STATE BANK OF INDIA vs ALOYSIUS DENNIS MASCREEN on 2 September 2025

1. Aloysius Dennis Mascreen, S/o.late Peter Joseph Mascreen, Tony’s Cottage, Kilikollur P.O., Kollam District - 691 004. Abroad Address: Aloysius Dennis Mascreen, M/s.Guardian Systems, M-2, A1-Mansoori Building, Khaleefa Street, P.O. Box 43734, Abu Dhabi, UAE.

2. Hilary Felson, S/o.Francis, Flat No.A5, Kenston Towers, Nanthencode, Kowdiar P.O., Trivandrum District - 695 003.

3. M/s.Hilary International, Registered office at: Vazhayila, Trivandrum - 695 005,

TC 15/219, USRA 21, Udarashiromani Road, Vellayambalam, Trivandrum District - 695 010.

…Defendants

This Original Application having been heard on 25.08.2025 in the presence of Advocate Sri.Vivek George J. for the applicant, Advocates M/s.S.Santhosh Kumar, Ruby P.Paulose and Lissy Jose P. for the 1st defendant and defendants 2 and 3 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.36,40,404.88 due under housing loan account together with future interest on the sum of Rs.36,38,517.64 @12.75% per annum with monthly rests from the defendants jointly and severally. Facts of the case:

2. The original applicant, State Bank of Travancore, is a body corporate constituted under the State Bank of India (Subsidiary Banks) Act, 1959 having its head office at Thiruvananthapuram and one of its branches at Kazhakoottam.

This application is continued by State Bank of India as successor of State Bank of Travancore in terms of the Acquisition of State Bank of Travancore Order, 2017.

3. The property having an extent of 12.350 cents belongs to the 2nd defendant, who is the managing director of the 3rd defendant company which is engaged in the business of land development and construction of building to augment its business. The 1st defendant approached the applicant bank for purchase of 1/8th undivided share of the entire extent of 12.350 cents and a two bedroom flat in the ground floor. Pursuant to the tripartite agreement entered into between defendants 1, 3 and erstwhile State Bank of Travancore, the bank granted a term loan (housing loan) of Rs.26,69,288/- to the 1st defendant as per sanction letter dated 21.03.2009.

4. The 1st defendant executed an agreement to mortgage in respect of the property to be purchased/constructed utilizing the proceeds of the loan. The loan amount was disbursed to the 3rd defendant directly as authorized by the 1st defendant. The 3rd defendant received an aggregate amount of Rs.24.80 lakhs for construction of the flat and sale of the same along with undivided share of the land but he failed to cause execution of the sale deed in favour of the 1st defendant. As the loan account became highly irregular, a lawyer notice was issued to the defendants calling upon them to repay the outstanding loan amount but they failed to liquidate the dues. In such premises, the bank was constrained to file the OA claiming the following reliefs:

(i) To recover a sum of Rs.36,40,404.88 together with pendente lite and post-decree interest on the sum of Rs.36,38,517.64 from the defendants jointly and severally;

(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.

5. The 1st defendant filed written statement contending inter alia that in view of the tripartite agreement executed among defendants 1, 2 and the bank, defendants 2 and 3 are bound to refund the entire consideration received by them to the bank. Clause 8 of the agreement obliges the builder to indemnify the bank as well as the 1st defendant if they cannot convey clear title to the property to him. This defendant had agreed to create an equitable mortgage of the undivided share of the property after completion of the construction and execution of sale deed by the 2nd defendant. Since the project was not completed and title to the property was not conveyed to this defendant, no mortgage was created in favour of the bank. In such backdrop, the bank can proceed only against defendants 2 and 3 and not against this defendant. The loan amounts were disbursed to defendants 2 and 3 without the consent of this defendant. Hence the OA is liable to be dismissed with costs.

6. The 2nd defendant entered appearance and sought adjournment for filing written statement but he did not file any written statement despite time granted and remained absent from the proceeding. The 3rd defendant neither appeared nor was it represented. Hence defendants 2 and 3 were declared exparte respectively on 23.11.2015 and 19.05.2014. Proof Affidavit:

7. In order to establish the claim on behalf of the applicant bank, one Mr.Majeed Rawther, Chief Manager of the applicant has filed proof affidavit and additional proof affidavit and produced the loan documents marked as Exhibits A1 to A20. The availing of the term loan (housing loan) is well established from the documents placed by the applicant bank. A sum of

Rs.36,40,404.88 is outstanding in the housing loan account as on 20.12.2012, which is clearly established from the account statements marked as Exts.A17 and A18.

8. In the additional proof affidavit filed by the applicant bank, it is averred that the 1st defendant is bound to repay the loan as per the agreement for loan entered into between him and the bank and he cannot run away from his responsibility by quoting the tripartite agreement. On inspection it is found that the flat is ready to occupy at any time. The rate of interest applied in the loan account is as per the agreement and in tune with the guidelines or directives of RBI from time to time. The contention of the 1st defendant lacks bonafide and it is only dilatory tactics for avoiding payment of debt due to the bank which cannot be countenanced.

9. The 1st defendant filed counter proof affidavit denying the claim of the bank. It is contended that the officials of the bank colluded with the 2nd defendant and disbursed the loan amount to them without the knowledge and consent of this defendant which is totally against the tripartite agreement and agreement for loan wherein it is clearly stated that the loan for construction of the house shall be disbursed in installments depending on the progress of the work. Only for disbursing the last installment of

Rs.88,000/-, the bank sought the consent of this defendant. Since defendants 2 and 3 have neither completed the construction nor executed sale deed, he is not liable to pay either the principal amount or the interest accrued thereon as demanded by the applicant. The rate of interest claimed is exorbitant and against the guideline of RBI. Hence he prayed to dismiss the OA with costs to him.

10. On careful consideration of the submissions of both sides and on perusal of the materials, it could be inferred that pursuant to the application submitted by the 1st defendant on 12.02.2009, erstwhile State Bank of Travancore granted a housing loan of Rs.26,69,288/- vide Ext.A4 sanction letter dated 21.03.2009 for purchase of a two bedroom flat having a super built up area of 1240 sq.ft. in the three storied building known as ‘A1 Residency’ and the sanction letter was countersigned by him in token of having accepted the terms and conditions thereof. The 1st defendant agreed to repay the loan amount in equated monthly installment of Rs.28,690/- vide Ext.A4 and he had also executed Ext.A3 agreement to mortgage and Ext.A5 loan agreement dated 27.03.2009 agreeing to abide by the terms and conditions governing the grant of loan.

11. Further, it could be seen that the 1st defendant and the 3rd defendant represented by its president 2nd defendant herein and erstwhile State Bank of Travancore had entered into a tripartite agreement marked as Ext.A2 wherein at clause 1, the borrower/1st defendant has given consent to State Bank of Travancore to disburse the loan amount sanctioned to him directly to the builder. At clause 6, it is stated that the borrower shall be under obligation to make payment of all the dues to the builder before taking possession of the property. The 1st defendant has not specifically stated the reason for non- registration of the flat in his favour. As per clause 10 of the tripartite agreement, the bank reserves the right to recall the entire loan on any default made by the borrower. As the loan was recalled by the bank before the builder has handed over possession of the flat to the 1st defendant, the builder is also liable to refund the amount received by him together with other dues payable to the bank. However, this does not absolve the borrower from his liability by virtue of the loan agreement executed by him in favour of the bank.

12. By executing Ext.A6 letter dated 23.03.2009, the 1st defendant had authorized the bank to credit the loan proceeds in installments to the 3rd defendant as and when demanded and further authorized the bank to deduct the monthly installments from his NRI account for giving credit to the loan account. In the e-mail communication marked as Ext.A9, the 1st defendant requested the bank to release the balance amount of Rs.88,000/- to the developer. In Ext.A10 communication sent by the 1st defendant to the bank, he is admitting the delay in repayment of the dues and sought for rescheduling the loan for 20 years tenure so as to make regular payments. In such premises, he cannot plead ignorance of the liability due to the bank from him. None of the contentions raised by the 1st defendant are tenable and he is also bound to repay the dues to the applicant bank along with defendants 2 and 3.

13. Pending the OA, the Tribunal passed an order of conditional attachment in IA No.3464/2012 on 21.12.2012 over the property scheduled therein. As the defendants 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 the petition schedule property was made absolute on 19.05.2014. Hence the applicant bank is entitled to realise the amount found due as above by sale of the attached property.

14. The records would show that the amount sanctioned towards housing loan is Rs.24,80,000/- and Rs.1,89,288/- as SBI Life, totaling to Rs.26,69,288/-. According to the applicant bank, the amount released to the 3rd defendant/builder is only Rs.24,80,000/-. In such premises, the 2nd defendant, President and CEO of the 3rd defendant and the 3rd defendant company are liable to repay the loan amount of Rs.24,80,000/- (i.e., excluding the sum of Rs.1,89,288/- sanctioned towards SBI Life) together with future interest and costs. Therefore, out of the total OA claim amount of Rs.36,40,404.88, liability of defendants 2 and 3 is limited to the extent of Rs.33,82,251.78 including interest as on the date of filing of the OA i.e., on 20.12.2012 and pendente lite and post decree interest is to be reckoned on the sum of Rs.33,80,498.37 from 21.12.2012 till realization in respect of defendants 2 and 3.

15. Considering the amount advanced, interest and penal interest applied, default committed 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.36,38,517.64 (i.e., after excluding the penal interest of Rs.1,887.24 from the OA claim amount of

Rs.36,40,404.88), which is reasonable in the facts and circumstances of the case.

16. 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.36,40,404.88 (Rupees thirty six lakhs forty thousand four hundred and four and Paise eighty eight only) due under the housing loan account from defendants 1 to 3 jointly and severally and by sale of the attachment schedule property; and the liability of defendants 2 and 3 is limited to the extent of Rs.33,82,251.78 (Rupees thirty three lakhs eighty two thousand two hundred and fifty one and Paise seventy eighty only) considering the amount released to them;

(ii) Pendente lite and post-decree interest @9% per annum on the sum of Rs.36,38,517.64 (Rupees thirty six lakhs thirty eight thousand five hundred and seventeen and Paise sixty four only) from 21.12.2012 till realization from defendants 1 to 3 jointly and severally and by sale of the attachment schedule property; and the liability of defendants 2 and 3 is limited to the extent of Rs.33,80,498.37 (Rupees thirty three lakhs eighty thousand four hundred and ninety eight and Paise thirty seven only); and

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

17. The schedule to IA No.3464/2012 shall be appended to this final order.

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

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

20. 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.Majeed Rawther, Chief Manager of the applicant bank.

Witness for Defendant(s): Aloysius Dennis Mascreen, 1st defendant.

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 12.02.2009 Agreement for sale and construction between the defendants. A2 .. Tripartite agreement between the applicant bank and the defendants. A3 12.02.2009 Agreement to mortgage executed by the 1st defendant. A4 21.03.2009 Sanction letter containing the terms and conditions of the sanction, counter signed by the 1st defendant. A5 27.03.2009 Agreement for loan (Housing loan) executed by the 1st defendant in favour of the applicant bank. A6 23.03.2009 Relative communication issued by the 1st defendant to the applicant bank. A7 09.09.2009 Letter issued by the 3rd defendant through 2nd defendant to the applicant bank to transfer the remaining fund. A8 17.11.2009 Email- issued by the 1st defendant to the applicant bank to transfer remaining fund to the 3rd defendant. A9 02.01.2010 Email issued by the 1st defendant to the applicant bank regarding the consent for releasing the balance amount. A10 03.01.2012 Email issued by the 1st defendant to the applicant bank for re-scheduling the loan and undertook to remit the dues. A11 13.01.2012 Office copy of the lawyer’s notice issued to the defendants.

A12 .. Postal acknowledgement card evidencing the receipt of Exhibit A11 notice to the 1st defendant in the abroad address. A13 .. Postal cover containing the Exhibit A11 notice returned as unserved to the 1st defendant in the local address. A14 .. Postal cover containing the Exhibit A11 notice returned as unserved to the 2nd defendant A15 .. Postal cover containing the Exhibit A11 notice returned as unserved to the 3rd defendant A16 28.04.2012 Reply notice to the Exhibit A11 notice issued by the 1st defendant through his lawyer. A17 18.12.2012 Statement of account in respect of Term loan (Housing loan) duly certified. A18 .. Calculation statement of interest accrued but not applied in the Exhibit A17 account. A19 .. Statement showing the period and rate of interest applied in the Exhibit A17 account. A20 .. Statement showing the penal interest applied and capitalised portion of the same in the Exhibit A17 account.

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 2nd September, 2025

TA No.201/2016 (OA NO.543/2012)

Between

State Bank of India, Successor of State Bank of Travancore, Kazhakoottam Branch, Kazhakoottam, Trivandrum District. …Applicant And

Aloysius Dennis Mascreen, S/o.late Peter Joseph Mascreen, Tony’s Cottage, Kilikollur P.O., Kollam District - 691 004. Abroad Address: Aloysius Dennis Mascreen, M/s.Guardian Systems, M-2, A1-Mansoori Building, Khaleefa Street, P.O. Box 43734, Abu Dhabi, UAE & 2 others.

...Defendants

F I N A L O R D E R