FEDERAL BANK vs K.P SUNNY on 13 July 2026

1. K.P.Sunny,

S/o.Philipose,

House No.175, Asha Cottage,

AKG Nagar, Peroorkada P.O.,

Thiruvananthapuram – 695 005.

2. Manjusha Sunny,

W/o.K.P.Sunny,

House No.175, Asha Cottage,

AKG Nagar, Peroorkada P.O.,

Thiruvananthapuram – 695 005.

3. George Thomas,

S/o.Thomas,

Thakidiparathu House, Kallarpattom Colony,

Kombayar.P.O.,

Idukki District – 685 554.

4. Lissy George,

W/o.George Thomas,

Thakidiparathu House, Kallarpattom Colony,

Kombayar.P.O.,

Idukki District – 685 554.

…Defendants

This Original Application having been heard on 23.06.2026 in the presence of Advocate Smt.Keerthi K.Narayan 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.17,77,164/- due under FML-1 account together with future interest thereon @21.25% per annum with monthly rests from defendants 1 to 3 and by sale of ‘A’ and ‘B’ schedule properties; and the sum of Rs.8,42,316/- due under FML-2 account with together with future interest thereon @21.25% per annum with monthly rests from defendants 1, 3 and 4 and by sale of ‘B’ schedule property. Facts of the case:

2. The applicant is a banking company constituted under the Companies Act, 1956 having its registered office at Aluva and a branch among other places at Thiruvananthapuram/Statue in Thiruvananthapuram District.

3. At the request of the defendants, applicant bank sanctioned the following credit facilities:

Date of sanction Type of loan Amount Availed by Co-obligants Collateral security 07.01.2006 Federal mortgage loan (FML-1) Rs.10 lakhs 1st defendant Defendants 2 and 3 ‘A’ and ‘B’ schedule properties 22.07.2006 Federal mortgage loan (FML-2) Rs.5 lakhs 3rd defendant Defendants 1 and 4 ‘B’ schedule property

The defendants availed the facilities but committed default in repayment. Hence the applicant issued lawyer notices dated 26.07.2008 and 15.12.2010 calling upon the defendants to repay the outstanding dues but they failed to settle the liability. In such premises, applicant bank was constrained to file the OA claiming the following reliefs:

(i) To recover an aggregate sum of Rs.26,19,480/- together with pendente lite and post-decree interest thereon from the respective defendants and by sale of ‘A’ and ‘B’ 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 entered appearance and presented a written statement but the same was rejected on 28.09.2015 for not rectifying the defects noted by the Registry. They remained absent from the proceeding from 17.12.2025 and none appeared to address argument in this case. Proof Affidavit:

5. To establish the claim on behalf of the applicant bank, one Mr.Tom Thomas Thekkel, Chief Manager of the bank has filed proof affidavit and produced the loan documents marked as Exhibits A1 to A24. The proof affidavit filed by AW1 and the documents produced in this case are not challenged by the defendants. The availing of the loans and creation of mortgage over the schedule properties are well established from the documents placed by the applicant bank. An aggregate sum of Rs.26,19,480/- is outstanding in the loan accounts as on 14.09.2011, which is clearly established from the account statements marked as Exts.A19 and A20.

6. Further, it could be seen from Exts.A23 and A24 statements that the applicant has charged a sum of Rs.45,105/- and Rs.19,004/- by way of penal interest in FML-1 account and FML-2 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.

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.17,32,059/- (i.e., after excluding the penal interest of Rs.45,105/- from the OA claim amount of Rs.17,77,164/-) in FML-1 account and @12% per annum on the sum of Rs.8,23,312/- (i.e., after excluding the penal interest of Rs.19,004/- from the OA claim amount of Rs.8,42,316/-) in FML- 2 account, 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, applicant bank is given a final order allowing it to recover:

(i) the sum of Rs.17,77,164/- (Rupees seventeen lakhs seventy seven thousand one hundred and sixty four only) due under FML-1 account together with pendente lite and post-decree interest on the sum of Rs.17,32,059/- (Rupees seventeen lakhs thirty two thousand and fifty nine only) @12% per annum from 15.09.2011 till realisation from defendants 1 to 3 and by sale of ‘A’ and ‘B’ schedule properties;

(ii) the sum of Rs.8,42,316/- (Rupees eight lakhs forty two thousand three hundred and sixteen only) due under FML-2 account together with pendente lite and post-decree interest on the sum of Rs.8,23,312/- (Rupees eight lakhs twenty three thousand three hundred and twelve only) @12% per annum from 15.09.2011 till realisation from defendants 1, 3 and 4 and by sale of ‘B’ schedule property; 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 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 July, 2026)

[SOVAN KUMAR DASH] PRESIDING OFFICER

A P P E N D I X Witness for Applicant: AW1: Sri.Tom Thomas Thekkel, Chief Manager of the applicant bank. Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 07.01.2006 Demand Promissory Note for Rs.10 lakhs executed by defendants 1 to 3 in favour of the applicant bank. A2 07.01.2006 Security delivery letter executed by defendants 1 to 3 in favour of the applicant bank. A3 07.01.2006 Agreement for mortgage loan executed by defendants 1 to 3 in favour of the applicant bank. A4 04.12.2004 Sale deed No.2351/2004 of Udumbanchola SRO. A5 18.06.1983 Sale deed No.909/1983 of Udumbanchola SRO. A6

09.01.2006 Letter executed by the 1st defendant confirming the deposit of title deed with the applicant bank. A7

09.01.2006 Letter executed by the 3rd defendant confirming the deposit of title deed with the applicant bank. A8

22.07.2006 Demand Promissory Note for Rs.10 lakhs executed by defendants 1, 3 and 4 in favour of the applicant bank. A9

22.07.2006 Security delivery letter executed by defendants 1, 3 and 4 in favour of the applicant bank. A10 22.07.2006 Agreement for mortgage loan executed by defendants 1, 3 and 4 in favour of the applicant bank. A11 24.07.2006 Letter executed by the 3rd defendant confirming the creation and extension of the mortgage. A12 05.01.2009 Balance confirmation letter executed by defendants 1 to 3 confirming the balance under FML-1 account as on 31.12.2008. A13 05.01.2009 Balance confirmation letter executed by defendants 1 to 3 confirming the balance under FML-1 account as on 15.07.2010.

A14 16.07.2010 Balance confirmation letter executed by defendants 1, 3 and 4 confirming the balance under FML-2 account. A15 26.07.2008 Copy of lawyer notice issued to defendants 1 to 3 calling upon them to repay the amount due under FML-1 account. A16 26.07.2008 Copy of lawyer notice issued to defendants 1, 3 and 4 calling upon them to repay the amount due under FML-2 account. A17 15.12.2010 Copy of lawyer notice issued to defendants 1 to 3 calling upon them to repay the amount due under FML-1 account. A18 15.12.2010 Copy of lawyer notice issued to defendants 1, 3 and 4 calling upon them to repay the amount due under FML-2 account. A19 ... Certified copy of the statement of account relating to FML-1. A20 ... Certified copy of the statement of account relating to FML-2. A21 ... Statement showing the rate of interest applied in Ext.A19 account from time to time. A22 ... Statement showing the rate of interest applied in Ext.A20 account from time to time. A23 ... Statement showing the penal interest charged in Ext.A19 account and capitalisation value thereof. A24 ... Statement showing the penal interest charged in Ext.A20 account and capitalisation value thereof.

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 July, 2026

TA No.1451/2016 (OA NO.387/2011)

Between

The Federal Bank Ltd., Thiruvananthapuram/Statue Branch, P.B.No.2, 1st Floor, Federal Towers, M.G.Road, Thiruvananthapuram. …Applicant

And

K.P.Sunny, S/o.Philipose, House No.175, Asha Cottage, AKG Nagar, Peroorkada.P.O., Thiruvananthapuram and 3 others.

…Defendants

F I N A L O R D E R