HDFC BANK vs Chindu J on 26 December 2025

1. Chindu J.,

Vadakkeparambil,

Champakulam,

Alappuzha – 688 505.

2. Johnson V.S.,

Vadakkeparambil,

Champakulam,

Alappuzha – 688 505. …Defendants

This Original Application having been heard on 17.12.2025 in the presence of Advocate Smt.Saraswathy P. 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.24,58,093.34 due under auto loan account together with future interest thereon @18% per annum with monthly rests from the defendants jointly and severally and their assets. 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 being operated through Calicut Branch.

3. The 1st defendant as principal borrower and 2nd defendant as co-borrower had applied for an auto loan on 28.09.2012. Considering their request, applicant bank sanctioned a loan of Rs.31 lakhs on 01.10.2012 which was availed by the defendants and purchased a BMW 520D car which was hypothecated to secure the loan. After availing the loan, the defendants failed to make repayment and hence a lawyer notice was issued on 10.12.2014 recalling the dues. Despite the notice, the defendants did not take any step to clear the liability. Hence the applicant bank was constrained to file the OA claiming the following reliefs:

(i) To recover the sum of Rs.24,58,093.34 together with pendente lite and post decree interest thereon from the defendants jointly and severally and their assets;

(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. But they neither appeared nor were they represented and hence the defendants were set exparte on 18.09.2015.

Proof Affidavit:

5. In order to establish the claim on behalf of the applicant bank, one Mr.Arjun C.A., 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 auto loan is well established from the documents placed by the applicant bank. As per Ext.A6 account statement produced by the applicant bank, a sum of Rs.24,58,093.34 is outstanding in the loan account as on 22.01.2015.

6. It could be seen from Ext.A6 account statement that applicant bank has charged an amount of Rs.26,377/- by way of late payment penalty charges in the loan account. It is well settled that penalty charges cannot be capitalized and no interest can be charged over it. Hence the applicant bank is not entitled to get any pendente lite and post-decree interest on the aforesaid amount of Rs.26,377/- charged in the loan account.

7. Further, Ext.A6 statement would show that applicant bank has debited a sum of Rs.64,488.29 towards ‘prepayment charges @3.37% on outstanding principal’ in the loan account. The applicant bank has no case that the defendants had pre-paid any installment or the loan amount, whereas it is claimed that the defendants failed to abide by the terms of loan agreement and hence Ext.A4 lawyer notice was issued on 10.12.2014 demanding pre-closure of the loan account. In such backdrop, applicant bank is not entitled to recover the aforesaid sum of Rs.64,488.29 debited as ‘prepayment charges’ in Ext.A6 account.

8. The report dated 22.09.2023 filed by the Advocate Commissioner appointed by the Tribunal in IA No.2208/2022 would reveal that he sold the hypothecated vehicle, viz., BMW 520D car bearing registration No.KL-05AA 9009 with Engine No.80647196 and Chassis No.WBANX35020CO66072, to one Mohammedkutty.T.K in the auction held on 05.09.2023 for Rs.3,63,000/- as against the reserve price of Rs.3,60,000/-. The successful bidder had remitted

Rs.36,000/- towards EMD on 05.09.2023 and the balance sale consideration was remitted on 11.09.2023 and the sale was confirmed in his favour.

9. Considering the amount advanced, interest applied, default committed and the recovery effected by sale of the secured asset, I am of the view that applicant bank is entitled to recover the sum of Rs.23,93,605.05 (i.e., after excluding the prepayment charges of Rs.64,488.29/- from the OA claim amount of Rs.24,58,093.34) together with pendente lite and post decree interest @12% per annum on the sum of Rs.23,67,228.05 (i.e., after excluding the late payment penalty charges of Rs.26,377/- from Rs.23,93,605.05), which is reasonable in the facts and circumstance of the case.

10. 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.23,93,605.05 (Rupees twenty three lakhs ninety three thousand six hundred and five and Paise five only) due under the auto loan account, less the sum of Rs.3,63,000/- (Rupees three lakhs sixty three thousand only) recovered by the applicant bank on 11.09.2023, from the defendants jointly and severally and their assets;

(ii) Pendente lite and post decree interest @12% per annum on the sum of Rs.23,67,228.05 (Rupees twenty three lakhs sixty seven thousand two hundred and twenty eight and Paise five only) from 13.02.2015 till realization, less the sum of Rs.3,63,000/- (Rupees three lakhs sixty three thousand only) recovered by the applicant bank on 11.09.2023, from the defendants jointly and severally and their assets; and

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

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 26th day of December, 2025)

[SOVAN KUMAR DASH]

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

Witness for Defendant(s): Nil

Applicant’s Exhibits

Ext.No Date Particulars of documents

A1 28.09.2012 Loan application submitted by the 1st defendant. A1(a) 28.09.2012 Loan application submitted by the 2nd defendant. A2 01.10.2012 Agreement for auto loan executed by the defendants. A3 01.10.2012 Demand promissory note for Rs.31 lakhs executed by the defendants. A4 10.12.2014 Copy of lawyer notice issued to the defendants. A5 18.12.2014 Acknowledgement card signed by the 1st defendant and the returned postal envelope addressed to the 2nd defendant. A6

… Certified copy of the statement of account relating to the auto loan.

Defendants’ Exhibits – Nil

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

Dated the 26th December, 2025

TA No.1274/2016 (OA No.66/2015)

Between

HDFC Bank Ltd, Business Banking Division, Represented by Manager (Legal), Cochin Branch. …Applicant

And

Chindu J., Vadakkeparambil, Champakulam, Alappuzha – 688 505 & another. …Defendants

F I N A L O R D E R