Allowed

Bank of India v. Ms Bajaj Store

DRT7 Aug 2025OA/1205/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an original application filed by a bank for recovery of dues exceeding one crore against three respondents, including a proprietorship firm and a guarantor, granted 12% interest, and directed the issuance of a recovery certificate after verifying the loan documents and non-contested stance of defendants.

What did the court decide?

Defendants directed to pay dues of Rs. 1,01,81,570 plus 12% interest and costs within two months; recovery certificate issued against defendants.

Bank of India versus Ms Bajaj Store — Contract and Commercial Disputes | DRT (2025)

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	.EBTS RECOVERY TR LUCKNOW	IBUN	AL
a proceeding	Order withsignatureofcourt			iceaction len with
O.A.No.1205/2024 07.08.2025	The Judgment is pronounced on separatesheet: attachedin09 sheets. Order beuploadedontI website. sI . e (Di (Pravas } PresidI	gned Separ Tribu ctated) r<br>Kumar: Offi ng	and ately nal’s M Singh) cer
	(MK)

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IN THE DEBTS RECOVERY TRIB rAL AT LUI row

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Preqent: Pravas Kumar Singh, Hresiding Ofabqr

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a Nagar,	'aseNo. Original Application N Dated:07.08.2025 ,Lucknow. Versus	P.1205	of2024	li :ant-bank
a Floord Buildin, Lucknc@ Bajaj. 1.	o uildover Plot No.3/15, KanakM g, VUyant I<hand, Gomti Q, k@through its soleproprietor Sr	bhesh Qagar, iJatin
r 3/292, 2.	3,Vipul Khand, Gomti Nagar,Luckn	k4w.
r R/o 43, , G , Luckn 3.	3/292, Vipul Khand, Gomti ,	3, , G bagar,	......Defdn&	&ants
Ld.Counselfo[ -k Ld.CounselfoF	[ Applicant-bank:ShriVinayShan Fthe Defendants:None. JUDGEMENT	:er,Adv	ocate
1. ThisOrI	ginalApplication has been filed §	§y thek-	Applicank-	k-bankunder
Section 19(1) defendantsfd Lac,Eighty-O pendent-lite a ,	if the Recovery of Debts& Bank r therecoveryofRs.I,Of,81,57k- -beThousand,FiveHundredSq, - bd future interest, costs and othet	& k+uptcy, , ,,,0k-(Ru q,enty - , reliefs	Act, 199+, peesOnb q,Only)t+ - , etc.	, ,bgainst the krore,One gbtherwith

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The bri+f facts of case are that the defenqants No.1 is a drdprietorship firm of which defendant no.2 is the sole propribtor and the d4ehdant No.3

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2 OIA. No.1205 of 2024

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is the guarantor. The defendant no.2 on behalf of dei^dantno.1 2018 and approached the Applicant-bank vide loan appli4ation dated 27] has applied & requested for grant of Cash Credit Limit of Rs.6] do lacs and ,75.00 lacs Term Loan FaEility of Rs.10.00 Ics, i.e. total creDit facilities of vide its sanctjon letter dated 28.03.2018 on 4rtain terms a ,d I conditions (Exhibit No.A+2 t, Exhibit No. A-4) to this Origi+al Application, :ed and 3. To seculre aforesaid credit facilities, de+endants had It-bank on signed variou+ security documents in favour of the Applic 28.03.2018. The defendant No.3 signed and exebuted Guarante e Agreement dated 28.03.2018 (Exhibit No. A-5 to Exhibitl No. A-17) to is Original Application.

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In ord+ to further secure the repaymknt of the baI dues, the .e. All that defendant No.# created equitable mortgage in rebpe( piece of Land with buildings, sheds and struct+es th+,bn ,t Sh,p lated in the No.2, Lower +round Floor, admeasuring 27.881square meters building knoW as “Kanak Mahesh Building” bbilt on Plot No. /[5, VUyant Khan(i, Gomti Nagar, Lucknow owned by Sri IJatin Bajaj in @our of the bank by deposIt of title deed (Exhibit No.A- 18) b this Original Adpncation. 5. Th,t ,gRin th, def,nd,nt N,.2 ,n b,h,if ,f th, d,f,ndh} N,.1 h,d approached tHe Appli„nt-b,nk vide his appli+ation dated o4.$.2020 f„ grant of anotHer Term Loan of Rs.6.50 laos vlde its Sanction 4etter dated 13.05.2020 (+xhibit No. A-20 & Exhibit +o. A-21) t, +his o,igi„,1 Application.

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To secdre aforesaid Credit Facilities, d+fendants had 9xpcuted and signed varioub security documents in favour of the applicb4 bank on

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13.05.2020. The defendant No.3 signed and executed Guarant€ .greernent (Exhibit No. A-22 t, Exhibit No. A-30) to this oh inal Applica+o 7 Further, the defendant No.2 on behalf bf the defend: No.1 had approached the Applicant-bank vide his applic?tion fOI datl 0.06.2020 for grant of ®orking Capital Term L,,n F4,ility ,f R,.9.bd 1„, w„ Sanctioned to the defendants under “Star G.E.C. Scheme” vidl Sanction Exhib No.A Letter dated ho.06.2020 (Exhibit No. A-32 ;) to this O,igi„al AppIIcation

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That ader sanction of ,h„„id T„m +,„ (GECL) 4ihity by th, applicant bi for Rs.9.00 laos, defendants had executl and si led various security doa lents in favour of the applicat bank on 10.66l2020. The defendant No.+ siWed and exec„t,d Gu„,nt,e 4g,eeme„t (E, lb it No. A-34 to Exhibit No. A-43) to this Original Appn,atio

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o.2 on bdhalf of the Subseq+ently, at the req„„t ,f th, defebd,nt defendant NO.b had appro„h,d the Applicant-b, vide his apdn+ation form dated 10.06.2+21 for grant of Working Caph41 Term L,,n da4ility „„d„ G.E.C.L. 1.0 Scheme’ of Rs.15.00 laos vidl Sanction } LEtter dated IO.06.2021.(Ebh,ibit N,. A-45) t, thi, O,iI [ppE,,ti,n 10 That ader sanction of aforesaid Capi Term [4an (GECL ld executed 1.o) facility b+ the applicant b,nk f„ R,.15.00 b„, d,f,nd,nt, It bank on and siWed v+io„s sec„,ity d„u„,e„ts i. fa„q„, ,f the appnl 15.06.2021 le defendant No.3 signed and ex+cuted Guarant4e I Agreement dated 15.06.2b21 (Exhibit No. A-46 t, ExhibiF No. -54) to LS Application.

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That as} per terms of the sanction letter ibsued by the appjicant bank, the defendan} No.2 has extended his earlibr equitable +rqngaged of

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1205 of 2024

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commercial free hold property / ,hop („igi„,nydeposih with applicant a term Id bank on 28.03.2018, t, „,„„ ,dditi,n,I wo,kihg ,,ph (GECL 1.o) ,fR,. 15.oo 1„, (Exhibit N,. A-55) t, thi, 4igin,1 )phcat# 12. Thereafter, at the request of the defenl lant Nl on aalf of the defendant No. 1 had approached the Applicant-bt for It of bther Term Loan Facility of Rs.5.00 lacs was sanction# to a defeAd under 'G.E.C.L. 1.o Fxt Sch,m,’ which was duly san4doned li the abplicant bank vide its sancti+n letter dated 15.11.2021 (Exhib+t N,.A:56 .bit No.A

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to this O,i&in,I Appli,,ti,„.

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13 . That an&r sanction of aforesaid Term Lo! (GECL Ext. 1+0] f,cility by the applicant bank for Rs.5.00 lacs, defendan+ had executel Id signed various security documents in favour of the al llicant bank a 5. 11.2021 The defendant No.3 signed and executed Gu i r a nt e e JII!IIII11 g r e e 4 e L t ( E I>!111b]Flib it No. A-58 to E$hibit No.A-60) t, this O,igi„,1 Al plicatio facilitil from 14. That anPr a,,iling ,f„ementioned c„dh applicant bank, that the d,f,„d,nt, b,1,„„ ,„d „,„,ity confirmation II executed currtie: dated ,06.2020 letters of ack„,wl,dgm,nt ,f debt ,nd , 17.03.2021, it.11.2021. 01.05.2023, 01.06.202 ; & 11.03.202, )spectively the loan accoubs (Exhibit N,. A-61) t, this o,ig nal Applicatio 15. To avail the afores,id credit f„ility, the Applil lt-ban lad opened six loan accodlts in the name of defendant No. 1 Firm order td 4aintain the credit facilitie:

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After a+,iII„g the ,f„,said „,dit f,Gil{ty, th, defend failed to maintain fina+cial discipline and also failed to comply with terms and conditions of the loan aWe,m,nt, ,ons,q„„,1 y, the loan a4c4unt of the defendant no.i/firm was classified as NPA on 2. 9.07.2024 by bank as per

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5 OIA. No. 1205 of 2024

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RBI guidelin€ thereafter the Applicant-bank issued ieveral al Legal Notice dated 05.09.2024 to the defendants :xhibit No. A-42 but, the + defendants stated no-response and they failed to repay the samI ld the loan accounts of le defendants are still un-liquihated, hence, Original Application been instituted. 17. As per lks of the bank maintained in tt e usual Ind or4idary course of banking business, an outstanding of Rs.1,01,8 1,570/(Rupe4s bne Crore, One Lac, Eigdty-One Thousand, Five Hundre& Seve OnI+) including interest UPto 07.11.2024, were lying due fdr payl Int, foI ,hich the defendants ar+ jointly and severally liable to reday the ime, @Ii}h they did not pay despi Ie repeated requests and dema4d. The ApplicahtFbank filed the Statemenl of loan Accounts. (Exhibit No.A-43 to Exhibit NoIA+68) to this Original Appli ion

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18, The ca of action for filing the presen+ application arbsb firstly on 28.03.2018 {hen the aforesaid credit facili were sancti+nbd by the Applicant-bank and the same were availed by t4e defendants and necessary documents w+re executed by the defendants on 28.03.2018, ,05.2020, 10.06.2020 }5.06.2021 and 15.11.2021. Su$sequently, on 0.06.2020, 17.03.2021, ,11.2021, 01.05.2023, 01.06.202b & 11.03.2024 rbspectively when balan. outstanding of all loan accounts were acceb by the defendants in writing by executing letters ofacknowledgml d of debt / securities and finally on 05.09.2024 when !gistered legal lotice was tAe' failed to served upon +he defendants by the applicaNt bank, but liquidate the danI< dues.

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Fo. 1205 of 2024 : o1

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The summons were served upon the dqfendant throu I h I registered post, as per the tracking report but the defendants did not a bpbar before the Tribunal th contest their case, hence the batter proceel a ex- parte against the defendants.

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From thR perusal of the record, it is evideht that the defI ndants were i k. As the provided with fair opportunities to contest th+ claim of the lsideration defendants odted not to contest the case, so only point of elamount as before this Tripunal is as to whether bank is legdlly entitled to tI claimed in OOginal Application on the basis &f documents nb pleading

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submitted by i

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In supp+rt of the case Shri Dinesh Kumar $rivastava, Chif the Applicant-bank has filed an affidavit.

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lanager of

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Id Exhibits 22. On a kareful scrutiny of the evidenc+ on affidavit lefendants marked as Exhibit No.A-1 to Exhibit No.A-68, +l is proved thab had availed t4e credit facilities from the APPli1 lnt-bank by e+e+uting loan and security dhcuments detailed as above in fa' 'our of the Applbc4nt-bank. A perusal of thh application, evidence and do( men relied lubon clearly shows that th& defendant had utilized the abov : loan facilities bsjgranted to them. The A+plicant-bank had maintained tI e Booh of acl AInt in the ordinary cour fe of banking business showing d sbursal of the loan amount to time and t 'ntries are The Bank hadF also charged interest from time relevant u/s 4} of the Banker Books of Evidence bct. It is also prb@d that the Applicant-bank’s claim is within limitation again st defendants, !refore, the

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defendants ark jointly and severally liable to pa+ the dues.

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0 A. No. 1205 of 2024

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23 Accordingly, the defendant Nos.1 to 3 arI directed to pa the balance dues to the Applicant-bank within a period of 2 months frod the date of judgement failing which the Applicant-bank 'ill be entitled lo sell the mortgaged pr+perty, hypothecated assets and personal asset;/jproperties of the defendants

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The Applicant-bank has claimed [email protected]% in lcbsh Credit Account, [email protected]% in Term Loan Acbount, [email protected]% in Demand Loa (CESS) Account, interest@12.#5% in Te,m Ldbn (GECL) Account, [email protected]% in Working Capital T4rm Loi (GECLI.b) Account a n d i n t e r e s t (B) 1 2 e 8 5 % i n T e r rn L o a n ( G E C LEx teje 0 ) Account pe jab num with monthly rest ,e.f. 08.11.2024 till the date of Healization and 4o£ts. On the basis of foreg ding discussion, interest of justice bill be rrved id pbndent-lite and future in+erest is granted @12% in all thb above Loan 4cbounts per annum with donthly rest on reducing balance jrom the date o iling of the O.A. till the dale of realization with costs

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25 I find +hat the bank h„ p„v,d th, ,,„bti,n of 1,an d+,+me„ts and creation ,f mbrtg,g, in it, f,,ou,. In the ,esaIt, the Origi., bpplication succeeds aga+nst the defendants with costs. T de ban las prdv4d the loan execution of lban documents in favour of the Bank and availdeht of credit !veral and facility. The liability of the defendant Nos.1 td 3 are joint and mortgaged pr+)perty, hypothecated asset as we II as the persodal properties are to be sold.

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It is, theFefore , ordered

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That the Original Application No.1205 ol 2024 of the A4plicant bank for issuance of Recovery Certificate to lhe tune of Rs.1,dl,81,570/ (Rupee# One Crore, One Lac, Eighty-O Ae Thousand, Hivb Hundred Seventy Only) along with the interest @142% per annum Wi+h monthly rest frqm the date of filing of the Origingl Application i 64.12.2024 till the joan is fully liquidated and costs sUcceeds ex-pa lgainst the defendbnts within a The defendant Nos.1 to 3 are directed to pay the dl which the period bf two months from the date of judgement, faili Appli1 It-bank will be entitled to recoveF the same frod the secured assets, personal movables and immovablb assets of the deFendants The Apdlicant–bank is entitled to recoveraforesaid arno+n+ by sale of mortgaLe property & assets (if not sold earlier under +h+ provision of the} S.A.R.F.A.E.S.I. Act 2002). ThI amount, if a+y already recove+ed by sale of any hypothecated bssets o othe tribe shall be recove}able, if the dues of the Applicant-bank st I remai J lnsatisfied, sale of the sade shall be recovered by attachmbnt and personal movabje assets of the defendant jointly dnd sevl ally. (iv) The de+Fndants are hereby restrained bE mean of injq :tion from br in an depletihg, transferring, encumbering, ali4nating k +ay dealing with their properties/estates without first paying the clbim of the Applicqnt-bank.

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„L. J„:„;„„„ 11

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(V) L,t R„,very Certincate be issued imdediately u/s 1+( 12) of the R„,,„„ery of Debt, Due to Banks ,nd Fi+ancial Instit„ti+nI Act, 1993 by fixing 07.11.2025 before R.0., DRT, 4ucknow \ (vi) The Applicant-bank is directed to nIe a Remo of cost for preparing \ R,co,,ry C,nin,,te uJs 19(22) of t+e Recovery of Debts Bankruptcy Act, 1993 . Judgmqnt is pronounced in the open cou D,t,d, b7.08.2025 rOb .„,L,t= 'ravas Kujmar £ingh) Pre#iqing Officer

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(MK)

Bank of India v. Ms Bajaj Store

Case brief

What is this about?

What did the court decide?

Bank of India v. Ms Bajaj Store

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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