DHANALAKSHMI BANK vs S. SURESH BABU on 29 June 2026

1. S.Suresh Babu,

Devamatha House,

Nedungolam P.O.,

Paravoor, Kollam – 691 334.

2. Leela Suresh,

W/o.S.Suresh Babu,

Devamatha House,

Nedungolam P.O.,

Paravoor, Kollam – 691 334. …Defendants

This Original Application having been heard on 15.06.2026 in the presence of Advocate Sri.Rajesh Kumar T.K. 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 an aggregate sum of Rs.75,24,311.56 due under vehicle loan accounts together with future interest thereon @15.27% per annum with monthly rests from the defendants jointly and severally and by sale of OA schedule vehicles. Facts of the case:

2. The applicant is a company incorporated under the Companies Act, 1956, having its registered office at Thrissur and a branch among other places at Kallambalam in Thiruvananthapuram District.

3. The 1st defendant is the sole proprietor of “Devamatha Transport” and the 2nd defendant is his wife. The defendants availed commercial vehicle loan facility of Rs.68,00,664/- from the applicant bank on 30.11.2011 for purchasing six carriage trucks. The defendants availed the facility after executing necessary security documents on 30.11.2011. Due to default in repayment, the applicant issued demand notice under S.13(2) of the SARFAESI Act calling upon the defendants to repay the outstanding dues. As they did not clear the liability, a notice was issued on 08.07.2013 demanding the defendants to handover possession of the secured assets. Since they did not take any step to repay the dues, the applicant was constrained to file the OA claiming the following reliefs:

(i) To recover the sum of Rs.75,24,311.56 together with pendente lite and post decree interest thereon from the defendants jointly and severally and by sale of the OA 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.

4. The defendants filed written statement contending inter alia that they availed a loan of Rs.68 lakhs from the applicant bank for purchasing six truck chassis to be used as goods carriage vehicles. They had already remitted an amount of Rs.27,15,688/- in the loan account. However, the Advocate Commissioner appointed by the CJM, Thiruvananthapuram took possession of the vehicles. The 1st defendant moved W.P.(C) No.29701/2013 before the Hon'ble High Court of Kerala but he was unable to comply the direction of the Hon'ble High Court and hence the vehicles were not released by the bank. The accounts maintained by the applicant bank are not proper and hence they are not entitled to recover the amount claimed in this case.

Proof Affidavit:

5. To establish the claim on behalf of the applicant, M/s.Vinutha Aiyappan, Prasanth S. and Suresh N., Branch Managers of the bank have filed proof affidavit and additional proof affidavits respectively and produced the loan documents marked as Exhibits A1 to A10. The availing of loans is well established from the documents placed by the applicant bank.

6. The defendants have not filed counter proof affidavit nor adduced any documentary evidence to substantiate their claim and remained absent from the proceeding from 21.11.2017.

7. Heard submissions of the learned counsel for the applicant bank and perused the records of the case. The sole issue arises for consideration is whether the applicant is entitled to recover the amount claimed in this case?

8. A perusal of the materials would reveal that the defendants availed six commercial vehicle loans of Rs.11,33,444/- each, totaling to Rs.68,00,664/- from the applicant bank on 30.11.2011 after executing the security documents marked as Exts.A1 to A4. It could be seen that as the borrowers did not repay the installments in terms of sanction, the accounts became NPA on 31.03.2013. Consequently, the applicant bank issued demand notice under S.13(2) of the SARFAESI Act on 08.05.2013 demanding a sum of Rs.61,15,088/- due as on 31.03.2013. As the defendants failed to repay the dues, possession of the vehicles was taken by the bank. The 1st defendant approached the Hon'ble High Court of Kerala by filing W.P.(C) No.29701/2013 seeking restoration of possession of the vehicles and the writ petition was disposed by judgement dated 04.12.2013 directing him to remit Rs.50 lakhs within a period of one week from 04.12.2013 and the balance amount of Rs.16 lakhs with interest and other charges in five equal monthly installments. Admittedly, the defendants did not comply with the direction of the Hon'ble High Court. The account statements marked as Exts.A8 series establish that an aggregate sum of Rs.75,24,311.56 is outstanding under the loan accounts as on 20.05.2014. In view of the admission made by the defendants as regards the availing of loans and the default in repayment even as per the direction of the Hon'ble High Court, the applicant is entitled to recover the amount claimed in this case from the defendants. The issue is answered in favour of the applicant.

9. In the affidavit filed by the applicant bank on 07.05.2026, it is averred that pending the OA, applicant bank conducted auction of the hypothecated vehicles on 02.01.2015

and recovered an amount of Rs.30 lakhs and the said amount was credited in the loan accounts.

10. Further, it could be seen from paragraph V.9 of the OA and paragraph 8 of the proof affidavit that the applicant bank has charged a sum of Rs.10,01,819.63 by way of penal interest in the loan accounts. It is well settled that penal interest cannot be capitalized and no interest can be charged on penal interest and hence the applicant is not entitled to get any pendente lite and post-decree interest on the aforesaid amount charged in the loan accounts.

11. Pending the OA, the Tribunal passed an order of attachment dated 16.02.2015 in respect of item No.1 property scheduled to IA No.1249/2014 belonging to the 1st defendant. Hence the applicant is entitled to realize the amount found due by sale of the attached property also.

12. Considering the amount advanced, interest and penal interest applied, default committed and substantial recovery effected by sale of the hypothecated vehicles, I am of the view that the applicant bank is entitled to get pendente lite and post- decree interest @10% per annum on the sum of Rs.65,22,491.93 (i.e., after excluding the penal interest of Rs.10,01,819.63 from the OA claim amount of Rs.75,24,311.56), which is reasonable in the facts and circumstances of the case.

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) the sum of Rs.75,24,311.56 (Rupees seventy five lakhs twenty four thousand three hundred and eleven and Paise fifty six only) due under the vehicle loan accounts, less the sum of Rs.30,00,000/- (Rupees thirty lakhs only) recovered by the applicant by sale of the secured assets on 02.01.2015, from the defendants jointly and severally and by sale of item No.1 property attached under IA No.1249/2014;

(ii) pendente lite and post-decree interest @10% per annum on the sum of Rs.65,22,491.93 (Rupees sixty five lakhs twenty two thousand four hundred and ninety one and Paise ninety three only) from 30.05.2014 till realization from the defendants jointly and severally and by sale of item No.1 property attached under IA No.1249/2014; and

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

14. Item No.1 property scheduled to IA No.1249/2014 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 29th day of June, 2026)

[SOVAN KUMAR DASH] PRESIDING OFFICER

A P P E N D I X Witness for Applicant: AW1: Mrs.Vinutha Aiyappan, Branch Manager of the applicant bank. AW2: Mr.Prasanth S., Branch Manager of the applicant bank. AW3: Mr.Suresh N., Branch Manager of the applicant bank. Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 30.11.2011 Deed of hypothecation executed by the defendants. A2 30.11.2011 demand promissory note for Rs.68,00,664/- executed by the defendants. A3 30.11.2011 DPN delivery letter executed by the defendants. A4 30.11.2011 Irrevocable power of attorney executed by the 1st defendant. A5 08.05.2013 Copy of demand notice under S.13(2) of the SARFAESI Act issued to the defendants. A6 08.07.2013 Copy of notice demanding possession of the secured assets issued to the defendants. A7 15.05.2014 Letter issued to Branch Manager of the applicant bank by its Authorised Officer, Regional Office, Thiruvananthapuram. A8 series … Certified copy of the statements of accounts relating to the vehicle loans. A9 … Statement of accounts for the period from 01.01.2015 to 11.01.2024. A10 … Statement of accounts for the period from 01.03.2025 to 24.04.2025.

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 29th June, 2026

TA No.890/2016 (OA No.298/2014)

Between

Dhanlaxmi Bank, Kallambalam Branch, Thiruvananthapuram. …Applicant

And

S.Suresh Babu, Devamatha House, Nedungolam P.O., Paravoor, Kollam & another.

...Defendants

F I N A L O R D E R