UNION BANK OF INDIA vs P SHYAM ALIAS SYAMRAJ on 29 July 2026

1. P.Shyam alias Syamraj,

Proprietor, M/s.Indraprastha Constructions, Murukalayam, Punnapra P.O.

Now at: Arjunam,

Thiruvambadi P.O.,

Alappuzha.

2. P.Babu,

Murukalayam,

Punnapra P.O.,

Alappuzha.

3. E.J.Ranganathan,

Iyyanikkattil House,

Mundathikodu P.O.,

Thrissur.

…Defendants

4. K.P.Ammini,

W/o.late Sreedharan Vaidyar,

Eyanikkattil House,

Mundathicode,

Thrissur – 680 623.

5. E.S.Syama,

D/o.Sreedharan Vaidyar,

Eyanikkattil House,

Mundathicode,

Thrissur – 680 623.

…Additional defendants [Additional defendants 4 and 5 were impleaded as per order dated 10.04.2023 in IA No.1147/2014.] This Original Application having been heard on 21.05.2026 in the presence of Advocate Ms.Sreedevi B., representing counsel for Advocates M/s.A.S.P.Kurup and Sadchith P.Kurup 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.1,08,58,245/- and Rs.33,01,616/- due under CCH account and term loan account respectively together with future interest and costs from the defendants jointly and severally and by sale of the 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 Mumbai and one of its branches at Alappuzha.

3. At the request of the 1st defendant, applicant bank sanctioned the following facilities: Date of sanction Type of loan Amount

Availed by Guarantor Collateral security 31.03.2006 CCH facility Rs.20 lakhs 1st defendant 2nd defendant Item No.1 property 28.09.2006 Enhanced CCH facility Rs.30 lakhs 1st defendant 3rd defendant (through POA holder) Item No.2 property 03.01.2007 Enhanced CCH facility Rs.70 lakhs 1st defendant … … 19.03.2007 Enhanced CCH facility Rs.82 lakhs 1st defendant 3rd defendant (through POA holder) Item No.2 property 28.02.2007 Term loan Rs.25 lakhs 1st defendant 3rd defendant (through POA holder) Item No.2 property

The 1st defendant availed the loans, but he did not make proper and regular repayments. Hence the applicant issued a lawyer notice to the defendants on 11.02.2009 calling upon them to repay the outstanding dues but they did not settle 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.1,41,59,861/- together with pendente lite and post-decree interest thereon from the defendants jointly and severally and by sale of the schedule property;

(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 1st defendant entered appearance as early on 22.12.2009 but he did not file any written statement despite sufficient opportunity granted and hence the chance of filing written statement and counter proof affidavit stood closed on 10.06.2014. Subsequently, the 1st defendant presented a written statement along with IA No.1018/2017 but he did not appear to move the application and hence IA No.1018/2017 was rejected on 29.10.2025.

5. The 2nd defendant was duly served with summons. But he remained absent from the proceeding and hence he was set exparte on 03.08.2010. Written statement

6. The 3rd defendant filed written statement contending inter alia that he has not executed any loan documents guaranteeing repayment of the loan availed by the 1st defendant and hence he is unnecessary party to the proceeding. He purchased the land having an extent of 9 cents as per sale deed No.1139/1990 on 16.04.1990. At this time, one Mr.Kannan, who is the proprietor of M/s.Vijaya Constructions approached him and requested him to stand as guarantor for availing a loan from the applicant bank. Accordingly, the 3rd defendant executed Annexure-A10 power of attorney in favour of the said Kannan authorizing him to avail a loan from the applicant bank in favour of M/s.Vijaya Constructions by offering his property as collateral security. Since the power of attorney was not acted upon, the 3rd defendant executed a settlement deed in favour of his father on 02.03.2007 settling the 9 cents of land covered under sale deed No.1139/1990 along with other properties and as such, this defendant is not the owner of item No.2 property. The documents marked as Annexures-A24 to 26 in the OA are not executed by him which are fabricated by the 1st defendant in connivance with the applicant bank. This defendant initiated criminal proceeding which was registered at Alappuzha South Police bearing FIR No.73/2009 against the bank manager, the 1st defendant and Mr.Kannan. The applicant is not entitled to get any relief against him and the OA is liable to be dismissed with costs.

7. The additional defendants 4 and 5 filed written statement contending that the entire action taken by the 3rd defendant is fraudulent and in collusion with the 1st defendant and applicant bank. Annexure-A10 power of attorney shows that 3rd defendant had executed the same for creating mortgage over the property as collateral security for the advances of M/s.Vijaya Constructions; whereas, the 1st defendant is the proprietor of M/s.Indraprastha Constructions, and such action is beyond the scope of power conferred by the 3rd defendant. Annexure-A10 power of attorney being not acted upon, the property in the name of the 3rd defendant was reconveyed to late E.Sreedharan Vaidhyer as per settlement deed No.1063/2007 dated 02.03.2007. Action of the power holder of the 3rd defendant in mortgaging the property was a fraudulent one which led to a criminal complaint being lodged by the 3rd defendant. In view of the above, there is no valid mortgage in favour of the applicant in respect of item No.2 property and the OA is liable to be dismissed with costs. Proof Affidavit:

8. In order to establish the claim on behalf of the applicant bank, one Mr.C.A.Abraham, Chief Manager and Mr.Arun B.Raj, Branch Manager have filed proof affidavit and additional proof affidavit respectively and produced the loan documents marked as Exhibits A1 to A33. The availing of loans by the 1st defendant is well established from the documents placed by the applicant bank.

9. The 3rd defendant filed counter proof affidavit claiming that he has not executed any loan documents nor visited the branch of the applicant bank in connection with availing of loan by the 1st defendant. He is not aware of any enhanced limit sanctioned to the 1st defendant and the term loan said to have been sanctioned on 28.02.2007. Annexures-A22 and A23 are sham documents executed without the authority of this defendant and hence cannot be acted upon. The OA is filed on an experimental basis relying on fabricated documents and suppressing material facts and hence the same is liable to be dismissed.

10. Heard arguments advanced by the learned counsel for the applicant bank. The 3rd defendant remained absent from the proceeding from 13.06.2017 and none appeared to address argument in this case. The additional defendants 4 and 5 also did not appear in this case from 23.04.2025.

11. The sole question arises for consideration is whether the applicant is entitled to get the relief as claimed in the OA?

12. There is no dispute regarding availing of the subject loans by the 1st defendant. In the letter dated 17.04.2009 marked as Ext.A29, the 1st defendant expressed his willingness to make payments towards the loans to keep the accounts regular. Similarly, the 2nd defendant being the guarantor as well as mortgagor of item No.1 property also did not dispute about the loans availed by the 1st defendant and he remained exparte in the proceeding.

13. The contention raised by the 3rd defendant in the WS is that he never executed any loan documents nor created mortgage over item No.2 property to secure the loans availed by the 1st defendant. However, on perusal of records it appears that the 3rd defendant executed a letter of guarantee dated 14.09.2007 marked as Ext.A24 in respect of the loan availed by the 1st defendant for his proprietary concern M/s.Indraprastha Constructions, guaranteeing due repayment of a sum of Rs.1,07,00,000/- and interest on such amount as may be due at the rate which the principal is liable to pay to the bank from the date of principal’s default until payment. Further, it could be seen that the 3rd defendant had executed letter of extension of mortgage dated 14.09.2007 marked as Ext.A25 wherein he agreed that 9 cents of land in Sy.No.744/1 of Meenaloor Village,

Thalappally Taluk in Thrissur District already mortgaged to the applicant bank by way of equitable mortgage by deposit of title deeds at Alappuzha Branch on 11.12.2006 will continue to be the security to the loan of Rs.1,07,00,000/- granted to M/s.Indraprastha Constructions, proprietor P.Shyam.

14. The 3rd defendant had also seen executed a declaration in favour of the applicant bank wherein at clause (9), it is stated that Union Bank of India, Alappuzha branch has sanctioned business loan for the concern by name and style “Indraprastha Constructions”, a proprietary concern owned by Mr.P.Shyam and he had given Power of Attorney appointing and authorizing Mr.P.K.Kannan, S/o.late Parameswaran as his attorney to execute the mortgage deed with Union Bank of India, Alappuzha, and he ratified the execution of the mortgage deed already made by Mr.P.K.Kannan for and on his behalf. Though the 3rd defendant had claimed non-execution of the loan documents, he failed to substantiate his claim by adducing any convincing evidence. On mere allegations, the contention of the 3rd defendant cannot be accepted.

15. The additional defendants 4 and 5 also have not come forward to substantiate their claim though they filed written statement resisting the claim of the applicant. The securitization

application bearing SA No.13/2009 (renumbered as TSA No.51/2016) filed by Mr.Sreedharan Vaidyar claiming to be the present owner of item No.2 property, was dismissed for default on 25.06.2025.

16. Admittedly, the 1st defendant had availed the subject loans from the applicant bank and there is default in repayment of the loans. It appears from the materials on record that defendants 2 and 3 had executed guarantee agreements and created mortgage over the subject matter properties to secure the loans availed by the 1st defendant and they failed to refute the claim of the applicant bank by adducing convincing evidence. As on the date of OA i.e., on 17.07.2009, an aggregate sum of Rs.1,41,59,861/- is outstanding under the subject loan accounts which is clearly established from the account statements marked as Exts.A30 and A31. In the above circumstance, applicant bank is entitled to recover the said amount from the defendants. The issue is answered accordingly.

17. It is stated by the applicant bank in paragraph 12 of the proof affidavit that it has charged a sum of Rs.4,499/- 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 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 account.

18. Considering the amount advanced, interest and penal interest applied, repayments effected and default committed, I am of the view that 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.

19. 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: CCH account Rs.1,08,58,245/- (Rupees one crore eight lakhs fifty eight thousand two hundred and forty five only) together with pendente lite and post-decree interest thereon @10% per annum from 24.07.2009 till realization from defendants 1 to 3 jointly and severally and by sale of the schedule item Nos.1 and 2 properties; Term loan account Rs.33,01,616/- (Rupees thirty three lakhs one thousand six hundred and sixteen only) together with pendente lite and post-decree interest on the sum of Rs.32,97,117/- (Rupees thirty two lakhs ninety seven thousand one hundred and seventeen only) @10% per annum from 24.07.2009 till realization from defendants 1 and 3 jointly and severally and by sale of the schedule item No.2 property; and 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.

20. The schedule to the OA shall be appended to this final order.

21. The applicant bank shall file memo of costs within ten days from the date of this final order.

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

23. 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 July, 2026)

[SOVAN KUMAR DASH] PRESIDING OFFICER

A P P E N D I X Witness for Applicant: AW1: Sri.C.A.Abraham, Chief Manager of the applicant bank. AW2: Sri.Arun B.Raj, Branch Manager of the applicant bank.

Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 31.03.2006 Demand promissory note for Rs.20 lakhs executed by the 1st defendant. A2 31.03.2006 Letter of continuity executed by the 1st defendant. A3 31.03.2006 Hypothecation agreement executed by the 1st defendant. A4 31.03.2006 Letter of guarantee executed by the 2nd defendant. A5 07.11.1984 Sale deed No.2940/1984 of Alappuzha SRO. A6

25.03.2006 Memorandum of deposit of title deeds drawn by the applicant bank. A7

28.09.2006 Demand promissory note for Rs.30 lakhs executed by the 1st defendant. A8

28.09.2006 Letter of continuity executed by the 1st defendant. A9

28.09.2006 Hypothecation agreement of goods and debts executed by the 1st defendant. A10 23.11.2006 Notarised copy of the power of attorney entrusted to the applicant bank. A11 11.12.2006 Letter of guarantee executed by the 3rd defendant through his power of attorney holder. A12 16.04.1990 Title deed No.1139/1990 of Vadakkancherry SRO. A13 12.12.2006 Memorandum of deposit of title deeds drawn by the applicant bank.

A14 03.01.2007 Demand promissory note for Rs.70 lakhs executed by the 1st defendant. A15 03.01.2007 Letter of continuity executed by the 1st defendant. A16 03.01.2007 Hypothecation agreement executed by the 1st defendant. A17 28.02.2007 Demand promissory note for Rs.25 lakhs executed by the 1st defendant. A18 28.02.2007 Term loan agreement executed by the 1st defendant. A19 19.03.2007 Demand promissory note for Rs.82 lakhs executed by the 1st defendant. A20 19.03.2007 Letter of continuity executed by the 1st defendant. A21 19.03.2007 Hypothecation agreement executed by the 1st defendant. A22 19.03.2007 Letter of guarantee executed by the 3rd defendant through his power of attorney holder. A23 19.03.2007 Letter of extension of mortgage executed by the 3rd defendant through his power of attorney holder. A24 14.09.2007 Letter of guarantee executed by the 3rd defendant. A25 14.09.2007 Letter of extension of mortgage executed by the 3rd defendant. A26 11.02.2009 Copy of lawyer notice issued to the defendants. A27 14.02.2009 & 16.02.2009 Postal acknowledgement cards (3 Nos.) signed by the defendants. A28 21.02.2009 Reply to Ext.A26 lawyer notice sent by the 3rd defendant. A29 17.04.2009 Letter sent to the applicant bank by the 1st defendant stating that he is willing to make substantial payments into the loan accounts. A30 … Certified copy of the statement of account relating to the CCH facility. A31 … Certified copy of the statement of account relating to the term loan.

A32 … Certified copy of the statement of account relating to the CCH facility for the period from 01.01.2008 to 10.11.2023. A33 … Certified copy of the statement of account relating to the term loan for the period from 01.01.2008 to 10.11.2023.

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 29th July, 2026

TA No.1263/2016 (OA NO.238/2009)

Between

Union Bank of India, Alappuzha Branch, Kabeer Plaza, Mullakkal, Alappuzha District.

…Applicant

And

P.Shyam alias Syamraj, Proprietor, M/s.Indraprastha Constructions, Murukalayam, Punnapra P.O. Now at: Arjunam, Thiruvambadi P.O., Alappuzha & 4 others.

…Defendants &

additional defendants

F I N A L O R D E R