The Debt Recovery Tribunal allowed the bank's application for recovery of ₹7.08 crore. The court fixed interest at 7.50% p.a. and authorized recovery from mortgaged properties via SARFAESI Act if dues remain unsatisfied.
Recovery of ₹7,08,62,864.19 with interest @7.50% p.a. and costs; issuance of Recovery Certificate.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH
ORIGINAL APPLICATION NO.41/2023
PRESIDED OVER BY MRIDULESH KUMAR SINGH
DATE OF INSTITUTION: 07.09.2022
DATE OF DECISION: 27.12.2023
Union Bank of India, a Body Corporate Constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, having its Head Office at Union Bank Bhawan, 239, Vidhan Bhawan Marg, Nariman Point, Mumbai, Maharashtra-400021 and Branch Offices amongst others at Branch Office situated at G.T. Road Branch, Vishwakarma Chowk, Ludhiana through its Power of Attorney, Sh. Dilip Kumar, Chief Branch Manager of the Applicant Bank
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Advocates: Argued by Sh. Sandesh Arora, Advocate for the applicant Sh. Harkirat Singh Jagdev, counsel for the defendants Defendants are ex-parte
FINAL ORDER 1. Present Original Application was instituted by the applicant bank under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of Rs.7,08,62,864.19p (Rupees Seven Crores Eight Lacs Sixty Two Thousand Eight Hundred Sixty Four and Nineteen Paise only). The Original Application has been filed through Sh. Dilip Kumar, Chief Branch Manager of the applicant bank, who is competent to institute the Original Application vide General Power of Attorney dated 14.09.2009, which is Annexure A1 to this OA. 2. The brief facts of the OA are that the defendant no.2 being the proprietor and on behalf of defendant no.1 had approached the applicant bank from time to time for the grant of CCH Limit of Rs.3.00 Crores and further for the enhancement of the limit to Rs.4.00 Crores. The defendant no.2 on behalf of defendant no.1 also requested for sight LC of Rs.2.00 Crores and UGECL of Rs.1.10 Crores and they later moved an application for the interchangeability of sight LC to CCH limit, enhancing the limit to Rs.6.00 Crores vide Loan applications dated 28.02.2015, 26.07.2016 and 17.09.2018, which are Annexures A14, A20 and A68 to this OA. 3. The applicant Bank sanctioned the CCH Limit of Rs.3.00 Crores, sight LC of Rs.2.00 Crores and UGECL of Rs.1.10 Crores. The applicant bank on request of the defendants enhanced the CCH limit to Rs.4.00 Crores and later converted the sight LC to CCH limit further enhancing it to Rs.6.00 Crores vide Sanction Letters along with terms and conditions dated 27.02.2014, 30.03.2017, 02.12.2017, 24.09.2018, 30.08.2019 and 23.09.2020, which are Annexures A2, A15, A24, A45, A69, A73 and A75 to this OA and the terms and conditions were duly accepted by the defendants.
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Documents executed:- Declaration of D-2 and Affidavit of D-2 dated 04.03.2014, which are Annexures A3 and A4 to this OA; Audit reports/Provisional & Audited Balance sheets, which are Annexures A9, A18, A19, A21, A37, A70, A72 and A92 to this OA; Letters to PSIEC dated 05.03.2007, 24.03.2014 and 26.04.2017, which are Annexures A10, A12 and A43 to this OA; Memorandum of deposit of title deeds dated 04.03.2014, which is Annexure A13 to this OA; Copy of FDR and Letter of lien dated 30.01.2015, which are Annexures A16 and A17 to this OA; Balance Confirmation letter dated 23.08.2016, which is Annexure A22 to this OA; Request letter dated 03.10.2016, which is Annexure A23 to this OA; Letters of Continuity, Letter of Undertaking, Interest Agreement, AD-02A, Letter of Guarantee, Composite Hypothecation Deed, D.P. notes all are dated 30.03.2017, which are Annexures A25 to A35 to this OA; Hypothecation Agreements and Letter of hypothecation of bills dated 30.03.2017, which are Annexures A39 to A41 to this OA; Letter regarding alignment of loans, which is Annexure A44 to this OA; D.P. notes, Letters of Continuity, Letters of Undertaking, Hypothecation Agreements, Annexure-II, Letter of Guarantee, Letter of Confirmation, Interest Agreement, Letter of Authority, Letter of undertaking from borrower, Annexure-I, Letter AD-02A, Letter of hypothecation of bills
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all are dated 02.12.2017, which are Annexures A45-A, A46 and A49 to A67 to this OA; Net worth statement of D2 and D3, which is Annexure A71 to this OA; Annexure IB, Letter of AD-02A, Undertaking, Undertaking letter from borrower, Annexure IA regarding pre condition, Deed of guarantee, Composite Hypothecation Agreement, Term loan Agreement, Hypothecation agreement of goods and debts, D.P. notes, Letters of continuity and Letter of undertaking not to alienate hypothecated goods all are dated 23.09.2020, which are Annexures A77 to A90 to this OA; Memorandum of entry dated 23.09.2020, which is Annexure A93 to this OA; Correspondence related to restructuring proposal of the defendants, which is Annexure A94 to this OA; Request and reminders, which is Annexure A95 to this OA; Demand notice u/s 13(2) of SARFAESI Act along with postal receipt dated 03.01.2022, which is Annexure A96 to this OA; Letter of defendant dated 15.02.2022, which is Annexure A97 to this OA; Demand notice u/s 13(4) of SARFAESI Act along with postal receipt dated 03.06.2022, which is Annexure A98 to this OA; Copy of the writ petition alongwith documents attached, which is Annexure A99 (Colly) to this OA; Statements of accounts along with the certificate under Bankers Books evidence act, which are Annexures A100 to A102 to this OA. 5. The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in loan accounts there was a debit of Rs.7,08,62,864.19p, which is recoverable and the defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant bank requested to accept the application and to issue Recovery Certificate accordingly.
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| 7. In |
support of the OA, affidavit ofSh. Dilip Kumar, Chief Branch |
|---|---|
| Manager | , Union Bank of Indiahas been filed. |
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both the loan accounts from the date of filing of the OA till realization of the amount ordered vide this final order. It is ordered accordingly. 11. In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.7,08,62,864.19p (Rupees Seven Crores Eight Lacs Sixty Two Thousand Eight Hundred Sixty Four and Nineteen Paise only) jointly and severally, with costs, current and future simple interest @7.50%p.a. in both the loan accounts from the date of filing of OA till the date of realization of the amount. Accordingly, the applicant bank shall be entitled to recover aforesaid amount from the sale of hypothecated/mortgaged properties of the defendants in execution proceedings if not sold earlier under the provisions of the SARFAESI Act, 2002. If the dues of the bank still remain unsatisfied, it shall be entitled to recover the same by attachment and sale of personal assets of the defendants. The applicant is at liberty to enforce the claim through due process of law.
Pronounced by me in the open Tribunal. Dated: 27.12.2023 (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh
3 issues framed by the court
Whether the applicant bank is entitled to recovery of the outstanding loan amount?
Whether the defendants are liable to pay interest at the claimed rate?
Whether the defendants are liable to pay costs and simple interest at 7.50% per annum?
1 provisions across 1 enactments
Union Bank of India
M/s Shri Balaji Fasteners
Arun Garg
Varun Garg
Pawan Kumar Garg
Mridulesh Kumar Singh
As recorded by the court registry
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