Allowed

State Bank of India v. Biju

DRT19 Nov 2024OA/569/2023

Case brief

AI extract

What is this about?

This DR tribunal allowed the applicant bank's application for a Recovery Certificate due to the defendant's default in installment payments under a Lok Adalath award. The court ordered the defendant to pay specific sums covering Cash Credit, Housing Loan, and Term Loans with interest, while rejecting claims for interest on penal amounts. Directions were issued for the sale of listed properties to

What did the court decide?

Recovery Certificate issued; Defendant directed to pay Rs.52,03,988.84 (Cash Credit) and other dues; Bank directed to sell Schedule A, B, C, D properties.

State Bank of India versus Biju — Insolvency and Bankruptcy | DRT (2024)

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Fair order

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IN THE DEBTS RECOVERY TRIBUNAL – 1 AT ERNAKULAM

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DATED THIS 19^th DAY OF NOVEMBER, 2024

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PRESENT: Su. WILLYAHM, B.Sc., M.L. [DISTRICT JUDGE - Retd] PRESIDING OFFICER

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OA No.569/2023

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Between

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State Bank of India, Asset Recovery Management Branch 1^st Floor, R. S. Building Opp. Maharajas College Ground M. G. Road, Ernakulam – 682 011 Represented by its Chief Manager

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----Applicant

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And

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Biju P.S., S/o. Sreedharan, Proprietor, M/s Green Power Solutions, Puthuparambil House, Kombayar P.O., Parathode Village, Idukki – 685 571, Now residing at 37/1047 D, Dhanyasree, Parambathu Road, Kizhukandi Paramba, Karuvasseri P.O., Vengeri, Kozhikode – 673 010.

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----Defendant

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This Original application coming on 21.10.2024 for hearing before me in the presence of Mr. Rajesh Raja Gopala Pillai, Advocate for the

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OA 569/2023

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Applicant bank and Mr. Kuruvila Mathew, Advocate for Defendant and upon hearing arguments of learned counsel for the parties and upon perusing the material records, this Tribunal delivered the following:

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O R D E R

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The applicant bank has filed the instant memo ID No.15558/2024 dated 08.10.2024 seeking to issue Recovery Certificate pursuant to the Lok Adalath award dated 20.01.2024.

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The applicant bank has filed a default memo stating inter alia that the defendant had remitted only the 1^st installment of Rs.25,000/- and defaulted in payment of the subsequent amounts as per the award of the Lok Adalath held on 20.01.2024. The OA was settled in Lok Adalath held at DRT-1 on 20.01.2024 and as per the terms of compromise, the defendant was obliged to remit a sum of Rs.1,05,00,000/- to the applicant bank in six installments. It was agreed that in the event of default of payment of installments, the defendant would have no objection to the issuance of Recovery Certificate for the entire amount claimed in the OA with interest and costs less such payments effected after the passing of the award. It is stated that the defendants have failed to remit the settled amount as per the said award and hence it is prayed to issue a Recovery Certificate as claimed in the OA.

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On perusal of records, it could be seen that as per the award, the defendant had to pay an amount of Rs.1,05,00,000/- to the applicant bank in six installments i.e. 1^st installment of Rs.25,000/- on 31.01.2024, 2^nd installment of Rs.10,00,000/- on or before 31.03.2024, 3^rd installment of Rs.25,00,000/on or before 31.07.2024, 4^th installment of Rs.15,00,000/- on or before 31.10.2024, 5^th installment of Rs.15,00,000/on or before 31.12.2024 and the final and last installment amount of Rs.39,75,000/- on or before 31.03.2025.

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It was made clear in the award that in the event of failure to pay the amounts as aforesaid, the defendant shall forfeit the benefits of compromise and they shall have no objection for issuance of Recovery Certificate for the entire amount claimed in the OA with interest and costs, less payments effected subsequent to passing of the award, on filing of necessary application before the Tribunal intimating the instance of such default.

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Page 2 of 7

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OA 569/2023

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According to the applicant bank, the defendant has only paid the 1^st installment of Rs.25,000/- and has failed to pay the balance installments as per the award dated 20.01.2024 and, therefore, a Recovery Certificate as claimed in the OA, may be issued.

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The applicant bank has charged Rs.2,95,714/-, Rs.18,733/- and Rs.2,060/- as penal interests on the Cash Credit, housing loan and Term Loan accounts respectively availed by the defendant in terms of the agreement in sanction letters. It is well settled that penal interest cannot be capitalised and no interest can be charged on penal interest. The applicant bank, therefore, is not entitled to get any further interest on the aforesaid amount of penal interest, as laid down by the Hon'ble Supreme Court of India in Central Bank of India v. Ravindra [reported in AIR 2001 SC 3095] .

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In the result, the Original Application is allowed directing defendant to pay to the applicant bank, as per the following lines :

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(i) A sum of Rs.52,03,988.84 (Rupees Fifty Two Lakhs Three Thousand Nine Hundred Eighty Eight and Paise Eighty Four only) due under Cash Credit account with interest on the sum of Rs.49,08,274.84 (Rupees Forty Nine Lakhs Eight Thousand Two Hundred Seventy Four and Paise Eighty Four only) @17.25% per annum from 25.04.2023 till the date of realisation and by sale of OA Schedules ‘A’, ‘B’ & ‘C’ properties and less a sum of Rs.25,000/- (Rupees Twenty Five Thousand only) credited on 31.01.2024;

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(ii) A sum of Rs.43,69,192.73 (Rupees Forty Three Lakhs Sixty Nine Thousand One Hundred Ninety Two and Paise Seventy Three only) due under Housing Loan account with interest on the sum of Rs.43,50,459.73 (Rupees Forty Three Lakhs Fifty Thousand Four Hundred Fifty Nine and Paise Seventy Three only) @8.80% per annum from 25.04.2023 till the date of realisation and by sale of OA ‘C’ schedule property;

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(iii) A sum of Rs.92,168.76 (Rupees Ninety Two Thousand One Hundred Sixty Eight and Paise Seventy Six only) due under Medium Term Loan account with interest on the sum of Rs.90,108.76 (Rupees Ninety Thousand One Hundred Eight and Paise Seventy Six only) @10.65% per annum from

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Page 3 of 7

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OA 569/2023

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25.04.2023 till the date of realisation and by sale of OA ‘D’ schedule property;

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(iv) A sum of Rs.9,76,891/- (Rupees Nine Lakhs Seventy Six Thousand Eight Hundred Ninety One only) due under Guaranteed Emergency Credit Line Loan account with interest @9.25% per annum from 25.04.2023 till the date of realisation and by sale of OA ‘A’, ‘B’ & ‘C’ schedule properties; and

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(v) A sum of Rs.22,97,468/- (Rupees Twenty Two Lakhs Ninety Seven Thousand Four Hundred Sixty Eight only) due under Working Capital Term Loan with interest on the sum of @17.25% per annum from 25.04.2023 till the date of realisation and by sale of OA ‘A’, ‘B’ & ‘C’ schedule properties.”

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On failure to pay the above said debts to the Applicant Bank, the Applicant Bank is directed to bring the immovable properties described as supra , for sale to realize its dues and its proportionate costs.

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The Registry is directed to prepare DRC in terms of this final order. The Applicant Bank shall file memo of costs within 10 days from the date of this order. Registry is directed to communicate the copy of this order to both parties as provided in Rule 16 of the Debts Recovery Tribunal (Procedure) Rules, 1993, as amended in 2003.

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Typed by PS, transcribed, corrected and pronounced by me in the open court on this the 19^th day of November, 2024.

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(Su. WILLYAHM) PRESIDING OFFICER

Page 4 of 7

OA 569/2023

SCHEDULE A

Stocks, receivables and other current assets kept with the defendant.

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SCHEDULE B

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District	:	Idukki
Sub District	:	Udumbanchoala
Taluk	:	Udumbanchoala
Village	:	Parathodu
Re. Sy. No.	:	230/6
OldSy. No.	:	4/1-206
Extent in Ares	:	8.09

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DESCRIPTION

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Property having an extent of 8.09 Ares in Re. Sy. No.230/6 (Old Sy. No. 4/1-206 in Old Sy. Block No.49) of Parathodu Village together with all improvements made therein together with all other rights, improvements, easements, appurtenant obtained under Sale Deed No.767/2005 of SRO Udumbanchoala.

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BOUNDARIES (As per title deed)

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East	:	Property	belonging to Sankaran Aachari
South	:	Road
West	:	Property	belonging to Kumaran
North	:	Property	belonging to Kumaran

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SCHEDULE C

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District : Kozhikode Sub District : Kakkodi

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Page 5 of 7

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OA 569/2023

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Taluk	:	Kozhikode
Village	:	Vengeri
Re. Sy. No.	:	59/4
OldSy. No.	:	84/10
Extent in Ares	:	2.3473

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DESCRIPTION

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Property having an extent of 2.3473 Ares in Re. Sy. No.59/4 (Old Sy. No.84/10) of Vengeri Village alongwith a house bearing No.37/1047D of Kozhikode Corporation and together with all improvements made therein together with all other rights, improvements, easements, appurtenant obtained under Sale Deedno.273/2016 of SRO Kakkodi.

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BOUNDARIES (As per title deed)

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East	:	Property belonging to Koya
South	:	Corporation Road
West	:	Corporation Road
North	:	Property belonging to others

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SCHEDULE D

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Hypothecation of Dost LS BS IV Vehicle

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Vehicle Class	: LMV Goods Carriage
Makers name	: Ashok Leyland Ltd.
Makers class	: Dost LS BS IV Goods vehicle
Reg. No.	: KL 11 BD 6337
Type of Body	: Open

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Page 6 of 7

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OA 569/2023

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Chassis No.	: MB1AA22E1GRW41582
Engine No.	: XGH030728P
Colour	: Irish Cream and Yellow

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(Su. WILLYAHM) PRESIDING OFFICER

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Page 7 of 7

State Bank of India v. Biju

Case brief

What is this about?

What did the court decide?

State Bank of India v. Biju

Case brief

What is this about?

What did the court decide?

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