SOUTH INDIAN BANK vs GRACE DAVIS on 18 December 2025

1. Grace Davis,

W/o.P.C.Davis,

Paravarakath House,

Amparanirappel,

Bharananganam – 686 578.

2. P.C.Davis (Dead. Legal heirs on record)

S/o.P.C.Chacko,

Paravarakath House,

Amparanirappel,

Bharananganam – 686 578.

3. Sujith Davis,

S/o.P.C.Davis,

Paravarakath House,

Amparanirappel,

Bharananganam – 686 578.

…Defendants

4. Anju Davis,

D/o.late P.C.Davis,

W/o.Philip Chakola,

Chakola House,

Peringavu P.O.,

Thrissur – 680 018.

…Additional 4th defendant [Additional 4th defendant was impleaded as per order dated 22.02.2017 in IA No.979/2016]

This Original Application having been heard on 05.12.2025 in the presence of Advocate Sri. Varughese Cherian for the applicant bank 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.96,94,126.80 due under KCC (OD) account together with future interest thereon @11.40% per annum with yearly rests and penal interest @2% per annum from the defendants jointly and severally and by sale of the schedule property. Facts of the case:

2. The applicant is a body corporate constituted under the Banking Companies Act, 1913 having its registered office at Thrissur and one of its branches at Pala, Kottayam.

3. The defendants approached the applicant bank for a KCC (OD) limit of Rs.75 lakhs which was sanctioned by the applicant bank as per sanction letter dated 30.07.2013. The defendants availed the facility after executing necessary security documents. Towards collateral security for the loan, the 1st defendant created equitable mortgage over the schedule property by deposit of title deed with the applicant bank on 30.07.2013 and executed letter dated 31.07.2013 confirming the creation of mortgage. Due to default in repayment of the loan, applicant bank issued a lawyer notice to the defendants on 27.04.2015 calling upon them to repay the outstanding loan amount. Even after receipt of the notice, they did not care to settle the dues. Hence the applicant was constrained to file the OA claiming the following reliefs:

(i) To recover a sum of Rs.96,94,126.80 together with pendente lite and post-decree interest thereon from the defendants jointly and severally and by sale of the schedule property.

(ii) To recover the costs, charges and expenses from the defendants.

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

4. The defendants entered appearance and sought adjournment for filing written statement but they did not file the same despite time granted. Meanwhile, the 2nd defendant died and the additional 4th defendant was impleaded as his legal heir as per order dated 22.02.2017 in IA No.979/2016. As there was no representation for the additional 4th defendant, she was set exparte on 05.04.2017. None appeared and represented for defendants 1 and 3 to address argument in this case. Proof Affidavit:

5. To establish the claim on behalf of the applicant bank, one Mr.Jolly Abraham, Chief Manager of the bank has filed proof affidavit and produced the loan documents marked as Exhibits A1 to A9. 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 is well established from the documents placed by the applicant bank. A sum of Rs.96,94,126.80 is outstanding in the loan account as on 23.09.2015, which is clearly established from the account statement marked as Ext.A9.

6. It is averred in paragraph 6 of the proof affidavit filed by AW1 that the applicant bank has charged a sum of Rs.1,02,772.65 by way of penal interest in the KCC (OD) 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.1,02,772.65 charged in the loan account.

7. Considering the amount advanced, interest and penal interest applied, repayments effected and default committed and also the facility granted being an agricultural loan, I am of the view that applicant bank is entitled to get pendente lite and post- decree interest @6% per annum on the sum of Rs.95,91,354.15 (i.e., after excluding the penal interest of Rs.1,02,772.65 from the OA claim amount of Rs.96,94,126.80), which is reasonable in the facts and circumstances of the case.

8. The applicant bank, therefore, is entitled to get a final order on the following lines: In the result, applicant bank is given a final order allowing it to recover:

(i) the sum of Rs.96,94,126.80 (Rupees ninety six lakhs ninety four thousand one hundred and twenty six and Paise eighty only) due under the KCC (OD) account from defendants 1 and 3 jointly and severally and by sale of the schedule property; in case of any shortfall, the same shall be recovered from the assets, if any, left by deceased 2nd defendant in the hands of additional 4th defendant, who shall be personally liable to the extent of the value of such assets succeeded by her in the event of her failure to satisfactorily account for the same;

(ii) pendente lite and post-decree interest @6% per annum on the sum of Rs.95,91,354.15 (Rupees ninety five lakhs ninety one thousand three hundred and fifty four and Paise fifteen only) from 25.09.2015 till realization from defendants 1 and 3 jointly and severally and by sale of the schedule property; in case of any shortfall, the same shall be recovered from the assets, if any, left by deceased 2nd defendant in the hands of additional 4th defendant, who shall be personally liable to the extent of the value of such assets succeeded by her in the event of her failure to satisfactorily account for the same; and

(iii) costs and expenses borne by it for realization of the loan from defendants 1 and 3.

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

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 18th day of December, 2025)

[SOVAN KUMAR DASH] PRESIDING OFFICER

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

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 30.07.2013 Sanction letter issued by the applicant bank sanctioning KCC (OD) limit of Rs.75 lakhs to defendants 1 to 3. A2 30.07.2013 Demand promissory note for Rs.75 lakhs executed by defendants 1 to 3. A3 30.07.2013 Agreement of hypothecation executed by the defendants. A4 … General terms and conditions applicable to credit facilities of the applicant bank executed by the defendants. A5 28.06.2003 Sale deed No.1406/2003 of Erattupetta SRO. A6

30.07.2013 Declaration executed by the 1st defendant. A7

31.07.2013 Letter executed by the 1st defendant confirming the deposit of title deeds with the applicant bank. A8

27.04.2015 Copy of lawyer notice issued to the defendants. A9

… certified copy of the statement of account relating to the KCC (OD) loan.

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 18th December, 2025

TA No.373/2016 (OA NO.472/2015)

Between

The South Indian Bank Ltd., Pala Branch.

…Applicant

And

Grace Davis, W/o.P.C.Davis, Paravarakath House, Amparanirappel, Bharananganam – 686 578 & 3 others.

...Defendants &

additional 4th defendant

F I N A L O R D E R