Allowed

The Federal Bank Limited v. M/S Ahuja Enterprises (India) and Others

DRT20 Nov 2025OA/17/2023

Case brief

AI extract

What is this about?

The Court allowed the Original Application filed by Federal Bank Limited for recovery of Rs. 4.66 Crore from the defendant firm and individuals. The Debts Recovery Tribunal established the debt, dismissed counterclaims due to ex-parte proceedings, and ordered the issuance of a Recovery Certificate with interest at 8% p.a.

What did the court decide?

Issuance of Recovery Certificate; Order for payment of principal Rs. 4,66,55,755.66 with interest at 8% p.a.; Authorization for recovery via sale of mortgaged property.

The Federal Bank Limited versus M/S Ahuja Enterprises (India)… — Banking and Recovery | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.17/2023

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 15.12.2022

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DATE OF DECISION: 20.11.2025

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The Federal Bank Limited, a Banking Company registered under the Companies Act and having its Registered Office at Alwaye, Ernakulam, District and having one of its branches amongst other places at B- 21/1425, Dholewal Kalsi Nagar, G.T. Road, Ludhiana (Punjab) 141003 through its General Power Attorney holder/Authorized Signatory Mohd. Zameer.

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……..Applicant

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Versus

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M/s Ahuja Enterprises (India), a Proprietorship Firm, having its place of Business/ office at 31, Krishna Nagar, Behind New Cycle Market, Gill Road, Ludhiana- 141001 (Punjab) through its proprietor Sh. Gurcharan Singh.

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Sh. Gurcharan Singh S/o Sh. Gurmukh Singh, sole proprietor of M/s Ahuja Enterprises (India), resident of House No.86, Ward No.34, New Sant Fateh Singh Nagar, Dugri Road, Ludhiana 141001 (Punjab)

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Sh. Bhagwant Singh S/o Sh. Gurmukh Singh, resident of House No.86, Ward No.34, New Sant Fateh Singh Nagar, Dugri Road, Ludhiana 141001 (Punjab)

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Smt. Harinder Kaur W/o Sh. Gurcharan Singh, resident of House No.86, Ward No.34, New Sant Fateh Singh Nagar, Dugri Road, Ludhiana 141001 (Punjab)

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….……Defendants

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Advocates:

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Present: Sh. Nitin Grover, Advocate for Applicant Defendants already ex-parte

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2 OA/17/2023 THE FEDERAL BANK LIMITED VS M/S AHUJA ENTERPRISES (INDIA) AND OTHERS

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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.4,66,55,755.66p (Rupees Four Crore Sixty Six Lacs Fifty Five Thousand Seven Hundred Fifty Five and Paise Sixty Six Only). The Original Application has been filed through Mohd. Zameer , Authorized Signatory o f the applicant, who is competent to institute the Original Application vide General Power of Attorney dated 01.07.2019, which is Annexure A1 to this OA.

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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.235 Lacs and Term Loan-I of Rs. 6.00 Lacs and Term Loan-II of Rs. 10.00 Lacs. Thereafter, the defendants approached the applicant for Working Capital Demand Loan of Rs. 25.00 Lacs.

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The Limit was reduced by the applicant to Rs. 200.00 Lacs. The defendants, approached the applicant for enhancement of the same to Rs. 225.00 Lacs and Term Loans (SME LAP) of Rs. 24.50 Lacs and Rs. 125.00 Lacs vide loan application dated 27.07.2017, which is Annexure A19 to this OA. Application for enhancement of CC Limit dated 28.12.2017, which is Annexure A21 to this OA. Thereafter, the defendants approached the applicant for Working Capital Term Loan of Rs. 68.00 Lacs under GECL vide loan application dated 28.10.2020, and request letter dated 28.10.2020, which are Annexures A45 and A46 to this OA. Thereafter, the defendants approached the applicant for One Time Restructuring of Loan accounts.

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The applicant sanctioned CC Limit of Rs.235 Lacs and Term Loan-I of Rs. 6.00 Lacs and Term Loan-II of Rs. 10.00 Lacs vide sanction letter dated 20.03.2015, which is Annexure A2 to this OA and terms and conditions were duly accepted by the defendants. Thereafter, the CC Limit was reduced to Rs. 200.00 Lacs and Working

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3 OA/17/2023 THE FEDERAL BANK LIMITED VS M/S AHUJA ENTERPRISES (INDIA) AND OTHERS

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Capital Demand Loan of Rs. 25.00 Lacs was sanctioned vide sanction letter dated 06.07.2016. Thereafter, the applicant again enhanced the limit to Rs. 225.00 Lacs and sanctioned Term Loan (SME LAP)-I of Rs. 24.50 Lacs and Term Loan (SME LAP)-II of Rs. 125.00 Lacs vide sanction letter dated 28.12.2017, which is Annexure A20 to this OA. Thereafter, the limit was renewed by the applicant vide sanction letter dated 18.05.2019, which is Annexure A36 to this OA. Thereafter, the applicant sanctioned Working Capital Term Loan of Rs. 68.00 Lacs under GECL vide sanction letter dated 28.10.2020, which is Annexure A44 to this OA. Thereafter, the applicant sanctioned Working Capital Term Loan of Rs. 23.30 Lacs for One Time Restructuring of MSME Advances vide sanction letter dated 29.06.2021, which is Annexure A53 to this OA.

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Defendant no. 1 (through its proprietor defendant no.2) and defendant no. 3 had mortgaged their immovable property i.e.

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(i) Commercial Land and Building (in the name of defendant no. 1) measuring 176 Sq. yards on Plot No.35, bearing M.C. No. B-16-1328 (measuring 140 Sq. Yards) and portion of property bearing M.C. No. B- 16-1327 (measuring 36 Sq. Yards), situated at Village Taraf Peeru Banda, Hadbast no. 167, Locality known as Krishna Nagar, Near Mohalla Muradpura, Ludhiana vide equitable mortgage of Title Deed bearing Vasika no. 7721 dated 08.08.2005, along with its translation, which is Annexure A10 to this OA.

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(ii) Commercial Plot No.35, bearing M.C. No. 737/5, (in the name of defendant no. 1) measuring 162.4 Sq. Yards situated at Village Taraf Peeru Banda, Hadbast no. 167, Locality known as Krishna Nagar, Near Mohalla Muradpura, Tehsil & District Ludhiana vide equitable mortgage of Title deed bearing vasika no. 13679 dated 07.02.2008. Copy of Title Deed filed vide IA no. 1491/2025 on 16.09.2025, vide diary no. 14840 in compliance to order dated 17.06.2025.

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4 OA/17/2023 THE FEDERAL BANK LIMITED VS M/S AHUJA ENTERPRISES (INDIA) AND OTHERS

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(iii) New House No. B-16-737/5 (Old H. No. B-16-1327) measuring 361 Sq. Yards (in the name of defendant no. 3) situated at Village Peeru Banda, Locality known as Krishna Nagar, Near Mohalla Muradpura, Tehsil & District Ludhiana vide equitable mortgage of Title deed bearing vasika no. 20805 dated 12.03.2007.

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Letter dated 24.03.2015 regarding deposit of Title deed, which is Annexure A11 to this OA; Agreement in lieu of interim collateral security dated 20.03.2015 and 28.12.2017, which are Annexures A8 and A30 to this OA; Letter regarding confirmation of deposit of title deeds and extension of mortgage dated 08.07.2016, which is Annexure A18 to this OA; Letter of confirmation of deposit of mortgaged deed dated 23.02.2018, which is Annexure A35 to this OA; Letters in lieu of redeposit dated 29.12.2017, which are Annexures A32 and A33 to this OA; Letters in lieu of redeposit dated 29.10.2020, which are Annexures A50 and A51 to this OA; Letters in lieu of redeposit dated 01.07.2021, which is Annexures A60 and A61 to this OA.

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Documents executed:- Agreement of Cash Credit/Overdraft/Demand Loan, Demand Promissory Note, Security Delivery Letter, undertaking Letters, Letter of set off, all dated 20.03.2015, which are Annexure A4 to A7 and A9 to this OA; Agreement of Cash Credit/Overdraft/Demand Loan, Demand Promissory Note, Security Delivery Letter, undertaking Letter, all dated 06.07.2016, which are Annexure A13 to A16 to this OA; Application for continuance of Overdraft/ Cash Credit/ Bill Discounting facility dated 06.07.2016, which is Annexure A17 to this OA; Agreement of Cash Credit/ Overdraft/Demand Loan, Demand Promissory Notes, Term Loan Agreement, Security Delivery Letters, Letter of undertaking, Letter of set off, all dated 28.12.2017, which are Annexures A22 to A29 and A31 to this OA; Agreement for Working Capital Facility, Demand Promissory Note, Security Delivery Letter, Undertaking Letter,

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5 OA/17/2023 THE FEDERAL BANK LIMITED VS M/S AHUJA ENTERPRISES (INDIA) AND OTHERS

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Declaration and Letter of undertaking, Letter of Set off, all dated 26.06.2019, which are Annexure A37 to A43 to this OA; Agreement for GECL, Demand Promissory Note, Take Delivery Letter to DPN, Acknowledgement of Debt and Security, all dated 28.10.2020, which are Annexures A47 to A49 and A52 to this OA; Term Loan Agreement, Demand Promissory Note, Take Delivery Letter to DPN, Sole proprietorship declaration, undertaking letter, letter of Set off, all dated 30.06.2021, which are Annexures A54 to A59 to this OA; Acknowledgment of Debt and Security dated 30.06.2021, which is Annexure A62 to this OA; Demand Notice dated 17.12.2021 U/S 13(2) of SARFAESI Act, which is Annexure A63 to this OA; Statement of accounts along with certificate under Bankers Book Evidence Act, which are Annexure A64 to A67 to this OA.

¶33

The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in loan accounts there was a debit of Rs.4,66,55,755.66p, 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. Sh. Puru Gupta, Advocate appeared on behalf of defendants on 28.02.2023 and filed his memo of appearance and was directed to file his Power of Attorney. Since, neither any Power of Attorney was filed nor anyone was appearing on behalf of defendants, they were proceeded ex-parte on 13.06.2025. 7. In support of the OA, affidavit of Mohd. Zameer , Authorized Signatory, Federal Bank Limited h as been filed. 8. Heard ex-parte arguments and perused record. 9. 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

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6 OA/17/2023 THE FEDERAL BANK LIMITED VS M/S AHUJA ENTERPRISES (INDIA) AND OTHERS

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Annexures A1 to A67 to this OA, it is proved that the defendants approached applicant for availing of the loan facilities which were granted to them and for that they had executed all the relevant documents in favour of the bank. The defendants failed to pay back the loans as per terms 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.4,66,55,755.66p (Rupees Four Crore Sixty Six Lacs Fifty Five Thousand Seven Hundred Fifty Five and Paise Sixty 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 @14.00%p.a. for CC Limit, @12.25%p.a. in Term Loan, @13.25%p.a. in GECL Loan, @14%p.a. in WCTL, with monthly rests, in all from 15.12.2022 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 loans 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 all 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.

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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.4,66,55,755.66p (Rupees Four Crore Sixty Six Lacs Fifty Five

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7 OA/17/2023 THE FEDERAL BANK LIMITED VS M/S AHUJA ENTERPRISES (INDIA) AND OTHERS

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Thousand Seven Hundred Fifty Five and Paise Sixty Six Only) jointly and severally, with costs, current and future simple interest @08.00%p.a. in all 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. 12. Any other application pending stands disposed of . 13. Issue Recovery Certificate accordingly. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 02.12.2025. 15. 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. Pronounced by me in the open Tribunal . Dated: 20.11.2025.

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

The Federal Bank Limited v. M/S Ahuja Enterprises (India) and Others

Case brief

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The Federal Bank Limited v. M/S Ahuja Enterprises (India) and Others

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