STATE BANK OF INDIA vs Mini Mathew on 31 July 2026

1. Mini Mathew,

W/o.T.M.Mathew,

Proprietrix,

Mini Enterprises,

Ettichuvadu P.O., Ranni,

Pathanamthitta District.

Residing at:

Kottayam District.

2. T.M.Mathew,

Kottayam District.

…Defendants

This Original Application having been heard on 14.07.2026 in the presence of Advocate Smt.Thankom Mukundakrishnan for TA 651/2016 (OA 383/2016)

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.22,45,557/- due under cash credit account together with future interest thereon @13.45% per annum with monthly rests plus penal interest @2% per annum from the defendants jointly and severally and by sale of the schedule properties; and the sum of Rs.8,96,085/- due under ‘kissan’ gold card account together with future interest thereon @12.95% per annum with half yearly rests plus penal interest @2% per annum from the 1st defendant and by sale of the schedule properties. Facts of the case:

2. The applicant is a body corporate constituted under the State Bank of India Act, 1955 having branches at various places including one at Ranni in Pathanamthitta District.

3. The 1st defendant approached the Ranni Branch of erstwhile State Bank of Travancore seeking financial assistance. Considering her request, the bank sanctioned the following facilities:

TA 651/2016 (OA 383/2016)

Date of sanction Type of loan Amount

Availed by Guarantor Collateral security 15.02.2007 Cash credit Rs.15 lakhs 1st defendant … ‘A’ schedule properties and item Nos.1 to properties in ‘B’ schedule 27.07.2011 Enhanced cash credit Rs.20 lakhs 1st defendant 2nd defendant ‘A’ and ‘B’ schedule properties 03.08.2010 Kissan gold card Rs.10 lakhs 1st defendant … ‘A’ schedule properties and item Nos.1 to 4 properties in ‘B’ schedule Kissan credit card Rs.1.50 lakhs Kissan credit card loan was subsequently closed.

After availing the loans, the defendants defaulted in repayment and the accounts became irregular. All efforts made by the bank to get the loan accounts settled have turned futile. Being unable to recover the outstanding dues, the applicant was constrained to file the OA claiming the following reliefs:

(i) To recover an aggregate sum of Rs.31,41,642/- together with pendente lite and post-decree interest thereon from the defendants and by sale of the schedule properties;

(ii) To recover the costs, charges and expenses from the defendants; TA 651/2016 (OA 383/2016)

(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 filed written statement denying the averments and execution of the loan documents. It is contended that the OA is barred by limitation. It is true that the 1st defendant availed cash credit facility from the bank and the original title deeds were handed over to the bank at the time of applying for the loans but the defendants have not executed memorandum of deposit of title deeds or extension of mortgage. The blank forms with the signature of the defendants obtained by the applicant bank were subsequently filled up to suit its case. The applicant bank had never put the defendants on notice about the various terms mentioned in the documents. It is claimed that they had made substantial payments into the loan accounts but thereafter they were unable to operate the accounts regularly due to reasons beyond their control. The amount claimed in the OA is incorrect and the applicant is not entitled to realize the said amount from the defendants. Hence the OA may be dismissed with costs.

TA 651/2016 (OA 383/2016)

Proof Affidavit:

5. To establish the claim on behalf of the applicant bank, one Mr.P.M.Bridget, Chief Manager has filed proof affidavit and produced the loan documents marked as Exhibits A1 to A25. The availing of the loans is well established from the documents placed by the applicant bank.

6. The defendants filed counter proof affidavit reiterating the averments in their written statement. Further, they sought to give an opportunity for negotiating and bringing in prospective purchasers for the secured properties to close the liability.

7. Heard arguments advanced by the learned counsel for the applicant bank. The defendants remained absent from the proceeding from 24.07.2019.

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

9. On careful consideration of the pleadings and evidence available on record, it appears that there is no dispute about availing of the subject loans and creation of hypothecation as well as mortgage charge over the schedule properties. Admittedly, there is default in repayment of the loans. Further, the 1st defendant executed Ext.A20 revival letter dated 26.07.2013 in respect of the kissan gold card loan of Rs.10 lakhs TA 651/2016 (OA 383/2016)

and defendants 1 and 2 executed Ext.A21 revival letter dated 17.06.2014 in respect of the cash credit limit of Rs.20 lakhs whereby they acknowledged the liability under the respective loan accounts and the OA is filed within the statutory period of limitation on 02.05.2016. In all the loan documents, the defendants had put their signatures in English. At the time of execution of such documents, the defendants had not claimed that they did not understand the documents executed by them. Hence the claim of the defendants is not sustainable in absence of any satisfactory evidence. When the defendants availed loans by depositing title deeds to secure the same, presumption can be drawn due execution of the loan documents. No material evidence is placed by the defendants to establish the plea of fraudulent creation of loan documents by obtaining of their signatures over blank forms. In absence of any rebuttal evidence, the contention of the defendants cannot be accepted.

10. The documents marked as Exts.A1 to A25 would substantiate the claim of the applicant bank. An aggregate sum of Rs.31,41,642/- is outstanding under the loan accounts as on 01.05.2016, which is clearly established from the account statements marked as Exts.A22, A23 and A25. In the above circumstances, the applicant is entitled to recover the said TA 651/2016 (OA 383/2016)

amount from the defendants. The issue is answered in favour of the applicant.

11. The statement marked as Ext.A25 would show that the applicant has charged a sum of Rs.51,347/- by way of penal interest in the cash credit account. 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 cash credit account.

12. 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 in the manner stated below, 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.22,45,557/- (Rupees twenty two lakhs forty five thousand five hundred and fifty seven only) due under the cash credit account together with pendente lite and post-decree interest @12% per TA 651/2016 (OA 383/2016)

annum on the sum of Rs.21,94,210/- (Rupees twenty one lakhs ninety four thousand two hundred and ten only) from 02.05.2016 till realization from the defendants jointly and severally and by sale of ‘A’ and ‘B’ schedule properties;

(ii) the sum of Rs.8,96,085/- (Rupees eight lakhs ninety six thousand and eighty five only) due under the kissan gold card account together with pendente lite and post-decree interest thereon @6% per annum from 02.05.2016 till realization from the 1st defendant and by sale of ‘A’ schedule properties and item Nos.1 to 4 in ‘B’ schedule properties; 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.

14. ‘A’ and ‘B’ schedules to the OA 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.

TA 651/2016 (OA 383/2016)

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 31st day of July, 2026)

[SOVAN KUMAR DASH] PRESIDING OFFICER

TA 651/2016 (OA 383/2016)

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

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 15.02.2007 Sanction letter issued by the bank sanctioning cash credit limit of Rs.15 lakhs to the 1st defendant. A2 15.02.2007 Agreement for hypothecation executed by the 1st defendant. A3 15.02.2007 Demand promissory note for Rs.15 lakhs executed by the 1st defendant. A4 30.04.1997 Title deed No.1010/1997 of Erumeli SRO. A5 30.04.1997 Title deed No.1012/1997 of Erumeli SRO. A6 05.06.1998 Rectification deed No.936/1998 of Erumeli SRO. A7 30.04.1997 Sale deed No.1013/1997 of Erumeli SRO. A8 21.12.2006 Sale deed No.3471/2006 of Erumeli SRO. A9 15.02.2007 Memorandum of deposit of title deeds executed by the 1st defendant. A10 03.08.2010 Letter of arrangement issued by the bank. A11 03.08.2010 Hypothecation agreement executed by the 1st defendant. A12 03.08.2010 Memorandum of extension of equitable mortgage executed by the 1st defendant. A13 27.07.2011 Sanction letter issued by the bank sanctioning the enhanced cash credit limit of Rs.20 lakhs to the 1st defendant. A14 27.07.2011 Hypothecation cum working capital agreement executed by the 1st defendant. A15 28.07.2011 Memorandum of extension of equitable mortgage executed by the 1st defendant. A16 27.07.2011 Guarantee agreement executed by the 2nd defendant.

TA 651/2016 (OA 383/2016)

A17 31.05.1983 Certified copy of title deed No.2104/1983. A18 28.07.2011 Memorandum of extension of equitable mortgage executed by the 2nd defendant. A19 28.12.2009 Revival letter executed by the 1st defendant. A20 26.07.2013 Revival letter executed by the 1st defendant. A21 17.06.2014 Revival letter executed by the defendants. A22 … Certified copy of the statement of account relating to the cash credit facility. A23 … Certified copy of the statement of account relating to the kissan gold card facility. A24 … Statement showing the rate of interest applied in the loan accounts from time to time. A25 … Statement showing the interest accrued and penal interest charged in the cash credit account.

Defendants’ Exhibits – Nil

PRESIDING OFFICER

TA 651/2016 (OA 383/2016)

TA 651/2016 (OA 383/2016)

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TA 651/2016 (OA 383/2016)

TA 651/2016 (OA 383/2016)

TA 651/2016 (OA 383/2016)

PRESIDING OFFICER

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

Dated the 31st July, 2026

TA No.651/2016 (OA NO.383/2016)

Between

State Bank of India, Ranni Branch, Manimalethu Building, Angadi P.O., Ranni, Pathanamthitta District. …Applicant

And

Mini Mathew, W/o.T.M.Mathew, Proprietrix,

Mini Enterprises, Ettichuvadu P.O., Ranni, Pathanamthitta District. Residing at:

Kottayam District & another.

…Defendants

F I N A L O R D E R