Allowed

Equitas Small Finance Bank Limited v. M/S Star Industries

DRT10 Mar 2025OA/1053/2024

Case brief

AI extract

What is this about?

DRT-III Chandigarh allowed the original application by Equitas Small Finance Bank Limited for recovery of Rs.1.02 crore outstanding dues from Star Industries. The Tribunal issued a recovery certificate and reduced the claimed interest rate to 8% p.a., permitting enforcement against hypothecated or personal assets under SARFAESI. Parties listed to appear on 11.04.2025. Quality: ok.

What did the court decide?

Recovery certificate issued; Defendants directed to pay Rs.1,02,63,443.00 plus costs and simple interest @8.00%p.a. from filing date till realization.

Equitas Small Finance Bank Limited versus M/S Star Industries — Banking and Recovery | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1053/2024 PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 12.08.2024

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DATE OF DECISION: 10.03.2025

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Equitas Small Finance Bank Limited, having its Registered office at:-4^th Floor, Phase II, Spencer Plaza No. 769, Mount Road, Anna Salai, Chennai, Tamil Nadu, India-600002 having Regional Office at : Equitas Small Finance Bank Ltd. SCO 2421-2422, Sec-22C, Chandigarh 160022, Zonal Office at: Equitas Small Finance Bank Ltd. BP8, Kaushailya Tower, 1^st Floor, Main Road, West Patel Nagar, New Delhi110088, Branch Office at: Equitas Small Finance Bank Ltd. JBN Tower opposite Canara Bank, Miller Ganj, Gill Road, Ludhiana-141003 through its Authorized Representative Sh. Manjeet Dahiya.

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……..Applicant

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Versus

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M/s Star Industries through its proprietor Sh. Nitin Kumar, B-211013, B-21-224/1, Industrial Area-B, Ludhiana, Punjab-141003

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Also at :- B-29536/25/25/1C, Main Sua Road, Opposite Jasbir Building Material, Ludhiana, Punjab-141014

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Sh. Nitin Kumar S/o Sh. Santosh Kumar, House No. 38, SF HIG Flats, Rani Jhansi Enclave, Ghumar Mandi, Ludhiana, Punjab- 141001

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………Defendants

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Advocates:

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Argued by Sh. Abhishek Garg, Advocate for the applicant None for Defendants

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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 Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of Rs.1,02,63,443.00 (Rupees One Crore Two Lacs Sixty Three Thousand

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Four Hundred and Forty Three only). The Original Application has been filed through Sh. Manjeet Dahiya, Authorized Representative w ho is competent to institute the Original Application vide General Power of Attorney dated 20.09.2023, which is Annexure A1 to this OA. 2. The brief facts of the OA are that the defendant No.1 through its Proprietor i.e. defendant no.2 h ad approached the applicant for the grant of OD Limit of Rs. 30.00 Lacs, Term Loan of Rs.3.00 Lacs and WCTL of Rs.1.40 Lacs vide Loan Application form along with KYC documents for OD facility of under CGTMSE scheme dated 04.07.2019, which is Annexure A2 to this OA. The defendants time to time approached the applicant for the renewal and enhancement of OD Limit to Rs.100.00 Lacs.

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The applicant sanctioned OD Limit of Rs. 30.00 Lacs, Term Loan of Rs.3.00 Lacs and WCTL of Rs.1.40 Lacs vide Sanction Letter dated 19.07.2019, 26.06.2020 and 28.06.2020, which are Annexures A3, A5 and A9 to this OA and further applicant sanctioned renewal and enhancement of OD Limit to Rs.100.00 Lacs vide Sanction letter dated 24.08.2020, 17.05.2021, 20.08.2022 20.08.2022, 19.01.2023 and 08.04.2024, which are Annexures A6, A7, A10, A11, A12 and A14 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendant no.1 had hypothecated its movable properties/Assets i.e. Book-debts, stock of raw materials, finished and semi-finished goods, movable plants, machinery, equipment appliance, furniture product vide Hypothecation letter for securing various credit facilities dated 19.07.2019, 17.05.2021, 20.08.2022 and 19.01.2023, along with its English Translation, which is Annexure A15 to this OA. Documents executed:- Loan Agreement dated 19.07.2019, 17.05.2021 and 19.01.2023, which are Annexures A4, A8 and A13 to this OA; Legal Notices dated 05.07.2021 with Postal Receipts, which is Annexure A16 to this OA and Certified statement of account along

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with calculation sheet pertaining to OD facilities and certificate under Banker’s Books Evidence Act, 1891, which is Annexure A17 to this OA.

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The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in both the loan accounts there was a debit of Rs.1,02,63,443.00, which is recoverable and the defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant requested to accept the application and to issue Recovery Certificate accordingly.

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The defendants were served notices to appear before this Tribunal. Ms. Jigyasa Tanwar, Advocate appeared on behalf of defendants and filed Power of Attorney but did not filed WS within stipulated period. Therefore, opportunity to file WS by defendants stand closed and their defense was struck of 20.02.2025. 7. In support of the OA, affidavit of Sh. Manjeet Dahiya, Authorized Representative, Equitas Small Finance Bank Limited has been filed. 8. Heard arguments of Ld. Counsel for applicant. None appeared for defendants for arguments. Perused record. 9. It was argued by learned counsel 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 A17 to this OA, it is proved that the defendants approached applicant for availing of the loan facilities which were granted to them and for that they had executed all the relevant documents in favour of the applicant. The defendants failed to pay back the loan as per terms and conditions of the agreement between the parties. Subsequently, both the accounts of the defendants were classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum Rs.1,02,63,443.00 (Rupees One Crore Two Lacs Sixty Three Thousand Four Hundred and Forty Three only) along with interest from the

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defendants, jointly and severally, from the date of filing of the present Original Application till realization of all the accounts.

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In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @10.00%p.a. plus penal interest @24.00%p.a. in all from 06.07.2024 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, 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 @8.00%p.a. in all 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.

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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.1,02,63,443.00 (Rupees One Crore Two Lacs Sixty Three Thousand Four Hundred and Forty Three only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in all the loan accounts 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/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 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. 13. Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 11.04.2025.

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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: 10.03.2025

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(MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Equitas Small Finance Bank Limited v. M/S Star Industries

Case brief

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Equitas Small Finance Bank Limited v. M/S Star Industries

Case brief

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