Allowed

Bank of Baroda v. Radhakrishnan

DRT20 Aug 2026OA/349/2025

Case brief

AI extract

What is this about?

The Tribunal allowed the recovery application based on a Lok Adalath award default. It directed issuance of a Recovery Certificate for principal plus future interest but disallowed interest on penal interest charges, relying on Supreme Court precedent.

What did the court decide?

Recovery Certificate issued for principal amounts with future interest @10.05% and 12.55%; penal interest not to be capitalized.

Bank of Baroda versus Radhakrishnan — Execution and Attachment | DRT (2026)

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Fair order

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IN THE DEBTS RECOVERY TRIBUNAL-1 AT ERNAKULAM

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DATED THIS 20^th DAY OF AUGUST, 2026

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

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OA No.349/2025

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Between

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Bank of Baroda, Vavanoor Branch Ground Floor, TMS Square P. K. Road, Vavanoor Palakkad – 679 533 Represented by its Senior Branch Manager

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---Applicant Bank

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And

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Radhakrishnan Legal heir of Late Ratheesh C. R. Chembranhalil House Nagalassery, Koottanad P.O Palakkad – 679 533

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Kamala M. T. W/o. Radhakrishnan Legal heir of Late Ratheesh C. R. Chembranhalil House Nagalassery, Koottanad P.O Palakkad – 679 533

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OA 349/2025

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Vedika C. R. D/o. Late Ratheesh C. R. Chembranhalil House Nagalassery, Koottanad P.O Palakkad – 679 533

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---Defendants

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This Original Application coming on 17.07.2026 for final hearing before me in the presence of Ms. Sreethu Sathyan, Counsel appearing for the Applicant Bank and Mr. Jayasankar, Counsel appearing for the 1^st defendant and no representation for defendants 2 & 3 and upon hearing arguments of learned counsels for the appearing parties and upon perusing the material on 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 MA No.149/2026 seeking to issue a Recovery Certificate as per award dated 21.02.2026 in favour of the applicant as prayed for in the Original Application.

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The counsel for the applicant bank has filed the present petition stating inter alia that the above OA has been filed for realization of a total sum of Rs.59,70,465.60 together with future interests @10.05% on Rs.54,72,602.54 and 12.55% on Rs.4,97,863.06 respectively with monthly rests from the date of OA till the date of payment and by sale of OA Schedule property and with costs.

¶19

Subsequently, the Original Application was referred to Lok Adalath organized by KELSA in Debts Recovery Tribunal – 1, Ernakulam on 21.02.2026 for settlement under Section 20(1)(i)(a) of The Legal Services Authorities Act and in pursuance of the compromise/settlement arrived at between the parties to the above case, an award came to be passed by the Lok Adalath on 21.02.2026 and as per the terms of compromise, the defendants were obliged to remit a sum of Rs.15,00,000/- to the applicant bank on or before 31.03.2026. In the event of failure to pay the amount, benefit of the compromise would be withdrawn and the bank was declared to be entitled to recover the entire amount as claimed in the OA by sale of the hypothecated/mortgaged properties shown in the OA and also from the other assets of the defendants as well as refund of the application fee paid by the applicant bank in accordance with law now in force. The relevant portion of the said award is as follows:-

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“Both parties agree that the applicant shall be entitled to seek refund of court fee in accordance with the law now in force.”

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Page 2 of 5

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OA 349/2025

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As per the award, the defendants had to pay an amount of Rs.15,00,000/- to the applicant bank. It was made clear in the award that in the event of failure to pay the amount as aforesaid, the defendants 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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According to the applicant bank, the defendants have not made any payment as per the award dated 21.02.2026 and, therefore, they are entitled for a Recovery Certificate in terms of the default clause set out therein. Therefore, this Tribunal holds that the applicant bank is entitled for a Recovery Certificate in terms of the default clause set out therein.

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The applicant bank has charged a sum of Rs.784.44 and Rs.628.88 as penal interests on the Loan account Nos.82880600001005 and 82880600000778 respectively availed by defendants in terms of the agreements. 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 light of the above, the Registry is hereby directed to issue Recovery Certificate in terms of the award dated 21.02.2026. In the result, the Original Application is allowed in terms of the award dated 21.02.2026 of the Lok Adalath as per the following lines :

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(i) The defendants are directed to pay to the applicant bank, jointly and severally, a sum of Rs.54,72,602.54 (Rupees Fifty Four Lakhs Seventy Two Thousand Six Hundred Two and Paise Fifty Four only) due under the Loan account No.82880600001005 with future interest on the sum of Rs.54,71,818.10 (Rupees Fifty Four Lakhs Seventy One Thousand Eight Hundred Eighteen and Paise Ten only) @10.05% per annum from 13.02.2025 to the date of realisation; and

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(ii) The defendants are directed to pay to the applicant bank, jointly and severally, a sum of Rs.4,97,863.06 (Rupees Four Lakhs Ninety Seven Thousand Eight Hundred Sixty Three and Paise Six only) due under the Loan account No.82880600000778 with future interest on the sum of Rs.4,97,234.18 (Rupees Four Lakhs Ninety Seven Thousand Two Hundred Thirty Four and Paise Eighteen only) @12.55% per annum from 13.02.2025 to the date of realisation.”

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Page 3 of 5

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OA 349/2025

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On failure to pay the above said debts to the Applicant Bank, the Applicant Bank is directed to bring the OA schedule property, 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 this the 20^th day of August, 2026.

(Su. WILLYAHM)

PRESIDING OFFICER

Page 4 of 5

OA 349/2025

SCHEDULE A

(Document No. Sale Deed No.3708/2017)

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District	:	Palakkad
Sub District	:	Thrithala
Village	:	Nagalassery
Taluk	:	Pattambi
Right	:	Janmam, Parambu
Old Sy. No.	:	264/3
Total Extent	:	1.72 Ares

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Description

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All that pieces and parcels of immovable property admeasuring 1.72 Ares together with building No.2/182-D comprised in Sy. No.264/3 of Nagalassery Village, Thrithala Sub District, Pattambi Taluk, Palakkad District in the State of Kerala and bounded as under :

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Boundaries

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North	:	Property in possession of Kottarathil
		Mangattu Sasikala
South	:	Pathway having a width of 3.3 meter and
		remaining property
East	:	Property in possession of Naalakath
		Kamaruddhin
West	:	Property in possession of Kodalil Sivaraman

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(Su. WILLYAHM)

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PRESIDING OFFICER

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Page 5 of 5

Bank of Baroda v. Radhakrishnan

Case brief

What is this about?

What did the court decide?

Bank of Baroda v. Radhakrishnan

Case brief

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