Allowed

Indian Overseas Bank v. M/S Shabnam Textile Works

DRT15 Dec 2025OA/1012/2024

Case brief

AI extract

What is this about?

The DRT allowed an ex-parte application by Indian Overseas Bank for recovery of over Rs.99 lakh as a cash credit facility to a proprietorship firm. Following the defendants' failure to appear, the court directed repayment within two months, authorized asset sales, and ordered the issuance of a Recovery Certificate.

What did the court decide?

Recovery of Rs.99,17,162.96 plus interest at 10% per annum; authorization to sell hypothecated and personal assets; issuance of Recovery Certificate.

Indian Overseas Bank versus M/S Shabnam Textile Works — Specific Performance | DRT (2025)

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/ J I

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DEBTS RECOVERY TRIBUNAL LUCKNOW

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Date of order or lroceedin!	Order withsignatureofcourt		Officeaction taken withdate
O.A.No.1012/2024 15.12.2025	Judgment is signed pronounced on separate sheets. Separatelyattachedin06she Order be uploaded on Tribunal’swebsite	and ets. the
	(PravasKurrlarR Presiding Offi	,;ingh) cer

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IN THE DEBTS RECOVERY TRIBUNAL AT LUCKNOW

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Present: Pravas Kumar Singh, Presiding Officer

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Case No. Original Application No.1012 of 2024 Dated: 15.12.2025

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Indian Overseas Bank, having Branch at D.N. College Branch Meerut.

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. . . . . . .. Applicant Bank

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Versus

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M/s. Shabnam Textile Work, Proprietor Mrs. Shabnam Parveen, W/o Mr. Mohd. Tamseer, R/o 400/295, South Islamabad Gali No.6, Main Lisari Gate, Meerut.

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Mrs. Shabnam Parveen, W/o Mr. Mohd. Tamseer, Proprietor of M/s. Shabnam Texile Works, R/o 400/295, South Islamabad Gan No.6, Main Lisari Gate, Meerut.

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Mr. Mohd. Hameed, S/o Mr. Islamuddin, R/o Western Islamabad, Meerut.

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Mr. Mohd. Tamseer, S/o Mr. Haji Abdul Wahid, R/o 400 South Islamabad6, Main Lisari Gate, Meerut.

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. . . . . . .Defendants

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Ld. Counsel for the applicant-bank: Mr. Sanjeev Sharma, Advocate. Ld. Counsel for the defendants:None

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JUDGMENT

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This Original Application has been filed by the applicant Bank under Section 19 of the Recovery of Debts & Bankruptcy Act, 1993, against the defendants for the recovery of Rs.99,17,162.96/- (Rupees Ninety Nine Lac, Seventeen Thousand, One Hundred Sixty Two and Paisa Ninety Six Only) together with pendent-lite and future interest, costs and other reliefs etc.

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O.A. No.1012 of 2024

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The brief facts of casebeingthat the defendant no.1 is a proprietorship firm, of which, the defendant no.2 is proprietor and the defendant nos.3 & 4 are guarantors. The defendant No. 1/firm through its proprietor approached the applicant-bank for grant of Cash Credit Facility of Rs.50 lac, which was duly considered and sanctioned by the applicant-bank vide sanction letter dated 01.6.2013 under CGTMSE Scheme on certain terms and conditions (Exhibit No.2& Exhibit No.3) to this original application.

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In orderto secure the aforesaidcredit facility of Rs.50 lac, the defendant no.2 on behalf of defendant no. I/firmhad executed and signed various security documents in favour of the applicant-bank on 20.6.2013 like Demand Promissory Note, Letter of Hypothecation and Fiypothecation of Book Debts. The defendant nos.3 & 4 also being guarantors towards the credit facility had executed and signed Agreement of Guarantee in favour of the applicant-bank on 19.8.2015 acknowledging therein their liability same and equal with the principal borrowers (Exhibit No.4 to Exhibit No.7) to this original application.

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To avail the aforesaid credit facility, the applicant-bank had opened aloan account in the name of defendant no.1/firm in order to maintain the credit facility.

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The defendant nos.1 to 3 had also executed and signed Balance and Security Confirmation Letter dated 01.10.2014 & 01.4.2015 confirming the balance in the loan account (Exhibit No.8) to this original application.

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The defendant nos.1 & 2 had also executed and signed Revival Letter dated 19.8.2025 and 08.8.2018 (Exhibit No.9) to this original application.

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After availing the aforesaid credit facility,the defendants failed to maintain financial discipline and also failed to comply with the terms and

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O.A. No.1012 of 2024

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conditions of the loan agreement, consequently, the loan account of the defendant no.1/firm was classified as NPA on 28.8.2016 by the applicantbank as per RBI guidelines (Exhibit No.10), therefore, the applicant-bank issued Legal Notice dated 18.9.2024 (Exhibit No.11), but, the defendants stated no-response and failed to repay the same and the loan account of the defendant no.1/firm is still un-liquidated, hence, this Original Application has been instituted.

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As per books of the bank maintained in the usual and ordinary course of banking business, an outstanding of Rs.99,17,162.96/- (Rupees Ninety Nine Lac, Seventeen Thousand, One Hundred Sixty Two and Paisa Ninety Six Only) including interest upto17.9.2024 were lying due for payment, which they did not pay despite repeated requests and demands. The applicant Bank has filed the copy of Statement of Account (EHlibit No.12) to this original application.

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The cause of action for filing the present application arose firstly on 01.6.2013 when the abovementioned credit facility was sanctioned by the applicant-bank and necessary documents were executed by the defendants. The cause of action further arose on 18.9.2024 when the applicant-bank had issuedlegal notice recalling the defendants to repay the dues of the applicant-bank, but, the defendantsfailed to pay the same.

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The summons was served upon the defendants through registered post, but, the defendants did not turn up to contest the case9 hence9 the case proceeded ex-parte against the defendant vide Tribunal’s order dated 21.4.2025.

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From perusal of the record, it is evident that the defendants were provided fair opportunities to contest the claim of the bank. As the

O.A. No.1012 of 2024

defendants opted not to contest the case, so only point of consideration before this Tribunal in as to whether the bank is legally entitled to the amount as claimed in Original Application on the basis of documents and pleading submitted by it.

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In support of the case Shri Gopal Das, SeniorManager of the applicant Bank has supported its caseon affidavit.

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13 . On a careful scrutiny of the evidence on affidavit and Exhibit marked as (Exhibit No.1 to Exhibit No.12 to this original application), it stands proved that the defendants had availed the credit facility from the applicant bank by executing loan and security documents detailed as above in favour of the applicant Bank. A perusal of the application, evidence and documents relied upon clearly establishes that defendants had utilized the above loan facility as granted to them. The applicant bank has maintained the Books of account in the ordinary course of banking business showing disbursal of the loan amount.It further shows that bank had regularly credited the amount paid by the defendants in the books of account. The Bank had also charged interest from time to time and the entries is relevant u/s 4 of the Bankers Book Evidence Act. It is also proved that the applicant bank’s claim is within limitation against the defendants,therefore, the defendants areliable to pay the dues.

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Accordingly, the defendantsaredirected to pay the balance dues to the applicant bank within a period of two months from the date of judgment failing which the applicant bank will be entitled to sell the hypothecated assets as well as personal properties of the defendants.

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The applicant-bank has claimedinterest @12.25% per annum in the above loan account together with pendent lite and future interest till the

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O.A. No.1012 of 2024

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actual date of its realization and costs. On the basis of the foregoing discussion, interest of justice will be served if pendent-lite and future interest is granted @10.00% per annum in the above loan account with monthly rest on reducing balance from the date of filing of the O. A. till the date of realization with costs.

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1 find that the bank has proved theexecution of loan documents in its favour. In the result, the Original Application succeeds ex-parte against the defendants with costs. The defendants are jointly and severally liable to pay the dues of the applicant-bank and the hypothecated assets as well as the personal properties are liable to be sold.

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17.It is, therefore,ordered

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(i) That the Original Application No.1012 of 2024 of the applicant bank for issuance of Recovery Certificate to the tune of Rs.99,17,162.96/(Rupees Ninety Nine Lac, Seventeen Thousand, One Hundred Sixty Two and Paisa Ninety Six Only) together with future and pendent lite interest @10.00% per annumin the loan accountfrom the date of filing of the Original Application i.e. 26.9.2024 till the loan is fully liquidated and costs succeeds and is hereby allowed ex-parte against the defendants.

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(ii) The defendantsaredirected to pay the dues within a period of two months from the date of judgment, failing which the applicant bank will be entitled to recover the same from thesecured assets7 personal movables and immovable assets of the defendants.

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(iii) The applicant-bank is entitled to recover aforesaid amount by sale of hypothecated assets (if not sold earlier under the

O.A. No.1012 of 2024

provisions of the S.A.R.F.A.E.S.I. Act 2002). The amount, if any, already recovered by sale of hypothecated assets or otherwise shall be adjusted towards the debt and only the balance amount shall be recoverable. If the dues of the applicantbank still remain unsatisfied, the same shall be recovered by attachment and sale of the personal movable and immovable assets of the defendants.

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(iv) Thedefendants are hereby restrained by means of injunction from depleting, transferring, encumbering, alienating or in any way dealing with their properties/estates without first paying the claim of the applicant bank.

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(V) Let Recovery Certificate be issued immediately u/s 19(22) of the Recovery of Debts Due to Banks and Financial Institution Act, 1993 by fixing 17.02.2026 before R.O., DRT, Lucknow. Judgment is pronounced in the open court.

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Dated: 15.12.2025

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(Pravas TCaRra Singh) Presiding Officer

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(Veeresh)

Indian Overseas Bank v. M/S Shabnam Textile Works

Case brief

What is this about?

What did the court decide?

Indian Overseas Bank v. M/S Shabnam Textile Works

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

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