Allowed

South Indian Bank v. M/s Indraja Furniture

DRT27 Jul 2026OA/58/2022

Case brief

AI extract

What is this about?

The Tribunal decreed an application filed by a bank to recover principal and interest from three defendants under CCOL, HTL, ECLGS, and FITL loan accounts. Directions were given for payment and sale of mortgaged properties.

What did the court decide?

Respondents directed to pay outstanding sums and future interest under CCOL, HTL, ECLGS, and FITL accounts; Schedule 'B' property directed to be sold for realization of dues.

South Indian Bank versus M/s Indraja Furniture — Company and Corporate | 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 27^th DAY OF JULY, 2026

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

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OA No.58/2022

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Between

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The South Indian Bank Ltd, Represented by its Branch Manager, Kadavanthra Branch, Ground Floor, Naveen Arcade Raveendran Road, Elamkulam, Kadavanthra P.O., Ernakulam – 682 020

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---Applicant Bank

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And

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M/s Indraja Furniture, A Partnership Firm, having office at, 11/751-FFG 1,2,3, Opp. More Supermarket, 11, Seaport Airport Road, Kakkanadu, Ernakulam- 682 030, Represented by its Managing Partner.

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Jagal Raj R, S/o Late A.K. Rajan, CRA-II, Arakkakadavil House, Chakkungal Road, Palarivattom Kochi, Ernakulam- 682 025.

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OA 58/2022

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Sathyabhama, W/o Late A. K. Rajan, CRA-II, Arakkakadavil House, Chakkungal Road, Palarivattom Kochi, Ernakulam- 682 025

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---Defendants

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This Original application coming on 10.06.2026 for final hearing before me in the presence of Mr. Anlit Theresa Shaji, Advocate representing Mr. Varughese Cherian, Counsel for the Applicant Bank and defendants having been set exparte and upon hearing the arguments of representing Counsel for the applicant bank and upon perusing the materials on record and having stood over for consideration till this day, this Tribunal delivered the following:

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O R D E R

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This application has been filed on 26.11.2021 by the applicant bank to recover from the defendants 1 to 3, jointly and severally, a sum of Rs.1,68,96,699.25 due under the CCOL loan account No.0439083000000027 together with interest @ 12.30% per annum compounded with monthly rests and penal interest @2% per annum on Rs.1,57,51,479.55 from 23.11.2021 till date of payment; from defendants 2 & 3, jointly and severally, a sum of Rs.9,25,863.16 due under the HTL account No.0439655000000142 together with interest @7.70% per annum compounded with monthly rests and penal interest @2% per annum on Rs.9,06,661.16 from 23.11.2021 till date of payment; from the defendants 1 to 3, jointly and severally, a sum of Rs.33,34,218.92 due under the ECLGS loan account No.0439656000000009 together with interest @ 8.60% per annum compounded with monthly rests and penal interest @2% per annum on Rs.32,91,395.92 from 23.11.2021 till date of payment; and from the defendants 1 to 3, jointly and severally, a sum of Rs.9,05,007.01 due under the FITL loan account No.0439656000000025 together with interest @ 12.30% per annum compounded with monthly rests and penal interest @2% per annum on Rs.9,05,007.01 from 23.11.2021 till date of payment and by sale of OA schedule ‘A & B’ properties and with costs.

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The brief averments of the application filed by the Applicant Bank are as follows:-

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The 2^nd defendant is the sole proprietor of the proprietorship concern in the name and style M/s. Indraja Furniture. The 2^nd defendant alongwith the 3^rd defendant approached the applicant bank seeking financial assistance by way of Cash Credit Open Loan facility for the purpose of

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OA 58/2022

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working capital and the applicant bank sanctioned a Cash Credit Open Loan facility (hereinafter referred to as CCOL loan) of Rs.40,00,000/- on 19.08.2009 to the defendants upon execution of necessary security documents. The 3^rd defendant stood as guarantor and executed guarantee agreement dated 19.08.2009. As security, the 2^nd defendant created equitable mortgage over his property more particularly described in Schedule A to the OA and executed letter confirming creation of equitable mortgage dated 28.08.2009.

¶23

Thereafter, the defendants 2 & 3 requested to renew and enhance the CCOL limit on various dates and the applicant bank renewed and enhanced the said facility from Rs.40 Lakhs to Rs.50,00,000/- then to Rs.65,00,000/and then to Rs.90,00,000/- then to Rs.1,40,00,000/- on 18.11.2010, 28.12.2011, 27.04.2013 and 20.01.2015 respectively upon execution of necessary security documents. The 3^rd defendant stood as guarantor. As security for the enhanced CCOL loan, the 2^nd defendant extended the benefit of equitable mortgage in respect of the OA Schedule ‘A’ property and executed letters confirming extension of equitable mortgage on 19.11.2010, 29.12.2011, 28.04.2013 and 21.01.2015 respectively.

¶24

Thereafter the proprietorship concern M/s. Indraja Furniture was changed to a partnership firm by inducting the 2^nd defendant as its Managing Partner and the 3^rd defendant as its partner and the 1^st defendant partnership firm represented by its partners approached the applicant bank for renewal and continuance of the aforesaid CCOL loan and the applicant allowed the request of the 1^st defendant to continue the CCOL facility for Rs.1,40,00,000/- with a sublimit of Book Debts of Rs.50 Lakhs under new account No.0439083000000027 by closing the account bearing no.0439083000000006 (in the name of the proprietorship concern) after executing necessary renewal documents in favour of the applicant on 13.05.2016. The defendants 2 & 3 stood as guarantors. As security for the renewed CCOL loan, the 2^nd defendant extended the benefit of equitable mortgage in respect of the OA Schedule ‘A’ property and executed letter confirming extension of equitable mortgage on 14.05.2016.

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Subsequently, the defendants 1 to 3 requested for renewal and enhancement of CCOL loan from Rs.140 Lakhs to Rs.160 Lakhs and the applicant bank enhanced the CCOL limit from Rs.140 Lakhs to Rs.160 Lakhs on 31.07.2017 upon execution of necessary security documents. The defendants 2 & 3 stood as guarantors and executed letter of guarantee dated 31.07.2017. The 1^st defendant hypothecated the entire current assets including stock, book debts, produce, goods and other movable properties more specifically described in Schedule ‘B’ to the OA and executed agreement of hypothecation dated 31.07.2017. As security for the

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OA 58/2022

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enhanced CCOL loan, the 2^nd defendant extended the benefit of equitable mortgage in respect of the OA Schedule ‘A’ property and executed letter confirming extension of equitable mortgage on 01.08.2017. The said limit was reduced from Rs.160 Lakhs to Rs.150 Lakhs on 26.07.2019 upon execution of necessary security documents.

¶29

Apart from the aforesaid CCOL loan, the defendants 2 & 3 had requested for another financial assistance by way of Housing Term Loan facility and the applicant bank sanctioned a Housing Term Loan for Rs.26,00,000/- with account No.0439655000000142 (hereinafter referred to as HTL) to the defendants on 19.08.2009 upon execution of necessary security documents. The said loan was to be repaid in 180 months of equated monthly installments of Rs.30,800/- each commencing from 19.09.2009. As security for the HTL, the 2^nd defendant created equitable mortgage over the OA schedule ‘A’ property and executed letter dated 28.08.2009.

¶30

Further, the defendants 1 to 3 approached the applicant bank for financial assistance under Emergency Credit Line Guarantee Scheme (hereinafter referred to as ECLGS) and the applicant bank sanctioned ECLGS with account No.0439656000000009 for Rs.30,00,000/- on 12.06.2020 upon execution of necessary security documents. As security, the 1^st defendant executed supplemental agreement of hypothecation on 12.06.2020 hypothecating the OA schedule ‘B’ property. As further security, the 2^nd defendant extended the benefit of equitable mortgage in respect of schedule ‘A’ property and executed letter of extension of equitable mortgage dated 12.06.2020.

¶31

Thereafter the defendants 1 to 3 again approached the applicant bank for financial assistance for the purpose of rescheduling the CCOL facility and the applicant bank sanctioned Funded Interest Term Loan (hereinafter referred to as FITL) with account No.0439656000000025 for Rs.8,83,000/on 15.09.2020 upon execution of necessary security documents. The said loan amount was to be repaid in 7 equal monthly installments of Rs.1,26,142.85 commencing from 30.09.2020. As security, the 2^nd defendant extended the benefit of equitable mortgage in respect of schedule ‘A’ property and executed letter of extension of equitable mortgage dated 15.09.2020.

¶32

The defendants 1 to 3 defaulted in their repayment obligations and failed and neglected to repay the loan amounts as per the terms and conditions of the loan agreements and the account was declared as NPA. The applicant bank initiated SARFAESI measures and issued demand notice dated 11.06.2021 and 30.07.2021 in respect of the loan accounts. The

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OA 58/2022

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applicant was constrained to recall notice dated 16.04.2021 in respect of CCOL loan, ECLGS and FITL accounts and recall notice dated 28.04.2021 in respect of CCOL loan, ECLGS and FITL accounts and recall notice dated 28.04.2021 in respect of HTL account. Despite demands and requests, the defendants failed to settle the accounts. Since the defendants failed to pay the amounts due to the applicant bank, the applicant bank filed the present Original Application for realisation of the outstanding amounts.

¶36

The defendants were duly served with summons. However, the defendants were neither represented in the proceedings nor did they file their written statement. Hence the defendants 1 to 3 were declared exparte on 06.07.2023.

¶37

Mr. Arun Mathew, Branch Manager of the applicant bank, as AW1 filed proof affidavit and got the documents marked as Exhs.A1 to A44 in support of its case. He had averred in his proof affidavit that the OA ‘A’ schedule property was sold under the SARFAESI measures for a sum of Rs.1,34,00,000/- on 21.12.2023 and the same has been appropriated in the CCOL loan account No.0439083000000027.

¶38

Although the defendants remained exparte, this Tribunal have examined the question of maintainability and jurisdiction and found that the OA is well maintainable and this Tribunal has jurisdiction to entertain the OA.

¶39

In the above circumstances, the case of the applicant bank regarding recovery of the sum of Rs.1,68,96,699.25 claimed as due under Exh.A34 certified copy of the statement of account relating to CCOL loan account No.0439083000000027 with future interest on the sum of Rs.1,57,51,479.55 from the defendants 1 to 3, jointly and severally; further a sum of Rs.9,25,863.16 claimed as due under Exh.A35 certified copy of the statement of account relating to HTL account No.0439655000000142 with future interest on the sum of Rs.9,06,661.16 from the defendants 2 & 3, jointly and severally; further a sum of Rs.33,34,218.92 claimed as due under Exh.A36 certified copy of the statement of account relating to ECLGS loan account No.0439656000000009 with future interest on the sum of Rs.32,91,395.92 from the defendants 1 to 3, jointly and severally; and further a sum of Rs.9,05,007.01 claimed as due under Exh.A37 certified copy of the statement of account relating to FITL loan account No.0439656000000025 with future interest on the sum of Rs.9,05,007.01 from the defendants 1 to 3, jointly and severally and by sale of the OA Schedule properties is proved by the uncontroverted averments in the proof affidavit of AW1 along with Exts.A1 to A44.

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OA 58/2022

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Thus this Tribunal holds that since the applicant bank has proved its case through its proof affidavit and the documents marked, the Original Application is allowed as per the following lines :

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(i) The defendants 1 to 3 are directed to pay to the applicant bank, jointly and severally, a sum of Rs.1,68,96,699.25 (Rupees One Crore Sixty Eight Lakhs Ninety Six Thousand Six Hundred Ninety Nine and Paise Twenty Five only) due under CCOL loan account No.0439083000000027 with future interest on the sum of Rs.1,57,51,479.55 (Rupees One Crore Fifty Seven Lakhs Fifty One Thousand Four Hundred Seventy Nine and Paise Fifty Five only) @ 12.30% per annum from 23.11.2021 till the date of realization less the net sale proceeds of Rs.1,34,00,000/(Rupees One Crores Thirty Four Lakhs only) credited on 21.12.2023;

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(ii) The defendants 2 & 3, are directed to pay to the applicant bank, jointly and severally, a sum of Rs.9,25,863.16 (Rupees Nine Lakhs Twenty Five Thousand Eight Hundred Sixty Three and Paise Sixteen only) due under HTL account No.0439655000000142 with future interest on the sum of Rs.9,06,661.16 (Rupees Nine Lakhs Six Thousand Six Hundred Sixty One and Paise Sixteen only) @ 7.70% per annum from 23.11.2021;

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(iii) The defendants 1 to 3 are directed to pay to the applicant bank, jointly and severally, a sum of Rs.33,34,218.92 (Rupees Thirty Three Lakhs Thirty Four Thousand Two Hundred Eighteen and Paise Ninety Two only) due under ECLGS loan account No.0439656000000009 with future interest on the sum of Rs.32,91,395.92 (Rupees Thirty Two Lakhs Ninety One Thousand Three Hundred Ninety Five and Paise Ninety Two only) @ 8.60% per annum from 23.11.2021 till the date of realization; and

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(iv) The defendants 1 to 3 are directed to pay to the applicant bank, jointly and severally, a sum of Rs.9,05,007.01 (Rupees Nine Lakhs Five Thousand Seven and Paise One only) due under FITL loan account No.0439656000000025 with future interest @ 12.30% per annum from 23.11.2021 till the date of realization.

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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 ‘B’ property, for sale to realize its dues and its costs.

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OA 58/2022

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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 27^th day of July, 2026.

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(Su. WILLYAHM) PRESIDING OFFICER

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OA 58/2022

SCHEDULE ‘A’

(Property sold under SARFAESI measures by the applicant bank)

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SCHEDULE –B

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Hypothecation entire current assets including stock, book debts produce, goods and other movable properties of any kind including machinery, vehicle and their accessories, implements, stored and on stocks, belonging to the 1^st defendant borrower, M/s Indraja Furniture, from time to time and shall be brought in, stored or be in or about their premises or godowns of the said firm.

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(Su. WILLYAHM) PRESIDING OFFICER

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Page 8 of 12

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OA 58/2022

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LIST OF DOCUMENTS FILED BY THE APPLICANT BANK

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Sl. No.	Date	Description of document	Exhibits
1	28.08.2009	Letter confirming the creation of equitable mortgage in respect of schedule A towards CCOL executed by 2^nd defendantin favourofthe applicant bank	Ex.A-1
2	19.11.2010	Letter confirming the extension of equitable mortgage in respect of schedule A towards the enhanced CCOL for Rs. 50 lakhs executed by 2^nddefendant in favour of the applicant bank	Ex.A-2
3	29.12.2011	Letter confirming the extension of equitable mortgage in respect of schedule A towards the enhanced CCOL for Rs. 65 lakhs executed by 2^nddefendant in favour ofthe applicant bank	Ex.A-3
4	28.04.2013	Letter confirming the extension of equitable mortgage in respect of schedule A towards the enhanced CCOL for Rs. 90 lakhs executed by 2^nddefendant in favour ofthe applicant bank	Ex.A-4
5	21.01.2015	Letter confirming the extension of equitable mortgage in respect of schedule A towards the enhanced CCOL for Rs.140 lakhs executed by 2^nddefendant in favour ofthe applicant bank	Ex.A-5
6	14.05.2016	Letter confirming the extension of equitable mortgage in respect of schedule A towards the enhanced CCOL for Rs. 140 lakhs executed by 2^nddefendant in favourofthe applicant bank	Ex.A-6
7	31.07.2017	The sanction intimation letter in respect of the renewal/enhancement of CCOL for Rs. 160 lakhs executed by defendants in favourofthe applicant bank	Ex.A-7
8	31.07.2017	The Demand promissory Note for Rs. 1,60,00,000/- executed by defendants in favour of the applicant bank	Ex.A-8
9	31.07.2017	The Credit Facility Agreement executed by defendants in favour of the applicant bank	Ex.A-9

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10	31.07.2017	Agreement of Hypothecation executed by defendants in favour of the applicant bank	Ex.A-10
11	31.07.2017	Agreement of Guarantee in respect of enhanced CCOL facility executed by defendants 2 & 3 in favour of the applicant bank	Ex.A-11
12	01.08.2017	The letter confirming the extension of equitable mortgage in respect of schedule A towards the enhanced CCOL for Rs. 160 lakhs executed by 2^nddefendant in favour of the applicant bank	Ex.A-12
13	26.07.2019	The sanction letter in respect of the renewal of CCOL account executed by defendants in favour of the applicant bank	Ex.A-13
14	26.07.2019	The letter of renewal for continuance on the renewal of CCOL account executed by defendants in favour of the applicant bank	Ex.A-14
15	19.08.2009	The sanction intimation letter in respect of the HTL executed by defendants 2 & 3 in favourofthe applicant bank	Ex.A-15
16	19.08.2009	The Housing Loan Agreement executed by defendants 2 & 3 in favour of the applicant bank	Ex.A-16
17	18.11.2010	The acknowledgement of Debt and Security in respect of HTL account executed by defendants 2 & 3 in favour of the applicant bank	Ex.A-17
18	23.05.2011	The acknowledgement of Debt and Security in respect of HTL account executed by defendants in favour of the applicant bank	Ex.A-18
19	28.12.2011	The acknowledgement of Debt and Security in respect of HTL account executed by defendants in favour of the applicant bank	Ex.A-19
20	28.04.2013	The acknowledgement of Debt and Security in respect of HTL account executed by defendants in favour of the applicant bank	Ex.A-20

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21	04.11.2014	The acknowledgement of Debt and Security in respect of HTL account executed by defendants in favour of the applicant bank	Ex.A-21
22	20.01.2015	The acknowledgement of Debt and Security in respect of HTL account executed by defendants in favour of the applicant bank	Ex.A-22
23	31.07.2017	The acknowledgement of Debt and Security in respect of HTL account executed by defendants in favour of the applicant bank	Ex.A-23
24	31.07.2017	The acknowledgement of Debt and Security in respect of HTL account executed by defendants in favour of the applicant bank	Ex.A-24
25	12.06.2020	The Sanction Intimation letter in respect of the ECLGS account executed by defendants in favour of the applicant bank	Ex.A-25
26	12.06.2020	Credit Facility Agreement executed by defendants in favour of the applicant bank	Ex.A-26
27	12.06.2020	Supplemental Agreement of Hypothecation executed by defendants in favour of the applicant bank	Ex.A-27
28	12.06.2020	The letter confirming the extension of equitable mortgage in respect of Schedule A towards the ECLGS executed by 2^nd defendant in favour of the applicant bank	Ex.A-28
29	15.09.2020	The Sanction intimation letter executed by defendants in favour of the applicant bank	Ex.A-29
30	15.09.2020	The undertaking in respect of the FITL facility executed by defendants in favour oftheapplicant bank	Ex.A-30
31	15.09.2020	The letter confirming extension of equitable mortgage in respect of Schedule A executed by 2^nddefendant in favour of the applicant bank	Ex.A-31
32	16.04.2021	The recall notice in respect of the CCOL, ECLGS and FITL account issued by the applicant bankto the defendants	Ex.A-32

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33	28.04.2021	The recall notice in respect of HTL account issued by the applicant bank to the defendants2& 3	Ex.A-33
34	22.11.2021	Statement of account pertaining to the CCOL with A/c. No.0439083000000027	Ex.A-34
35	22.11.2021	Statement of account pertaining to the HTL with A/c. No. 043965500000142.	Ex.A-35
36	22.11.2021	Statement of account pertaining to the ECLGS with A/c. No. 0439656000000009.	Ex.A-36
37	22.11.2021	Statement of account pertaining to the FITL with A/c.No. 0439656000000025	Ex.A-37
38	----	The Penal Interest Statement in respect of the CCOLaccount	Ex.A-38
39	----	The Penal Interest Statement in respect of theHTLaccount	Ex.A-39
40	----	The Penal Interest Statement in respect of theECLGS account	Ex.A-40
41	----	The statement showing the different rates of interest chargedinthe CCOL account.	Ex.A-41
42	----	The statement showing the different rates of interest chargedintheHTL account	Ex.A-42
43	----	The statement showing the different rates of interest chargedintheECLGS account	Ex.A-43
44	----	The statement showing the different rates of interest chargedintheFITL account	Ex.A-44

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(Su. WILLYAHM) PRESIDING OFFICER

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South Indian Bank v. M/s Indraja Furniture

Case brief

What is this about?

What did the court decide?

South Indian Bank v. M/s Indraja Furniture

Case brief

What is this about?

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