FEDERAL BANK vs M/s A N S ENTERPRISES on 17 September 2026

1. M/s.A N S Enterprises,

Ward No.XXI, Building No.516,

Eramattathil Building,

Nattakom Panchayath,

Mariapally P.O.,

Kottayam District – 686 023.

2. Arjun E. Vasudev,

S/o.E.G.Vasudevan,

Eramattathil House,

Mariapally P.O.,

Kollam District – 686 023.

3. Shabeer Ali,

S/o.P.B.Ali,

Puthiyaveettil House,

Inchamudi P.O.,

Thrissur District – 680 564.

4. Naveen A.,

S/o.Arjun,

Inchakkattil House,

Perumon P.O., Perinad,

Kollam District – 691 600.

…Defendants

This Original Application having been heard on 10.08.2026 in the presence of Advocate Sri.Varughese Cherian for the applicant bank and Advocate Sri.Anup T.Paul 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.45,71,658.19 together with future interest @19.75% per annum with monthly rests on the sum of Rs.44,45,356.10 from the defendants jointly and severally and by sale of the 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 Kottayam.

3. The 1st defendant is a partnership firm and defendants 2 to 4 are its partners. At the request of the 1st defendant, applicant bank sanctioned the following credit facilities:

Date of sanction Type of loan Amount

Availed by Co-obligants Security 06.02.2010 Cash credit Rs.32.50 lakhs 1st defendant Defendants 2 to 4 ‘A’ schedule property 06.02.2010 Term loan Rs.9 lakhs 1st defendant Defendants 2 to 4 ‘B’ schedule property

After availing the loans, the defendants failed and neglected to regularize the loan accounts as per the terms and conditions specified in the loan agreement. Hence the applicant initiated securitization proceeding and issued demand notice to the defendants on 28.01.2013 calling upon them to repay the entire outstanding dues. As they did not respond to the notice, the applicant was constrained to file the OA seeking relief to recover the sum of Rs.45,71,658.19 together with pendente lite and post- decree interest on the sum of Rs.44,45,356.10 from the defendants jointly and severally and by sale of the schedule properties.

4. The defendants jointly filed written statement denying the averments in the OA. It is claimed that the person, who has signed and verified the OA, has no authority to represent the applicant bank. It is true that the defendants availed a cash credit facility of Rs.32.50 lakhs from the applicant bank but the averment of the applicant that they executed security documents is not correct. At the time of availing the loan, the defendants were forced to sign various blank printed forms which were fabricated by the employee of the applicant and filed along with the OA and the said documents are not legally acceptable. They availed the loan on the basis of CGTMSE scheme and the applicant can claim insurance for the loan amount. The applicant is not entitled to charge interest more than 9% per annum and there was no agreement to pay penal interest. These defendants have not executed any balance confirmation letter on 31.01.2013 which is a fabricated document. The statement of account produced by the applicant is not correct. The applicant has no cause of action against the defendants. The OA is filed without any bonafide and hence the same is liable to be dismissed. Proof Affidavit:

5. To establish the claim on behalf of the applicant bank, one Mr.Venugopalan Nair K.P., Chief Manager and Principal Officer of the bank has filed proof affidavit and produced the loan documents marked as Exhibits A1 to A15. The availing of the loans is well established from the documents placed by the applicant bank.

6. The defendants filed counter proof affidavit claiming that the 1st defendant is a partnership firm and defendants 2 to 4

are its partners. It is reiterated that while availing the loan, the defendants were forced to sign some documents which are not legally acceptable. The amount remitted by the defendants are not properly credited in the account. The amount claimed by the applicant is without any basis. In the additional counter proof affidavit filed by the defendants, it is claimed that since the loan was covered under CGTMSE scheme and they have remitted insurance fee on annual basis, the applicant can claim insurance for the loan and the OA may be dismissed with costs.

7. Heard the rival submissions and perused the records of the case. The sole issue arises for consideration is whether the applicant is entitled to get the relief as claimed in this case?

8. On careful consideration of the pleadings and evidence available on record, it appears that admittedly, the defendants had availed a cash credit limit of Rs.32.50 lakhs from the applicant bank on 06.02.2010. It could be seen that towards security for the cash credit facility, the defendants had executed Ext.A2 demand promissory note for Rs.32.50 lakhs, Ext.A3 security delivery letter and Ext.A4 cash credit agreement agreeing to repay the loan amount together with interest @14.25% per annum with monthly rests. It appears that the defendants have also undertook to pay additional interest at such rates as may be prescribed by the bank/RBI from time to time over and above the rates mentioned above in case the borrower default in paying the periodic interest/installments vide clause 3 of Ext.A4 agreement. Similar set of documents viz., demand promissory note for Rs.9 lakhs, security delivery letter and term loan agreement marked as Exts.A5 to A7 respectively were executed by the defendants to secure the term loan availed by them on 06.02.2010. Except contending in a vague fashion that they have not executed the aforementioned documents, no evidence is adduced by the defendants to corroborate their claim.

9. On execution of the aforesaid 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. Further, it could be seen that the defendants have executed Ext.A8 balance confirmation letter dated 31.01.2013 confirming the balance outstanding under the subject loan accounts as on 30.01.2013 and also the securities furnished by them.

10. It is the further contention of the defendants that their signatures were obtained by the applicant bank on blank printed forms which cannot be acted upon. As the defendants have admitted the availing of the subject loans, presumption can be drawn that they have executed the loan documents after understanding the nature and purport of the same. No material evidence is placed by the defendants to establish the plea of fraudulent creation of the loan documents by obtaining of their signatures over blank forms. In absence of any evidence, the claim of the defendants cannot be believed. It is concluded that they have executed the documents after understanding the true purport of the same.

11. Another contention raised by the defendants is that the signatory to the OA is incompetent to sign the same and hence the OA is not maintainable. There is no dispute that the applicant is a banking company incorporated under the Companies Act, 1956. It is a legal entity entitled to sue or be sued in its name. The OA is signed and verified by its Chief Manager and Principal Officer, who is competent to file this application and the contention on this point is not sustainable.

12. It is also contended that since the subject loans are covered under CGTMSE scheme, the applicant can claim the insurance for the loan amount and the defendants are not entitled to repay the outstanding dues. CGTMSE Scheme is an insurance scheme to protect the interest of the banks in the event of default by the borrower and the premium payable for the coverage of the loan under the scheme is debited in the account of the borrower based on the terms of agreement executed by him. Merely because the loans are covered under the CGTMSE scheme does not mean that the borrower is not liable to repay the loan. The coverage protects the bank against default by the borrower and the recovery made from the borrower shall be refunded to the CGTMSE. Hence the applicant can continue the recovery proceeding against the defendants even after they invoke the guarantee claim. There is no substance in the contention raised by the defendants.

13. The documents marked as Exts.A1 to A15 would substantiate the claim made by the applicant bank in this case. An aggregate sum of Rs.45,71,658.19 (i.e., after excluding the impact of capitalized penal interest of Rs.58,098.91 from the total outstanding dues of Rs.46,29,757.10) is outstanding under the subject loan accounts as on 14.11.2013, which is clearly established from the account statements marked as Exts.A10 and A11. In the above circumstances, the applicant is entitled to recover the said amount from the defendants. The issue is answered in favour of the applicant.

14. 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.

15. 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.37,99,611.17 (Rupees thirty seven lakhs ninety nine thousand six hundred and eleven and Paise seventeen only) due under the cash credit account together with pendente lite and post-decree interest @12% per annum on the sum of Rs.36,76,925/- (Rupees thirty six lakhs seventy six thousand nine hundred and twenty five only) from 15.11.2013 till realization from the defendants jointly and severally and by sale of ‘A’ schedule property;

(ii) the sum of Rs.7,72,047.02 (Rupees seven lakhs seventy two thousand forty seven and Paise two only) due under the term loan account together with pendente lite and post-decree interest @12% per annum on the sum of Rs.7,68,431.10 (Rupees seven lakhs sixty eight thousand four hundred and thirty

one and Paise ten only) from 15.11.2013 till realization from the defendants jointly and severally and by sale of ‘B’ schedule property; and

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

16. ‘A’ and ‘B’ schedules to the OA shall be appended to this final order.

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

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

19. 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 17th day of September, 2026)

[SOVAN KUMAR DASH] PRESIDING OFFICER

A P P E N D I X Witness for Applicant: AW1: Sri.Venugopalan Nair K.P., Chief Manager and Principal Officer of the applicant bank. Witness for Defendant(s):

DW1:

Sri.Naveen, 4th defendant

DW2:

Sri.Shabeer Ali, 3rd defendant

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 06.02.2010 Partnership firm letter executed by defendants 2 to 4. A2 06.02.2010 Demand promissory note for Rs.32.50 lakhs executed by the defendants. A3 06.02.2010 Security delivery letter executed by the defendants. A4 06.02.2010 Agreement of cash credit executed by the defendants. A5 06.02.2010 Demand promissory note for Rs.9 lakhs executed by the defendants. A6 06.02.2010 Security delivery letter in respect of the term loan executed by the defendants. A7 06.02.2010 Term loan agreement executed by the defendants. A8 31.01.2013 Balance confirmation letter executed by the defendants. A9 28.01.2013 Copy of demand notice under S.13(2) of the SARFAESI Act issued to defendants 2 to 4. A10 … Certified copy of the statement of account relating to the cash credit facility. A11 … Certified copy of the statement of account relating to the term loan. A12 15.11.2013 Statement showing the rate of interest applied in the cash credit account from time to time. A13 15.11.2013 Statement showing the rate of interest applied in the term loan account from time to time.

A14 … Statement showing the penal interest charged in Ext.A10 account and capitalized portion thereof. A15 … Statement showing the penal interest charged in Ext.A11 account and capitalized portion 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 17th September, 2026

TA No.1042/2016 (OA NO.551/2013)

Between

The Federal Bank Ltd., Kottayam Branch, PB No.269, Thekkumkal Building, T.B.Road, Kottayam – 686 001. …Applicant

And

M/s.A N S Enterprises, Ward No.XXI, Building No.516, Eramattathil Building, Nattakom Panchayath, Mariapally P.O., Kottayam District – 686 023 & 3 others.

…Defendants

F I N A L O R D E R