CANARA BANK vs ROSHNI V. NAIR on 30 October 2025

1. Roshni V. Nair, W/o.Venu K. Nair, Vaishnavam, Aickadu, Kodumon (P.O.), Pathanamthitta - 691 555.

2. Venu K. Nair, S/o.N.Kesava Pillai, Vaishnavam, Aickadu, Kodumon (P.O.), Pathanamthitta - 691 555. …Defendants

This Original Application having been heard on 27.10.2025 in the presence of Advocate Sri.C.Ajith Kumar for the applicant bank and the defendants being absent 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.10,30,511/- due under agricultural loan account together with future interest thereon @12.95% per annum with monthly rests plus penal interest @2% per annum from the defendants and by sale of ‘A’ schedule property. Facts of the case:

2. Pursuant to the application submitted by the 1st defendant, erstwhile Syndicate Bank sanctioned a farm loan of Rs.4 lakhs on 21.12.2005 for purchase of 40 cents of agricultural land and the 2nd defendant stood as guarantor for the loan. The 1st defendant availed the facility after executing necessary security documents including agreement of agricultural advances on 28.12.2005. Towards collateral security for the loan, the 1st defendant created equitable mortgage over ‘A’ schedule property on 07.01.2006 and executed letter dated 17.01.2006 confirming the deposit of title deeds with the bank. After availing the facility, the 1st defendant failed to adhere to the repayment schedule and the account turned NPA on 01.07.2009. Despite issuance of lawyer notice to the defendants calling upon them to repay the outstanding dues, they did not settle the liability. In such premises, the bank was constrained to file the OA claiming the following reliefs:

(i) To recover a sum of Rs.10,30,511/- together with pendente lite and post-decree interest thereon from the defendants and by sale of ‘A’ schedule property;

(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.

3. The defendants filed written statement contending inter alia that the claim made in the OA is exorbitant and excessive. The interest agreed to be paid at the time of sanction was only @9% per annum. There is no provision in the loan agreement for charging penal interest and hence there is no justification for the bank to charge the same in the loan account. The 2nd defendant is not a necessary party in the OA. In view of the above, the OA may be dismissed with cost to the defendants. Proof Affidavit:

4. To establish the claim on behalf of the applicant bank, one Mr.Arun V.S., Branch Manager has filed proof affidavit and produced the loan documents marked as Exhibits A1 to A16. The proof affidavit filed by AW1 and the 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 are well established from the documents placed by the applicant bank.

5. Despite time granted, the defendants have not filed any counterproof affidavit nor adduced any documentary evidence to substantiate their case.

6. On careful consideration of the submissions and the available materials, it appears that there is no dispute regarding the availing of the loan and creation of mortgage over the subject matter property. The contention raised by the defendants as regards the interest charged is concerned, Ext.A3 agreement for agricultural advances executed by the 1st defendant would show that she has agreed to pay interest @11% per annum and overdue interest @2% per annum over the agreed rate as may be fixed by the bank from time to time. In Ext.A2 sanction letter, it is stated that loan amount together with interest @11% per annum is to be repaid in 120 monthly installments of Rs.3,340/- and half yearly interest is to be serviced as and when due. The 1st defendant had countersigned the sanction letter in token of having accepted the terms and conditions thereof. The 2nd defendant executed Ext.A4 deed of guarantee guaranteeing due repayment of the amount due under the agricultural loan of Rs.4 lakhs availed by the 1st defendant. Further, the 1st defendant had executed Ext.A14 acknowledgement of debt confirming the balance outstanding under the loan account as on 07.10.2013. The defendants have no case that they have repaid the loan amount as per the sanctioned terms and no material was also produced to prove their contentions. Mere averments of the defendants do not merit any consideration of the Tribunal. A sum of Rs.10,30,511/- is outstanding in the loan account as on 31.03.2016 which is clearly established from the account statements marked as Exts.A17 and A18.

7. Further, it could be seen from Ext.A18 statement that the applicant has charged a sum of Rs.82,743/- by way of penal interest in the agricultural 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.82,743/- charged in the loan account.

8. Considering the amount advanced, interest and penal interest applied and the loan granted being an agricultural facility, I am of the view that the applicant bank is entitled to get pendente lite and post decree interest @6% per annum on the sum of Rs.9,47,768/- (i.e., after excluding the penal interest of Rs.82,743/- from the OA claim amount of Rs.10,30,511/-), which is reasonable in the facts and circumstances 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.10,30,511/- (Rupees ten lakhs thirty thousand five hundred and eleven only) due under the agricultural loan account from the defendants and by sale of ‘A’ schedule property;

(ii) pendente lite and post-decree interest @6% per annum on the sum of Rs.9,47,768/- (Rupees nine lakhs forty seven thousand seven hundred and sixty eight only) from 11.04.2016 till realization from the defendants and by sale of ‘A’ schedule property; and

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

10. ‘A’ schedule to the OA shall be appended to this final order.

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

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

13. 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 30th day of October, 2025)

[SOVAN KUMAR DASH] PRESIDING OFFICER

A P P E N D I X Witness for Applicant: AW1: Sri.Arun V.S., Branch Manager of the applicant bank.

Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 20.12.2005 Application for loan submitted by the 1st defendant before the applicant bank A2 21.12.2005 Sanction Memorandum of the applicant bank for grant of the loan to the 1st defendant. A3 28.12.2005 Agreement for agricultural advances executed by the 1st defendant in favour of the applicant bank. A4 28.12.2005 Deed of guarantee executed by the 2nd defendant in favour of the applicant bank. A5 28.12.2005 Receipt for Rs.4,00,000/- executed by the 1st defendant in favour of the applicant bank. A6 07.01.2006 Letter handing over title deeds of properties executed by the 1st defendant. A7 17.01.2006 Confirmation of deposit of title deeds executed by the 1st defendant. A8 27.12.2005 Sale Deed No.3836/2005 of Adoor SRO. A9 27.10.2005 Encumbrance certificate no.4556/2005 issued by the Adoor SRO for the period from 01.01.1991 to 26.10.2005. A10 16.12.2005 Encumbrance certificate no.5237/2005 issued by the Adoor SRO for the period from 01.10.2005 to 15.12.2005. A11 06.01.2006 Possession certificate no.72/2006 issued by the Village Officer, Adoor. A12 06.01.2006 Basic tax receipt no.2056310 issued by the Village Officer, Adoor. A13 28.11.2005 Location sketch issued by the Village Officer, Adoor.

A14 07.10.2013 Acknowledgement of debt executed by the 1st defendant in favour of the applicant bank. A15 13.01.2015 Office copy of the lawyer notice issued to the 1st defendant. A16 13.01.2015 Office copy of the lawyer notice issued to the 2nd defendant. A17 .. Extract of the agricultural loan account of the 1st defendant maintained with the applicant duly certified under Banker’s Book of Evidence Act. A18 .. Statement of account showing unapplied interest and penal interest charged in the Exhibit A17 account. A19 31.12.2016 Notarised attest copy of power of attorney executed by the applicant bank in favour of AW1.

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 30th October, 2025

TA No.699/2016 (OA NO.333/2016)

Between

Canara Bank, Adoor Branch, Puthenvilayil Building, Thatta Road, Central, Adoor - 691 523, Pathanamthitta.

…Applicant And

Roshni V. Nair, W/o.Venu K. Nair, Vaishnavam, Aickadu, Kodumon (P.O.), Pathanamthitta - 691 555 & another.

...Defendants

F I N A L O R D E R