CANARA BANK vs Retheesh Kumar S on 30 June 2026

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

Dated this the 30th day of June, 2026

TA No.1284/2016 (OA No.381/2012) Between

Canara Bank, Ranni Branch, SNDP Building, Ranni – 689 672.

…Applicant

And

Retheesh Kumar S.,

S/o.C.K.Sasi,

Proprietor, M/s.Gowri Arts Flex Printing and Sticker Cutting Unit, Charivu Vilayil House, Vayyattupuzha P.O., Chittur, Pathanamthitta District – 689 663. …Defendant This Original Application having been heard on 29.05.2026 in the presence of Advocate Ms.Jessy George 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.10,71,416/- and Rs.55,620/- due under term loan account and cash credit account respectively together with future interest thereon @15.50% per annum with monthly rests and @16.25% per annum with monthly rests from the defendant and by sale of ‘A’ 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 one of its branches at Ranni in Pathanamthitta District.

3. At the request of the defendant, applicant bank sanctioned a term loan of Rs.8.64 lakhs and a cash credit limit of Rs.50,000/- under PMEGP Scheme as per sanction letter dated 30.06.2010. The defendant availed the facilities and hypothecated the articles described in ‘A’ schedule as security for the loans. The defendant has also executed necessary security documents to secure repayment of the loans. After availing the facilities, the defendant did not adhere to the repayment schedule and committed default in repayments. Hence the applicant issued a lawyer notice dated 23.02.2012 calling upon the defendant to repay the outstanding dues but he did not liquidate the liability.

In such premises, the applicant was constrained to file the OA claiming the following reliefs:

(i) To recover an aggregate sum of Rs.11,27,036/- together with pendente lite and post-decree interest thereon from the defendant and by sale of ‘A’ schedule properties;

(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. Written statement

4. The defendant filed written statement contending inter alia that the bank sanctioned an amount of Rs.8.64 lakhs as term loan and he repaid more than Rs.1.50 lakhs and hence the applicant has no pecuniary jurisdiction to file the OA, which is liable to be dismissed. Proof Affidavit:

5. To establish the claim on behalf of the applicant bank, one Mr.G.Mathukutty, Branch Manager of the bank filed proof affidavit and Mr.Rajesh K.S. and Mrs.Vidya S., Senior Managers have filed additional proof affidavits and produced the loan documents marked as Exhibits A1 to A19.

6. The defendant filed counter proof affidavit claiming that the applicant has applied higher rate of interest in the loan accounts which is against the RBI guidelines and the interest calculated is incorrect. The agreement of loan is unilateral and illegal. The installments remitted by the defendant is not properly accounted. In view of the above, the OA is liable to be dismissed with costs.

7. Heard submissions of the learned counsel for the applicant bank and perused the materials on record. The defendant remained absent from the proceeding from 20.09.2017 and none appeared and represented for him to address argument in this case.

8. The sole issue arises for consideration is whether the applicant is entitled to get the relief as claimed in this case?

9. There is no dispute with regard to the availing of loans from the applicant bank. The defendant has not produced any material to substantiate his contentions raised in his written statement as well as in the counter proof affidavit. At the time of availing the loans i.e., cash credit limit (SME) of Rs.50,000/- and term loan (SME) of Rs.8.64 lakhs, the defendant had executed letter of undertaking dated 30.06.2010 marked as Ext.A6 wherein he agreed to abide by the terms of Ext.A5 sanction letter as regards the rate of interest applicable to the loans and other terms and conditions of sanction. The account statements would show that he had not remitted the installments regularly and there is default in repayment of the loans. An aggregate sum of Rs.11,27,036/- is outstanding in the loan accounts as on 31.07.2012, which is clearly established from the account statements marked as Exts.A14 and A16 and the applicant is entitled to recover the same from the defendant.

10. It is averred in paragraph 8 of the proof affidavit that the applicant has charged a sum of Rs.6,595/- 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. Hence the applicant bank is not entitled to get any pendente lite and post-decree interest on the aforesaid amount of Rs.6,595/- charged in the term loan account. The issue is answered accordingly.

11. On perusal of the account statements marked as Exts.A18 and A19 and the additional proof affidavit filed by the applicant on 25.01.2024, it could be discerned that subsequent to filing of the OA, the following amounts were recovered by the applicant bank: Date Details of account Amount 07.12.2012 Term loan Rs.50,000/- 02.01.2014 Term loan Rs.3,50,000/- 01.03.2016 Term loan Rs.18,000/- 07.12.2012 Cash credit Rs.15,000/-

12. Pending the OA, the Tribunal passed an order of conditional attachment in IA No.2475/2012 on 11.09.2012 in respect of the property scheduled therein. As the defendant failed to furnish security for the required sum or to show cause why such security should not be furnished within the stipulated time and the applicant has made out a case for attachment of the property, the conditional attachment was made absolute on 20.08.2025. Hence the applicant bank is entitled to realize the amount found due as above by sale of the attached property also.

13. 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 @10% per annum, 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, applicant bank is given a final order allowing it to recover the amount as shown below: Term loan account Rs.10,71,416/- (Rupees ten lakhs seventy one thousand four hundred and sixteen only) together with pendente lite and post-decree interest on the sum of Rs.10,64,821/- (Rupees ten lakhs sixty four thousand eight hundred and twenty one only) @10% per annum from 10.09.2012 till realization, less the amount recovered by the applicant bank as stated in paragraph No.11 of this final order, from the defendant and by sale of ‘A’ schedule properties, if available, and also from the property attached under IA No.2475/2012; Cash credit account Rs.55,620/- (Rupees fifty five thousand six hundred and twenty only) together with pendente lite and post-decree interest thereon @10% per annum from 10.09.2012 till realization, less the amount recovered by the applicant bank as stated in paragraph No.11 of this final order, from the defendant and by sale of ‘A’ schedule properties, if available, and also from the property attached under IA No.2475/2012; and costs and expenses borne by it for realization of the loans from the defendant.

15. ‘A’ schedule to the OA and schedule to IA No.2475/2012 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.

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 30th day of June, 2026)

[SOVAN KUMAR DASH] PRESIDING OFFICER

A P P E N D I X Witness for Applicant: AW1: Sri.G.Mathukutty, Branch Manager of the applicant bank. AW2: Sri.Rajesh K.S., Senior Manager of the applicant bank. AW3: Smt.Vidya S., Senior Manager of the applicant bank. Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 16.03.2002 Notarized copy of general power of attorney executed by the applicant bank in favour of AW1. A2 27.08.2010 Letter of proprietorship executed by the defendant. A3 … Common application for credit facilities submitted by the defendant. A4 18.06.2010 Letter addressed to the applicant bank by District Industries Centre, Pathanamthitta. A5 30.06.2010 Sanction memorandum issued by the applicant bank sanctioning OCC limit of Rs.50,000/- and term loan of Rs.8.64 lakhs. A6

30.06.2010 Letter of undertaking executed by the defendant. A7

30.06.2010 Pronote for Rs.8.64 lakhs executed by the defendant. A8

30.06.2010 Take delivery letter executed by the defendant. A9

27.08.2010 Request for overdraft facility submitted by the defendant. A10 30.06.2010 Deed of hypothecation of machinery executed by the defendant. A11 27.08.2010 Cash credit agreement executed by the defendant. A12 23.02.2012 Copy of lawyer notice issued to the defendant. A13 15.03.2012 Acknowledgement card signed by the defendant. A14 … Certified copy of the statement of account relating to the term loan. A15 … Statement showing the rate of interest applied in Ext.A14 account from time to time.

A16 … Certified copy of the statement of account relating to the cash credit facility. A17 … Statement showing the rate of interest applied in Ext.A16 account from time to time. A18 … Statement of account in respect of cash credit account for the period from 01.01.2010 to 31.12.2023. A19 … Statement of account in respect of term loan account for the period from 30.06.2010 to 28.12.2023.

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 30th June, 2026

TA No.1284/2016 (OA No.381/2012)

Between

Canara Bank, Ranni Branch, SNDP Building, Ranni – 689 672. …Applicant

And

Retheesh Kumar S., S/o.C.K.Sasi, Proprietor, M/s.Gowri Arts Flex Printing and Sticker Cutting Unit, Charivu Vilayil House, Vayyattupuzha P.O., Chittur, Pathanamthitta District. …Defendant

F I N A L O R D E R