CANARA BANK vs DINAKARAN S.P on 27 March 2026

1. Dinakaran S.P.,

Tamil Nadu.

2. Sudha S.P.,

Tamil Nadu.

3. Retnavally D.,

H.No.13/4, Kaliammankovil Street,

Raippanpetty P.O.,

Uthamapalayam,

Theni District,

Tamil Nadu.

…Defendants

This Original Application having been heard on 13.02.2026 in the presence of Advocate Smt.Ruby P.Paulose for the applicant TA 476/2016 (OA 190/2011)

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 an aggregate sum of Rs.1,37,97,728/- due under various loan accounts together with future interest and costs from the defendants and by sale of ‘A’ to ‘F’ schedule properties. 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 Bangalore and its AF branch at Kottayam.

3. At the request of the defendants, applicant bank sanctioned a term loan (grapevine development loan) of Rs.37.23 lakhs, another term loan (farm development cum power tiller loan) of Rs.28.77 lakhs and KCC loan of Rs.3 lakhs as per sanction letter dated 23.11.2004. The defendants executed agreement for agricultural loans and deed of hypothecation to secure the loans. Towards collateral security for the facilities, the 1st defendant created equitable mortgage over ‘A’ and ‘C’

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schedule properties, the 2nd defendant created mortgage over ‘B’, ‘D’ and ‘E’ schedule properties and the 3rd defendant created mortgage over ‘F' schedule properties and executed letters dated 29.11.2004 confirming the deposit of respective title deeds with the applicant bank. The defendants availed the loans but committed default in repayments. Hence the applicant bank issued a lawyer notice to the defendants on 26.09.2007 calling upon them to repay the outstanding dues but they did not clear the liability despite receipt of the notice. In such premises, applicant bank was constrained to file the OA claiming the following reliefs:

(i) To recover an aggregate sum of Rs.1,37,97,728/- together with pendente lite and post decree interest thereon from the defendants and by sale of ‘A’ to ‘F’ 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.

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4. All the defendants were duly served with summons. The defendants 1 and 2 entered appearance and offered to file vakalath and written statement but they did not file the same despite sufficient opportunity granted and hence they were set exparte on 14.03.2014.

5. The 3rd defendant filed written statement admitting the availing of loans and execution of loan documents as well as creation of mortgage over ‘F' schedule properties by depositing the title deeds marked as Annexures-A29 to A45 in the OA. It is also admitted that she executed letter dated 29.11.2004 marked as Annexure-A28 confirming the deposit of title deeds with the applicant bank to secure the loans availed from it. It is contended that the account statements produced by the applicant suffer from miscalculation and hence they are not entitled to get the relief sought for in the OA, which is liable to be dismissed. Proof Affidavit:

6. To establish the claim on behalf of the applicant bank, one Mr.Pradeep Kumar B., Senior Manager of the applicant has filed proof affidavit and produced the loan documents marked as Exhibits A1 to A59.

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7. The 3rd defendant has not filed any counter proof affidavit nor adduced any documentary evidence to substantiate her claim and remained absent from the proceeding from 27.11.2017.

8. Heard arguments advanced by the learned counsel for the applicant bank and perused the records of the case.

9. The sole issue arises for consideration is as to whether the applicant bank is entitled to recover the amount from the defendants as claimed in this case?

10. On perusal of the records, it appears that the defendants availed the subject loans from the applicant bank vide Ext.A1 sanction memorandum dated 23.11.2004 and executed Exts.A2 and A3 memorandum of agreement for agricultural loans and Ext.A4 agreement and deed of hypothecation for kisan credit card dated 29.11.2014 to secure the loan transactions. As further security for the loans, defendants 1 to 3 created mortgage over ‘A’ to ‘F’ schedule properties by depositing respective title deeds with the applicant bank. The availing of loans and creation of mortgage charge over the schedule properties are well established from the documents placed by the applicant bank. The defendants executed Exts.A46 and A47 acknowledgement of TA 476/2016 (OA 190/2011)

debt and security confirming the balance outstanding under the loan accounts. The account statements marked as Exts.A53 to A58 would establish the claim made by the applicant in this case and hence they are entitled to recover the same from the defendants.

11. The Tribunal passed a restraint order in IA No.1075/2011 on 13.05.2011 directing the defendants not to alienate or encumber the IA schedule properties, which are the mortgaged properties, until further orders and the said order was made absolute on 08.12.2025.

12. The statements marked as Exts.A56 to A58 would show that the applicant bank has charged a sum of Rs.79,054/-, Rs.53,311/- and Rs.29,905/-, totalling to Rs.1,62,270/- by way of penal interest in the loan account Nos.368, 369 and 340 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 amount charged in the loan accounts.

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13. Considering the amount advanced, interest and penal interest applied, repayments effected and default committed and also the facilities granted being agricultural loans, I am of the view that the applicant bank is entitled to get pendente lite and post-decree interest @6% per annum on the sum of Rs.1,36,35,458/- (i.e., after excluding the penal interest of Rs.1,62,270/- from the OA claim amount of Rs.1,37,97,728/-), which is reasonable in the facts and circumstances of the case.

14. 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.1,37,97,728/- (Rupees one crore thirty seven lakhs ninety seven thousand seven hundred and twenty eight only) from the defendants and by sale of ‘A’ to ‘F' schedule properties;

(ii) pendente lite and post-decree interest @6% per annum on the sum of Rs.1,36,35,458/- (Rupees one crore thirty six lakhs thirty five thousand four hundred and fifty eight only) from 28.04.2011 till realization TA 476/2016 (OA 190/2011)

from the defendants and by sale of ‘A’ to ‘F' schedule properties; and

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

15. ‘A’ to ‘F’ schedules to the OA shall be appended to this final order.

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

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

18. 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 27th day of March, 2026)

[SOVAN KUMAR DASH]

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A P P E N D I X Witness for Applicant: AW1: Sri.Pradeep Kumar B., Senior Manager of the applicant bank. Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 23.11.2004 Sanction letter issued by the applicant bank sanctioning two term loans and a KCC loan to the defendants. A2 29.11.2004 Memorandum of agreement for agricultural loan of Rs.37.23 lakhs executed by the defendants. A3 29.11.2004 Memorandum of agreement for agricultural loan of Rs.28.77 lakhs executed by the defendants. A4 29.11.2004 Agreement and deed of hypothecation for kisan credit card executed by the defendants in favour of the applicant bank. A5 29.11.2004 Letter executed by the 1st defendant confirming the deposit of title deeds with the applicant bank. A6

04.08.2004 Sale deed No.1503/2004. A7

29.11.2004 Letter executed by the 2nd defendant confirming the deposit of title deeds with the applicant bank. A8

04.08.2004 Sale deed No.1502/2004. A9

29.11.2004 Letter executed by the 1st defendant confirming the deposit of title deeds with the applicant bank. A10 19.05.2003 Sale deed No.1599/2003. A11 29.11.2004 Letter executed by the 2nd defendant confirming the deposit of title deeds with the applicant bank. A12 12.08.2004 Sale deed No.2150/2004. A13 29.11.2004 Letter executed by the 2nd defendant confirming the deposit of title deeds with the applicant bank. A14 21.07.2004 Sale deed No.2707/2004.

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A15 21.07.2004 Sale deed No.2708/2004. A16 11.11.1996 Sale deed No.3239/1996. A17 21.07.2004 Sale deed No.2709/2004. A18 21.07.2004 Sale deed No.2702/2004. A19 17.07.1997 Sale deed No.2735/1997. A20 31.08.1998 Sale deed No.2638/1998. A21 31.08.1998 Sale deed No.2637/1998. A22 31.08.1998 Sale deed No.2636/1998. A23 02.12.1998 Sale deed No.3547/1998. A24 09.09.2003 Sale deed No.2786/2003. A25 16.08.2004 Sale deed No.2914/2004. A26 09.08.2004 Sale deed No.2870/2004. A27 16.08.2004 Sale deed No.2913/2004. A28 29.11.2004 Letter executed by the 3rd defendant confirming the deposit of title deeds with the applicant bank. A29 21.07.2004 Sale deed No.2701/2004. A30 21.07.2004 Sale deed No.2704/2004. A31 21.07.2004 Sale deed No.2705/2004. A32 21.07.2004 Sale deed No.2706/2004. A33 21.07.2004 Sale deed No.2703/2004. A34 21.07.2004 Sale deed No.2868/2004. A35 08.03.2004 Sale deed No.943/2004. A36 08.03.2004 Sale deed No.940/2004. A37 08.03.2004 Sale deed No.941/2004. A38 08.03.2004 Sale deed No.942/2004. A39 18.02.2004 Sale deed No.631/2004. A40 18.02.2004 Sale deed No.632/2004. A41 31.08.1998 Sale deed No.2632/1998. A42 31.08.1998 Sale deed No.2634/1998. A43 23.04.2001 Sale deed No.1248/2001. A44 31.08.1998 Sale deed No.2635/1998.

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A45 29.07.2004 Sale deed No.2869/2004. A46 21.04.2007 Acknowledgement of debt and security executed by the 1st defendant. A47 20.02.2010 Acknowledgement of debt and security executed by the defendants. A48 26.09.2007 Copy of lawyer notice issued to the defendants. A49 28.07.2010 Copy of demand notice under S.13(2) of the SARFAESI Act issued to the 1st defendant. A50 … Statement showing the rate of interest charged in A/c No.368 from time to time. A51 … Statement showing the rate of interest charged in A/c No.369 from time to time. A52 … Statement showing the rate of interest charged in A/c No.370. A53 … Certified copy of the statement of account relating to A/c No.368. A54 … Certified copy of the statement of account relating to A/c No.369. A55 … Certified copy of the statement of account relating to A/c No.370. A56 … Statement showing the unapplied interest and penal interest in Ext.A53 account. A57 … Statement showing the unapplied interest and penal interest in Ext.A54 account. A58 … Statement showing the unapplied interest and penal interest in Ext.A55 account. A59 21.12.2010 Copy of general power of attorney holder executed by the applicant bank in favour of AW1.

Defendants’ Exhibits – Nil

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IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

Dated the 27th March, 2026

TA No.476/2016 (OA No.190/2011)

Between

Canara Bank, Hi – Tech AF Branch, M.C.Road, Kottayam – 686 001. …Applicant

And

Dinakaran S.P.,

Tamil Nadu & 2 others.

...Defendants

F I N A L O R D E R