CANARA BANK vs George Joseph R on 9 June 2026

1. George Joseph R.,

S/o.Robert Joseph,

GL Cottage, Vazhuthur,

Neyyattinkara Village,

Neyyattinkara P.O.,

Thiruvananthapuram – 695 121.

2. Lilly George,

W/o.George Joseph R.,

GL Cottage, Vazhuthur,

Neyyattinkara Village,

Neyyattinkara P.O.,

Thiruvananthapuram – 695 121.

…Defendants

This Original Application having been heard on 20.05.2026 in the presence of Advocate Smt.Thankom Mukundakrishnan for the applicant bank and Advocate Sri.Abdul Rasac C.H. 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.12,86,020.70 due under KCC loan account together with future interest and costs from the defendants and by sale of ‘A’ and ‘B’ schedule properties; and the sum of Rs.14,69,497.80 due under farm loan account together with future interest and costs from the defendants and by sale of ‘C’ schedule property. 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 one of its branches at Neyyattinkara in Thiruvananthapuram District.

3. The defendants approached the applicant bank seeking financial assistance for agricultural purpose. Considering their request, applicant bank sanctioned the following facilities: Date of sanction Type of loan Amount

Availed by Collateral security 05.12.2006 KCC loan Rs.4 lakhs Defendants ‘A’ and ‘B’ schedule properties 20.07.2007 Farm house loan Rs.5 lakhs Defendants ‘C’ schedule property

After availing the loans, the defendants violated the terms and conditions of the loan agreement and committed default in repayment. Despite the defendants were requested to pay the defaulted installments and regularize the loan accounts, they did not take any step to clear the dues. In such premises, the applicant was constrained to file the OA claiming the following reliefs:

(i) To recover an aggregate sum of Rs.27,55,518.50 together with pendente lite and post-decree interest thereon from the defendants and by sale of ‘A’ to ‘C’ 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. Written statement

4. The defendants jointly filed written statement admitting the availing of the KCC limit of Rs.4 lakhs from the applicant bank. In respect of the farm loan, it is claimed that the applicant had not sanctioned the entire loan of Rs.5 lakhs. The amount claimed by the applicant is more than double the principal amount actually advanced, which is illegal. The Government had already written off the agricultural loans availed by the defendants as per Agricultural Debt Relief order dated 23.05.2008 and hence the applicant bank is not entitled to get any amount as claimed in this case. They deny the execution of acknowledgement of debt and security in favour of the bank. In view of the above, the OA is liable to be dismissed. Proof Affidavit:

5. In order to establish the claim on behalf of the applicant bank, one Mr.C.M.Hari Lal, Chief Manager of the bank has filed proof affidavit and produced the loan documents marked as Exhibits A1 to A23. The availing of loans and creation of mortgage charge over the schedule properties are well established from the documents placed by the applicant bank.

6. The defendants filed counter proof affidavit denying the execution of loan documents and claimed that as per the Debt Relief Scheme, the Government had decided to write off the agricultural loans which become overdue as on 29.02.2008 and they are entitled to get the benefits of the said scheme. Suppressing the material facts, this OA was filed by the applicant and hence the same may be dismissed.

7. Heard the submissions of both sides and perused the materials on record. The sole issue arises for consideration is whether the applicant is entitled to get any relief as claimed in this case?

8. The KCC limit of Rs.4 lakhs and the term loan (farm house loan) of Rs.5 lakhs were sanctioned by the applicant vide Ext.A1 sanction memorandum dated 05.12.2006 and Ext.A6 sanction memorandum dated 20.07.2007 respectively and Exts.A1 and A6 were countersigned by the defendants in token of having accepted the terms and conditions thereof. As security for the KCC limit, the defendants executed Ext.A2 agreement and deed of hypothecation dated 05.12.2006 and the 1st defendant created equitable mortgage over ‘A’ and ‘B’ schedule properties and executed letter dated 05.12.2006 confirming the deposit of title deeds with the applicant bank on 15.11.2006. The defendants have also executed Ext.A7 memorandum of agreement for agricultural loans to secure the loan of Rs.5 lakhs and created mortgage over ‘C’ schedule property by deposit of Ext.A8 sale deed with the applicant bank on 05.07.2007. Evidently, the defendants had executed acknowledgement of debt and security marked as Exts.A10 and A11 in respect of the KCC limit of Rs.4 lakhs, Ext.A12 in respect of the farm house loan of

Rs.5 lakhs and Ext.A13 dated 12.03.2013 in respect of both the loan accounts. As on the date of filing of the OA on 04.03.2016, an aggregate sum of Rs.27,55,518.50 is outstanding under the loan accounts, which is established from the account statements marked as Exts.A16, A18, A19 and A21. In view of the execution of aforementioned loan documents and the admitted default in repayments, applicant bank is entitled to recover the said amount from the defendants and the issue is answered accordingly.

9. In response to the claim made by the defendants under the Agricultural Debt Waiver and Debt Relief Scheme, 2008, the learned counsel for the applicant bank raised dispute and stated that the applicants are not entitled to get any relief under such scheme which is not applicable to the Public Sector Banks. Such issue can be raised by the defendants in proper forum by submitting representation. In this OA, it cannot be adjudicated whether they are entitled to get any benefit under such scheme or not. Hence the contention of the learned counsel for the defendants on this score is not accepted.

10. The statements marked as Exts.A17 and A20 would show that the applicant bank has charged a sum of Rs.97,468/- and Rs.23,611/- by way of penal interest in the KCC loan account and farm loan account 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.

11. Considering the amount advanced, quantum of interest and penal interest charged and default committed and also the facilities granted being agricultural loans, I am of the view that applicant bank is entitled to get pendente lite and post decree interest @6% per annum on the sum of Rs.11,88,552.70 (i.e., after excluding the penal interest of Rs.97,468/- from the OA claim amount of Rs.12,86,020.70) in the KCC loan account and @6% per annum on the sum of Rs.14,45,886.80 (i.e., after excluding the penal interest of Rs.23,611/- from the OA claim amount of Rs.14,69,497.80) in the farm house loan account, which is reasonable in the facts and circumstances of the case.

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 the amount as shown below: KCC loan account Rs.12,86,020.70 (Rupees twelve lakhs eighty six thousand twenty and Paise seventy only) together with pendente lite and post-decree interest on the sum of Rs.11,88,552.70 (Rupees eleven lakhs eighty eight thousand five hundred and fifty two and Paise seventy only) @6% per annum from 04.03.2016 till realization from the defendants and by sale of ‘A’ and ‘B’ schedule properties; Farm house loan account Rs.14,69,497.80 (Rupees fourteen lakhs sixty nine thousand four hundred and ninety seven and Paise eighty only) together with pendente lite and post- decree interest on the sum of Rs.14,45,886.80 (Rupees fourteen lakhs forty five thousand eight hundred and eighty six and Paise eighty only) @6% per annum from 04.03.2016 till realization from the defendants and by sale of ‘C’ schedule property; and costs and expenses borne by it for realization of the loans from the defendants.

13. ‘A’ to ‘C’ schedules 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. If the defendants are certain that they are entitled to get benefit under the Agricultural Debt Waiver and Debt Relief

Scheme, 2008 announced by the Government, they can approach the applicant bank by submitting a representation along with supporting documents to redress their grievance. In such an event, the applicant shall consider the representation of the defendants in the right perspective and communicate the decision taken thereon before proceeding further in the matter.

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 9th day of June, 2026)

[SOVAN KUMAR DASH] PRESIDING OFFICER

A P P E N D I X Witness for Applicant: AW1: Sri.C.M.Hari Lal, Chief Manager of the applicant bank.

Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 05.12.2006 Sanction memorandum issued by the applicant bank sanctioning KCC limit of Rs.4 lakhs to the defendants. A2 05.12.2006 Agreement and deed of hypothecation for kisan credit card executed by the defendants. A3 19.01.2005 Sale deed No.106/2005 of Perumkadavila SRO. A4 03.10.2006 Sale deed No.1691/2006 of Perumkadavila SRO. A5 05.12.2006 Letter evidencing deposit of title deeds executed by the 1st defendant. A6 20.07.2007 Sanction memorandum issued by the applicant bank sanctioning term loan (farm house loan) of Rs.5 lakhs to the defendants. A7 23.07.2007 Memorandum of agreement for agricultural loan executed by the defendants. A8 10.11.1988 Sale deed No.2030/1988 of Neyyattinkara SRO. A9 10.07.2007 Letter evidencing deposit of title deed executed by the defendants. A10 04.08.2009 Acknowledgement of debt and security in respect of the KCC limit of Rs.4 lakhs executed by the defendants. A11 09.06.2010 Acknowledgement of debt and security in respect of the loan of Rs.4 lakhs executed by the defendants. A12 31.03.2010 Acknowledgement of debt and security in respect of the loan of Rs.5 lakhs executed by the defendants. A13 12.03.2013 Acknowledgement of debt and security executed by the defendants.

A14 28.10.2015 Letter submitted to the applicant bank by the 1st defendant. A15 06.11.2015 Reply to Ext.A14 letter issued by the applicant bank. A16 01.01.2016 Certified copy of the statement of account relating to the KCC loan. A17 … Statement showing the penal interest charged in Ext.A16 account and capitalized portion thereof. A18 … Statement showing the unapplied interest under Ext.A17 account. A19 01.01.2016 Certified copy of the statement of account relating to the farm loan. A20 … Statement showing the penal interest charged in Ext.A19 account and capitalized portion thereof. A21 … Statement showing the unapplied interest under Ext.A19 account. A22 … Statement showing the rate of interest applied in Ext.A16 account from time to time. A23 … Statement showing the rate of interest applied in Ext.A19 account 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 9th June, 2026

TA No.1335/2016 (OA NO.210/2016)

Between

Canara Bank, Neyyattinkara Branch, Opp: K.S.R.T.C. Bus Stand, Neyyattinkara, Trivandrum District. …Applicant

And

George Joseph R., S/o.Robert Joseph, GL Cottage, Vazhuthur, Neyyattinkara Village, Neyyattinkara P.O., Thiruvananthapuram & another.

…Defendants

F I N A L O R D E R