CENTRAL BANK OF INDIA vs C. BALAJI on 9 February 2026

1. C.Balaji,

S/o.Gopinathan,

IV/35A, Pazhayamadom,

Manpuzhakkavu,

Ramankkerri P.O., Kuttanad,

Alappuzha District.

2. B.Vimala,

W/o.Balaji,

IV/35A, Pazhayamadom,

Manpuzhakkavu,

Ramankkerri P.O., Kuttanad,

Alappuzha District.

…Defendants

This Original Application having been heard on 20.01.2026 in the presence of Advocate Sri.Santhosh Kumar K. for the applicant bank and Advocate Sri.Peer Mohamed Khan for the defendants, 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.15,39,820/- due under term loan account together with future interest thereon @11% per annum with quarterly rests from the defendants jointly and severally and by sale of ‘A’ 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 central office at Mumbai and one of its branches at Chengannur.

3. At the request of the defendants, the applicant bank sanctioned a term loan of Rs.12 lakhs to the 1st defendant on 29.05.2006 for purchase of rubber estate described in ‘A’ schedule. As per the terms of sanction, repayment of the loan will commence from the 4th year with yearly rests; however, interest on the loan amount is to be paid by the defendants as and when debited in the account. The 2nd defendant stood as guarantor for the loan. As security for the loan, the 1st defendant created equitable mortgage over ‘A’ schedule property and executed letter dated 20.06.2006 confirming the deposit of title deeds with the applicant bank on 19.06.2006. All the standing crops in the property were also hypothecated to the bank to secure the loan. Due to default in repayment, the account was classified as NPA on 01.04.2008. Thereafter the applicant issued lawyer notice to the defendants calling upon them to repay the outstanding dues. Though the defendants received the notice, they did not clear the liability. Hence the applicant was constrained to file the OA claiming the following reliefs:

(i) To recover a sum of Rs.15,39,820/- together with pendente lite and post-decree interest thereon from the defendants jointly and severally and by sale of ‘A’ 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. Written statement

4. The defendants filed written statement denying the averments in the OA and execution of loan documents as well as creation of mortgage over the schedule property. It is the case of the defendants that the applicant bank in collusion with one Josy Varghese and Mr.Sudhakaran had allegedly sanctioned loan of Rs.12 lakhs and disbursed the said amount to them. The then manager of the bank asked the defendants to put some signatures in a printed form and these defendants have no occasion to avail any loan from the applicant bank. It is alleged that the aforesaid persons have misappropriated huge amount of money by availing loans in the name of different persons with the help of the bank officials. Due to the loss occurred to the bank, criminal case was initiated against such persons and Kochi unit of the CBI has submitted final report before the Hon'ble Court of Special Judge for CBI Cases-1, Ernakulam. There is no cause of action for filing the OA against the defendants. It is submitted that these defendants have no objection for realization of the amount by sale of ‘A’ schedule property and they may be exonerated from their personal liability. Proof Affidavit:

5. To establish the claim on behalf of the applicant bank, one Mr.Jayabalan and Ms.Mini Mariam Mathew, Branch Managers of the bank have filed proof affidavit and additional proof affidavit respectively and produced the loan documents marked as Exhibits A1 to A10.

6. The defendants were granted sufficient opportunity to file counter proof affidavit along with documents to substantiate their case but they did not file the same and hence the chance of filing counter proof affidavit stood closed on 08.12.2015.

7. From the respective case of the applicant and defendants, the following issues are emerged for adjudication in this case:

(i) Whether the contention raised by the defendants regarding non-execution of loan documents is sustainable?

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

FINDINGS:

Issue Nos.(i) & (ii):

8. The materials available on record would show that pursuant to the loan application marked Ext.A1 submitted by the 1st defendant, applicant bank sanctioned a term loan of Rs.12 lakhs for purchase of ‘A’ schedule property vide Ext.A2 sanction letter dated 29.05.2006. The 1st defendant is seen executed Ext.A3 loan-cum-hypothecation agreement agreeing to repay the principal loan amount after the holiday period of three years and interest will be paid as and when debited in the account. Ext.A2 would show that the loan amount is to be repaid with interest @11.50% per annum with half yearly rests and additional 2% in case of delayed repayments. The 2nd defendant executed guarantee agreement dated 29.05.2006 marked as Ext.A7 to secure repayment of the loan.

9. According to the applicant bank, equitable mortgage was created over ‘A’ schedule property by the 1st defendant by depositing Ext.A4 sale deed No.1589/2006 dated 30.05.2006 of Peerumedu SRO with the applicant bank on 19.06.2006 and executed letter dated 20.06.2006 confirming the creation of mortgage. Whereas, it is claimed by the defendants that they had neither purchased the subject matter property nor created any mortgage in favour of the bank and hence they have no objection in taking any step against the property scheduled in the application.

10. Though the defendants have claimed that they had not availed the subject loan and never executed any loan documents, they have failed to establish their claim of non- affixture of their signatures that the signatures over the same. In such premises, the contention raised by the defendants in this regard is not sustainable. Further, if valid mortgage was created over the subject matter property by the 1st defendant, the applicant bank can proceed against the same to recover the outstanding loan amount. The issues are answered in favour of the applicant bank.

11. Considering the amount advanced, interest applied, default committed and the loan granted being an agricultural facility, 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.

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.15,39,820/- (Rupees fifteen lakhs thirty nine thousand eight hundred and twenty only) due under the term loan account from the defendants jointly and severally and by sale of ‘A’ schedule property;

(ii) pendente lite and post-decree interest @6% per annum on the sum Rs.15,39,820/- (Rupees fifteen lakhs thirty nine thousand eight hundred and twenty only) from 15.05.2009 till realization from the defendants jointly and severally and by sale of ‘A’ schedule property; and

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

13. ‘A’ schedule to the OA shall be appended to this final order.

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

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

16. 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 9th day of February, 2026)

[SOVAN KUMAR DASH] PRESIDING OFFICER

A P P E N D I X Witness for Applicant: AW1: Sri.Jayabalan, Branch Manager of the applicant bank. AW2: Ms.Mini Mariam Mathew, Branch Manager of the applicant bank.

Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 29.05.2006 Certified copy of the loan application submitted to the applicant bank by the 1st defendant. A2 29.05.2006 Certified copy of the sanction letter issued by the applicant bank sanctioning term loan of Rs.12 lakhs to the 1st defendant. A3 29.05.2006 Certified copy of loan-cum-hypothecation agreement executed by the 1st defendant. A4 30.05.2006 Certified copy of sale deed No.1589/2006 of Peerumedu SRO. A5 06.06.2006 Certified copy of land tax issued by Kokkayar Village. A6 06.06.2006 Certified copy of possession certificate issued by Kokkayar Village. A7 29.05.2006 Certified copy of the letter of guarantee executed by the 2nd defendant. A8 … Acknowledgement card signed by the 1st defendant. A9 … Acknowledgement card signed by the 2nd defendant. A10 … Certified copy of the statement of account relating to the term loan.

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 9th February, 2026

TA No.324/2016 (OA NO.168/2009)

Between

Central Bank of India, Chengannur Branch, Chengannur.

…Applicant

And

C.Balaji, S/o.Gopinathan, IV/35A, Pazhayamadom, Manpuzhakkavu, Ramankkerri P.O., Kuttanad, Alappuzha District & another.

…Defendants

F I N A L O R D E R