Allowed

Canara Bank v. M/S Xero Garments and Another

DRT24 Nov 2025OA/1049/2025

Case brief

AI extract

What is this about?

The Tribunal allowed the debtor recovery application filed by Canara Bank against M/s Xero Garments and its proprietor for an outstanding loan of Rs. 25,48,122.16p. The court observed that the defendants failed to appear and proceeded ex parte, granting recovery with simple interest at 8% p.a.

What did the court decide?

Recovery Certificate issued for Rs. 25,48,122.16p plus interest at 8% p.a. from filing date till realization, enforceable via sale of assets.

Canara Bank versus M/S Xero Garments and Another — Contract and Commercial Disputes | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1049/2025

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 31.07.2025

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DATE OF DECISION: 24.11.2025

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Canara Bank, a body Corporate and Nationalized Bank under the Provisions of Banking Companies (Acquisition and Transfer of Undertakings) Act of 1970 with its Head Office at J.C. Road, Bangalore and one of its branches amongst other places at Main Road, Kailash Nagar, Basti Jodhewal, Kailash Nagar Ludhiana (Punjab) through its Manager/General Power Attorney Holder Sh. Lovish Kumar.

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……..Applicant

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Versus

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M/s Xero Garments, C/o 31-369 (First Floor), Indra Colony, Chandigarh Road, Ludhiana (Punjab) Pin Code-141008 through its Proprietor Sh. Amandeep Gulati. 2^nd Address: House No.73-B, New Nanda Colony, Rahon Road, Krishna Colony, Ludhiana (Punjab)-141007.

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Sh. Amandeep Gulati S/o Sh. Bhupinder Gulati, R/o House No.731-C, Dugri Road, Model Town Extension, Ludhiana (Punjab)-141001 Proprietor of M/s Xero Garments .

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………Defendants

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Advocates:

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Argued by Sh. Rujhan Dhawan, Advocate for Applicant (through VC) Defendants already ex parte

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FINAL ORDER

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Present Original Application was instituted by the applicant under Section 19 of the Recovery of Debts & Bankruptcy Act, 1993, against the defendants for recovery of Rs.25,48,122.16p (Rupees Twenty Five Lacs Forty Eight Thousand One Hundred Twenty Two & Paise Sixteen Only). The Original Application has been filed through Sh. Lovish Kumar, Branch Manager, of the applicant, who is competent to institute the Original Application vide Power of attorney dated 21.01.2021, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant no. 1 through its proprietor defendant no. 2 the applicant for grant of OCC Limit of

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2 OA NO.1049/2025 CANARA BANK VS M/S XERO GARMENTS AND ANOTHER

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Rs.50.00 Lacs vide Application form dated 01.11.2022, which is Annexure A2 to this OA. Thereafter, the defendants approached the applicant for Renewal of the Limit for Rs.24.00 Lacs vide loan application dated 29.12.2023, which is Annexure A14 to this OA. 3. The applicant sanctioned OCC Limit of Rs.24.00 Lacs vide Sanction letter dated 21.12.2022, which is Annexures A3 to this OA and the terms and conditions were duly accepted by the defendants. The Limit was thereafter renewed by the applicant vide sanction letter dated 29.12.2013, which is Annexure A15 to this OA. 4. Defendant no. 1 through its proprietor defendant no. 2 hypothecated stock i.e. hosiery goods mainly t-shirts and jackets etc. vide Cash Credit Agreement, which is Annexure A5 to this OA. Documents executed:- Letter of Proprietorship, Request for Overdraft Facility, Pronote, Letter of Undertaking, Letter of Undertaking/Consent , Disclosure of Information of defaulters , Undertaking Letter , Undertakings , Letter Evidencing Execution of Documents, Certificate of Loan Papers obtained, all dated 21.12.2022, which are Annexures A4, A6 to A13 to this OA; Letter of Proprietorship, Letter of Renewal, Disclosure of Information on defaulters, Undertaking Letter, Letter Evidencing Execution of Documents, all dated 29.12.2023, which are Annexures A16 to A20 to this OA; Legal notice dated 03.07.2025, which is Annexure A21 to this OA and Statements of account, which is Annexure A22 to this OA. 5. The loan account became irregular and were classified as NPA and after adjusting debit and credit entries in loan account there was a debit of Rs. 25,48,122.16p, which is recoverable and the defendants were served recall notice but defendants did not repay the outstanding amount, therefore, the applicant requested to accept the application and to issue Recovery Certificate accordingly. 6. The defendants were served notice to appear before this Tribunal but no one appeared on behalf of defendants and they were proceeded ex-parte on 19.11.2025. 7. In support of the OA, affidavit of Sh. Lovish Kumar, Manager, Canara Bank, has been filed.

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3 OA NO.1049/2025 CANARA BANK VS M/S XERO GARMENTS AND ANOTHER

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Heard ex-parte arguments and perused record. 9. It was argued by learned counsel through Video Conferencing that in view of the documentary evidence brought on record which had gone unrebutted, the applicant had proved its case. From the perusal of all the Annexures A1 to A22 to this OA, it is proved that the defendants approached applicant for availing of the loan facility which were granted to them and for that they had executed all the relevant documents in favour of the bank. The defendants failed to pay back the loan as per terms and conditions of the agreement between the parties. Subsequently, account of the defendants was classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs. 25,48,122.16p (Rupees Twenty Five Lacs Forty Eight Thousand One Hundred Twenty Two & Paise Sixteen Only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the account.

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In so far as pendente lite and future rate of interest is concerned, the applicant in relief clause has interest @10.25% p.a. with monthly rests from 10.07.2025 till the realization.

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The Tribunal is of the considered opinion that sometimes in appropriate cases the prerogative of mercy is the brightest jewel in the crown of the Judge. Keeping in view the facts and circumstances of the instant case including nature of the mortgaged property/hypothecated assets, undertaking of the defendants, quantum of loan and prevalent market rates of interest which have gone drastically downhill in yester years, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @08.00%p.a. in the loan account from the date of filing of the OA till realization of the amount ordered vide this final order. It is ordered accordingly.

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In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs. 25,48,122.16p (Rupees Twenty Five Lacs Forty Eight Thousand One Hundred Twenty Two & Paise Sixteen Only) jointly and severally, with costs, current and future simple interest @08.00%p.a. in the loan

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OA NO.1049/2025 CANARA BANK VS M/S XERO GARMENTS AND ANOTHER

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account from the date of filing of OA till the date of realization of the amount. Accordingly, the applicant shall be entitled to recover aforesaid amount from the sale of hypothecated assets of the defendants in execution proceedings if not sold earlier under the provisions of the SARFAESI Act, 2002. If the dues of the applicant 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.

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Any other application pending stands disposed of .

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Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 04.12.2025.

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Copy of this order be given dasti to the applicant and be sent to defendants through registered/speed post and this order be also uploaded on the official website of this Tribunal and record be consigned.

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Pronounced by me in the open Tribunal .

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Dated: 24.11.2025

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(MRIDULESH KUMAR SINGH)

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Presiding Officer, DRT-III, Chandigarh

Canara Bank v. M/S Xero Garments and Another

Case brief

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Canara Bank v. M/S Xero Garments and Another

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