CANARA BANK vs Anil Kumar V T on 17 July 2025

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

Dated this the 17th day of July, 2025

TA No.1366/2016 (OA No.295/2009) Between

Canara Bank, Asset Recovery – Management Branch, Near Deepa Theatre, Ravipuram, M.G. Road, Ernakulam- 682 016.

…Applicant

And

Anil Kumar V.T., S/o.Thankappan Nair, Proprietor, Pranavam Food Products, Residing at Valiyavattathu – Puthen Veedu, Elanthoor East P.O., Pathanamthitta District.

...Defendant

This Original Application having been heard on 25.06.2025 in the presence of Advocates M/s.M.Gopikrishnan Nambiar, Joson Manavalan, Dominic Antony, Izhar Mohammed, Hannah Ryhana and Ananthika Basant for the applicant bank and the defendant being exparte and stood over to this day for consideration, the Tribunal delivered the following:

TA 1366/2016 (OA 295/2009)

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.9,27,104/- and Rs.3,67,242.99, totaling to Rs.12,94,346.99 due under term loan account and cash credit account respectively together with future interest thereon @14.75% per annum with monthly rests including penal interest @2% per annum from the defendant and by sale of the schedule properties Facts of the case:

2. At the request of the defendant, applicant bank sanctioned a term loan of Rs.6 lakhs on 10.04.2006 and cash credit limit of Rs.3 lakhs on 14.03.2007, which were availed by the defendant after executing security documents in favour of the applicant bank. Due to default in repayment of the loans, the applicant bank issued a lawyer notice to the defendant on 10.06.2008 calling upon him to repay the outstanding dues. Despite receipt of the notice, the defendant did not settle the liability. In such premises, the applicant bank was constrained to file the OA claiming the following reliefs:

TA 1366/2016 (OA 295/2009)

(i) To recover an aggregate sum of Rs.12,94,346.99 together with pendente lite and post-decree interest thereon from the defendant and by sale of the schedule property;

(ii) To recover the costs, charges and expenses from the defendant;

(iii) To issue Recovery Certificate to the Recovery Officer with a direction to recover the amount and pay it to the applicant bank.

3. The defendant was duly served with summons. But he neither appeared nor was he represented and hence the defendant was set exparte on 17.11.2023. Proof Affidavit:

4. In order to establish the claim on behalf of the applicant bank, one Mr.Renjith K., Manager of the applicant has filed proof affidavit and produced the loan documents marked as Exhibits A1 to A12. The proof affidavit filed by AW1 and the documents produced in this case are not challenged by the defendant. The availing of the credit facilities is well established from the documents placed by the applicant bank. An aggregate sum of Rs.12,94,346.99 is outstanding in the loan accounts as on TA 1366/2016 (OA 295/2009)

31.03.2009, which is clearly established from the accounts statements marked as Exts.A9 to A12.

5. Further, it could be seen from the statements produced by the applicant bank along with the OA that a sum of Rs.7,722/- and Rs.759/- were charged by way of penal interest in the term loan and cash credit accounts respectively. 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 penal interest of Rs.7,722/- and Rs.759/-, totaling to Rs.8,481/- charged in the loan accounts.

6. 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 @11% per annum on the sum of Rs.12,85,865.99 (i.e., after excluding the penal interest of Rs.8,481/- from the OA claim amount of Rs.12,94,346.99), which is reasonable in the facts and circumstances of the case.

7. The applicant bank, therefore, is entitled to get a final order on the following lines:

TA 1366/2016 (OA 295/2009)

In the result, the applicant bank is given a final order allowing it to recover:

(i) an aggregate sum of Rs.12,94,346.99 (Rupees twelve lakhs ninety four thousand three hundred and forty six and Paise ninety nine only) due under the term loan and cash credit accounts from the defendant and by sale of the schedule properties, if available;

(ii) Pendente lite and post-decree interest @11% per annum on the sum of Rs.12,85,865.99 (Rupees twelve lakhs eighty five thousand eight hundred and sixty five and Paise ninety nine only) from 16.06.2009 till realisation from the defendant and by sale of the schedule properties, if available; and

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

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

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

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

TA 1366/2016 (OA 295/2009)

11. 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 July, 2025)

[SOVAN KUMAR DASH] PRESIDING OFFICER

TA 1366/2016 (OA 295/2009)

A P P E N D I X Witness for Applicant: AW1: Sri.Renjith K., Manager of the applicant bank. Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 10.04.2006 Sanction letter for Term loan of Rs.6 lakhs issued by the applicant bank and duly signed by the defendant. A2 10.04.2006 Agreement of hypothecation of machinery executed by the defendant in favour of the applicant bank. A3 14.03.2007 Letter of undertaking executed by the defendant in favour of the applicant bank. A4 14.03.2007 Request for overdraft facilities of Rs.3 lakhs issued by the defendant to the applicant bank. A5 14.03.2007 Cash credit agreement executed by the defendant in favour of the applicant bank. A6 16.04.2008 Acknowledgement of debt and security executed by the defendant. A7 10.06.2008 Office copy of the lawyer’s notice issued to the defendant. A8 .. Postal acknowledgment card evidencing the receipt of Exhibit A7 notice. A9 .. Certified copy of the statement of account in relation to the term loan. A10 .. Certified copy of the statement of account in relation to the cash credit facility. A11 .. Certified copy of statement of unapplied interest but accrued interest in respect of Exhibit A9 account.

TA 1366/2016 (OA 295/2009)

A12 .. Certified copy of statement of unapplied interest but accrued interest in respect of Exhibit A10 account.

Defendant’s Exhibits – Nil

PRESIDING OFFICER

TA 1366/2016 (OA 295/2009)

PRESIDING OFFICER

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

Dated the 17th July, 2025

TA No.1366/2016 (OA No.295/2009)

Between

Canara Bank, Asset Recovery – Management Branch, Near Deepa Theatre, Ravipuram, M.G. Road, Ernakulam- 682 016. …Applicant

And

Anil Kumar V.T., S/o.Thankappan Nair, Proprietor, Pranavam Food Products, Residing at Valiyavattathu – Puthen Veedu, Elanthoor East P.O., Pathanamthitta District. ...Defendant

F I N A L O R D E R