Allowed

Union Bank of India v. Ms Phoenix Industries and Another

DRT21 Nov 2025OA/1279/2025

Case brief

AI extract

What is this about?

In an ex parte proceeding, the Debt Recovery Tribunal allowed the bank's application for recovery of an unsecured commercial loan. The court confirmed liability for the outstanding balance and granted interest at 8% p.a., ordering the issuance of a Recovery Certificate.

What did the court decide?

Debt of Rs.21,09,070.78p to be paid with interest at 8% p.a.; Recovery Certificate issued.

Union Bank of India versus Ms Phoenix Industries… — Contract and Commercial Disputes | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO. 1279/2025

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 09.09.2025

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DATE OF DECISION: 21.11.2025

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Union Bank of India, a body corporate, constituted under 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 village Phullanwal, Tehsil and District Ludhiana, through duly authorized person and attorney holder Sh. Jagmohan Singh, Branch Manager.

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……..Applicant

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Versus

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M/s Phoenix Industries, B-32, Luxmi Colony, Street no.2, Kailash Nagar Road, Gehlewal, Ludhiana- 141007 (through its prop. Sh. Varun Soni son of Sh. Surjeet Kumar Soni) 2nd address: B-24-2721, Main Road, Sunder Nagar, Opposite First Line Exclusive, Ludhiana-141008.

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Sh. Varun Soni son of Sh. Surjeet Kumar Soni, Resident of House no. G-51, Royal View Executive, Omaxe, village Dad, Pakhowal Road, Ludhiana 142022 (Proprietor of M/s Phoenix Industries).

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….……Defendants Advocates:

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Argued by Sh. R K Chauhan, Advocate for Applicant

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Defendants already ex parte

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FINAL ORDER 1. 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.21,09,070.78p (Rupees Twenty One Lacs Nine Thousand Seventy & Paise Seventy Eight Only). The Original Application has been filed through Sh. Jagmohan Singh, Branch Manager o f the applicant, who is competent to institute the Original Application vide Power of Attorney dated 17.08.2022, which is Annexure A1 to this OA.

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The brief facts of the OA are proprietor of defendant no.1 through its proprietor defendant no.2 had approached the applicant for

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2 OA NO. 1279/2025 UNION BANK OF INDIA VS M/S PHOENIX INDUSTRIES AND ANOTHER

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the grant of CC Limit of Rs.20.00 Lacs vide Application form for MSMEs dated 26.06.2024, which is Annexure A2 to this OA.

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The applicant sanctioned the CC Limit of Rs.20.00 Lacs vide Memorandum to sanctioning authority and sanction letter, both dated 04.07.2024, which are Annexures A5 and A6 to this OA; T erms and conditions of Sanction, which is Annexure A7 to this OA were duly accepted by the defendants.

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Defendant no. 1 through its Proprietor Defendant no. 2 hypothecated stocks vide Hypothecation Agreement dated 05.07.2024, which is Annexure A12 to this OA.

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Documents executed :- GST registration dated 23.05.2024, which is Annexure A3 to this OA; Udyam registration certificate dated 28.05.2024, which is Annexure A4 t o this OA; Standard undertaking by borrower, Annexure-VI by borrower, Demand Promissory Note, Letter of Continuity, all dated 05.07.2024, which are Annexures A7 to A11 to this OA; Letter of Undertaking from borrower, AD-02A, Letter of undertaking not to alienate hypothecated goods, Agreement on rate of interest , Deed of Guarantee, Letter of Undertaking from the Guarantor, all dated 05.07.2024, which are Annexures A13 to A18 to this OA; Letter by defendant to applicant regarding change of address of defendants, which is Annexures A19 to this OA; Letter dated 17.05.2025 by applicant to defendants for adjustment of overdue and postal receipt thereof, which is Annexures A20(Colly) to this OA; Letter dated 02.07.2025 by applicant to defendants for adjustment of overdue, which is Annexures A21 to this OA; Letter dated 14.07.2025 by applicant to defendants for adjustment of overdue, which is Annexure A22 to this OA; Legal notice dated 08.07.2025 along with postal receipts, which is Annexure A23 (Colly) to this OA; Recall notice dated 07.08.2025 by applicant to defendants, which is Annexure A24 to this OA; Recall notice dated 30.08.2025 by advocate along with postal receipts, which is Annexure A25 (Colly) to this OA and Statement of account with Certificate, which are Annexures A26 & A27 to this OA. 5. The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in loan account there was a

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3 OA NO. 1279/2025 UNION BANK OF INDIA VS M/S PHOENIX INDUSTRIES AND ANOTHER

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debit of Rs.21,09,070.78p, 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 but no one appeared on behalf of defendants and they were proceeded ex-parte on 19.11.2025.

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In support of the OA, affidavit of Sh. Jagmohan Singh , Branch Manager, Union Bank of India h as been filed. 8. Heard ex-parte arguments and perused record.

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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 A27 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.21,09,070.78p (Rupees Twenty One Lacs Nine Thousand Seventy & Paise Seventy Eight Only) 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 claimed interest @11.00% p.a. with 2% penal interest with monthly rests from 01.09.2025 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

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4 OA NO. 1279/2025 UNION BANK OF INDIA VS M/S PHOENIX INDUSTRIES AND ANOTHER

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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.21,09,070.78p (Rupees Twenty One Lacs Nine Thousand Seventy & Paise Seventy Eight 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 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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12. 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 03.12.2025.

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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 . Dated: 21.11.2025

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(MRIDULESH KUMAR SINGH)

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Presiding Officer,

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DRT-III, Chandigarh

Union Bank of India v. Ms Phoenix Industries and Another

Case brief

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Union Bank of India v. Ms Phoenix Industries and Another

Case brief

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