Allowed

Uco Bank v. M/S Faris Cashew Factory

DRT27 Jan 2026OA/456/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the bank's original application for recovery of an aggregate sum of approximately Rs. 4.56 crore from the borrowers and guarantor, including specified principal amounts for different loan categories along with contingent post-decree interest and costs, relying on submitted documentary evidence.

What did the court decide?

Recovery of principal amounts totaling approximately Rs. 4.56 crore along with post-decree interest at applicable rates for each loan category, costs, and expenses from the respondents.

Uco Bank versus M/S Faris Cashew Factory — Contract and Commercial Disputes | DRT (2026)

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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 27^th day of January, 2026

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ORIGINAL APPLICATION No.456/2022

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Between

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UCO Bank Ltd., Kollam Branch, Khaise Building, Beach Road, Kollam – 691 001. …Applicant

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And

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1. Faris Cashew Factory, Represented by its sole proprietor Biju Sham Sudhen, Door No.KSP 310, K.S.Puram, Karunagappally, Kollam – 690 544.

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2. Jasmin Biju, W/o.Biju Shamsudheen, Panamoottilkadathoor, Kulasekharapuram P.O., Karunagappally – 690 544. …Defendants

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This Original Application having been heard on 05.01.2026

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in the presence of Advocate Ms.Sreekala Krishnadas for the applicant bank and stood over to this day for consideration, the Tribunal delivered the following:

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OA 456/2022

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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.4,56,54,261.39 due under various loan accounts together with further interest and costs from the defendants jointly and severally and by sale of ‘A’ to ‘D’ schedule properties.

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Facts of the case:

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The applicant is a company incorporated under the Banking Companies Act, 1956 having its registered office at Kolkata and one of its branches at Khaise Building, Beach Road, Kollam.

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The defendants approached the applicant bank for financial assistance for their food processing unit. Considering their request, applicant bank sanctioned a cash credit limit of Rs.60 lakhs on 30.03.2017, which was enhanced from time to time and finally enhanced to Rs.3.15 crores on 05.02.2020, and a term loan of Rs.61 lakhs on 13.07.2020. The 2^nd defendant stood as guarantor for the loans. Towards collateral security for the loans, the 1^st defendant created equitable mortgage over ‘A’ to ‘C’ schedule properties and hypothecation charge was created over

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OA 456/2022

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‘D’ schedule properties. After availing the facilities, the defendants failed to repay the dues and the accounts became NPA w.e.f. 31.03.2021. Consequently, the applicant issued a notice under S.13(2) of the SARFAESI Act demanding repayment of the outstanding dues but no amount was paid by the defendants. In such premises, the applicant was constrained to file the OA claiming the following reliefs:

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(i) To recover an aggregate sum of Rs.4,56,54,261.39 together with pendente lite and post-decree interest thereon from the defendants jointly and severally and by sale of ‘A’ to ‘D’ 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 they neither appeared nor were they represented and hence the defendants were declared exparte on 26.11.2024.

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Proof Affidavit :

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To establish the claim on behalf of the applicant bank,

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one Mr.Pradeepraj M., Authorised Officer of the bank has filed

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OA 456/2022

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proof affidavit and produced the loan documents marked as Exhibits A1 to A38. The proof affidavit filed by AW1 and the documents produced in this case are not challenged by the defendants. The availing of the loans is well established from the documents placed by the applicant bank. An aggregate sum of Rs.4,56,54,261.39 is outstanding in the loan accounts as on 31.05.2022 which is clearly established from the account statements marked as Exts.A33 to A37.

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The statement marked Ext.A37 would show that the following amounts are debited as penal interest in the loan accounts:

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Cash credit	Rs.5,04,185.07
WCTL-EI	Rs.2,46,553.81
GECL	Rs.1,43,212.04
FITL	Rs.24,686.92

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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 aforementioned penal interest charged in the loan accounts.

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OA 456/2022

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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 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.2,50,59,417.37 (Rupees two fifty nine thousand four hundred Paise thirty seven only) together	crores fifty l and seventeen with_pendente_	akhs and lite
	and post-decree interest o	n the sum	of
	Rs.2,45,55,232.30 (Rupees two lakhs fifty five thousand two hun and Paise thirty only) @9% 23.06.2022 till realization fro jointly and severally and by schedule properties;	crores forty dred and thirty per annum f m the defend sale of ‘A’ to	five two rom ants ‘D’
WCTL-EI	Rs.1,23,70,956.32 (Rupees one lakhs seventy thousand nine hu and Paise thirty two only) toget	crore twenty t ndred and fifty her with_pend_	hree six ente
	_lite_and post-decree interest	on the sum	of
	Rs.1,21,24,402.51 (Rupees one lakhs twenty four thousand four	crore twenty hundred and	one two

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OA 456/2022

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	and Paise fifty one only) @9% per annum from 23.06.2022 till realization from the defendants
	jointly and severally and by sale of ‘A’ to ‘D’ schedule properties;
GECL	Rs.70,09,577.95 (Rupees seventy lakhs nine thousand five hundred and seventy seven and Paise ninety five only) together with_pendente lite_and post-decree interest on the sum of Rs.68,66,365.91 (Rupees sixty eight lakhs sixty six thousand three hundred and sixty five and Paise ninety one only) @7% per annum from 23.06.2022 till realization from the defendants jointly and severally and by sale of ‘A’ to ‘D’ schedule properties;
FITL	Rs.12,14,309.75 (Rupees twelve lakhs fourteen thousand three hundred and nine and Paise seventy five only) together with_pendente lite_and post- decree interest on the sum of Rs.11,89,622.83 (Rupees eleven lakhs eighty nine thousand six
	hundred and twenty two and Paise eighty three
	only) @10% per annum from 23.06.2022 till realization from the defendants jointly and severally and by sale of ‘A’ to ‘D’ schedule properties; and
costs and e the defenda	xpenses borne by it for realization of the loans from nts.

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

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OA 456/2022

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The applicant bank shall file memo of costs within ten

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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

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(Procedure) Rules, 1993.

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(Dictated to my PA, corrected and pronounced by me in the open Tribunal on this the 27^th day of January, 2026)

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[SOVAN KUMAR DASH] PRESIDING OFFICER

OA 456/2022

A P P E N D I X

Witness for Applicant: AW1: Mr.Pradeepraj M., Authorised Officer 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 documents
A1	23.03.2017	Application for loan submitted by the defendants.
A2	30.03.2017	Sanction letter issued by the applicant bank sanctioning cash credit limit of Rs.60 lakhs to the 1^stdefendant.
A3	31.03.2017	Demand promissory note for Rs.60 lakhs executed by the 1^stdefendant.
A4	31.03.2017	Composite deed of hypothecation executed by the 1^stdefendant.
A5	31.03.2017	Letter of guarantee executed by the 2^nd defendant.
A6	22.03.2017	Sale deed No.576/2017 of Harippad SRO.
A7	30.03.2017	Letter executed by the 1^stdefendant confirming the deposit of title deeds with the applicant bank.
A8	14.12.2017	Sanction letter issued by the applicant bank sanctioning the enhanced cash credit limit of Rs.225 lakhs to the 1^stdefendant.
A9	14.12.2017	Demand promissory note for Rs.225 lakhs along with waiver letter executed by the 1^stdefendant.
A10	14.12.2017	Composite deed of hypothecation executed by the 1^stdefendant.
A11	14.12.2017	Letter of guarantee executed by the 2^nd defendant.
A12	09.12.2013	Sale deed No.3591/2013 of Sasthamkotta SRO.
A13	09.12.2013	Sale deed No.3592/2013 of Sasthamkotta SRO.
A14	15.12.2017	Letter executed by the 1^stdefendant confirming the deposit of title deed with the applicant bank.
A15	15.12.2017	Letter executed by the 1^stdefendant confirming the deposit of title deed with the applicant bank.

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OA 456/2022

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A16	04.07.2018	Letter executed by the 1^stdefendant regarding enhancement of the cash credit limit to Rs.265 lakhs.
A17	04.07.2018	Demand promissory note for Rs.265 lakhs along with waiver letter executed by the 1^stdefendant.
A18	04.07.2018	Composite deed of hypothecation executed by the 1^stdefendant.
A19	04.07.2018	Letter of guarantee executed by the 2^nd defendant.
A20	04.07.2018	Letter executed by the 1^stdefendant confirming the deposit of title deeds with the applicant bank and the extension thereof.
A21	16.11.2018	Demand promissory note for Rs.285 lakhs executed by the 1^stdefendant.
A22	16.11.2018	Composite deed of hypothecation executed by the 1^stdefendant.
A23	05.02.2020	Sanction letter issued by the applicant bank sanctioning the enhanced limit of Rs.315 lakhs.
A24	05.02.2020	Agreement for term loan executed by the 1^st defendant.
A25	05.02.2020	Demand promissory note for Rs.215 lakhs executed by the 1^stdefendant.
A26	05.02.2020	Composite deed of hypothecation executed by the 1^stdefendant.
A27	05.02.2020	Letter of guarantee executed by the 2^nd defendant.
A28	05.02.2020	Letter executed by the 2^nddefendant regarding extension of mortgage.
A29	13.07.2020	Agreement for term loan executed by the defendants.
A30	13.07.2020	Composite deed of hypothecation executed by the defendants.
A31	13.07.2020	Letter executed by the 1^stdefendant confirming the deposit of title deeds with the applicant bank and the extension thereof.
A32	26.05.2022	Copy of demand notice under S.13(2) of the SARFAESI Act issued to the defendants.

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OA 456/2022

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A33 …	Certified copy of relating to cash cred	the statement of account it facility.
A34 …	Certified copy of relating to WCTL.	the statement of account
A35 …	Certified copy of relating to GECL.	the statement of account
A36 …	Certified copy of relating to FITL.	the statement of account
A37 …	Statements showin penal interest under	g the unapplied interest and the loan accounts.
A38 …	Statement showing the loan accounts fr	the rate of interest applied in om time to time.
Defendants’Exhibits	– Nil

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PRESIDING OFFICER

OA 456/2022

OA 456/2022

OA 456/2022

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 27^th January, 2026

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OA NO.456/2022

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Between

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UCO Bank Ltd., Kollam Branch, Khaise Building, Beach Road, Kollam – 691 001. …Applicant

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And

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Faris Cashew Factory, Represented by its sole proprietor Biju Sham Sudhen, Door No.KSP 310, K.S.Puram, Karunagappally, Kollam – 690 544 & another. …Defendants

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F I N A L O R D E R

Uco Bank v. M/S Faris Cashew Factory

Case brief

What is this about?

What did the court decide?

Uco Bank v. M/S Faris Cashew Factory

Case brief

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