FEDERAL BANK vs Jancy Emmanuel on 31 July 2026

1. Jancy Emmanuel,

W/o.Emmanuel Thomas,

Chittakattu,

Kurichithanam P.O.,

Uzhavoor,

Kottayam – 686 634.

2. Emmanuel Thomas,

S/o.Thomas,

Chittakattu,

Kurichithanam P.O.,

Uzhavoor,

Kottayam – 686 634.

…Defendants

This Original Application having been heard on 07.07.2026 in the presence of Advocate Sri.Peter Tharakan for the applicant bank and Advocate Sri.V.K.Peer Mohamed Khan 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.12,99,004.85 due under FKCC loan account together with future interest on the sum of Rs.12,64,936/- @14.70% per annum with yearly rests from the defendants and by sale of ‘A’ and ‘B’ schedule properties. 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 Uzhavoor in Kottayam District.

3. During November, 2010 the defendants approached the applicant bank seeking financial assistance for seasonal agricultural operations. Considering their request, applicant bank sanctioned a Federal Kisan Credit Card (FKCC) loan of Rs.7.50 lakhs which was availed by them after executing necessary security documents. As security for the loan, the defendants hypothecated the mixed crops described in ‘A’ schedule and the 1st defendant created equitable mortgage over ‘B’ schedule property and executed letter dated 29.11.2010 confirming the deposit of title deed and creation of mortgage. The defendants failed and neglected to repay the loan as per the terms and conditions of the loan agreement. Hence the applicant issued a notice under S.13(2) of the SARFAESI Act calling upon the defendants to repay the outstanding dues. As they failed to settle the liability, the applicant filed the OA claiming the following reliefs:

(i) To recover the sum of Rs.12,99,004.85 together with pendente lite and post-decree interest on the sum of Rs.12,64,936/- from the 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. Written statement

4. The defendants filed written statement denying the averments in the OA. It is contended inter alia that the documents are created taking signatures of the defendants on the blank papers. The defendants did not agree to pay interest @11.50% per annum with quarterly rests as claimed by the applicant. Since the facility granted being an agricultural loan, interest is to be calculated on annual basis as per the circular issued by the RBI. It is true that the 1st defendant is the owner in possession of 6.74 Ares in Kurichithanam Village but the claim of the applicant as regards the creation of mortgage in respect of the said property is incorrect. They did not execute balance confirmation letter dated 19.06.2013. The applicant is not entitled to charge interest at the end of every quarter and to add such amount in the outstanding balance. The claim of the applicant is liable to be rejected and the OA may be dismissed. Proof Affidavit:

5. In order to establish the claim on behalf of the applicant bank, one Mr.Jebin K.Jose, Senior Manager has filed proof affidavit and additional proof affidavit and produced the loan documents marked as Exhibits A1 to A11. The availing of the FKCC loan is well established from the documents placed by the applicant bank.

6. The defendants filed counter proof affidavit reiterating the same averments in the written statement and prayed to dismiss the OA with costs.

7. Heard arguments advanced by the learned counsel appearing on either side and perused the materials on record.

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

9. On a conspectus of the pleadings and evidence available on record, it appears that the applicant bank sanctioned an FKCC loan of Rs.7.50 lakhs to the defendants on 27.11.2010. While availing the loan, the defendants executed demand promissory note dated 27.11.2010 marked as Ext.A1 wherein the defendants promised to pay the loan amount together with interest @11.50% per annum with monthly rests/quarterly rests. The defendants have also executed Ext.A2 security delivery letter and Ext.A3 agreement for agricultural loan wherein the securities furnished to the bank, both movable and immovable, were stated and they affixed their signature on the said documents. Ext.A3 agreement would show that the defendants had agreed to pay interest @11.50% per annum or at such rates as may be prescribed by the bank or RBI from time to time. On execution of relevant documents, the defendants have given their explicit consent to the bank to charge interest as per the terms and conditions of the contract and hence the contrary contention raised by them is unsustainable.

10. The 1st defendant had executed Ext.A5 letter dated 29.11.2010 confirming the deposit of Ext.A4 sale deed

No.1712/2007 dated 23.06.2007 with the applicant bank on 27.11.2010 with the intention to create mortgage as continuing collateral security for the FKCC limit of Rs.7.50 lakhs granted by the bank. The defendants had also executed balance and security confirmation letter dated 19.06.2013 confirming the balance outstanding under the loan account as on 18.06.2013 and also the securities furnished to the bank to secure the subject loan.

11. In this OA the defendants claim their signatures were taken on blank papers by the applicant bank. Since the defendants availed loan, presumption can be drawn that they executed the loan documents after understanding the nature and purport of the same. No satisfactory evidence is placed to arrive at a conclusion that the loan documents were procured fraudulently from them. In absence of any evidence, the claim of the defendants cannot be believed. It is concluded that they executed documents after understanding true purport of the same.

12. The evidence adduced by the applicant bank marked as Ext.A1 to A11 would substantiate their claim. Ext.A8 account statement would demonstrate that interest was calculated annually in the subject loan account except from the date of availing of loan till 31.03.2011. The penal interest charged in the account and the effect of capitalization of penal interest are excluded from the claim. An amount of Rs.12,99,004.85 is outstanding under the subject loan account as on 11.08.2015, which is clearly established from the account statements marked as Exts.A8 and A9. In view of the above, applicant bank is entitled to recover the said amount from the defendants. The issue is answered in favour of the applicant.

13. Considering the amount advanced, interest and penal interest applied, repayments effected and the facility granted being an agricultural loan, I am of the view that the applicant bank is entitled to get pendente lite and post decree interest @6% per annum on agricultural loan and the applicant bank is not entitled interest in excess of such rate.

14. 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.12,99,004.85 (Rupees twelve lakhs ninety nine thousand four and Paise eighty five only) due under the FKCC account from the defendants and by sale of ‘A’ and ‘B’ schedule properties;

(ii) pendente lite and post-decree interest @6% per annum on the sum of Rs.12,64,936/- (Rupees twelve lakhs sixty four thousand nine hundred and thirty six only) from 12.08.2015 till realization from the defendants and by sale of ‘A’ and ‘B’ schedule properties; and

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

15. ‘A’ and ‘B’ schedule properties to the OA 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.

17. Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of the final order.

18. 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

A P P E N D I X Witness for Applicant: AW1: Sri.Jebin K.Jose, Senior Manager of the applicant bank.

Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 27.11.2010 Demand promissory note for Rs.7.50 lakhs executed by the defendants. A2 27.11.2010 Security delivery letter executed by the defendants. A3 27.11.2010 Agreement for agricultural loan executed by the defendants. A4 23.06.2007 Sale deed No.1712/2007 of Kuravilangad SRO. A5 29.11.2010 Letter executed by the 1st defendant confirming the deposit of title deed with the applicant bank. A6

19.06.2013 Balance confirmation letter executed by the defendants. A7

19.01.2015 Copy of demand notice under S.13(2) of the SARFAESI Act issued to the defendants. A8

… Certified copy of the statement of account relating to the FKCC loan. A9

… Statement showing the unapplied interest under Ext.A8 account. A10 … Statement showing the penal interest charged in Ext.A8 account and capitalized portion thereof. A11 … Statement showing the rate of interest applied in Ext.A8 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 31st July, 2026

TA No.998/2016 (OA NO.380/2015)

Between

The Federal Bank Ltd., Uzhavoor Branch, Kottayam.

…Applicant

And

Jancy Emmanuel, W/o.Emmanuel Thomas, Chittakattu, Kurichithanam P.O., Uzhavoor, Kottayam – 686 634 & another.

...Defendants

F I N A L O R D E R