DHANALAKSHMI BANK vs JOY DANIEL on 2 September 2025

1. Joy Daniel, S/o.Daniel, Kannampuzha House, 4/152/1 Chelakkottukara, Chiyyaram Village, Kizhakkekotta P.O., Thrissur Taluk, Thrissur-5.

2. Anitha, W/o.Joy Daniel, Kannampuzha House, 4/152/1 Chelakkottukara, Chiyyaram Village, Kizhakkekotta P.O., Thrissur Taluk, Thrissur-5.

…Defendants

This Original Application having been heard 08.08.2025 and 01.09.2025 in the presence of Advocates M/s.Prakash P.George and Sader E.Reaz for the applicant bank and Advocate Sri.V.K.Peer Mohamed Khan 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 a sum of Rs.11,45,267.72 due under housing loan account together with future interest thereon @15.75% per annum with monthly rests and penal interest @2% per annum from the defendants 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 Thrissur and a branch among other places at Thrissur.

3. The defendants submitted an application for a housing loan of Rs.10 lakhs which was sanctioned by the applicant bank on 05.08.2008 for construction of a residential house. The defendants executed demand promissory note, agreement for home loan etc. to secure the loan. Towards collateral security for the facility, the 2nd defendant created equitable mortgage over ‘A’ schedule property by deposit of title deed with the applicant bank on 05.08.2008 and executed letter dated 06.08.2008 confirming the creation of mortgage. Due to default in repayment, the account was classified as NPA on 31.12.2009 and a demand notice under S.13(2) of the SARFAESI Act was issued to the defendants demanding repayment of the entire outstanding amount but they did not repay the dues. Thereafter, when the bank initiated steps to take physical possession of ‘A’ schedule property, it was realized that the residential house was constructed in the property of the 1st defendant i.e., in ‘B’ schedule property instead of constructing the same in the mortgaged property owned by the 2nd defendant. Hence the applicant lodged a criminal complaint against the defendants and a charge sheet was filed by the Police before the Judicial First Class Magistrate Court-1, Thrissur. As the defendants failed to discharge the liability, applicant bank was constrained to file the OA claiming the following reliefs:

(i) To recover a sum of Rs.11,45,267.72 together with pendente lite and post-decree interest thereon from the defendants 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 filed written statement denying the averments made in the OA. It is contended inter alia that they had not executed the security documents and Annexures-A1 to A4 are not binding on them. The sale deed marked Annexure-A5 belongs to the 1st defendant as he had purchased the property from the 2nd defendant. The allegation raised in the complaint are totally false. The rate of interest shown in the application is excessive. ‘B’ schedule property is not mortgaged to the bank and hence the same cannot be made liable for the alleged dues of the bank. The defendants prayed to dismiss the OA with costs. Proof Affidavit:

5. In order to establish the claim on behalf of the applicant bank, one Mr.Sijo Joseph, Chief 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 original documents produced in this case are not challenged by the defendants. The availing of the credit facility and creation of mortgage over ‘A’ schedule property is well established from the documents placed by the applicant bank. A sum of Rs.11,45,267.72 is outstanding in the loan account as on 02.08.2011 which is clearly established from the account statement marked as Ext.A10.

6. Despite sufficient opportunity granted, the defendants did not file any counter proof affidavit nor adduced any documentary evidence to substantiate their case.

7. On careful evaluation of the submissions and the available materials, it is apparent that the defendants availed the housing loan of Rs.10 lakhs from the applicant bank on 05.08.2008 and ‘A’ schedule property belongs to the 2nd defendant was mortgaged to the bank by depositing Ext.A5 sale deed No.1074/2008 dated 04.03.2008 to secure the loan transaction. The 2nd defendant had also executed Ext.A6 letter dated 06.08.2008 confirming the deposit of Ext.A5 sale deed with the bank on 05.08.2008 with the intention of creating mortgage over the said property towards security for the amount due to the bank under the housing loan of Rs.10 lakhs. Further, defendants 1 and 2 had executed Ext.A1 demand promissory note, Ext.A2 DPN delivery letter, Ext.A3 agreement for housing loan and Ext.A4 letter of undertaking in favour of the bank to secure the loan transaction. In absence of any proof, the contentions raised by the defendants cannot be accepted and the same are only to be brushed aside.

8. Further, it could be seen from Ext.A11 statement that the applicant bank has charged a sum of Rs.12,942.91 by way of penal interest in the housing 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 penal interest of Rs.12,942.91 charged in the loan account.

9. Pending the OA, the Tribunal passed an order of conditional attachment in IA No.1895/2011 on 29.08.2011 in respect of the property described in ‘B’ schedule to the OA belonging to the 1st defendant. As he failed to furnish security for the required sum or to show cause why such security should not be furnished within the stipulated time, the attachment sought for as against ‘B’ schedule property was made absolute on 01.09.2025. Hence the applicant bank is entitled to realize the amount found due as above by sale of the attached property also.

10. Considering the amount advanced, interest and penal interest applied and the facility granted being a housing loan, I am of the view that the applicant bank is entitled to get pendente lite and post decree interest @9% per annum on the sum of

Rs.11,32,324.81 (i.e., after excluding the penal interest of Rs.12,942.91 from the OA claim amount of Rs.11,45,267.72), which is reasonable in the facts and circumstances of the case.

11. 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.11,45,267.72 (Rupees eleven lakhs forty five thousand two hundred and sixty seven and Paise seventy two only) due under the housing loan account from the defendants and by sale of ‘A’ schedule mortgaged property and also by sale of ‘B’ schedule property attached under IA No.1895/2011;

(ii) Pendente lite and post-decree interest @9% per annum on the sum of Rs.11,32,324.81 (Rupees eleven lakhs thirty-two thousand three hundred and twenty-four and Paise eighty-one only) from 03.08.2011 till realization from the defendants and by sale of ‘A’ schedule mortgaged property and also by sale of ‘B’ schedule property attached under IA No.1895/2011; and

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

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

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

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

15. 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 2nd day of September, 2025)

[SOVAN KUMAR DASH] PRESIDING OFFICER

A P P E N D I X Witness for Applicant: AW1: Shri.Sijo Joseph, Chief Manager of the applicant bank.

Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 05.08.2008 Demand Promissory Note for Rs.10,00,000/- executed by the defendants in favour of the applicant bank. A2 05.08.2008 Demand Promissory Note delivery letter executed by the defendants to the applicant bank. A3 05.08.2008 Agreement for home loans executed by the defendants in favour of the applicant bank. A4 05.08.2008 Letter of undertaking issued by the defendants to the applicant bank. A5 04.03.2008 Sale Deed No.1074/2008 of Ollukkara SRO. A6 06.08.2008 Letter confirming the deposit of title deed and creation of mortgage issued by the 2nd defendant to the applicant bank. A7 20.01.2011 True copy of CMP No.466/2011 filed before the Chief Judicial Magistrate, Thrissur. A8 07.02.2011 True copy of FIR in Crime No.164/2011 of East Trichur Police Station. A9 30.03.2011 True copy of the charge sheet filed in CC No.81/2011 of the Judicial First Class Magistrate Court-1, Ernakulam. A10 02.08.2011 Attested copy of the home loan account certified under Banker’s Book Evidence Act and also under Sec.65B of the Indian Evidence Act. A11 .. Statement showing the rate of interest charged from time to time in the Exhibit A10 account.

A12 .. Statement showing the rate of interest charge in Exhibit A10 account for various period.

PRESIDING OFFICER

ATTACHMENT SCHEDULE PROPERTY

PRESIDING OFFICER

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

Dated the 2nd September, 2025

TA No.1175/2016 (OA NO.364/2011)

Between

The Dhanlaxmi Bank Ltd., Branch: High Road, Thrissur.

…Applicant

And

Joy Daniel, S/o.Daniel, Kannampuzha House, 4/152/1 Chelakkottukara, Chiyyaram Village, Kizhakkekotta P.O., Thrissur Taluk, Thrissur-5 & another.

...Defendants

F I N A L O R D E R