CANARA BANK vs NIGIL UDAYA PRAKASH PADMA SUDHA, PROPRIETOR EIVIE LINES on 10 February 2026

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

Dated this the 10th day of February, 2026

TA No.856/2016 (OA No.222/2014) Between

Canara Bank,

Puthenchanthai Branch,

Devaswom Building, M.G.Road,

Thiruvananthapuram – 695 001.

…Applicant And

Nigil Udaya Prakash Padma Sudha,

Proprietor, Eivie Lines,

S/o.Udaya Prakash,

TC 5/96, Ambika Vilas,

Ambalamukku, Peroorkada,

Thiruvananthapuram – 675 005. …Defendant

This Original Application having been heard on 14.01.2026 in the presence of Advocate Sri.M.R.Rajesh 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.6,60,869.14 and Rs.16,62,866.57 due under term loan account and OCC account respectively together with future interest and costs from the defendant and his assts (No relief is sought against the hypothecated assets scheduled to the OA). Facts of the case:

2. The applicant is a body corporate incorporated under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its head office at Bangalore and branches at various places including one at Puthenchanthai, Thiruvananthapuram.

3. Considering the loan application submitted by the defendant, applicant bank sanctioned an OCC limit of Rs.13 lakhs and a term loan of Rs.6.40 lakhs as per sanction memorandum dated 10.12.2011. The defendant executed loan agreements and deed of hypothecation whereby he hypothecated machinery, book debts etc. to secure the loans. The defendant availed the facilities but committed default in repayment which resulted in classification of the accounts as NPA on 30.04.2013. The applicant bank issued notice to the defendant on 16.05.2013 demanding repayment of the outstanding dues. Despite receipt of the notice, the defendant did not turn up to liquidate the liability. Hence the applicant was constrained to file the OA claiming the following reliefs:

(i) To recover an aggregate sum of Rs.23,23,735.71 together with pendente lite and post-decree interest thereon from the defendant and his assets;

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

(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 defendant filed written statement denying the averments and execution of the loan documents. It is claimed that the applicant bank had obtained signature of the defendant in unfilled forms having blank columns and the documents were created by the bank for the purpose of this case and hence the OA may be dismissed with costs. Proof Affidavit:

5. To establish the claim on behalf of the applicant bank, one Mrs.Jaya Krishnan, Senior Manager has filed proof affidavit and produced the loan documents marked as Exhibits A1 to A16. The availing of the loans is well established from the documents placed by the applicant bank.

6. The defendant filed counter proof affidavit reiterating the contentions raised in the written statement.

7. The defendants remained absent from the proceeding from 05.08.2022 and none appeared to address argument in this case. Heard arguments advanced by the learned counsel for the applicant bank.

8. The sole issue arises for consideration is whether the applicant bank is entitled to recover the amount claimed in the TA from the defendant?

9. On perusal of the materials, it could be inferred that the defendant submitted Ext.A1 loan application to the applicant bank on 04.05.2011 seeking financial assistance to meet the working capital requirement of his proprietary concern M/s.Eivie Lines. Considering his request, applicant bank sanctioned an OCC limit of Rs.13 lakhs and term loan of Rs.6.40 lakhs as per Ext.A4 sanction letter dated 10.12.2011. The defendant availed the facilities after executing deed of hypothecation, loan agreements and pronote in favour of the applicant bank on 10.12.2011 which are marked as Exts.A5 to A7, besides hypothecating the schedule properties to secure the loans. Due to irregular repayments, the applicant bank issued notice dated 16.05.2013 marked as Ext.A10 calling upon the defendant to repay the overdue amount within seven days which was received by him vide Ext.A11 acknowledgement card but he did not repay the dues. The account statements marked as Exts.A12 and A13 would establish the claim made by the applicant bank. Evidently, the defendant agreed to repay the loans together with interest and costs as per the terms of sanction.

10. The defendant has disputed the loan transaction but no material is placed by him to refute the claim made by the applicant bank in this case. In absence of any evidence to refute the claim of the applicant bank. In such premises, the applicant bank is entitled to recover the sum of Rs.23,23,735.71 outstanding in the loan accounts as on 31.03.2014.

11. The account statement marked as Ext.A16 would show that the applicant has charged a sum of Rs.2,469/- by way of penal interest in the term loan 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 sum of Rs.2,469/- charged in the term loan account.

12. Considering the amount advanced, interest and penal interest applied, repayments effected and default committed, I am of the view that the applicant bank is entitled to get pendente lite and post decree interest @11% per annum on the sum of Rs.23,21,266.71 (i.e., after excluding the penal interest of

Rs.2,469/- from the OA claim amount of Rs.23,23,735.71), which is reasonable in the facts and circumstances.

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) an aggregate sum of Rs.23,23,735.71 (Rupees twenty three lakhs twenty three thousand seven hundred and thirty five and Paise seventy one only) due under the OCC loan account and term loan account from the defendant and by sale of the schedule properties, if available;

(ii) pendente lite and post-decree interest @11% per annum on the sum Rs.23,21,266.71 (Rupees twenty three lakhs twenty one thousand two hundred and sixty six and Paise seventy one only) from 24.04.2014 till realization from the defendant and by sale of the schedule properties, if available; and

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

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 10th day of February, 2026)

[SOVAN KUMAR DASH] PRESIDING OFFICER

A P P E N D I X Witness for Applicant: AW1: Smt.Jaya Krishnan, Senior Manager of the applicant bank.

Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 04.05.2011 Loan application submitted by the defendant. A2 26.08.2011 Letter addressed to the applicant bank by the Assistant District Industries Officer. A3 10.12.2011 Request for overdraft facility executed by the defendant. A4 10.12.2011 Sanction letter issued by the applicant bank sanctioning OCC limit of Rs.13 lakhs and term loan of Rs.6.40 lakhs to the defendant. A5 10.12.2011 Deed of hypothecation executed by the defendant in favour of the applicant bank. A6 10.12.2011 Loan agreement executed by the defendant. A7 10.12.2011 Agreement regarding advances against book debts executed by the defendant. A8 10.12.2011 Pronote for Rs.13 lakhs executed by the defendant. A9 10.12.2011 Letter of undertaking executed by the defendant. A10 16.05.2013 Copy of recall notice issued to the defendant. A11 … Acknowledgement card evidencing receipt of Ext.A10 notice by the defendant. A12 26.07.2016 Certified copy of the statement of account relating to the term loan. A13 26.07.2016 Certified copy of the statement of account relating to the OCC facility. A14 … Statement showing the rate of interest applied in the term loan account from time to time.

A15 … Statement showing the rate of interest applied in the OCC facility from time to time. A16 … Statement showing the penal interest charged in term loan account and capitalized portion thereof.

Defendant’s Exhibits – Nil

PRESIDING OFFICER

PRESIDING OFFICER

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

Dated the 10th February, 2026

TA No.856/2016 (OA NO.222/2014)

Between

Canara Bank, Puthenchanthai Branch, Devaswom Building, M.G.Road, Thiruvananthapuram. …Applicant

And

Nigil Udaya Prakash Padma Sudha, Proprietor, Eivie Lines, S/o.Udaya Prakash, TC 5/96, Ambika Vilas, Ambalamukku, Peroorkada, Thiruvananthapuram. …Defendant

F I N A L O R D E R