Allowed

Union Bank of India v. Bindhu Das

DRT16 Jul 2025OA/306/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the applicant bank's application for recovery of loans totaling over Rs. 51 lakhs from two defendants who committed defaults. The Tribunal granted relief for the principal amount and future interest from 11.04.2024, while explicitly excluding pre-existing penal interest from capitalization.

What did the court decide?

Recovery of principal amounts for three loan accounts plus pendente lite and post-decree interest from 11.04.2024; Penal interest excluded from calculation; Recovery Certificate issued to Recovery Off

Union Bank of India versus Bindhu Das — Money Laundering | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

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PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

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Dated this the 16^th day of July, 2025

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ORIGINAL APPLICATION No.306/2024

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Between

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Union Bank of India, Kottarakkara Branch, Tharakans Building, M.C.Road, Pulamon Junction, Kottarakara P.O. Kerala – 691 531. ...Applicant And

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Bindhu Das, Proprietor, M/s.AB Traders, EP XIV/493, Vilayil Building, Irumpanangad P.O., Ambalathumkala, Ezhukone, Kollam – 691 505.

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Ajith Kumar, Proprietor, M/s.AJ Traders, EP IV/430, 555, Irumpanangad P.O., Ambalathumkala, Ezhukone, Kollam – 691 505. …Defendants

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This Original Application having been heard on 18.06.2025

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in the presence of Advocates M/s.B.Ashok Kumar, Pradeep Kumar

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C.M. and Manoj Kumar P.S. for the applicant bank and the

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OA 306/2024

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defendants being absent and stood over to this day for consideration, the Tribunal delivered the following:

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F I N A L O R D E R

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This Original Application has been filed under S.19(1) of the Recovery of Debts and Bankruptcy Act, 1993 for recovery of an aggregate sum of Rs.51,35,172.94 due under three loan accounts together with future interest and costs from the defendants jointly and severally and by sale of ‘A’ and ‘B’ schedule properties.

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Facts of the case:

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The applicant is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its head office at Mumbai and a branch among other places at Kottarakara in Kollam District.

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The 1^st defendant is the proprietrix of M/s.A.B.Traders and the 2^nd defendant is the proprietor of M/s.A.J.Traders. At the request of the defendants, the applicant bank sanctioned the following credit facilities:-

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Date of sanction	Type of loan	Amount (Rs.)	Availed by	Guarantor	Collateral security
22.09.2021	Cash credit	Rs.30 lakhs	2^nddefendant	1^stdefendant	‘A’ and ‘B’ schedule properties

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OA 306/2024

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12.08.2020	Term loan	Rs.3 lakhs	2^nddefendant	1^stdefendant	‘A’ and ‘B’ schedule properties
29.01.2021	Cash credit	Rs.10 lakhs	1^stdefendant	2^nd defendant	‘A’ and ‘B’ schedule properties

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The defendants availed the facilities but committed default in repayment and thus violated the terms and conditions of the loan agreements. Hence the applicant bank issued a lawyer notice to the defendants on 11.03.2024 recalling the outstanding dues but they did not clear the liability. In such premises, the applicant bank was constrained to file the OA claiming the following reliefs:

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(i) To recover an aggregate sum of Rs.51,35,172.94 together with pendente lite and post-decree interest thereon from the defendants jointly and severally and

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by sale of ‘A’ and ‘B’ schedule properties;

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

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

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The defendants were duly served with summons but

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they remained absent from the proceeding.

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OA 306/2024

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Proof Affidavit :

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To establish the claim on behalf of the applicant bank, one Mr.Saravanan P., Branch Manager of the bank has filed proof affidavit and produced the loan documents marked as Exhibits A1 to A23. The proof affidavit filed by AW1 and the documents produced in this case are not challenged by the defendants. The availing of the loans and creation of hypothecation/mortgage charge over the schedule properties are well established from the documents placed by the applicant bank. An aggregate sum of Rs.51,35,172.94 is outstanding in the loan accounts as on 31.03.2024, which is clearly established from the accounts statements marked as Ext.A23.

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The statement produced along with the OA would show that the applicant bank has charged a sum of Rs.3,054/- by way of penal interest in the term loan account (A/c No.528006990000023). 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.3,054/- charged in the term loan account. According to the applicant bank, penal interest is not charged in the cash credit accounts.

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OA 306/2024

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Considering the amount advanced, interest and penal

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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 in the manner stated below, which is reasonable in the facts and circumstances of the case.

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The applicant bank, therefore, is entitled to get a final order on the following lines:

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In the result, the applicant bank is given a final order allowing it to recover:

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Cash credit account of the 1^st defendant	Rs.11,81,964.36 (Rupees eleven lakhs eighty one thousand nine hundred and sixty four and Paise thirty six only) together with p_endente lite_and post- decree interest thereon @11% per annum from
	11.04.2024 till realisation from the defendants
	jointly and severally and by sale of ‘A’ and ‘B’ schedule properties.
Cash credit	Rs.37,09,324/- (Rupees thirty seven lakhs nine
account of the 2^nd defendant	thousand three hundred and twenty four only) together with p_endente lite_and post-decree interest thereon @11% per annum from 11.04.2024 till realisation from the defendants jointly and severally and by sale of ‘A’ and ‘B’ schedule properties.
Term loan account of the 2^nd	Rs.2,43,884.58 (Rupees two lakhs forty three thousand eight hundred and eighty four and Paise

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OA 306/2024

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defendant	fifty eight only) together with p_endente lite_and
	post-decree interest on the sum of Rs.2,40,830.58
	(Rupees two lakhs forty thousand eight hundred
	and thirty and Paise fifty eight only) @7% per
	annum from 11.04.2024 till realisation from the
	defendants jointly and severally and by sale of ‘A’
	and ‘B’ schedule properties; and

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costs and expenses borne by it for realisation of the loans from the defendants.

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‘A’ and ‘B’ schedules to the OA shall be appended to this final order.

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The applicant bank shall file memo of costs within ten days from the date of this final order.

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

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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.

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(Dictated to my PA, corrected and pronounced by me in the open Tribunal on this the 16^th day of July, 2025)

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[SOVAN KUMAR DASH] PRESIDING OFFICER

OA 306/2024

A P P E N D I X

Witness for Applicant: AW1: Sri.Saravanan P., Branch Manager of the applicant bank.

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Witness for Defendant(s): Nil

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Applicant’s Exhibits

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Ext.No	Date	Particulars of document	s
A1	21.07.2008	Settlement deed No.2650/2008 of Principal SRO and its English transla	Kottarak tion.	kara
A2	22.11.2013	Memorandum of deposit of title de of the mortgaged property prep applicant bank.	eds in res ared by	pect the
A3	12.08.2020	Memorandum of extension of mort by the applicant bank.	gage prep	ared
A4	22.09.2021	Demand promissory note for executed by the 2^nddefendant.	Rs.30 l	akhs
A5	22.09.2021	Hypothecation agreement execute defendant.	d by the	2^nd
A6	22.09.2021	Deed of guarantee executed by the	1^stdefend	ant.
A7	22.09.2021	Letter of undertaking executed defendant.	by the	2^nd
A8	22.09.2021	Letter of undertaking executed defendant.	by the	1^st
A9	12.08.2020	Demand promissory note for Rs.3 l by the 2^nddefendant.	akhs exec	uted
A10	12.08.2020	Composite hypothecation deed exe 2^nddefendant.	cuted by	the
A11	12.08.2020	Term loan agreement executed defendant.	by the	2^nd
A12	12.08.2020	Deed of guarantee executed by the	1^stdefend	ant.
A13	12.08.2020	Letter of undertaking executed defendant.	by the	2^nd
A14	12.08.2020	Letter of undertaking executed defendant.	by the	1^st

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OA 306/2024

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A15	29.01.2021	Demand promissory note for executed by the 1^stdefendant.	Rs.1	0 la	khs
A16	29.01.2021	Hypothecation agreement execute defendant.	d by	the	1^st
A17	29.01.2021	Interest agreement executed defendant.	by	the	1^st
A18	29.01.2021	Letter of undertaking executed defendant.	by	the	1^st
A19	29.01.2021	Letter of undertaking executed defendant.	by	the	2^nd
A20	...	Debit balance confirmation letter ex defendants acknowledging the liabi loan accounts.	ecute lity u	d by nder	the the
A21	11.03.2024	Copy of lawyer notice issued to the	defen	dant	s.
A22	...	Interest report of the loan accounts.
A23	...	Certified copy of the statements pertaining to the three loans av defendants.	of ailed	acco by	unts the

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Defendants’ Exhibits – Nil

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PRESIDING OFFICER

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OA 306/2024

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PRESIDING OFFICER

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IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

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PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

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Dated the 16^th July, 2025

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OA NO.306/2024

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Between Union Bank of India, Kottarakkara Branch, Tharakans Building, M.C.Road, Pulamon Junction, Kottarakara P.O. Kerala – 691 531.

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...Applicant

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And

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Bindhu Das, Proprietor, M/s.AB Traders, EP XIV/493, Vilayil Building, Irumpanangad P.O., Ambalathumkala, Ezhukone, Kollam – 691 505 & another. …Defendants

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F I N A L O R D E R

Union Bank of India v. Bindhu Das

Case brief

What is this about?

What did the court decide?

Union Bank of India v. Bindhu Das

Case brief

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