FEDERAL BANK vs SREEKUMAR T on 1 October 2018

**FINAL ORDER**

This Original Application is filed on 16.06.2015 under Section 19(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 for recovery of total amount of Rs.10,26,124.68 [Rupees Ten lakhs Twenty six thousand One hundred and twenty four and paise sixty eight only] from the defendants directing to pay the applicant Rs.5,13,891.84/- (Rupees Five Lakhs Thirteen thousand eight hundred and ninety one and paise eighty four only) due under the ACC-01 account with interest @ 14% per annum with yearly rests on Rs. 4,95,674/- from 16.06.2015 till realization in full from the defendants personally and from the 'A' and 'C' to 'H' schedule properties and an amount of Rs.5,12,232.84/- (Rupees Five Lakhs Twelve Thousand Two Hundred and Thirty Two and paise Eighty Four only) due under the ACC-02 account with interest @ 14% per annum with yearly rests on Rs.4,94,063/- (Rupees Four lakhs ninety four thousand and sixty three only) from 16.06.2015 till realization in full from the defendants personally and from sale of the 'B' and 'C' to 'H' schedule properties.

3**BRIEF FACTS OF THE CASE**

1. The applicant is a banking Company constituted under the Companies Act, 1956 having its registered office at Alwaye, Kerala and a branch amongst other places including one at Nedumkandam in Idukki District. The application is signed and verified by Senior Manager and the Principal officer of the applicant bank who is conversant with the facts of the case and is competent to verify and file this application and represent the applicant bank in this application.

2. The applicant bank declares that the application is within the limitation prescribed under Section 24 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The defendants executed Balance Confirmation Letter on 31.07.2012.

3. It is the case of the applicant that the 1^st defendant is the principal borrower who had availed an Agricultural Cash Credit facility vide loan account No. ACC-01 for an amount of Rs.3,00,000(Rupees Three Lakhs only) on 29.09.2009 and defendants 2 to 6 being the co-obligants executed the necessary documents for maintenance of crops. The defendants executed a demand promissory note, Security Delivery Letter and Agreement for Agricultural Loan dated 29.09.2009 for Rs.3Lakhs in favour of the applicant bank.

4. As primary security to the loan availed, the defendants 1,4, 5 and 6 hypothecated the standing crops of cardamom, pepper etc in land having an extent of 53.82 ares in Sy.No.140/2 and 140/3, 21.85 ares in Sy.No.140/2, 8.09 ares in

Sy.No.140/2 and 20.23 ares in Sy.No.140/2 respectively in Udumbanchola Taluk Parathodu Village in Idukki District described under Schedule A of the application.

5. On 29.09.2009 the 2^nd defendant as the principal borrower and defendants 1 and 3 to 6 as the co-obligants, availed another Agricultural Cash Credit vide account No. ACC-02 for an amount of Rs.3,00,000/- (Rupees Three Lakhs only) after executing necessary documents/creating securities. The defendants executed Demand Promissory note, Security Delivery letter and Agreement for Agricultural Loan dated 29.09.2009 for Rs.3 Lakhs in favour of the applicant bank.

6. As primary security to the loan (ACC-02) availed, the 2^nd and 3^rd defendants hypothecated standing crops of cardamom, pepper etc in land having an extent of 49.77 ares in Sy.No.140/2 and 140/3 and 50.18 ares in Sy.No.140/2 and 140/3 respectively in Udumbanchola Taluk, Parathodu Village in Idukki District described under Schedule B of the application.

7. As collateral security for both loan accounts, the defendants deposited the title deeds of the property having an extent of 36.42 Ares in Sy.No.140/2, 4.05 Ares in Sy.No.140/2, 9.3 ares in Sy. No.140/3, and 4.05 ares in Sy.No.140/2 owned by the 1^st defendant described under Schedule C of the application, 36.42 ares in Sy.No.140/2, 9.3 ares in Sy.No.140/3 and 4.05 ares in Sy.No.140/2 belonging to the 2^nd defendant described under Schedule D of the application, 36.42 Ares in Sy.No.140/2, 9.71 ares in Sy.No.140/3 and 4.05 ares in

Sy.No.140/2 belonging to 3^rd defendant described under Schedule E of the application, 21.85 ares in Sy.No.140/2 belonging to 4^th defendant described under Schedule F of the application, 8.09 ares in Sy.No.140/2 belonging to 5^th defendant described under Schedule G of the application and 20.23 ares in Sy.No.140/2 belonging to 6^th defendant described under Schedule H of the application.

8. The defendants 1 to 6 have vide letter dated 30.09.2009 confirmed the deposit of the title deed and creation of mortgage in respect of 'C' to 'H' Schedule properties respectively favouring the applicant bank.

9. The defendants also executed a Balance Confirmation Letter dated 02.0.2012 for ACC-01 and ACC - 02 accounts as on 31.07.2012 confirming the balance outstanding in both the loan accounts.

10. After availing the loan, the defendants committed default in repayment of the monthly installments and neglected to abide by the terms and conditions of the loan agreement. In spite of several requests made by the applicant bank, the defendants failed to repay the instalments and regularize the loan account and hence the applicant bank issued a Lawyer notice dated 21.01.2015 calling upon the defendants to pay the entire amount due under the loan accounts. As per the accounts maintained by the applicant bank, a total sum of Rs.10,26,973/- is due from the defendants and hence the applicant was constrained to file this original application for recovery of the said amount.

11. After filing of the OA, the applicant has taken out summons as directed by this Tribunal and has filed proof of service on 07.07.2015. The summons issued to the defendant is duly served and service of summons is completed as per the regulations. The defendants 3 to 6 neither appeared nor filed the vakalath to contest the case. Since there was no appearance for the defendants nor were represented by any counsel, the defendants 3 to 6 were placed exparte on 20.10.2015. The defendants 1 and 2 have filed vakalath and filed written statement wherein they admitted the averments in the OA and expressed their inability to pay the entire amount in lumpsum and sought to refer the matter to Adalath. It is also submitted that they deposited an amount of Rs.40,000/- on 07.09.2015 after the institution of the Original application by the applicant bank to which the applicant bank concedes and has filed an affidavit submitting that the defendants have made payment of Rs.40,000/- on 07.09.2015 and it was the only payment made by the defendants after institution of the OA.

12. The evidence on the side of the applicant bank consists of the proof affidavit of its Manager and Principal Officer, AW1 and Exhibits A1 to A21 are marked on the side of applicant and closed their side of evidence.

13. Heard arguments of the applicant bank and perused the records of the case. The following points arise for my consideration:

**(i) Whether the applicant is entitled for the reliefs prayed for in the OA?**

**(ii) What order?**

My findings on the above points are as follows:- **Point No.(i): In the affirmative**

**Point No.(ii): As per final order.**

**Reasons:-**

14. The evidence of the applicant bank by way of proof affidavit of Senior Manager and Principal Officer AW1, reiterates the facts pleaded in the OA and the affidavit is corroborated by the above referred Exhibits A1 to A21 which clearly establishes the case of the applicant bank to allow the present OA. Even otherwise the whole case of the applicant bank is based on the documentary evidence and the witness has duly proved all the documents exhibited by him. It is quite evident from the documents placed on record by the applicant bank that defendants have availed the financial assistance from the respondent bank and have failed to repay the dues of the respondent bank. Added to this, it appears that the defendants 3 to 6 did not contest the matter as they admitted the entire case of the applicant as sought for in the OA. The 1^st and 2^nd defendant in their written statement admitted the claim of the OA and expressed their inability to pay. However, they made a payment of Rs.40,000/- on 07.09.2015. In view of the above, the present OA is to be allowed with costs as sought for by the applicant bank.

15. Having regard to the amount advanced, the interest applied, the conduct and operations in the account and the default committed, the Tribunal is of the view that the applicant bank is entitled to get a final order on the following lines:-

**ORDER**

- (a) The OA is allowed with costs.

- (b) The defendants are jointly and severally directed to pay the applicant Rs.5,13,891.84(Rupees Five Lakhs Thirteen thousand eight hundred and ninety one and paise eighty four only) together with future interest compounded yearly on sum of Rs.4,95,249.84 (Rs.5,13,891.84 - Penal interest of Rs.18642) @ 12% per annum from 16.06.2015 till realization and also its costs from the defendant;

- (c) The defendants are jointly and severally directed to pay the applicant Rs.5,12,232.84 (Rupees Five Lakhs Twelve Thousand Two Hundred and Thirty Two and paise Eighty Four only) together with future interest compounded yearly on sum of Rs.4,93,638.84 (Rs.5,12,232.84 - Penal interest of Rs.18594) @ 12% per annum from 16.06.2015 till realization and and also its costs less Rs.40,000/- paid by the defendants on 07.09.2015 from the defendant;

- (d) In the event of failure of the defendants to pay the OA claim amount, the bank is at liberty to sell the OA 'A' to 'H' Schedule properties of the defendants and the sale proceeds be appropriated towards the OA claim amount as required under law;

- (e) In the event of non-realization of the OA claim amount despite the sale of the mortgaged properties referred above, the bank is at liberty to proceed against the other properties of the defendants, as required under law;

- (f) Schedule properties A to H shown in the OA shall become part and parcel of the final order of the OA and Recovery Certificate of present OA;

- (g) The applicant bank shall file memo of costs within ten days from the date of this final order;

- (h) Recovery Certificate shall be drawn up and issued to the Recovery Officer in terms of the final order.

16 The Registry is directed to communicate copy of the order to the parties concerned by speed post or registered post with AD.

*[Dictated to the steno, transcribed by him, corrected by me and then pronounced in the open court on this the 1^st day of October, 2018]*

APPENDIX

Witness for Applicant:

AW1: Mr. Ramachandran S, Senior Manager and Principal Officer of the applicant bank.

Witness for Defendant(s): Nil

Exhibits on the part of the applicant

<table border="1"> <thead> <tr> <th><u>Ext.No</u></th> <th><u>Date</u></th> <th><u>Particulars of documents</u></th> </tr> </thead> <tbody> <tr> <td>A1</td> <td>29.09.2009</td> <td>Demand Promissory Note for ACC-01</td> </tr> <tr> <td>A2</td> <td>29.09.2009</td> <td>Security Delivery Letter</td> </tr> <tr> <td>A3</td> <td>29.09.2009</td> <td>Agreement for ACC-01</td> </tr> <tr> <td>A4</td> <td>29.09.2009</td> <td>Demand Promissory note for ACC-02</td> </tr> <tr> <td>A5</td> <td>29.09.2009</td> <td>Security Delivery Letter</td> </tr> <tr> <td>A6</td> <td>29.09.2009</td> <td>Agreement for ACC-02</td> </tr> <tr> <td>A7</td> <td>25.04.2006</td> <td>Will No.22/111/2006 of Udumbanchola SRO</td> </tr> <tr> <td>A8</td> <td>30.09.2009</td> <td>Letter confirming deposit of Title deed by D1</td> </tr> <tr> <td>A9</td> <td>30.09.2009</td> <td>Letter confirming deposit of Title deed by D2</td> </tr> <tr> <td>A10</td> <td>30.09.2009</td> <td>Letter confirming deposit of Title deed by D3</td> </tr> <tr> <td>A11</td> <td>30.09.2009</td> <td>Letter confirming deposit of Title deed by D4</td> </tr> <tr> <td>A12</td> <td>30.09.2009</td> <td>Letter confirming deposit of Title deed by D5</td> </tr> <tr> <td>A13</td> <td>30.09.2009</td> <td>Letter confirming deposit of Title deed by D6</td> </tr> <tr> <td>A14</td> <td>02.08.2012</td> <td>Balance Confirmation Letter</td> </tr> <tr> <td>A15</td> <td>23.07.2014</td> <td>Lawyer Notice</td> </tr> <tr> <td>A16</td> <td>-</td> <td>Statement of Account in ACC-01</td> </tr> <tr> <td>A17</td> <td>-</td> <td>Statement of Account in ACC-02</td> </tr> <tr> <td>A18</td> <td>-</td> <td>Statement showing impact of Capitalization in ACC-01</td> </tr> <tr> <td>A19</td> <td>-</td> <td>Statement showing impact of Capitalization in ACC-02</td> </tr> <tr> <td>A20</td> <td>-</td> <td>Statement showing rate of interest applied in the ACC-01 account</td> </tr> <tr> <td>A21</td> <td>-</td> <td>Statement showing rate of interest applied in the ACC-02 account</td> </tr> </tbody> </table>

<table border="1"> <tr> <td>A22</td> <td>17.10.1994</td> <td>Reserve Bank of India Circular</td> </tr> <tr> <td>A23</td> <td>26.06.1976</td> <td>Reserve Bank of India Circular</td> </tr> <tr> <td>A24</td> <td>26.07.2002</td> <td>Reserve Bank of India Circular</td> </tr> </table>

Defendant's Exhibits - Nil


**EXHIBIT NO. 1** All that piece and parcel of land situated in the area of 36 Acres at Sy. No. 240/2, Block No. 49 along with all buildings existing all buildings situated at d. of d. in PA 27-10-1988 Village Udaybanshore Tahsil, Tarkar District.

East: Block No. 1347 North: D. of d. property in the name of West: D. of d. property in the name of South: D. of d. property in the name of

(C Schedule as per WAI No 12/1116/008)

**EXHIBIT NO. 2** All that piece and parcel of land having an extent of 4.05 Acres in Sy. No. 240/2 Block No. 49 along with all buildings existing all buildings situated at d. of d. in PA 27-10-1988 Village Udaybanshore Tahsil, Tarkar District.

**A SCHEDULE**

Hypothecation of standing crops of cardamom, pepper etc. in land having and extent of 53.82 ares in Sy.No. 140/2 and 140/3, 21.85 ares in Sy.No 140/2, 8.09 ares in Sy.No. 140/2 and 20.23 ares in Sy.No. 140/2, Block No.49 in Udumbanchola Taluk, Parathodu Village in Idukki District.

**B SCHEDULE**

Hypothecation of standing crops in 49.77 ares in Sy.No.140/2 and 140/3 and 50.18 ares in Sy.No. 140/2 and 140/3, Block no.49 in Udumbanchola Taluk, Parathodu village in Idukki District.

**C SCHEDULE**

**Item No.1**

All that piece and parcel of land having an extent of 36.42 Ares in Sy.No.140/2, Block No.49 along with all improvements thereon including all buildings existing and /or to be constructed in Parathodu Village, Udumbanchola Taluk, Idukki District.

<table> <tbody> <tr> <td>East</td> <td>:</td> <td>Block No. 1347</td> </tr> <tr> <td>North</td> <td>:</td> <td>D scheduled property in the Will</td> </tr> <tr> <td>West</td> <td>:</td> <td>D scheduled property in the Will</td> </tr> <tr> <td>South</td> <td>:</td> <td>E scheduled property in the Will</td> </tr> </tbody> </table>

(C Schedule as per Will No.22/111/2006)

**Item No.2**

All that piece and parcel of land having an extent of 4.05 ares in Sy.No. 140/2, Block No.49 along with all improvements thereon including all buildings existing and /or to be constructed in Parathodu Village, Udumbanchola Taluk, Idukki District.

13**Boundaries:**

<table> <tbody> <tr> <td>East</td> <td>:</td> <td>A schedule property</td> </tr> <tr> <td>North</td> <td>:</td> <td>F scheduled property in the Will</td> </tr> <tr> <td>West</td> <td>:</td> <td>C2 scheduled property in the Will</td> </tr> <tr> <td>South</td> <td>:</td> <td>Panchayath Road</td> </tr> </tbody> </table>

(C1 Schedule as per Will No.22/111/2006)

**Item No.3**

All that piece and parcel of land having an extent of 9.3 ares in Sy.No. 140/3, and 4.05 Ares in Sy.No.140/2, Block No.49 along with all improvements thereon including all buildings existing and /or to be constructed in Parathodu Village, Udumbanchola Taluk, Idukki District.

<table> <tbody> <tr> <td>East</td> <td>:</td> <td>Block No.1347</td> </tr> <tr> <td>North</td> <td>:</td> <td>D scheduled property in the Will</td> </tr> <tr> <td>West</td> <td>:</td> <td>D scheduled property in the Will</td> </tr> <tr> <td>South</td> <td>:</td> <td>E scheduled property in the Will</td> </tr> </tbody> </table>

(C2 Schedule as per Will No.22/111/2006)

(Property mortgaged by D1 covered under Will no.22/111/2006 dated 25.04.2006 of SRO Udumbanchola)

**D SCHEDULE****Item No.1**

All that piece and parcel of land having an extent of 36.42 Ares in Sy.No.140/2, Block No.49 along with all improvements thereon including all buildings existing and /or to be constructed in Parathodu Village, Udumbanchola Taluk, Idukki District.


East : Block No. 1347 North : B scheduled property in the Will and the property of Ramayya Pillai West : D scheduled property in the Will South : E scheduled property in the Will (D Schedule as per Will No. 22/111/2006)

**Item No. 2**

All that piece and parcel of land having an extent of 9.3 ares in Sy.No. 140/3, and 4.05 Ares in Sy.No.140/2, Block No.49 along with all improvements thereon including all buildings existing and /or to be constructed in Parathodu Village, Udumbanchola Taluk, Idukki District.

East : C and D scheduled properties in the Will North : Property of Ramayya Pillai West : Block No.1349 South : E 1 scheduled property in the Will (D1 Schedule as per Will No.22/111/2006)

(Property mortgaged by D2 covered under Will no.22/111/2006 dated 25.04.2006 of SRO Udumbanchola)

**E SCHEDULE**

**Item No. 1**

All that piece and parcel of land having an extent of 36.42 Ares in Sy.No.140/2, Block No.49 along with all improvements thereon including all buildings existing and /or to be constructed in Parathodu Village, Udumbanchola Taluk, Idukki District.

15**Boundaries:**

East : Block No. 1347 North : C scheduled property in the Will West : A-F scheduled property in the Will South : Panchayath Road (E Schedule as per Will No.22/111/2006)

**Item No.2**

All that piece and parcel of land having an extent of 9.71 Ares in Sy.No.140/3 and 4.05 ares in Sy.No.140/2, Block No.49 along with all improvements thereon including all buildings existing and /or to be constructed in Parathodu Village, Udumbanchola Taluk, Idukki District.

East : F scheduled property in the Will North : D scheduled property in the Will West : Block No.1349 South : C2 scheduled property in the Will (E1 Schedule as per Will No.22/111/2006)

(Property mortgaged by D3 covered under Will no.22/111/2006 dated 25.04.2006 of SRO Udumbanchola)

**FSCHEDULE**

All that piece and parcel of land having an extent of 21.85 Ares in Sy.No.140/2 along with all improvements thereon including all buildings existing and /or to be constructed in Parathodu Village, Udumbanchola Taluk, Idukki District.

East : E scheduled property in the Will North : F scheduled property in the Will West : C1 scheduled property in the Will South : Jeep Road (A Schedule as per Will No.22/111/2006)

(Property mortgaged by D4 covered under Will no.22/111/2006 dated 25.04.2006 of SRO Udumbanchola)

**G SCHEDULE**

All that piece and parcel of land having an extent of 8.09 Ares in Sy.No.140/2, Block No.49 along with all improvements thereon including all buildings existing and /or to be constructed in Parathodu Village, Udumbanchola Taluk, Idukki District.

East : C and E scheduled property in the Will North : C scheduled property in the Will West : C and E scheduled property in the Will South : A and C1 scheduled property in the Will (F Schedule as per Will No.22/111/2006)

(Property mortgaged by D5 covered under Will no.22/111/2006 dated 25.04.2006 of SRO Udumbanchola)

**H SCHEDULE**

All that piece and parcel of land having an extent of 20.23 Ares in Sy.No.140/2 along with all improvements thereon including all buildings existing and /or to be constructed in Parathodu Village, Udumbanchola Taluk, Idukki District.

East : Block No.1347

North : Property of Ramayya Pillai

West : D scheduled property in the Will

South : D scheduled property in the Will (B Schedule as per Will No.22/111/2006)

(Property mortgaged by D6 covered under Will no.22/111/2006 dated 25.04.2006 of SRO Udumbanchola)


Nadumbanchola P.O. Munai - 685552

[Advisers: C.M. Rao, D. Chandrasekhar, S. S. S. Rao]

Sri. Jayakumar T. Via Lane Thulambanchola P.O. Munai - 685553

Sri. Jayakumar T. Via Lane Thulambanchola P.O. Munai - 685553

Smt. Swarnamala. Via Lane Thulambanchola P.O. Munai - 685553

**IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM**

Dated this the 01^st day of October, 2018

**Present: S.V.Gowramma, B.A., LL.B**

**Presiding Officer**

T.A No: 145 / 2017[OA No:284 /2015]

**Bétween**

The Federal Bank Ltd, Nedumkandam Branch, .....Applicant

**And**

Sri. Sreekumar T, & others ...Defendants

**FINAL ORDER**