Allowed

State Bank of India v. M/S Kushwaha Traders

DRT22 Sept 2025OA/134/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal awarded the applicant bank an ex-parte order for the recovery of loan dues. The court found the defendants liable after scrutinizing loan documents and bank books, directing payment of principal, interest, and costs, and authorizing the sale of assets.

What did the court decide?

Issuance of Recovery Certificate for Rs.38,83,376 plus 9% per annum interest; direction to defendants to pay dues within 2 months or face asset sale.

State Bank of India versus M/S Kushwaha Traders — Contract and Commercial Disputes | DRT (2025)

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DEBTS RECOVERY TRIB rAL LUCKNOW

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a proceeding			Officeaction taken with date
O.A. No. 134/2023 22.09.2025	The Judgment is signed pronounced on separate sheets. Separ attachedin07 sheets. Order be uploaded on the Tribu website.	and ately nal’s
	(Dictated) ' (PravasKumar PresidingOffic (MK)	\St \y Slngh) er

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IN THE DEBTS REC'OVERY TRIBUNAL AT LUCKNOW

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Present: Pravas Kumar Singh, Presiding Officer

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Case No. Original Application No.134 of 2023

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Dated: 22.09.2025

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State Bank of India, having Branch at 2-d Floor, 2-Tilak Marg, Near National PG College, Hazratganj, Lucknow – 226001.

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........Applicant-bank

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Versus

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M/s Kushwaha Traders (Borrower) Through Proprietor Smt. Meena Devi AddressLinjiganj, Farrukhabad, U.P. – 209625.

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Smt. Meena Devi, W/o Shri Sunil Kumar (Borrower & Guarantor) Proprietor of M/s Kushwaha Traders, R/o – 5/162, Burawali Gali, Mufti Sahab Farrukhabad, U.P. 209625. ...... Defendants

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Ld. Counsel for Applicant-bank: Shri Shivanshu Bajpai, Advocate Ld. Counsel for the Defendants: None.

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JUDGEMENT

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This Original Application has been filed by the Applicant-bank under Section 19(1) of the Recovery of Debts & Bankruptcy Act, 1993, against the defendants for the recovery of Rs.38,83,376.00/- (Rupees Thirty Eight Lacs, Eighty Three Thousand, Three Hundred Seventy Six Only) [Rs.25,65,135.00/-

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in Cash Credit Loan Account] [Rs.5,19,841/- in GECL Loan Account] [Rs.7,98,400/- in FITL Loan Account] together with pendent-lite and future

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interest, costs and other reliefs etc

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O.A. No. 134 of 2023

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The brief facts of case are that the defendants No.1 is a proprietorship firm of which defendant no.2 is the sole proprietor. The defendant no.2 on behalf of defendant no.1 approached the Applicant-bank for financial assistance. The Applicant-bank considered the request of the defendants and sanctioned Cash Credit Limit of Rs.24.00 lacs vide its sanction letter dated 16.12.2019 on certain terms and conditions (Annexure No. A-3) to this Original Application.

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To secure aforesaid credit facility, defendants had executed and signed various security documents in favour of the Applicant-bank on 16.12.2019 (Annexure No.A-4 & Annexure No.A-5) to this Original Application.

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That subsequently, in the year 2020, the defendants approached the applicant bank for renewal of loan facility provided on 16.12.2019 anf for the grant of additional loan of Rs.4.80 lacs under the GECL Scheme of the applicant bank vide its letter of arrangement dated 28.05.2020.

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That in consideration thereto, the defendants signed and executed Letter of Arrangement in favour of the applicant bank on 28.05.2020 (Annexure No.A-6) to this Original Application.

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Subsequently, at the request of the defendant No.2 on behalf of the defendant No.1 had approached the applicant for grant of FITL of Rs.8.60 lacas vide its letter of arrangement dated 04.08.2021.

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That in consideration thereto, the defendants signed and executed

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Letter of Arrangement & Supplemental Agreement of Loan cum

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O.A. No.134 of 2023

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Hypothecation in favour of the applicant bank on 04.08.2021 (Annexure

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No.A-8 & Annexure No.A-9) to this Original Application.

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To avail the aforesaid credit facility, the Applicant-bank had opened three loan accounts in the name of defendant No. 1 in order to maintain the credit 'facilities.

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After availing the aforesaid credit facility, the defendants failed to maintain financial discipline and also failed to comply with the terms and conditions of the loan agreement, consequently, the loan account of the defendant no.1/firm was classified as NPA on 28.09.2022 by the bank as per RBI guidelines (Annexure No. A-10), thereafter the Applicant-bank issued recall-cum-demand notice dated 24.12.2022 to the defendants (Annexure No. A-11), but, the defendants stated no-response and they failed to repay the same and the loan accounts of the defendants are still un-liquidated, hence, this Original Application has been instituted.

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As per books of the bank maintained in the usual and ordinary course of banking business, an outstanding of Rs.38,83,376.00/- (Rupees Thirty Eight Lacs, Eighty Three Thousand, Three Hundred Seventy Six Only) [Rs.25,65,135.00/- in Cash Credit Loan Account] [Rs.5,19,841/- in GECL Loan Account] [Rs.7,98,400/- in FITL Loan Account] including interest upto

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23.12.2022, were lying due for payment, for which the defendants are jointly and severally liable to repay the same, which they did not pay despite repeated requests and demand. The Applicant-bank filed the Statement of

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loan Accounts. (Annexure No.A-12) to this Original Application.

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The cause of action for filing the present application arose firstly on

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16.12.2019, 25.08.2020 and 04.08.2021 when the aforesaid credit facility UP

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O.A. No.134 of 2023

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were sanctioned by the Applicant-bank and the same were availed by the defendants and necessary documents were executed by the defendants. The cause of action further arose on when recall-cum-demand notice dated 24.12.2022 was sent to the defendants, recalling the entire outstanding dues and they failed to pay the same.

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The summons were served upon the defendants through registered post, the defendants appeared through counsel before this Tribunal and filed counter affidavit mainly stating that due to covid, she became a defaulter.

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From the perusal of the record, it is evident that the defendants were provided with fair opportunities to contest the claim of the bank. As the defendants opted not to contest the case, so only point of consideration before this Tribunal is as to whether bank is legally entitled to the amount as claimed in Original Application on the basis of documents and pleading submitted by it.

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In support of the case Shri Anupam Saxena, Chief Manager of the Applicant-bank has filed an affidavit.

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On a careful scrutiny of the evidence on affidavit and Exhibits marked as Exhibit No.A-1 to Exhibit No.A-12, it is proved that defendants had availed the credit facilities from the Applicant-bank by executing loan and security documents detailed as above in favour of the Applicant-bank. A perusal of the application, evidence and documents relied upon clearly show that defendant had utilized the above loan facilities as granted to

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them. The Applicant-bank had maintained the Books of account in the

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5 O.A. No. 134 of 2023

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ordinary course of banking business showing disbursal of the loan amount. The Bank had also charged interest from time to time and the entries are relevant u/s 4 of the Banker Books of Evidence Act. It is also proved that the Applicant-bank’s claim is within limitation against defendants, therefore, the defendants are jointly and severally liable to pay the dues.

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Accordingly, the defendants are directed to pay the balance dues to the Applicant-bank within a period of 2 months from the date of judgement failing which the Applicant-bank will be entitled to sell the hypothecated assets and personal assets/ properties of the defendants.

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The Applicant-bank has claimed interest@ 21.30% in Cash Credit Loan Account, [email protected]% in GECL Loan Account and [email protected]% in FITL Loan Account per annum with monthly rest w.e.f. 23.12.2022 till the date of realization and costs. On the basis of foregoing discussion, I am of view that interest of justice will be served if pendent- lite and future interest is granted @9% in above the three loan accounts per annum with monthly rest reducing balance from the date of filing of the O.A. till the date of realization with costs.

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1 find that the bank has proved the execution of loan documents and creation of mortgage in its favour. In the result, the Original Application succeeds as ex-parte against the defendants with costs. The bank has proved the loan execution of loan documents in favour of the bank and availment of credit facility. The liability of the defendant Nos.I & 2 are joint and several and hypothecated asset as well as the personal properties are to

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be sold.

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O.A. No. 134 of 2023

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It is, therefore , ordered

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(i) That the Original Application No.134 of 2023 of the Applicant bank for issuance of Recovery Certificate to the tune of Rs.38,83,376.00/(Rupees Thirty Eight Lacs, Eighty Three Thousand, Three Hundred Seventy Six Only) [Rs.25,65,135.00/- in Cash Credit Loan Account] [Rs.5,19,841/- in GECL Loan Account] [Rs.7,98,400/- in FITL Loan Account] along with the interest @9% per annum with monthly rest from the date of filing of the Original Application i.e. 19.01.2023 till the loan is fully liquidated and costs succeeds ex-parte against the defendants.

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(ii) The defendants are directed to pay the dues within a period of two months from the date of judgement, failing which the Applicant-bank will be entitled to recover the same from the secured assets, personal movabIes and immovable assets of the defendants.

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(iii) The Applicant–bank is entitled to recover aforesaid amount by sale of hypothecated assets (if not sold earlier under the provision of the S.A.R.F.A.E.S.I. Act 2002). The amount, if any already recovered by sale of any hypothecated assets or otherwise shall be recoverable, if the dues of the Applicant-bank still remain unsatisfied, the same shall be recovered by attachment and sale of the personal movable assets of the defendant jointly and severally.

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(iv) The defendants are hereby restrained by means of injunction from depleting, transferring, encumbering, alienating or in any way dealing

r\a k>\ \

O.A. No.134 of 2023

with their properties/estates without first paying the claim of the Applicant-bank.

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(V) Let Recovery Certificate be issued immediately u/s 19(22) of the Recovery of Debts Due to Banks and Financial Institution Act, 1993 by fixing 22.12.2025 before R.O., DRT, Lucknow.

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(vi) The Applicant-bank is directed to file a memo of cost for preparing Recovery Certificate u/s 19(22) of the Recovery of Debts Bankruptcy Act, 1993 .

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Judgment is pronounced in the open court.

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Dated: 22.09.2025

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r, ,b , JP (Pravas Kum£F{frlgh) Presiding Officer

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(MK)

State Bank of India v. M/S Kushwaha Traders

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/S Kushwaha Traders

Case brief

What is this about?

What did the court decide?

What the court decided

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