ALCHEMIST ARC vs M/s Karthikeya Fabrics on 13 February 2026

1. M/s.Karthikeya Fabrics,

Office at: Ganapath Buildings,

Thakaraparambu Road,

Thiruvananthapuram – 695 023.

2. M/s.Sonas,

Office at: Ganapath Buildings,

Thakaraparambu,

Thiruvananthapuram – 695 023.

3. Karthika Muthu Krishnan,

Managing Partner,

M/s.Karthikeya Fabrics,

Ganapath Buildings,

Thakaraparambu,

Thiruvananthapuram – 695 023.

Residing at: House No.28(a),

Ganapath, Sreevaraham Nagar,

Sree Varaham, Vallakadavu P.O.,

Thiruvananthapuram – 695 008.

4. Annamalai Muthu Krishnan,

Managing Partner, M/s.Sonas,

Ganapath Buildings,

Thakaraparambu,

Thiruvananthapuram – 695 023.

Residing at: House No.28(a),

Ganapath, Sreevaraham Nagar,

Sree Varaham, Vallakadavu P.O.,

Thiruvananthapuram – 695 008.

5. K.Nagaraja Reddiar,

Ganapath, Sreevaraham Nagar,

Sree Varaham, Vallakadavu P.O.,

Thiruvananthapuram – 695 008.

6. Jehufar Rawther,

TC 8/1985,

Elipode Junction,

Tirumala P.O.,

Thiruvananthapuram – 695 006.

7. Sajna Rawther,

New Rejina Textiles,

Kadakkal, Kadakkal P.O.,

Kollam – 691 536.

8. Sasikala Ganapath,

Sreevaraham Nagar,

Sreevaraham, Vallakadavu P.O.,

Thiruvananthapuram – 695 008.

9. L.Muthulakshmi,

Ganapath, Sreevaraham Nagar,

Sreevaraham, Vallakadavu P.O.,

Thiruvananthapuram – 695 008. …Defendants

This Original Application having been heard on 12.02.2026 in the presence of Advocate Ms.Arya Satheesh 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.31,11,288.55 and Rs.31,07,954.43 due under OCC A/c No.1194 and OCC A/c No.1195 respectively together with future interest and costs from the defendants and by sale of the schedule properties. Facts of the case:

2. The 1st defendant is a partnership firm of defendants 3 and 5 to 7, of which the 3rd defendant is the managing partner. The 2nd defendant is a partnership firm of defendants 4, 5, 8 and 9, of which the 4th defendant is its managing partner. At the request of defendants 1 and 2, Killipalam Branch of Indian Overseas Bank sanctioned the following credit facilities: Date of sanction Type of loan Amount Availed by Guarantor Collateral security 30.03.2011 OCC A/c No.1194 Rs.25 lakhs 1st defendant Defendants 3, 5, 6 & 7 Item No.1 in ‘A’ schedule and ‘B’ schedule properties 30.03.2011 OCC A/c No.1195 Rs.25 lakhs 2nd defendant Defendants 3, 4, 5, 8 & 9 Item No.2 in ‘A’ schedule and ‘B’ schedule properties

After availing the loans, the defendants 1 and 2 defaulted in repayment which resulted in classification of the accounts as NPA on 30.06.2012. Thereafter, the applicant issued demand notice under S.13(2) of the SARFAESI Act on 31.07.2012 calling upon the defendants to repay the outstanding dues. Despite receipt of the notices, they did not take any step to clear the liability. Hence the applicant was constrained to file the OA claiming the following reliefs:

(i) To recover an aggregate sum of Rs.62,19,242.98 together with pendente lite and post-decree interest thereon from the respective defendants and by sale of the schedule properties;

(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.

3. All the defendants were duly served with summons. Defendants 1 to 5 and 8 entered appearance and sought adjournment for filing written statement but they did not file written statement despite sufficient time granted. Subsequently, they remained absent from the proceeding and hence defendants

1 to 5 and 8 were declared exparte on 26.08.2022. The defendants 6, 7 and 9 neither appeared nor were they represented and hence defendants 6 and 9 were set exparte on 27.08.2014 and the 7th defendant was set exparte on 03.12.2014. Proof Affidavit:

4. To establish the claim on behalf of the applicant bank, one Mr.Sujil K., Manager and Principal Officer of the applicant has filed proof affidavit and produced the loan documents marked as Exhibits A1 to A21. The proof affidavit filed by AW1 and the documents produced in this case are not challenged by the defendants. The availing of loans and creation of charge over the schedule properties are well established from the documents placed by the applicant bank. An aggregate sum of Rs.62,19,242.98 is outstanding in the loan accounts as on 30.06.2013, which is established from the account statements marked as Exts.A18 to A20.

5. Pending the OA, the Tribunal granted a conditional attachment in respect of two items of properties (1st item belonging to the 3rd defendant and the 2nd item belonging to defendants 3 and 5) scheduled to IA No.2081/2013 on 15.07.2013 and the said order was made absolute on 04.12.2025. Hence the applicant bank is entitled to realize the amount found due as above by sale of the attached properties also.

6. The statements marked as Exts.A20 and A20(a) would show that the applicant has charged a sum of Rs.61,078/- and Rs.60,848/- by way of penal interest in the OCC A/c No.1194 and OCC A/c No.1195 respectively. 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.61,078/- and Rs.60,848/- charged in the loan accounts.

7. 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 @12% per annum on the sum of Rs.30,50,210.55 (i.e., after excluding the penal interest of Rs.61,078/- from the OA claim amount of Rs.31,11,288.55) in OCC A/c No.1194 and @12% per annum on the sum of Rs.30,47,106.43 (i.e., after excluding the penal interest of Rs.60,848/- from the OA claim amount of Rs.31,07,954.43) in OCC A/c No.1195, which is reasonable in the facts and circumstances of the case.

8. 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.31,11,288.55 (Rupees thirty one lakhs eleven thousand two hundred and eighty eight and Paise fifty five only) due under OCC A/c No.1194 together with pendente lite and post-decree interest @12% per annum on the sum of Rs.30,50,210.55 (Rupees thirty lakhs fifty thousand two hundred and ten and Paise fifty five only) from 02.07.2013 till realization from defendants 1, 3, 5, 6 and 7 jointly and severally and by sale of item No.1 in ‘A’ schedule and ‘B’ schedule properties; in case of any shortfall, the same shall be recovered by sale of the properties attached under IA No.2081/2013;

(ii) the sum of Rs.31,07,954.43 (Rupees thirty one lakhs seven thousand nine hundred and fifty four and Paise forty three only) due under OCC A/c No.1195 together with pendente lite and post-decree interest @12% per annum on the sum of Rs.30,47,106.43 (Rupees thirty lakhs forty seven thousand one hundred and six and

Paise forty three only) from 02.07.2013 till realization from defendants 2, 3, 4, 5, 8 and 9 jointly and severally and by sale of item No.2 in ‘A’ schedule and ‘B’ schedule properties; in case of any shortfall, the same shall be recovered by sale of the properties attached under IA No.2081/2013; and

(iii) costs and expenses borne by it for realization of the loans from the defendants, in proportion to the amount ordered to be recovered from them.

9. ‘A’ and ‘B’ schedules to the OA and schedule to IA No.2081/2013 shall be appended to this final order.

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

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

12. 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 13th day of February, 2026)

[SOVAN KUMAR DASH] PRESIDING OFFICER

A P P E N D I X Witness for Applicant: AW1: Mr.Sujil K., Manager and Principal Officer of the applicant bank. Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 24.01.2008 Demand promissory note for Rs.20 lakhs executed by the 1st defendant. A2 26.03.2009 Demand promissory note for Rs.25 lakhs executed by the 1st defendant. A3 30.11.2010 Demand promissory note for Rs.50 lakhs executed by the 1st defendant. A4 30.03.2011 Credit sanction advice issued by the applicant bank sanctioning OCC limit of Rs.25 lakhs to the 1st defendant. A5 30.03.2011 Demand promissory note for Rs.25 lakhs executed by the 1st defendant. A6 30.03.2011 Letter of hypothecation executed by the 1st defendant. A7 30.03.2011 Letter of guarantee executed by defendants 3 and 5 in favour of the bank. A8 30.03.2011 Letter of guarantee executed by defendants 6 and 7 in favour of the bank. A9 24.01.2008 Demand promissory note for Rs.20 lakhs executed by the 2nd defendant. A10 22.06.2010 demand promissory note for Rs.10 lakhs executed by the 2nd defendant. A11 30.03.2011 Credit sanction advice issued by the bank sanctioning OCC limit of Rs.25 lakhs to the 2nd defendant. A12 30.03.2011 Demand promissory note for Rs.25 lakhs executed by the 2nd defendant. A13 30.03.2011 Letter of hypothecation executed by the 2nd defendant.

A14

30.03.2011

Letter of guarantee executed by defendants 3 to 5, 8 and 9 in favour of the bank. A15 02.04.2009 Sale deed No.1162/2009 of Thiruvananthapuram SRO. A16 30.03.2011 Letter executed by the 3rd defendant confirming the deposit of title deeds with the applicant bank. A17 … Reply sent to the bank by the tenants in respect of the notice issued by the bank. A18 … Certified copy of the statement of account relating to OCC A/c No.1194. A18(a) … Statement showing the unapplied interest under Ext.A18 account. A19 … Certified copy of the statement of account relating to OCC A/c No.1195. A19(a) … Statement showing the unapplied interest under Ext.A19 account. A20 … Statement showing the undebated and overdue interest under Ext.A18 account. A20(a) … Statement showing the undebated and overdue interest under Ext.A19 account. A21 … Statement showing the rate of interest applied in the loan accounts from time to time.

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 13th February, 2026

TA No.1026/2016 (OA NO.332/2013)

Between

Alchemist Asset Reconstruction- Company Limited, Represented by its Senior Manager, Akshat Sharma.

…Applicant

And

M/s.Karthikeya Fabrics, Office at: Ganapath Buildings, Thakaraparambu Road, Thiruvananthapuram – 695 023 & 8 others.

...Defendants

F I N A L O R D E R