FEDERAL BANK vs Abdul Manaf on 5 June 2025

1. Abdul Manaf, (Sole Proprietor of M/s.V K Marketing), S/o.Saidu Mohammed Kunju, Vadakkettathu Kaleelil, Palackal, Thevalakkara P.O., Kollam District - 690 524.

2. Nishaja S. Noorudeen,

W/o.Abdul Manaf,

Vadakkettathu Kaleelil, Palackal, Thevalakkara P.O., Kollam District - 690 524.

3. Abdul Rasheed, S/o.Saidu Mohammed Kunju, Vadakkettathu Kaleelil, Palackal, Thevalakkara P.O., Kollam District - 690 524.

4. Shahida Rasheed, W/o.Abdul Rasheed, Vadakkettathu Kaleelil, Palackal, Thevalakkara P.O., Kollam District - 690 524.

...Defendants

[ This Original Application having been heard on 20.05.2025 in the presence of Advocates M/s.Varughese Cherian and Jayakala S.S. for the applicant bank and the defendants being exparte 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.77,97,085.14 due under overdraft account together with future interest on the sum of Rs.76,42,881/- @14.98% per annum with monthly rests from the defendants jointly and severally 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 amongst other places at Padappanal in Kollam District.

3. The 1st defendant is the sole proprietor of M/s.V.K.Marketing and defendants to are the co- obligants/guarantors to the credit facility availed by the 1st defendant. At the request of the defendants, applicant bank sanctioned an overdraft facility of Rs.60 lakhs on 26.05.2012 and they availed the same after executing necessary security documents. As primary security for the loan, the defendants hypothecated the stock of electrical and electronic items described in ‘A’ schedule to the OA. Towards collateral security for the overdraft facility, defendants 3 and 4 created mortgage over ‘B’ schedule property by deposit of title deed with the applicant bank and executed letter dated 28.05.2012 confirming the creation of mortgage. As the defendants failed to repay the loan, the applicant bank issued demand notice under S.13(2) of the SARFAESI Act on 29.07.2014 calling upon them to repay the entire amount due under the loan account. But they did not remit any amount despite issuance of the notice. In such premises, the applicant bank was constrained to file the OA claiming the following reliefs:

(i) To recover the sum of Rs.77,97,085.14 together with pendente lite and post decree interest on the sum of Rs.76,42,881/- from the defendants jointly and severally 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.

4. The defendants were duly served with summons. Defendants 1 and 2 neither appeared nor were they represented and hence they were declared exparte on 26.09.2016. The defendants 3 and 4 entered appearance and presented a written statement which was rejected for not rectifying the defects noted by the Registry. Thereafter, defendants 3 and 4 presented a written statement but no step was taken to accept the same on record and they remained absent from the proceeding. Hence defendants 3 and 4 were also declared exparte on 04.08.2022. Proof Affidavit:

5. To establish the claim on behalf of the applicant bank, one Mrs.Mary Geena G., Manager of the applicant has filed proof affidavit and produced the loan documents marked as Exhibits A1 to A10. The proof affidavit filed by AW1 and the documents produced in this case are not challenged by the defendants. The availing of the overdraft facility and creation of hypothecation/mortgage charge over the schedule properties are well established from the documents placed by the applicant bank. A sum of Rs.77,97,085.14 is outstanding in the loan account, which is clearly established from the account statement marked as Ext.A8.

6. Further, it is averred in the proof affidavit that during the pendency of this case, applicant bank proceeded with the securitization measures and sold ‘B’ schedule property under the SARFAESI Act on 13.03.2017 for Rs.42 lakhs and the said amount was appropriated in the overdraft account on 31.03.2017.

7. Considering the amount advanced, interest and penal interest applied and default committed and also substantial recovery effected by sale of the secured asset, I am of the view that the applicant bank is entitled to get pendente lite and post decree interest @10% per annum on the sum of Rs.76,42,881/- (i.e., after excluding the penal interest of Rs.1,54,204.14 from the OA claim amount of Rs.77,97,085.14), which is reasonable in the facts and circumstances of the case.

8. 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.77,97,085.14 (Rupees seventy seven lakhs ninety seven thousand eighty five and Paise fourteen only) due under the overdraft account, less the sum of Rs.42,00,000/- (Rupees forty two lakhs only) recovered by the applicant bank by sale of ‘B’ schedule property on 13.03.2017, from the defendants jointly and severally and by sale of ‘A’ schedule property;

(ii) Pendente lite and post decree interest @10% per annum on the sum of Rs.76,42,881/- (Rupees seventy six lakhs forty two thousand eight hundred and eighty one only) from 30.01.2016 till realisation, less the sum of Rs.42,00,000/- (Rupees forty two lakhs only) recovered by the applicant bank on 13.03.2017, from the defendants jointly and severally and by sale of ‘A’ schedule property; and

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

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

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

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

12. 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 5th day of June, 2025)

[SOVAN KUMAR DASH] PRESIDING OFFICER

A P P E N D I X Witness for Applicant: AW1: Smt.Mary Geena G., Manager of the applicant bank. Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 13.04.2012 Power if attorney executed by the 3rd defendant in favour of the 4th defendant. A2 26.05.2012 Demand Promissory Note for Rs.60,00,000/- executed by the defendants in favour of the applicant bank. A3 26.05.2012 Security delivery letter issued by the defendants to the applicant bank. A4 26.05.2012 Agreement of cash credit/ overdraft executed by the defendants in favour of the applicant bank. A5 28.05.2012 Letter confirming the deposit of title deed executed by the 3rd and 4th defendant. A6

12.06.2014 Balance confirmation letter issued by the defendants to the applicant bank. A7

29.07.2014 Copy of the Sec.13(2) notice issued under the SARFAESI Act to the defendants. A8

19.01.2016 Statement of account as certified under Bankers Book Evidence Act/ I.T. Act. A9

... Statement showing the penal interest charged in the account and the effect of capitalization of the penal interest in Exhibit A8 account. A10 ... Statement showing the different rates of interest charged in Exhibit 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 5th June, 2025

TA No.688/2016 (OA NO.248/2016)

Between

The Federal Bank Ltd., Registered Office: Aluva, Branch: Padappanal, Kollam District. …Applicant

And

Abdul Manaf, (Sole Proprietor of M/s.V K Marketing), S/o.Saidu Mohammed Kunju, Vadakkettathu Kaleelil, Palackal, Thevalakkara P.O., Kollam District - 690 524 & 3 others.

...Defendants

F I N A L O R D E R