Allowed

State Bank of India v. T Srinagesh

DRT24 Jun 2025OA/432/2023

Case brief

AI extract

What is this about?

In this Original Application under Section 19(1) of the RDB Act 1993, the Tribunal allowed the bank to recover outstanding loans with appropriate interest rates, distinguishing penal interest from principal, and directed issuance of a recovery certificate for sale of secured properties.

What did the court decide?

Allowed recovery of principal sums with specific interest rates and ordered issuance of Recovery Certificate for sale of schedule properties.

State Bank of India versus T Srinagesh — Contract and Commercial Disputes | 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 24^th day of June, 2025

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ORIGINAL APPLICATION No.432/2023

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Between

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State Bank of India, Stressed Assets Recovery Branch, LMS Compound, Near Museum West Gate, Vikas Bhavan P.O., Thiruvananthapuram – 695 033. …Applicant

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And

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T.Srinagesh, S/o.Thrivikraman, Sole Proprietor, M/s.Mani Enterprises, Residing at VishalakshiMandiram, Kilimanoor, Thiruvananthapuram – 695 601.

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Deepak S., S/o.Sree Nagesh, Sole proprietor, Sree Lakshmi Agencies, Residing at VishalakshiMandiram, Kilimanoor, Thiruvananthapuram – 695 601.

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M/s.Milano Furniture, N.S.Plaza, Kilimanoor Junction, Thiruvananthapuram – 695 601, Represented by its Managing Partner T.Srinagesh. ...Defendants

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OA 432/2023

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This Original Application having been heard on 17.06.2025 in the presence of Advocate Sri.Tom K.Thomas for the applicant bank and Advocate Sri.V.Philip Mathews was represented by Advocate Lakshmi S. for the defendants 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.2,43,23,736.45 together with future interest and costs from the defendants and by sale of ‘A’ to ‘E’ schedule properties.

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Facts of the case:

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The applicant is a body corporate constituted under the State Bank of India Act, 1955 having its corporate centre at Mumbai and branches at various places including the Stressed Assets Recovery Branch at Thiruvananthapuram.

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Considering the request of the defendants, the erstwhile State Bank of Travancore sanctioned various credit facilities to the defendants and they availed the same after executing necessary security documents. Towards security for the loans, hypothecation charge was created over ‘A’ and ‘C’ schedule

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OA 432/2023

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properties and equitable mortgage was created over ‘B’, ‘D’ and ‘E’ schedule properties by the 1^st defendant by deposit of title deeds with the bank. Due to default in repayment of the loans, the applicant bank issued lawyer notice to the defendants on 16.05.2023 demanding repayment of the amounts due to the bank but they did not liquidate 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 the sum of Rs.2,43,23,736.45 together with pendente lite and post decree interest thereon from the defendants and by sale of ‘A’ to ‘E’ 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 entered appearance and filed vakalath as early on 12.10.2023 but they did not file written statement despite time granted. During the hearing, the representing counsel for the defendants vaguely disputed the claim made by the applicant bank.

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OA 432/2023

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Proof Affidavit :

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To establish the claim on behalf of the applicant bank, one Mrs.Shiny Alexander, Chief Manager of the applicant has filed proof affidavit and produced the loan documents marked as Exhibits A1 to A98. The proof affidavit filed by AW1 and the documents produced in this case are not challenged by the defendants. The availing of the credit facilities 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.2,43,23,736.45 is outstanding in the loan accounts as on 02.06.2023, which is clearly established from the accounts statements marked as Exts.A78, A79, A81 to A88 and A90 to A95.

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Further, it could be seen from Exts.A80, A89 and A96 statements that the applicant bank has charged a sum of Rs.73,597/-, Rs.4,30,951/- and Rs.35,573/- by way of penal interest in cash credit A/c No.57009093982, cash credit A/c No.67153944118 and cash credit A/c No.67357940984 respectively. 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

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OA 432/2023

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Rs.73,597/-, Rs.4,30,951/- and Rs.35,573/- charged in the loan accounts.

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Considering the amounts 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 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	Rs.19,26,927.42 (Rupees nineteen lakhs twenty six
account A/c No.57009093982	thousand nine hundred twenty seven and Paise forty two only) together with_pendente lite_and post decree interest @12% per annum on the sum of Rs.18,53,330.42 (Rupees eighteen lakhs fifty three thousand three hundred thirty and Paise forty two only) from 13.06.2023 till realisation from the 1^st
	defendant and by sale of ‘A’ and ‘B’ schedule
	properties;
GECL A/c No. 39375101356	Rs.2,25,132.35 (Rupees two lakhs twenty five thousand one hundred and thirty two and Paise thirty five only) together with_pendente lite_and post

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OA 432/2023

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	decree interest thereon @9% per annum from 13.06.2023 till realisation from the 1^stdefendant and by sale of ‘A’ and ‘B’ schedule properties;
Term loan A/c No.39421285503	Rs.81,64,762.48 (Rupees eighty one lakhs sixty four thousand seven hundred sixty two and Paise forty eight only) together with_pendente lite_and post decree interest thereon @10% per annum from 13.06.2023 till realisation from defendants 1 and 2 jointly and severally and by sale of ‘B’ to ‘E’ schedule properties;
GECL A/c No. 39417739122	Rs.20,85,200.67 (Rupees twenty lakhs eighty five thousand two hundred and Paise sixty seven only) together with_pendente lite_and post decree interest thereon @9% per annum from 13.06.2023 till realisation from defendants 1 and 2 jointly and severally and by sale of ‘B’ to ‘E’ schedule properties;
Cash credit A/c No.67153944118	Rs.78,40,359.67 (Rupees seventy eight lakhs forty thousand three hundred and fifty nine and Paise sixty seven only) together with_pendente lite_and post decree interest on the sum of Rs.74,09,408.67 (Rupees seventy four lakhs nine thousand four hundred and eight and Paise sixty seven only) @10% per annum from 13.06.2023 till realisation from defendants 1 and 2 jointly and severally and by sale of ‘B’ to ‘E’ schedule properties;
Term loan A/c No.40107641844	Rs.27,99,677.01 (Rupees twenty seven lakhs ninety nine thousand six hundred seventy seven and Paise

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OA 432/2023

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	one only) together with_pendente lite_and post decree interest thereon @10% per annum from 13.06.2023 till realisation from defendants 1 to 3 jointly and severally and by sale of ‘B’, ‘D’ and ‘E’ schedule properties;
GECL A/c No. 39375099118	Rs.3,79,655.04 (Rupees three lakhs seventy nine thousand six hundred and fifty five and Paise four only) together with_pendente lite_and post decree interest thereon @9% per annum from 13.06.2023 till realisation from defendants 1 to 3 jointly and severally and by sale of ‘B’, ‘D’ and ‘E’ schedule properties;
Cash credit A/c No.37357940984	Rs.5,33,756.28 (Rupees five lakhs thirty three thousand seven hundred and fifty six and Paise twenty eight only) together with_pendente lite_and post decree interest @12% per annum on the sum of Rs.4,98,183.28 (Rupees four lakhs ninety eight thousand one hundred and eighty three and Paise twenty eight only) from 13.06.2023 till realisation from defendants 1 to 3 jointly and severally and by sale of ‘B’, ‘D’ and ‘E’ schedule properties;
Housing loan A/c No.67222168341	Rs.3,68,265.53 (Rupees three lakhs sixty eight thousand two hundred and sixty five and Paise fifty three only) together with_pendente lite_and post decree interest thereon @9% per annum from 13.06.2023 till realisation from the 1^stdefendant and by sale of ‘D’ schedule property; and

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OA 432/2023

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

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‘A’ to ‘E’ 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 24^th day of June, 2025)

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[SOVAN KUMAR DASH] PRESIDING OFFICER

OA 432/2023

A P P E N D I X

Witness for Applicant: AW1: Smt.Shiny Alexander, Chief Manager of the applicant bank. Witness for Defendant(s): Nil

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Applicant’s Exhibits

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Ext.No	Date	Particulars of documents
A1	08.01.2003	Sanction letter issued by the erstwhile State Bank of Travancore and duly signed by the 1^st defendant as proprietor of M/s. Mani Enterprises.
A2	08.01.2003	Agreement for hypothecation executed by the 1^st defendant as proprietor of M/s. Mani Enterprises in favour of the erstwhile State Bank of Travancore.
A3	03.05.1990	Copy of Will Deed No.29/1990 of Kilimanoor SRO.
A4	27.07.2009	Sanction letter issued by the erstwhile State Bank of Travancore and duly signed by the 1^st defendant.
A5	27.07.2009	Supplemental hypothecation cum working capital agreement executed by the 1^stdefendant as proprietor of M/s. Mani Enterprises in favour of the erstwhile State Bank of Travancore.
A6	25.07.2009	Memorandum of extension of equitable mortgage executed by the 1^stdefendant in respect to ‘B’ schedule property.
A7	13.05.2010	Sanction letter issued by the erstwhile State Bank of Travancore and duly signed by the 1^st defendant as proprietor of M/s. Mani Enterprises.
A8	13.05.2010	Supplemental hypothecation cum working capital agreement executed by the 1^stdefendant as proprietor of M/s. Mani Enterprises in favour of the erstwhile State Bank of Travancore.
A9	12.05.2010	Memorandum of extension of equitable mortgage executed by the 1^stdefendant in respect to ‘B’ schedule property.

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OA 432/2023

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A10	03.06.2020	Letter of arrangement issued by the applicant bank and duly signed by the 1^stdefendant as proprietor of M/s. Mani Enterprises.
A11	03.06.2020	Supplemental agreement of loan cum hypothecation executed by the 1^stdefendant as proprietor of M/s. Mani Enterprises in favour of the applicant bank.
A12	02.07.2011	Sanction letter issued by the erstwhile State Bank of Travancore and duly signed by the defendant nos.1 and 2.
A13	20.07.2011	Hypothecation cum working capital agreement executed by the 2^nddefendant as proprietor of M/s. Sreelakshmi Agencies in favour of the erstwhile State Bank of Travancore.
A14	20.07.2011	Guarantee agreement executed by the 1^st defendant.
A15	21.07.2011	Memorandum of extension of equitable mortgage executed by the 1^stdefendant in respect to ‘B’ schedule property.
A16	11.04.2012	Sanction letter issued by the erstwhile State Bank of Travancore and duly signed by the defendant nos.1 and 2.
A17	13.04.2012	Supplemental hypothecation cum working capital agreement executed by the 2^nddefendant as proprietor of M/s. Sreelakshmi Agencies in favour of the erstwhile State Bank of Travancore.
A18	13.04.2012	Supplemental guarantee agreement executed by the 1^stdefendant.
A19	14.04.2012	Memorandum of extension of equitable mortgage executed by the 1^stdefendant in respect to ‘B’ schedule property.
A20	21.08.2013	Sanction letter issued by the erstwhile State Bank of Travancore and duly signed by the defendant nos.1 and 2.
A21	21.08.2013	Supplemental hypothecation cum working capital agreement executed by the 2^nddefendant as proprietor of M/s. Sreelakshmi Agencies in favour of the erstwhile State Bank of Travancore.
A22	21.08.2013	Supplemental guarantee agreement executed by the 1^stdefendant.

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OA 432/2023

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A23	22.08.2013	Memorandum of extension of equitable mortgage executed by the 1^stdefendant in respect to ‘B’ schedule property.
A24	25.06.1992	Sale Deed No.1846/1992 of Kilimanoor SRO.
A25	22.08.2013	Memorandum of extension of equitable mortgage executed by the 1^stdefendant in respect to ‘D’ schedule property.
A26	12.03.2014	Sanction letter issued by the erstwhile State Bank of Travancore and duly signed by the defendant nos.1 and 2.
A27	12.03.2014	Supplemental hypothecation cum working capital agreement executed by the 2^nddefendant as proprietor of M/s. Sreelakshmi Agencies in favour of the erstwhile State Bank of Travancore.
A28	12.03.2014	Supplemental guarantee agreement executed by the 1^stdefendant.
A29	13.03.2014	Memorandum of extension of equitable mortgage executed by the 1^stdefendant in respect to ‘B’ schedule property.
A30	13.03.2014	Memorandum of extension of equitable mortgage executed by the 1^stdefendant in respect to ‘D’ schedule property.
A31	10.11.2014	Sanction letter issued by the erstwhile State Bank of Travancore and duly signed by the defendant nos.1 and 2.
A32	10.11.2014	Supplemental hypothecation cum working capital agreement executed by the 2^nddefendant as proprietor of M/s. Sreelakshmi Agencies in favour of the erstwhile State Bank of Travancore.
A33	10.11.2014	Supplemental guarantee agreement executed by the 1^stdefendant.
A34	11.11.2014	Memorandum of extension of equitable mortgage executed by the 1^stdefendant in respect to ‘B’ schedule property.
A35	11.11.2014	Memorandum of extension of equitable mortgage executed by the 1^stdefendant in respect to ‘D’ schedule property.
A36	02.12.1995	Will Deed No.51/1995 of Kilimanoor SRO.
A37	29.12.2000	Release Deed No.3614/2000 of Kilimanoor SRO.

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OA 432/2023

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A38	14.05.2015	Memorandum of deposit of title deeds executed by the 1^stdefendant in respect to ‘E’ schedule property.
A39	20.06.2015	Sanction letter issued by the erstwhile State Bank of Travancore and duly signed by the defendant nos.1 and 2.
A40	20.06.2015	Supplemental hypothecation cum working capital agreement executed by the 2^nddefendant as proprietor of M/s. Sreelakshmi Agencies in favour of the erstwhile State Bank of Travancore.
A41	20.06.2015	Supplemental guarantee agreement executed by the 1^stdefendant.
A42	21.06.2015	Memorandum of extension of equitable mortgage executed by the 1^stdefendant in respect to ‘B’ schedule property.
A43	21.06.2015	Memorandum of extension of equitable mortgage executed by the 1^stdefendant in respect to ‘D’ schedule property.
A44	21.06.2015	Memorandum of extension of equitable mortgage executed by the 1^stdefendant in respect to ‘E’ schedule property.
A45	28.03.2017	Sanction letter issued by the erstwhile State Bank of Travancore and duly signed by the defendant nos.1 and 2.
A46	28.03.2017	Agreement of hypothecation of goods and assets executed by the 2^nddefendant as proprietor of M/s. Sreelakshmi Agencies in favour of the erstwhile State Bank of Travancore.
A47	28.03.2017	Agreement of loans for overall working capital limit executed by the 2^nddefendant as proprietor of M/s. Sreelakshmi Agencies in favour of the erstwhile State Bank of Travancore.
A48	28.03.2018	Supplemental agreement of loan for increase in the overall working capital limit executed by the 2^nddefendant as proprietor of M/s. Sreelakshmi Agencies in favour of the erstwhile State Bank of Travancore.
A49	28.03.2017	Deed of guarantee for increase in the overall working capital limitexecuted by the 1^st defendant.

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OA 432/2023

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A50	28.03.2017	Supplemental deed of guarantee for increase in the overall working capital limitexecuted by the 1^stdefendant.
A51	29.03.2017	Memorandum of extension of equitable mortgage executed by the 1^stdefendant in respect to ‘B’, ‘D’ and ‘E’ schedule properties.
A52	15.05.2019	Letter of arrangement issued by the applicant bank and duly signed by the defendant nos.1 and 2.
A53	15.05.2019	Supplemental agreement of loan cum hypothecation executed by the 2^nddefendant as proprietor M/s. Sreelakshmi agencies in favour of the applicant bank.
A54	15.05.2019	Guarantee agreement executed by the 1^st defendant.
A55	16.05.2019	Memorandum of extension of equitable mortgage executed by the 1^stdefendant in respect to ‘B’ schedule property.
A56	16.05.2019	Memorandum of extension of equitable mortgage executed by the 1^stdefendant in respect to ‘D’ schedule property.
A57	16.05.2019	Memorandum of extension of equitable mortgage executed by the 1^stdefendant in respect to ‘E’ schedule property.
A58	18.06.2020	Letter of arrangement issued by the applicant bank and duly signed by the defendant nos.1 and 2.
A59	18.06.2020	Supplemental agreement of loan cum hypothecation executed by the 2^nddefendant as proprietor M/s. Sreelakshmi agencies in favour of the applicant bank.
A60	18.06.2020	Guarantee agreement executed by the 1^st defendant.
A61	17.06.2020	Mortgage Deed No.814/2020 of Kilimanoor SRO.
A62	19.06.2020	Memorandum of extension of equitable mortgage executed by the 1^stdefendant in respect to ‘D’ schedule property.

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OA 432/2023

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A63	19.06.2020	Memorandum of extension of equitable mortgage executed by the 1^stdefendant in respect to ‘E’ schedule property.
A64	28.03.2016	Sanction cum arrangement letter issued by the erstwhile State Bank of Travancore and duly signed by the defendants.
A65	28.03.2016	Hypothecation cum working capital agreement executed by the 3^rd defendant through defendants 1 and 2 in favour of the erstwhile State Bank of Travancore.
A66	28.03.2016	Guarantee agreement for working capital limit executed by the defendant nos.1 and 2.
A67	28.03.2016	Partnership letter issued by the defendants to the erstwhile State Bank of Travancore.
A68	03.06.2020	Letter of arrangement issued by the applicant bank and duly signed by the defendants.
A69	03.06.2020	Supplement agreement of loan cum hypothecation executed by the 3^rddefendant through defendants 1 and 2 in favour applicant bank.
A70	03.06.2020	Guarantee agreement executed by the defendant nos.1 and 2.
A71	31.03.2021	Letter of arrangement issued by the applicant bank and duly signed by the defendants.
A72	31.03.2021	Supplement agreement of loan cum hypothecation executed by the 3^rddefendant through defendants 1 and 2 in favour applicant bank.
A73	31.03.2021	Guarantee agreement executed by the defendant nos.1 and 2.
A74	30.04.2013	Sanction letter for housing loan issued by the erstwhile State Bank of Travancore and duly signed by the 1^stdefendant.
A75	30.04.2013	Agreement for loan executed by the 1^stdefendant in favour of the erstwhile State Bank of Travancore.
A76	01.05.2013	Memorandum of deposit of title deeds executed by the 1^stdefendant in respect of ‘D’ schedule property.

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OA 432/2023

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A77	16.05.2023	Postal receipts showing the issuance of lawyer’s notice to the defendants.
A78	09.06.2023	Statement of account of Cash Credit A/c no.57009093982 of the M/s. Mani Enterprises with Certificate of Banker’s Book of Evidence Act.
A79	..	Statement of unapplied but accrued interest in the Exhibit A78 account together with rate of interest.
A80	..	Statement of penal interest in the Exhibit A78 account.
A81	09.06.2023	Statement of account of GECL A/c no.39375101356 of the M/s. Mani Enterprises with Certificate of Banker’s Book of Evidence Act.
A82	..	Statement of unapplied but accrued interest in the Exhibit A81 account together with rate of interest.
A83	09.06.2023	Statement of account of Term Loan A/c no.39421285503 of the M/s. Sreelakshmi Agencies with Certificate of Banker’s Book of Evidence Act.
A84	..	Statement of unapplied but accrued interest in the Exhibit A83 account together with rate of interest.
A85	09.06.2023	Statement of account of GECL A/c no.39417739122 of the M/s. Sreelakshmi Agencies with Certificate of Banker’s Book of Evidence Act.
A86	..	Statement of unapplied but accrued interest in the Exhibit A85 account together with rate of interest.
A87	09.06.2023	Statement of account of Cash Credit A/c no.67153944118 of the M/s. Sreelakshmi Agencies with Certificate of Banker’s Book of Evidence Act.
A88	..	Statement of unapplied but accrued interest in the Exhibit A87 account together with rate of interest.
A89	..	Statement of penal interest in the Exhibit A87 account.

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OA 432/2023

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A90	09.06.2023	Statement of account of Term Loan A/c no.40107641844 of the 3^rddefendant with Certificate of Banker’s Book of Evidence Act.
A91	..	Statement of unapplied but accrued interest in the Exhibit A90 account together with rate of interest.
A92	09.06.2023	Statement of account of GECL A/c no.39375099118 of the 3^rddefendant with Certificate of Banker’s Book of Evidence Act.
A93	..	Statement of unapplied but accrued interest in the Exhibit A92 account together with rate of interest.
A94	09.06.2023	Statement of account of Cash Credit A/c no.67357940984 of the 3^rddefendant with Certificate of Banker’s Book of Evidence Act.
A95	..	Statement of unapplied but accrued interest in the Exhibit A94 account together with rate of interest.
A96	..	Statement of penal interest in the Exhibit A94 account.
A97	09.06.2023	Statement of account of Housing Loan A/c no.67222168341 of the 1^st defendant with Certificate of Banker’s Book of Evidence Act.
A98	..	Statement of unapplied but accrued interest in the Exhibit A97 account together with rate of interest.

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Defendants’ Exhibits – Nil

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PRESIDING OFFICER

OA 432/2023

OA 432/2023

OA 432/2023

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 24^th June, 2025

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OA NO.432/2023

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Between State Bank of India, Stressed Assets Recovery Branch, LMS Compound, Near Museum West Gate, Vikas Bhavan P.O., Thiruvananthapuram. …Applicant And

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T.Srinagesh, S/o.Thrivikraman, Sole Proprietor, M/s.Mani Enterprises, Residing at VishalakshiMandiram, Kilimanoor, Thiruvananthapuram & 2 others. ...Defendants

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F I N A L O R D E R

State Bank of India v. T Srinagesh

Case brief

What is this about?

What did the court decide?

State Bank of India v. T Srinagesh

Case brief

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What the court decided

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