Allowed

Union Bank of India v. M/S Saggu Industries and Another

DRT24 Apr 2025OA/1172/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the Original Application by Union Bank of India against M/s Saggu Industries and Sukhwinder Singh for recovery of a debt of Rs. 22,97,726.50p. The Tribunal ordered payment of principal, costs, and simple interest at 8.00% p.a. from the filing date until realization, and authorized recovery via sale of hypothecated properties or attachment of personal assets.

What did the court decide?

Recovery Certificate issued; Defendants ordered to pay Rs. 22,97,726.50p with interest @8.00%p.a. and costs, enforceable via sale of assets or attachment.

Union Bank of India versus M/S Saggu Industries and Another — Banking and Recovery | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1172/2024

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PRESIDED OVER BYMRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 24.09.2024

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DATE OF DECISION: 24.04.2025

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Union Bank of I ndia, a body corporate constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970 having its Head Office at 239, Vidhan Bhawan Marg, Nariman Point, Mumbai and having a Branch Office Interalia at Kesar Ganj, Ludhiana, through its duly authorized person and Power of Attorney holder Sh. Rohit Chhabra, Branch Head

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……..Applicant Versus

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M/s Saggu Industries, 3862, Street No.5, Near Samral Chowk, Near Perfect Marriage Palace, Hargobindpure, Ludhiana -141001 through its Proprietor Sh. Sukhwinder Singh

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Sh. Sukhwinder Singh S/o Sh. Mahinder Singh, R/o 3862, Street No.5, Near Samral Chowk, Near Perfect Marriage Palace, Hargobindpure, Ludhiana -141001 (Proprietor of M/s Saggu Industries)

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….……Defendants

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Advocates:

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Present Sh. Amod Kumar Thakur, Advocate proxy for Sh. R.K. Chauhan, Advocate for the Applicant Defendants are 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 Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of Rs.22,97,726.50p (Rupees Twenty Two Lac Ninety Seven Thousand Seven Hundred Twenty Six And Paise Fifty Only). The Original Application has been filed through Sh. Rohit Chhabra, Branch Head of the applicant, who is competent to institute the Original Application vide Power of Attorney dated 25.08.2020, which is Annexure A1 to this OA.

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2 OA NO.1172/2024

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UNION BANK OF INDIA VS M/S SAGGU INDUSTRIES AND ANOTHER

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The brief facts of the OA are that the defendants had approached the applicant for the grant of CC Limit of Rs.20.00 Lacs vide Application Form dated 13.09.2022, which is Annexure A2 to this OA.

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The applicant sanctioned CC Limit of Rs.20.00 Lacs vide Memorandum of Sanction and Sanction Letter dated 25.09.2022 and 27.09.2022, which are Annexures A5 and A6 to this OA and the terms and conditions were duly accepted by the defendants vide Term and Condition dated 27.09.2022, which is Annexure A7 to this OA.

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Defendant No.1 had hypothecated their movable properties/assets i.e. Stocks of Electric Motor, Stocks of Accessories used in manufacturing of electric motors, Sheller of exhaust Fan, Ceiling Fan etc. vide Agreement of Hypothecation dated 27.09.2022 which is Annexure A11 to this OA.

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Documents executed:- Udhyam Registration certificate dated 25.08.2020, which is Annexure A3 to this OA; GST Registartion Certificate dated 19.04.2018, which is Annexure A4 to this OA; Annexure VI, D.P. Note, Letter of Continuity, Hypothecation Agreement of Goods and Book Debts, Letter of Undertaking, AD-02, Letter of Undertaking not alienate Hypothecated goods, Deed Guarantee, Letter of Undertaking from Borrower and Guarantors all dated 27.09.2022, which are Annexures A8 to A10, A12 to A16 to this OA; Letter for Adjustment of Overdue Amount dated 07.10.2023, which is Annexure A17 to this OA; Legal Notices dated 18.01.2024 with postal receipts, which are Annexures A18(colly) and A19(colly) to this OA and Statement of Account with certificate, which are Annexures A20 and A21 to this OA.

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The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in the loan account there was a debit of Rs.22,97,726.50p, which is recoverable and the defendants were served recall notices but they did not repay the

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3 OA NO.1172/2024 UNION BANK OF INDIA VS M/S SAGGU INDUSTRIES AND ANOTHER

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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 but no one appeared on behalf of defendants and they were proceeded ex parte on 08.04.2025.

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In support of the OA, affidavit of Sh. Naresh, Branch Manager, Union Bank of India h as been filed.

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Heard arguments of Ld. counsel for applicant. None appeared for defendants for arguments. Perused record.

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It was argued by learned proxy counsel that in view of the documentary evidence brought on record which had gone unrebutted, the applicant bank had proved its case. From the perusal of all the Annexure A1 to A21 to this OA, it is proved that the defendants approached applicant for availing of the loan facility which was 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, 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.22,97,726.50p (Rupees Twenty Two Lac Ninety Seven Thousand Seven Hundred Twenty Six And Paise Fifty 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 pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @11.55%p.a. along with penal interest @2.00%p.a. from 05.09.2024 till the realization.

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The Tribunal is of the considered opinion that sometimes inappropriate 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,

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4 OA NO.1172/2024

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UNION BANK OF INDIA VS M/S SAGGU INDUSTRIES AND ANOTHER

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undertaking of the defendant, 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.22,97,726.50p (Rupees Twenty Two Lac Ninety Seven Thousand Seven Hundred Twenty Six And Paise Fifty Only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in the loan account 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 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 21.05.2025.

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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: 24.04.2025

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

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OA NO.1172/2024

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UNION BANK OF INDIA VS M/S SAGGU INDUSTRIES AND ANOTHER

Union Bank of India v. M/S Saggu Industries and Another

Case brief

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Union Bank of India v. M/S Saggu Industries and Another

Case brief

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