FEDERAL BANK vs BIJU P.V on 7 September 2026

1. Biju P.V. alias Biju Varghese,

S/o.Varghese,

Idukki District – 685 552.

2. Jayanthi Biju,

W/o.Biju P.V.,

Idukki District – 685 552.

3. Thomas T.U.,

S/o.Ulahannan,

Thazhathuvarikayil,

Ayyappan Kovil,

Kanchiyar P.O.,

Thoppippala,

Idukki District – 685 511.

…Defendants

TA 82/2017 (OA 451/2016)

This Original Application having been heard on 13.08.2026 in the presence of Advocate Sri.K.K.Sajikumar for the applicant bank and Advocate Ms.Krishna Priya G., representing counsel for Advocate Sri.Dileep S.Kallar, 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 an aggregate sum of Rs.2,50,87,463.27 due under various loan accounts together with future interest and costs from the defendants and by sale of ‘A’ to ‘P’ 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 Munnar in Idukki District.

3. The defendants approached the applicant bank seeking financial assistance. Considering their request, applicant bank sanctioned the following credit facilities: Date of sanction Type of loan Amount

Availed by Co- obligants Collateral security 28.02.2008 AMTL (A/c No.3589) Rs.1.39 crores 1st defendant Defendants 2 & 3 ‘B’ to ‘P’ schedule properties

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28.02.2008 FKCC (A/c No.3723) Rs.34 lakhs 1st defendant Defendants 2 & 3 ‘A’ to ‘P’ schedule properties 19.11.2010 Enhanced FKCC Rs.70 lakhs 1st defendant Defendants 2 & 3 ‘A’ to ‘P’ schedule properties 22.08.2008 AMTL (A/c No.3712) Rs.24 lakhs 1st defendant Defendants 2 & 3 ‘B’ to ‘P’ schedule properties 31.03.2014 WCTL (A/c No.2422) Rs.38,84,514/- 1st defendant Defendants 2 & 3 ‘B’ to ‘P’ schedule properties

After availing the facilities, the defendants executed balance confirmation letters acknowledging the liability under the loan accounts. Due to default in repayments, applicant bank issued a lawyer notice to the defendants calling upon them to repay the entire outstanding dues but they failed to settle the liability. In such premises, applicant was constrained to file the OA claiming the following reliefs:

(i) To recover the sum of Rs.2,50,87,463.27 together with pendente lite and post-decree interest on the sum of Rs.2,45,48,973/- from the defendants and by sale of ‘A’ to ‘P’ schedule properties;

(ii) To recover the costs, charges and expenses from the defendants; TA 82/2017 (OA 451/2016)

(iii) To issue Recovery Certificate to the Recovery Officer with a direction to recover the amount and pay it to the applicant bank. 4.1 The defendants jointly filed written statement denying the entire averments in the OA. It is contended inter alia that the 1st defendant approached the applicant bank for a takeover loan and a loan for purchasing cardamom land in Pallivasal Village. After sanctioning the loan, Rs.80 lakhs was adjusted towards the takeover loan in State Bank of India, Adimali Branch. As per the loan agreement, these defendants deposited the title deed after purchasing the cardamom plantation but they never executed a promissory note for Rs.1.39 crores. These defendants never agreed to pay interest @11% per annum and penal interest @2% per annum. The averment that applicant bank sanctioned an agricultural medium term loan on 18.08.2008 is incorrect. In fact, as requested by the applicant bank, these defendants put their signatures in some printed documents without knowing the contents therein. 4.2 The applicant bank had charged exorbitant interest and penal interest in the loan accounts. They never agreed to continue with the collateral securities scheduled in ‘B’ to ‘H' for availing the agricultural medium term loan of Rs.24 lakhs. The TA 82/2017 (OA 451/2016)

allegation that the 2nd defendant confirmed the benefit of mortgage already created over the properties scheduled in ‘I’ to ‘N' is also incorrect. These defendants never executed the documents as stated in the OA. The allegation that working capital term loan of Rs.38,84,514/- was sanctioned to the defendants is incorrect. Annexures-16, 23, 25, 33, 35, 37 to 40 and 51 to 53 are not genuine documents which are wrongly created by the applicant bank and hence denied the same. It is claimed that the defendants are very prompt in repaying the amount till 2014 and thereafter due to change in the climate condition and natural calamities, agricultural activities were collapsed. The applicant has not complied with the guidelines of RBI for the agricultural loan and they are not liable to remit the exorbitant amount claimed by them. Hence the OA may be dismissed with costs. Proof Affidavit:

5. To establish the claim on behalf of the applicant bank, one Mr.Sajan Varghese, Senior Manager of the bank has filed proof affidavit and additional proof affidavit and produced the loan documents marked as Exhibits A1 to A71 for recovery of the claim amount from the defendants.

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6. The defendants filed counter proof affidavit denying the execution of loan documents and claimed that interest and penal interest charged in the accounts are unconscionable and against the guidelines of RBI. The 2nd defendant never executed any power of attorney in favour of the 1st defendant. The documents mentioned in the proof affidavit are not correct and most of the documents are created by the applicant for the purpose of filing this case and hence the OA may be dismissed.

7. The applicant bank filed additional proof affidavit claiming that the fact regarding availing of the subject loans by the defendants, execution of security documents, creation of equitable mortgage over the subject matter properties and extension thereof are proved by the documents produced in this case. Penal interest is levied by the applicant as per the guideline of RBI and capitalization effect of penal interest has been deducted from the outstanding amount. The applicant had translated the contents of the documents in Malayalam and the defendants affixed their signatures in the loan documents fully knowing the contents of such documents and the consequence thereof. It is claimed that the exhibits produced would establish the allegations raised by the defendants as ill-founded and ill- motivated.

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8. The defendants filed reply to additional proof affidavit filed by the applicant bank and claimed that due to labour problem and changes in the climate condition, the defendants had to freeze the agricultural activities. Due to the said reason, repayments became irregular on certain occasions. Some of the properties of the defendants were sold with the permission of the applicant and sale consideration was deposited in the loan accounts. The bank authorities collected the title deeds without complying the provisions stipulated under S.58 of the Transfer of Property Act. The defendants never agreed to remit interest and penal interest as claimed by the bank.

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

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

11. On a conspectus of the pleadings and evidence available on record, it appears that the 1st defendant as principal borrower and defendants 2 and 3 as co-obligants had availed four agricultural loans from the applicant bank. During arguments, the defendants did not dispute about availing of the subject loans from the applicant bank. It is also the admitted case of the TA 82/2017 (OA 451/2016)

defendants that there occurred some default in repayment of the loans.

12. The records would show that the 3rd defendant had executed a general power of attorney dated 12.08.2005 marked Ext.A1 authorizing the 1st defendant to do all acts in respect of the property having an extent of 1.97 hectares jointly owned by defendants 1 and 3 for availing loan from the applicant bank, execute necessary documents, crate securities, repay the loan amount and settle the dues. Accordingly, 3rd defendant being a co-obligant had executed the security documents through the 1st defendant in favour of the applicant bank.

13. According to the defendants, they never executed demand promissory note for Rs.1.39 crores and never agreed to pay interest @11% per annum and penal interest @2% per annum. On perusal of the documents, it could be seen that the defendants had executed demand promissory note dated 29.02.2008 for Rs.1.39 crores marked Ext.A2 and by executing Ext.A3 agreement for agricultural loans, they agreed to pay the loan amount together with interest @11% per annum with half- yearly rests and undertook to pay penal interest @2% per annum in case the borrower(s) default in paying the installments, interest or other charges.

TA 82/2017 (OA 451/2016)

14. The materials on record would divulge the fact that while availing the subject loans viz., AMTL of Rs.1.39 crores, FKCC limit of Rs.34 lakhs/enhanced FKCC loan of Rs.70 lakhs, AMTL of Rs.24 lakhs and WCTL of Rs.38,84,514/-, the defendants executed demand promissory notes, security delivery letters and agreement for loans marked as Exts.A1 to A8, A26 to A28, A34 to A36 and A41 to A49 agreeing and undertaking to repay the loan amounts together with interest, penal interest and other charges as per the terms and conditions of sanction. Further, ‘A’ schedule property was hypothecated to secure the FKCC loan. Defendants 1 and 2 deposited their respective title deeds marked as Exts.A9 to A15, A17 to A22, A24 and A32 relating to ‘B’ to ‘P’ schedule properties and executed letters marked Exts.A16, A23, A25, A29 to A31, A33, A37 to A40 and A50 to A53 confirming the deposit of title deeds with the applicant bank with an intent to create mortgage over the subject matter properties and the extension thereof towards collateral security for the loans.

15. When the defendants availed the loans by depositing title deeds to secure the same, presumption can be drawn due execution of the loan documents. They cannot plead ignorance of execution of the aforementioned documents. Further, no material evidence is placed by the defendants to establish the plea of

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fraudulent creation of such security documents. In absence of any rebuttal evidence, the contention of the defendants cannot be accepted.

16. It is the further case of the defendants that at the instance of the applicant bank, they put their signatures in some blank printed forms without knowing the contents thereof and hence such documents cannot be acted upon as against them. If that be their case, they could have made complaint to the higher authorities of the bank for having obtained signed blank loan documents from them, but they have no such claim in this case.

17. No prudent man will sign and issue blank papers to anyone and also no banker will advance huge amount like the one involved in this case to anyone without obtaining proper documentation. Further, in the agreement for agricultural loans marked Ext.A4 at clause 37 it is explicitly declared that ‘The contents of this agreement have been read over and translated into Malayalam and explained to the borrower(s) and he/they has/have understood the contents thereof before subscribing to the agreement’ and the defendants have affixed their signatures beneath such declaration. Similar clause is incorporated in all the loan agreements executed by the defendants pertaining to the subject loans. In such backdrop, they cannot claim and contend TA 82/2017 (OA 451/2016)

contrary in this proceeding. Further, it could be seen that without raising any dispute, the defendants have executed balance confirmation letters dated 06.12.2010, 11.03.2013, 26.03.2014 and 29.12.2014 marked as Exts.A54 to A57 confirming and acknowledging the liability under the loan accounts and also acknowledged the securities furnished by them, both movable and immovable, towards security for the subject loans. On an overall analysis of the pleadings and evidence available on record, it is apparent that the defendants have validly executed all the loan documents and created equitable mortgage over the schedule properties to secure the subject loans availed from the applicant bank. The contrary contentions raised by them are unsustainable and quite misconceived.

18. The account statements marked as Exts.A60 to A63 would establish the claim made by the applicant bank in this case i.e., Rs.2,50,87,463.27 due as on 10.06.2016 (i.e., after excluding the capitalized portion of the penal interest of Rs.4,50,897.73 from the total outstanding dues of Rs.2,55,38,361/-) and hence the applicant is entitled to recover the said amount from the defendants. The issue is answered in favour of the applicant.

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19. Considering the amount advanced, interest and penal interest applied, repayments effected, default committed and the facilities granted being agricultural loans, I am of the view that the applicant bank is entitled to get pendente lite and post decree interest @6% per annum, which is reasonable in the facts and circumstances of the case.

20. 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: AMTL A/c No.3589 Rs.1,27,91,904.94 (Rupees one crore twenty seven lakhs ninety one thousand nine hundred and four and Paise ninety four only) together with pendente lite and post-decree interest @6% per annum on the sum of Rs.1,26,26,003/- (Rupees one crore twenty six lakhs twenty six thousand and three only) from by sale of ‘B’ to ‘P’ schedule properties; FKCC A/c No.3723 Rs.45,85,946.86 (Rupees forty five lakhs eighty five thousand nine hundred and forty six and Paise eighty six only) together with pendente lite and post-decree interest @6% per annum on the sum of Rs.43,08,597/- (Rupees forty three lakhs eight thousand five hundred and ninety seven only) from 11.06.2016 till realization from the defendants and

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by sale of ‘A’ to ‘P’ schedule properties; AMTL A/c No.3712 Rs.24,32,936.94 (Rupees twenty four lakhs thirty two thousand nine hundred and thirty six and Paise ninety four only) together with pendente lite and post-decree interest @6% per annum on the sum of Rs.23,88,470/- (Rupees twenty three lakhs eighty eight thousand four hundred and seventy only) from 11.06.2016 till realization from the defendants and by sale of ‘B’ to ‘P’ schedule properties; WCTL A/c No.2422 Rs.52,76,674.53 (Rupees fifty two lakhs seventy six thousand six hundred and seventy four and Paise fifty three only) together with pendente lite and post- decree interest @6% per annum on the sum of Rs.52,25,903/- (Rupees fifty two lakhs twenty five thousand nine hundred and three only) from by sale of ‘B’ to ‘P’ schedule properties; and costs and expenses borne by it for realization of the loans from the defendants.

21. ‘A’ to ‘P’ schedules to the OA shall be appended to this final order.

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

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

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24. 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 7th day of September, 2026)

[SOVAN KUMAR DASH] PRESIDING OFFICER

TA 82/2017 (OA 451/2016)

A P P E N D I X Witness for Applicant: AW1: Sri.Sajan Varghese, Senior Manager and Principal Officer of the applicant bank. Witness for Defendant(s):

DW1:

Sri.Biju P.V., 1st defendant.

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 12.08.2005 General power of attorney executed by the 3rd defendant in favour of the 1st defendant. A2 29.02.2008 Demand promissory note for Rs.1.39 crores executed by the defendants. A3 29.02.2008 Security delivery letter executed by the defendants. A4

defendants. A5 29.02.2008 Demand promissory note for Rs.34 lakhs executed by the defendants. A6

29.02.2008 Security delivery letter executed by the defendants in respect of the FKCC loan of Rs.34 lakhs. A7

29.02.2008 Agreement for agricultural loans executed by the defendants in respect of the FKCC loan of Rs.34 lakhs. A8

29.02.2008 Agreement in lieu of interim collateral security executed by the defendants. A9

02.07.2005 Sale deed No.2436/2005 of SRO, Devikulam. A10 17.02.2006 Sale deed No.584/2006 of SRO, Devikulam. A11 17.02.2006 Sale deed No.587/2006 of SRO, Devikulam. A12 17.02.2006 Sale deed No.589/2006 of SRO, Devikulam. A13 13.03.2006 Sale deed No.864/2006 of SRO, Devikulam. A14 13.03.2006 Sale deed No.866/2006 of SRO, Devikulam. A15 13.03.2006 Sale deed No.869/2006 of SRO, Devikulam. A16 03.03.2008 Letter executed by the 1st defendant confirming

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A17 16.12.2005 Sale deed No.3889/2005 of SRO, Devikulam. A18 20.01.2006 Sale deed No.237/2006 of SRO, Devikulam. A19 20.01.2006 Sale deed No.238/2006 of SRO, Devikulam. A20 17.02.2006 Sale deed No.588/2006 of SRO, Devikulam. A21 13.03.2006 Sale deed No.863/2006 of SRO, Devikulam. A22 13.03.2006 Sale deed No.868/2006 of SRO, Devikulam. A23

A24 07.03.2008 Sale deed No.733/2008 of SRO, Devikulam. A25 13.03.2008 Letter executed by the 1st defendant confirming the deposit of title deeds with the applicant bank. A26 22.08.2008 Demand promissory note for Rs.24 lakhs executed by the defendants. A27 22.08.2008 Security delivery letter executed by the defendants. A28 22.08.2008 Agreement for agricultural cash credit executed by the defendants. A29 23.08.2008 Letter executed by the 1st defendant confirming the deposit of title deeds with the applicant bank and the extension thereof to secure the agricultural medium term loan of Rs.24 lakhs. A30

the deposit of title deeds with the applicant bank and the extension thereof to secure the agricultural medium term loan of Rs.24 lakhs. A31 23.08.2008 Letter executed by the 1st defendant confirming extension of benefit of mortgage of ‘O' schedule property to secure the agricultural medium term loan of Rs.24 lakhs. A32 22.08.2008 Sale deed No.1595/2008 of SRO, Udumbanchola. A33 28.08.2008 Letter executed by the 1st defendant confirming

A34 06.12.2010 Demand promissory note for Rs.70 lakhs executed by the defendants. A35 06.12.2010 Security delivery letter executed by the defendants.

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A36 06.12.2010 Agreement for agricultural loans executed by the defendants. A37 07.12.2010 Letter executed by the 1st defendant confirming the extension of benefit of mortgage of ‘B’ to ‘H' schedule properties. A38 07.12.2010 Letter executed by the 2nd defendant confirming the extension of benefit of mortgage of ‘I’ to ‘N' schedule properties. A39 07.12.2010 Letter executed by the 1st defendant confirming the extension of benefit of mortgage of ‘O’ schedule property. A40 07.12.2010 Letter executed by the 1st defendant confirming the extension of benefit of mortgage of ‘P’ schedule property. A41 26.03.2014 Demand promissory note for Rs.95,09,106/- executed by the defendants. A42 26.03.2014 Security delivery letter executed by the defendants. A43 26.03.2014 Agreement for rescheduling term loan executed

A44 26.03.2014 Demand promissory note for Rs.20,09,044/- executed by the defendants. A45 26.03.2014 Security delivery letter executed by the defendants. A46 26.03.2014 Agreement for rescheduling term loan executed by the defendants. A47 31.03.2014 Demand promissory note for Rs.38,84,514/- executed by the defendants. A48 31.03.2014 Security delivery letter executed by the defendants. A49 31.03.2014 Agreement of term loan executed by the defendants. A50 01.04.2014 Letter executed by the 1st defendant confirming the extension of mortgage of ‘B’ to ‘H' schedule properties. A51

the extension of benefit of mortgage of ‘I’ to ‘N' schedule properties.

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A52 01.04.2014 Letter executed by the 1st defendant confirming the extension of benefit of mortgage of ‘O’ schedule property. A53 01.04.2014 Letter executed by the 1st defendant confirming the extension of benefit of mortgage of ‘P’ schedule property. A54 06.12.2010 Balance confirmation letter executed by the defendants. A55 11.03.2013 Balance confirmation letter executed by the defendants. A56 26.03.2014 Balance confirmation letter executed by the defendants. A57 29.12.2014 Balance confirmation letter executed by the defendants. A58 05.03.2016 Copy of lawyer notice issued to the defendants. A59 19.05.2016 Copy of corrected lawyer notice issued to the defendants. A60 … Certified copy of the statement of account relating to AMTL A/c No.3589. A61 … Certified copy of the statement of account relating to FKCC A/c No.3723. A62 … Certified copy of the statement of account relating to AMTL A/c No.3712. A63 … Certified copy of the statement of account relating to WCTL A/c No.2422. A64 10.06.2016 Statement showing the penal interest and impact of capitalization of penal interest charged in AMTL A/c No.3589. A65 10.06.2016 Statement showing the penal interest and impact of capitalization of penal interest charged in FKCC A/c No.3723. A66 10.06.2016 Statement showing the penal interest and impact of capitalization of penal interest charged in AMTL A/c No.3712. A67 10.06.2016 Statement showing the penal interest and impact of capitalization of penal interest charged in WCTL A/c No.2422.

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A68 09.06.2016 Certificate showing the rate of interest applied in AMTL A/c No.3589. A69 09.06.2016 Certificate showing the rate of interest applied in FKCC A/c No.3723. A70 09.06.2016 Certificate showing the rate of interest applied in AMTL A/c No.3712. A71 09.06.2016 Certificate showing the rate of interest applied in WCTL A/c No.2422.

Defendants’ Exhibits – Nil

PRESIDING OFFICER

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PRESIDING OFFICER

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

Dated the 7th September, 2026

TA No.82/2017 (OA NO.451/2016)

Between

The Federal Bank Ltd., PB No.15, G.H.Road, Munnar – 686 512, Idukki District.

…Applicant

And

Biju P.V. alias Biju Varghese, S/o.Varghese,

Idukki District – 685 552 & 2 others.

…Defendants

F I N A L O R D E R