HDFC BANK vs NAJEEB on 15 September 2025

1. Najeeb,

S/o.Ahammed Rowther, 426, Medampurayil Veedu,

Konni,

Pathanamthitta – 689 691.

2. Saju,

669, Mepurath House,

Mangaram,

Pathanamthitta – 689 691.

…Defendants

This Original Application having been heard on 08.09.2025 in the presence of Advocate Smt.Saraswathy P. 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.35,78,304.05 due under the loan account together with future interest thereon @21% per annum with monthly rests (inclusive of penal interest @2% per annum) from the defendants jointly and severally and by sale of the immovable properties owned by the defendants. Facts of the case:

2. The applicant is a Banking Company constituted under the Companies Act having its registered office at Mumbai and the account of the defendants is being operated through Kollam Branch.

3. The 1st defendant as borrower and the 2nd defendant as guarantor had submitted a construction equipment loan application to the applicant bank on 19.02.2012. Considering their request, applicant bank sanctioned a loan of Rs.35.20 lakhs and the same was availed by the defendants after executing the loan agreement on 28.07.2012. As the defendants committed default in repayment, a lawyer notice was issued on 13.05.2013 calling upon them to repay the outstanding dues but they did not clear the liability. In such premises, applicant bank was constrained to file the OA claiming the following reliefs:

(i) To recover the sum of Rs.35,78,304.05 together with pendente lite and post-decree interest thereon from the defendants jointly and severally and by sale of the immovable properties owned by the defendants;

(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. Though they entered appearance and sought adjournment for filing written statement, they did not file any written statement within the stipulated period. Subsequently, the defendants remained absent from the proceeding and hence they were declared exparte on 24.03.2015. Proof Affidavit:

5. To establish the claim on behalf of the applicant bank, one Mr.Shyam Menon, Manager (Legal) has filed proof affidavit and produced the loan documents marked as Exts.A1 to A6. The proof affidavit filed by AW1 and the documents produced in this case are not challenged by the defendants. The availing of the loan is well established from the documents placed by the applicant bank. As per the account statement marked as Ext.A5 produced by the applicant bank, a sum of Rs.35,78,304.05 is outstanding in the loan account as on 13.05.2013.

6. Ext.A5 statement would show that the applicant bank has charged a sum of Rs.25,672/- by way of late payment penalty charges in the loan account. As per RBI guidelines, no further interest shall be computed on such charges and hence the applicant bank is not entitled to get any pendente lite and post-decree interest on the aforesaid sum of Rs.25,672/- debited in the loan account.

7. Further, it could be seen that the applicant has debited a sum of Rs.1,21,326.92 towards ‘prepayment charges @4% on outstanding principal’ in the loan account. In paragraph No.8 of the proof affidavit filed by the applicant bank, it is averred that the 1st defendant had failed to pay the amounts sticking to the repayment schedule and even the 2nd installment had been bounced and thereafter paid only paltry amounts by way of cash. In such backdrop, applicant bank is not entitled to recover the aforesaid sum of Rs.1,21,326.92 debited towards prepayment charges. Besides the same, the relief sought for by the applicant for sale of the immovable properties is also not sustainable since no mortgage was created over such properties of the defendants.

8. Considering the amount advanced, interest applied and default committed, I am of the view that applicant bank is entitled to recover the sum of Rs.34,56,977.13 (i.e., after excluding the prepayment charges of Rs.1,21,326.92 from the OA claim amount of Rs.35,78,304.05) together with pendente lite and post-decree interest @14% per annum on the sum of Rs.34,31,305.13 (i.e., after excluding the late payment penalty charges of Rs.25,672/- from Rs.34,56,977.13), which is reasonable in the facts and circumstance of the case.

9. 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.34,56,977.13 (Rupees thirty four lakhs fifty six thousand nine hundred and seventy seven and Paise thirteen only) due under the loan account from the defendants jointly and severally;

(ii) Pendente lite and post-decree interest @14% per annum on the sum of Rs.34,31,305.13 (Rupees thirty four lakhs thirty one thousand three hundred and five and Paise thirteen only) from 24.05.2013 till realization from the defendants jointly and severally; and

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

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 15th day of September, 2025)

[SOVAN KUMAR DASH]

A P P E N D I X Witness for Applicant: AW1: Sri.Shyam Menon, Manager (Legal) of the applicant bank.

Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 04.07.2011 Copy of Power of Attorney executed by the applicant bank in favour of Sri.Sojin Kumar, Assistant Manager. A2 14.02.2012 Loan application submitted by the defendants. A3 28.07.2012 Agreement for loan and guarantee executed by the defendants in favour of the applicant bank. A4 28.07.2012 Demand promissory note for Rs.35.80 lakhs executed by the defendants. A5 … certified copy of the statement of account relating to the loan. A6 03.05.2013 Copy of lawyer notice issued to the defendants calling upon them to repay the outstanding dues.

Defendants’ Exhibits – Nil

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

Dated the 15th September, 2025

TA No.38/2018 (OA No.259/2013)

Between

HDFC Bank Ltd., Business Banking Division, Rep. by Manager (Legal) Sojin Unnikrishnan.

…Applicant

And

Najeeb, S/o.Ahammed Rowther, 426, Medampurayil Veedu, Konni, Pathanamthitta – 689 691 & another.

…Defendants

F I N A L O R D E R