STATE BANK OF INDIA v. ABDUL SAMAD Y

OA 666/2019

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terms and conditions and defaulted in repayment. All the efforts made by the applicant to get the loan account regularized have turned futile. Hence the applicant bank was constrained to file the OA claiming the following reliefs:

(i) To recover the sum of Rs.37,02,262.62 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 a direction 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 any written statement despite sufficient opportunity granted and the chance of filing written statement stood closed on 29.03.2022. The defendants remained absent from the proceeding and none came forward to address arguments in this case.

Proof Affidavit:

5. To establish the claim on behalf of the applicant bank, one Mrs.Pushpakala R., Chief Manager of the applicant has filed

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proof affidavit and produced the loan documents marked as Exhibits A1 to A8. The proof affidavit filed by AW1 and the documents produced in this case are not challenged by the defendants. The availing of the cash credit facility and creation of mortgage over the schedule property are well established from the documents placed by the applicant bank. A sum of Rs.37,02,262.62 is outstanding in the loan account as on 08.11.2019, which is clearly established from the account statements marked as Exts.A7 and A8.

6. Further, it could be seen from Ext.A8 statement that the applicant bank has charged a sum of Rs.27,449/- by way of penal interest in the cash credit. 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.27,449/- charged in the loan account.

7. Considering the amount advanced, interest and penal interest applied, repayments effected and default committed, I am of the view that the applicant bank is entitled to get pendente lite and post-decree interest @12% per annum on the sum of Rs.36,74,813.62 (i.e., after excluding the penal interest of

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Rs.27,449/- from the OA claim amount of Rs.37,02,262.62), 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, the applicant bank is given a final order allowing it to recover:

(i) the sum of Rs.37,02,262.62 (Rupees thirty seven lakhs two thousand two hundred and sixty two and Paise sixty two only) due under the cash credit account from the defendants jointly and severally and by sale of the schedule property;

(ii) pendente lite and post-decree interest @12% per annum on the sum of Rs.36,74,813.62 (Rupees thirty six lakhs seventy four thousand eight hundred and thirteen and Paise sixty two only) from 09.11.2019 till realisation from the defendants jointly and severally and by sale of the schedule property; and

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

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

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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 28^th day of July, 2025)

[SOVAN KUMAR DASH]

PRESIDING OFFICER

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A P P E N D I X

Witness for Applicant:

AW1: Sri.Pushpakala R., Chief Manager of the applicant bank.

Witness for Defendant(s): Nil

Applicant's Exhibits

Ext.No Date Particulars of documents A1 17.12.2012 Sanction letter issued by the erstwhile State Bank of Travancore and duly signed by the defendants. A2 17.12.2012 Hypothecation cum working capital agreement executed by the 1^stdefendant in favour of the erstwhile State Bank of Travancore.

A3 17.12.2021 Guarantee agreement for working capital limit executed by the 2^nddefendant.

A4 02.12.2010 Sale Deed No.2329/2010 of Oyoor SRO. A5 29.09.2012 Memorandum of deposit of title deed executed by the defendants.

A6 12.09.2015 Memorandum of extension of equitable mortgage executed by the defendants.

A7 08.11.2019 The certified copy of the statement of account of the cash credit A/c No.67204909121 under the

Banker's Book Evidence Act.

A8 .. Statement showing the penal interest accrued from 01.07.2017 to 08.11.2019 but not applied in the Exhibit A7 account.

Defendants' Exhibits - Nil

PRESIDING OFFICER

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PRESIDING OFFICER

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IN THE DEBTS RECOVERY

TRIBUNAL-2, KERALA

AT ERNAKULAM

PRESENT: SRI.SOVAN KUMAR DASH

PRESIDING OFFICER

Dated the 28^thJuly, 2025

OA NO.666/2019

Between State Bank of India, Stressed Assets Recovery Branch, Thiruvananathapuram. …Applicant And

Abdul Samad Y.,

S/o.Yusef Kunju,

Elavinmoottil Veedu,

Karalikonam, Arkkannoor, Kollam District - 691 533 & another. ...Defendants

F I N A L O R D E R

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