Allowed

State Bank of India v. M/S S P Services

DRT21 Aug 2025OA/11/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed State Bank of India's application for recovery of loan dues of Rs.21,45,873.00 from M/s S.P. Services. The court directed payment of principal and future interest at 11% per annum and authorized sale of hypothecated properties.

What did the court decide?

Direct payment of Rs.21,45,873.00 plus future interest at 11% p.a. and authorization to sell hypothecated properties; issuance of recovery certificate.

State Bank of India versus M/S S P Services — Execution and Attachment | DRT (2025)

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Presented on: 19.04.2023 Registered on: 04.01.2024 Decided on: 21.08.2025 Duration: Y M D 02 04 02

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IN THE DEBTS RECOVERY TRIBUNAL AT AURANGABAD (Before Dr. J.R. Chauhan Presiding officer) TOTAL CLAIM AMOUNT – Rs.21,45,873.00/-

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ORIGINAL APPLICATION No.11/2024

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State Bank of India , A body corporate constituted under State Bank of India Act, 1955, Having its Local Head Office at, Madam Cama Road, Nariman Point, Mumbai 400 021 and one of its branch Stressed Assets Recovery Branch, Aurangabad, At Plot No. 1, Ground Floor, Administrative Building, Town Centre, N-5, CIDCO, Aurangabad, Through its authorized signatory, Shri. Vivek Dattatray Chavan, Deputy Manager & City Case Officer.

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… Applicant

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Versus

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M/s S. P. Services Through Proprietor Mr. Prakash Yadav Pakhare Age: Major Occu: Business At: Plot No. 5/5/305, Uttara Nagari, Bujwadi, Aurangabad- 431001

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… Defendant

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APPEARANCES For the Applicant Smt. Archana B. Karadkhedkar - Advocate For the Defendant Ex-parte

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[SBJ] (OA No. 11/2024) Page 1 of 10

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JUDGMENT (Delivered on 21^st August, 2025)

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The Applicant Bank has filed the present application for recovery of the sum of Rs.21,45,873.00 Paisa (Rupees Twenty-One Lacs, Forty-Five Thousand, Eight Hundred Seventy-Three only) as on 03.03.2023 with future interest @12.15% per annum with monthly rests from 04.03.2023 till realization of entire dues and costs and expenses of the application from the defendant.

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Brief facts of the application are as under :

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The applicant State Bank of India is having its Local Head Office at Madam Cama Road, Nariman Point Mumbai and has its various branches, centers and Regional Business offices at various places providing Banking services. The State Bank of India, Small and Medium Enterprises Credit Cell (SMECC) Branch, District Aurangabad sanctioned Term loan facility to the defendant. After the loan accounts categorized NPA, for initiating further legal action and recovery of the dues, the loan account migrated from State Bank of India, Small and Medium Enterprises Credit Cell (SMECC) Branch to Stressed Asset Recovery Branch Aurangabad.

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[SBJ] (OA No. 11/2024) Page 2 of 10

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This Original Application is filed by Mr. Vivek Dattatray Chavan, working as Deputy Manager & City Case Officer in Stressed Asset Recovery Branch, Aurangabad and he is the City Case Officer of the loan account of the defendant. The officers/ Managers are authorized to sign and verify the original application, pleadings, adduce evidence and to represent the applicant in all proceedings as per Notification No. BPR/SB/2935 dated 29.10.2005 published in Gazette of India. This Notification is issued as per Regulation 76(1) of State Bank of India, General Regulation 1955, framed under Section 50 of State Bank of India Act, 1955.

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The Defendant is the resident of Aurangabad. The defendant M/s. S.P. Services is a proprietary firm and Mr. Prakash Yadav Pakhare is the Proprietor of the said firm and the principal borrower. The defendant through its Proprietor Mr. Prakash Yadav Pakhare who was in need of financial assistance, approached the applicant bank and requested for Term Loan Facility of Rs.20,00,000/- (Rupees Twenty Lacs only) for running his business. Considering the request of the defendant, the applicant bank sanctioned and granted the Term Loan of Rs.20,00,000/- (Rupees

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[SBJ] (OA No. 11/2024) Page 3 of 10

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Twenty Lacs only) for running the business of manufacturing of fabrication and engineering work to the defendant vide Letter of Arrangement dated 24.09.2021.

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In order to secure the aforesaid Term Loan of Rs.20,00,000/- (Rupees Twenty Lacs only), availed by the defendant, the defendant signed, executed and acknowledged various necessary loan and security documents in favour of the applicant bank i.e. Letter of Arrangement dated 24.09.2021, Agreement of loan-cumHypothecation dated 24.09.2021 thereby hypothecating all kinds of machinery/stocks purchased out of bank finance, book debts and other current assets (covered period not over 90 days), Stock, receivables and present and future assets to be purchased out of bank finance mentioned in Paragraph No.3-A and 5.3 of the Original Application. The defendant executed Affidavit dated 24.09.2021 for Term Loan Facility in favour of applicant bank mentioned in Paragraph No. 5.4 (B) of the Original Application.

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The defendant agreed to repay the Term Loan of Rs.20,00,000/- (Rupees Twenty Lacs only) in 53 monthly installments of Rs.49,088/- each plus interest and 1^st monthly installment of Rs.21,238/- each plus interest

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[SBJ] (OA No. 11/2024) Page 4 of 10

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starting from 01.03.2022.The applicable interest rate at the time of sanction was @3.85% margin above the MCLR/RLLR/ELBR which is at the time of sanction was @6.65% p.a. The effective rate of interest @10.50% per annum calculated on daily products with monthly rests.

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The applicant bank further submitted that after availment of the Term Loan facility, the defendant failed to repay the dues as agreed and assured and as such the loan account of the defendant became irregular/doubtful and the entire outstanding amount in the loan account become overdue. The defendant failed and neglected to repay the legal dues despite repeated demands by personal requests. The entire outstanding in the account has become due and payable by the defendant to the bank in lump sum.

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The particulars of the claim is as under:

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Sr.
a)

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In Term Loan Account No.40479388487

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Sr. No.	Particulars	Amount in Rs.
a)	The amount due on 03.03.2023 inclusive of interest debited to the loan account up to 29.09.2022.	Rs. 20,25,202.00
b)	Interest applied from 29.09.2022 to 03.03.2023 but not debited to the loan account.	Rs. 1,20,671.00
	Total	Rs. 21,45,873.00

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[SBJ] (OA No. 11/2024) Page 5 of 10

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The applicant bank submitted that the applicant bank has maintained the Term Loan account of the defendant regularly and has taken entries of all the transaction in the account of the defendant. The Statement of Account is duly certified as per Section 4 of the Banker’s Books Evidence Act, 1891 stating the rate of interest and compounding interest. It is further certified that the interest charged is at such a rate and capitalized at such a periodical rests as permitted by the Reserve Bank of India.

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The applicant bank further submitted that the defendant committed defaults in repayment of the loan amount and as such, the loan account of the defendant classified as NonPerforming Asset on 29.09.2022 as per the guidelines of the Reserve Bank of India in respect of Asset classification. However, the defendant only extended false promises of repayment of dues of the applicant bank and as such the applicant had to initiate securitization action under the SARFAESI Act, 2002. The cause of action arose for filing the OA on 29.09.2022 when the account of defendant had been classified as NPA. Therefore, the applicant bank issued legal notice on 27.03.2023 to the defendant through its panel Advocate thereby calling upon the defendant to pay its

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[SBJ] (OA No. 11/2024) Page 6 of 10

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dues of Rs.21,45,873.00/- as on 03.03.2023 and future interest, costs, expenses etc. from 04.03.2023 onwards till realization of entire dues.

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Hence, this Original Application filed by the applicant bank to recover the dues from the defendant jointly and severally. The applicant bank further prayed for directions to sell the hypothecated properties to recover the dues of the applicant bank.

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In this matter the defendant was served through paper publication on 04^th April, 2024 but failed to appear and as such, as per Order dated 01.05.2025, the defendant proceeded ex-parte.

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The applicant bank has filed Claim Affidavit of Evidence (Exhibit-04) of Mr. Vivek Dattatray Chavan Deputy Manager and City Case Officer, State Bank of India, Stressed Asset Recovery Branch, Aurangabad i.e. the applicant bank, and has produced on record the Original loan documents at Sr.No. A-1 to A-9 alongwith List (Exhibit-05), which corroborates the case of the applicant bank.

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[SBJ] (OA No. 11/2024) Page 7 of 10

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I have heard argument of the learned Advocate for the applicant bank.

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Since the defendant failed to appear and contest the application, I find no reason to disbelieve the un-rebutted evidence of the applicant bank. Therefore, the applicant bank is entitled for reliefs as claimed.

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In this matter the applicant bank has claimed the relief for Rs.21,45,873.00 Paisa (Rupees Twenty-One Lacs, FortyFive Thousand, Eight Hundred Seventy-Three only) as on 03.03.2023 with future interest @12.15% per annum with monthly rests from 04.03.2023 till realization of entire dues and costs and expenses of the application from the defendant. However, considering the facts of the case, I am of the opinion that if future interest is granted @11% per annum (simple), it would be just and reasonable rate of interest.

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Hence, I pass the following order. ORDER

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(A) Original Application No.11/2024 is allowed with costs.

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(B) Defendant is hereby ordered and directed to

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[SBJ] (OA No. 11/2024) Page 8 of 10

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pay to the applicant the aggregate sum of Rs.21,45,873.00 Paisa (Rupees Twenty-One Lacs, Forty-Five Thousand, Eight Hundred SeventyThree only) along with future interest @11% per annum (simple) from the date of filing of the original application i.e. 19^th April, 2023 till full payment/realization of the amount.

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(C) The aforesaid adjudicated amount is secured by the Agreement of loan-cum-Hypothecation dated 24.09.2021 thereby hypothecating all kinds of machinery/stocks purchased out of bank finance, book debts and other current assets (covered period not over 90 days), Stock, receivables and present and future assets to be purchased out of bank finance as mentioned in Paragraph No.3-A and 5.3 of the Original Application and in the List of Documents (Exhibit-05) marked at Exhibit A-4.

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(D) The applicant Bank is entitled to sell the hypothecated properties as mentioned in the Paragraph No.3-A and 5.3 of the Original Application and document Exhibit A-4in the List

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[SBJ] (OA No. 11/2024) Page 9 of 10

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of Documents Exhibit-05, to recover its dues.

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(E) Issue Recovery Certificate accordingly.

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(F) The Registry is directed to send the copy of Judgment and Recovery Certificate to the applicant and defendant.

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(G) File be consigned to the Record Room after due compliance. Pronounced in open Court. Sd/Date : 21.08.2025 (Dr. J.R. Chauhan) Presiding Officer Debts Recovery Tribunal, Aurangabad.

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[SBJ] (OA No. 11/2024) Page 10 of 10

State Bank of India v. M/S S P Services

Case brief

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State Bank of India v. M/S S P Services

Case brief

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