Allowed

State Bank of India v. M/S Shivanga Corrugators and Others

DRT5 Jun 2025OA/132/2024

Case brief

AI extract

What is this about?

In an ex parte application under Section 19 RDBFI Act, the Tribunal decreed a loan amount of Rs. 6.21 Cr against a partnership firm and partners. The Tribunal adjusted the interest rate uniformly to 7.40% p.a. and ordered recovery from mortgaged properties.

What did the court decide?

Recovery of Rs. 6,21,64,676.00 with interest @7.40% p.a. from loan accounts; Recovery Certificate issued.

State Bank of India versus M/S Shivanga Corrugators and Others — Banking and Recovery | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.132/2024

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PRESIDED OVER BYMRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 05.01.2024

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DATE OF DECISION: 05.06.2025

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State Bank of India a body corporate constituted under the provisions of The State Bank of India Act, 1955(23 of 1955) having its Corporate Office at Madame Cama Road, Nariman Point, Mumbai (Maharashtra) 400021, carrying on its Business of Banking in India and Abroad having one of its Local Head Office at Sector 17, Chandigarh, having its SME Branch amongst other places at New Grain Market, Branch Sangrur, District Sangrur(Punjab) and one of the specialized Branch known as Stressed Assets Recovery Branch, at SCO No. 15, Firs Floor, Sector 7-C, Madhya Marg, Chandigarh, UT 160019 through its Chief Manager Sh. Sanjeev Prakash Verma.

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……..Applicant Versus

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M/s Shivanga Corrugators, a partnership firm, at Plot no. 4534 inside Khanna Road, Village Ikolaha, Tehsil Khanna, District Ludhiana, Punjab – 141401 through its Partners Sh. Gaurav Singla son of Sh. Satish Kumar Singla and Sh. Satish Kumar Singla Son of Sh. Ravi Shankar.

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IInd Address : Head office at Narindera Colony, Near DAV School, Malerkotla (Punjab)-148023

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Sh. Gaurav Singla Son of Sh. Satish Kumar Singla, Partner of M/s Shivanga Corrugators, Resident of House no. F-5/0035, Narindera Colony, Near DAV School, Malerkotla (Punjab)148023.

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Sh. Satish Kumar Singla Son of Sh. Ravi Shankar partner of M/s Shivanga Corrugators, Resident of House no. F-5/0035, Narindera Colony, Near DAV School, Malerkotla (Punjab)148023.

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2 OA NO.132/2024 STATE BANK OF INDIA VS M/S SHIVANGA CORRUGATORS AND OTHERS

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Smt. Santosh Rani W/o Sh. Satish Kumar Singla, R/o House no.

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F-5/0035, Narindera Colony, Near DAV School, Malerkotla (Punjab)-148023.

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………. Defendants

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Advocates:

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Argued by Sh. Manish Luthra, Advocate proxy for Sh. Vivek Verma, 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.6,21,64,676.00 (Rupees Six Crore Twenty One Lacs Sixty Four Thousand Six Hundred Seventy Six Only). The Original Application has been filed through Sh. Sanjeev Prakash Verma, Chief Manager of the applicant, who is competent to institute the Original Application in terms of gazette notification dated 26.09.1959, 26.08.1972 and 02.05.1987 under Regulation No.76 and 77 of State Bank of India Regulations framed in exercise of powers conferred by Section 50 of the state bank of India Act, 1955 passed by the central government.

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The brief facts of the OA are that the defendant no. 1 through its partners i.e. defendant no. 2 & 3 had approached the applicant for grant of CC Limit of Rs.130.00 Lacs and Term Loan of Rs. 350.00 Lacs vide Loan application dated 26.07.2016, which is Annexure A2 to this OA and Further for grant of GECL Loan of Rs. 85.00 Lacs vide Offer Letter & Offer Acceptance Letter dated 05.06.2020, which are Annexures A12 & A13 to this OA. Thereafter, defendants again approached the applicant bank for restructuring of Credit facilities and grant of GECL Extension of Rs.42.00 Lacs vide Application for grant/renewal/restructuring of credit facility dated 15.07.2021, which is Annexure A21 to this OA.

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3 OA NO.132/2024 STATE BANK OF INDIA VS M/S SHIVANGA CORRUGATORS AND OTHERS

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The applicant sanctioned CC Limit of Rs.130.00 Lacs and Term Loan of Rs. 350.00 Lacs vide Letter of Arrangement dated 29.10.2018, which is Annexure A3 to this OA and further sanctioned GECL Loan of Rs. 85.00 Lacs vide Letter of Arrangement dated 06.06.2020, which is Annexures A14 to this OA. Thereafter, the applicant sanctioned GECL Extension of Rs. 42.00 Lacs vide Letter of Arrangement dated 29.07.2021, which is Annexures A22 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendant no. 2 had mortgaged his immovable properties i.e. (i) Factory land building measuring 16K-13½M situated at Village Ikolaha, Inside Khanna Road, Hadbast No.236, Tehsil Khanna, District Ludhiana, Punjab vide Equitable Mortgage of Sale deed bearing vasika no. 4534 dated 28.10.2011 along with its translation, which are Annexure A6 & A6T to this OA.

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(ii) Residential House measuring 00K-8-2/3M (259.77 Sq. Yds) situated at near DAV School, Hadbast No.58, Malerkotla, Punjab vide Equitable Mortgage of Transfer Deed bearing vasika no. 1537 dated 03.12.2015 along with its translation, which is Annexure A8 to this OA.

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Documents executed:- Partnership Deed dated 26.07.2016, which is Annexure A1 to this OA; Agreement of Loan-cum-hypothecation and Guarantee Agreement for Rs. 4.80 Lacs dated 29.10.2018, which are Annexures A4 & A5 to this OA; Memorandum for Recording creation of Mortgage by deposit of Title Deeds dated 30.10.2018, which are Annexures A7 & A9 to this OA; Letters of confirmation dated 29.10.2018, which are Annexures A10 to A11 to this OA; Agreement for loan-cum-hypothecation, Guarantee Agreement, Letters of confirmation for extension of mortgage by deposit of Title Deed and Memorandum for Recording extension of Mortgage by deposit of Title Deeds for covering enhanced limit all dated 08.06.2020, which are Annexures A15 to A20 to this OA; Supplemental Agreement of Loan-

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4 OA NO.132/2024 STATE BANK OF INDIA VS M/S SHIVANGA CORRUGATORS AND OTHERS

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cum-hypothecation and Guarantee Agreement dated 29.07.2021, which are Annexures A23 to A24 to this OA; Letters of confirmation for extension of mortgage by deposit of Title Deed and Memorandum for Recording extension of Mortgage by deposit of Title Deeds for covering enhanced limit dated 30.07.2021, which are Annexures A25 to A27 to this OA; Letter of Arrangement, Agreement of Loan-cumhypothecation, Link Letter, Certificate to be signed by the borrower, Letter of variance, Guarantee Agreement, Letters of confirmation for extension of mortgage by deposit of Title Deed and Memorandum for Recording extension of Mortgage by deposit of Title Deeds for covering enhanced limit dated 18.01.2023, which are Annexures A28 to A36 to this OA; Legal notice along with its postal Receipts dated 30.06.2023, which is Annexure A37 to this OA; CERSAI Reports of Year 2020, which is Annexure A37A to this OA; Statement of accounts which are Annexures A38 to A41 to this OA; 13(2) Notice dated 15.09.2023, which is Annexure A42 to this OA and Valuation Report dated 27.09.2022, which is Annexure A43 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 all the loan accounts there was a debit of Rs.6,21,64,676.00, 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. 6. 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 08.10.2024.

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In support of the OA, affidavit of Sh. Sanjeev Prakash Verma, Chief Manager, State Bank of India h as been filed. 8. Heard arguments and perused record. 9. It was argued by learned proxy counsel that in view of the documentary evidence brought on record which had gone unrebutted,

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5 OA NO.132/2024 STATE BANK OF INDIA VS M/S SHIVANGA CORRUGATORS AND OTHERS

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the applicant had proved its case. From the perusal of all the Annexures A1 to A43 to this OA, it is proved that the defendants approached applicant for availing of the loan facilities which were granted to him and for that he had executed all the relevant documents in favour of the bank. The defendants failed to pay back the loans as per Housings and conditions of the agreement between the parties. Subsequently, 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 of Rs.6,21,64,676.00 (Rupees Six Crore Twenty One Lacs Sixty Four Thousand Six Hundred Seventy Six Only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of 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 @10.75%p.a. for CC Limit and Term Loan & interest @7.40% p.a. for GECL-I and GECL-II with monthly rest from 14.11.2023 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 @07.40%p.a. in 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. 11. In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.6,21,64,676.00 (Rupees Six Crore Twenty One Lacs Sixty Four

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6 OA NO.132/2024

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STATE BANK OF INDIA VS M/S SHIVANGA CORRUGATORS AND OTHERS

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Thousand Six Hundred Seventy Six Only) jointly and severally, with costs, current and future simple interest @07.40%p.a. in 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.

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Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 27.06.2025.

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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: 05.06.2025

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

State Bank of India v. M/S Shivanga Corrugators and Others

Case brief

What is this about?

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State Bank of India v. M/S Shivanga Corrugators and Others

Case brief

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