including the rate of interest to the amount disbursed to the SHGs. If the OA is allowed, irreparable injury and hardship would be caused to them and hence the same may be dismissed with exemplary costs.

7. From the respective case of both the parties, the following issues are emerged for adjudication:

(i) Whether the defendants are entitled to repay the loan amount without application of interest as claimed by them?

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

FINDINGS:

Issue Nos.(i) & (ii):

8. For the sake of convenience, both the points, being interlinked with each other, are taken up together for adjudication. There is no dispute with regard to the availing of agricultural term loan of Rs.80 lakhs from the bank and default in repayment of the loan.

9. It is claimed by the defendants that in document No.2 at page No.9 of the OA, they have agreed that the entire loan amount would be paid in 60 EMIs without any interest. On perusal of the said document marked as Ext.A2, it appears that the defendants have agreed to repay the loan amount together with interest and other charges as stipulated therein. Further, Ext.A1

sanction letter would show that the agricultural term loan of Rs.80 lakhs is to repaid in 36 installments of Rs.2,57,800/- each and the rate of interest applicable at the time of sanction of the loan was 1% below SBT PLR, minimum 10% per annum. The said sanction letter was countersigned by the defendants in token of having accepted the terms and conditions thereof. In such premises, the defendants cannot claim and contend that they are not liable to pay any interest accrued in the loan account.

10. No material is placed and proved by the defendants that they have repaid the loan and only an amount of Rs.11.45 lakhs is due to the bank as claimed in the WS. As per the account statement marked as Ext.A7, a sum of Rs.36,71,911/- is outstanding in the agricultural term loan account as on 20.08.2012 and the applicant bank is entitled to recover the same from the defendants.

11. Considering the amount advanced, interest applied, substantial repayments effected and the facility granted being an agricultural loan, I am of the view that the applicant bank is entitled to get pendente lite and post decree interest @6% per annum, which is reasonable in the facts and circumstances. Both the issues are answered in favour of the applicant bank.

12. 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.36,71,911/- (Rupees thirty six lakhs seventy one thousand nine hundred and eleven only) due under the agricultural term loan account from the defendants jointly and severally and their assets;

(ii) pendente lite and post-decree interest @6% per annum on the sum Rs.36,71,911/- (Rupees thirty six lakhs seventy one thousand nine hundred and eleven only) from 21.08.2012 till realization from the defendants jointly and severally and their assets; and

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

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

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

15. 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 2nd day of February, 2026)

[SOVAN KUMAR DASH]

A P P E N D I X Witness for Applicant: AW1: Sri.Mohanan M., Branch Manager of the applicant bank.

Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 14.03.2006 Sanction letter for agricultural term loan (Clean) of Rs.80 lakhs acknowledged by 1st defendant through 2nd and 3rd defendants. A2 13.03.2006 Articles of agreement executed by the 1st defendant through 2nd and 3rd defendants in favour of the applicant bank. A3 13.03.2006 Undertaking executed by the 2nd and 3rd defendants in favour of the applicant bank. A4 04.03.2009 Revival letter executed by the 1st defendant through 2nd and 3rd defendants. A5 05.05.2011 Revival letter executed by the 1st defendant through 2nd and 3rd defendants. A6 22.10.2011 Office copy of lawyer notice issued to the defendants. A7 23.01.2023 Certified copy of the statement of account of the agricultural term loan (clean).

Defendants’ Exhibits – Nil

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

Dated the 2nd February, 2026

TA No.328/2016 (OA NO.365/2012)

Between

State Bank of India, Muhamma Branch, Alappuzha.

…Applicant And

Society for Economic and Environmental- Development (S.E.E.D), S.L.Puram P.O., Alappuzha – 688 523, Represented by its President and Secretary & 2 others.

...Defendants

F I N A L O R D E R