Allowed

State Bank of India v. M/S Gupta Enterprises

DRT18 Sept 2025OA/189/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal permitted an ex-parte application by State Bank of India against defaulting borrowers and guarantors. The Tribunal adjudicated a debt claim of approx Rs. 39 lacs secured by guarantees and mortgage following failure to repay loans and non-appearance by defendants.

What did the court decide?

Recovery certificate issued for Rs. 39,01,792 plus interest; directions for sale of mortgaged and personal assets; 2-month payment deadline; injunction against property alienation.

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

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DEBTS RECOVERY TRIBUNAL LUCKNOW

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Date oforder or proceeding	Order withsignatureof court	Officeaction taken with date
O.A.No.189/2023 18.09.2025	The Judgment is signed and pronounced on separate sheets. Separately attachedin08 sheets. Order be uploaded on the Tribunal’s website
	(Dictated) E" (Pravas Kumar Singh) PresidingOfficer
	(MK)

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IN THE DEBTS RECOVERY TRIBUNAL AT LUC'KNOW

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Present: Pravas Kumar Singh, Presiding Officer

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Case No. Original Application No.189 of 2023

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Dated: 18.09.2025

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State Bank of India, having Branch at Stressed Asset Recovery Branch, 2-d Floor, Capital House, 2 Tilak Marg, Hazratganj, Lucknow 226001. Applicant-bank

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Versus

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M/s Gupta Enterprises & M/s Gupta Fertilizers & Seeds Vikreta, Mohalla – Gautam Alipura, district – Bahraich (UP) through its sole Proprietor Sri Lallu Babu Gupta. 2. Sri Lallu Babu Gupta S/o Sri Dasrath Prasad Gupta, R/a Mohalla – Gulam Alipura, District Bahraich (UP). 3. Smt. Uma Devi W/o Sri Lallu Babu Gupta, R/o Mohall – Gulam Alipura, District – Bahraich (UP). ...... Defendants

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Ld. Counsel for Applicant-bank: Shri Vinay Shanker, 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.39,01,792.00/- (Rupees Thirty Nine Lacs, IIII i One Thousand, Seven Hundred Ninety Two Only) [Rs.12,17,693.00/- in Cash Credit Account] [Rs.25,01,930/- in another Cash Credit Account] and

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O.A. No. 189 of 2023

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Rs.1,82,169.00/- in FITL Loan Account] together with pendente-lite and future interest, costs and other reliefs etc.

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The brief facts of case being that the defendants No.1 is a proprietorship firm of which defendant no.2 is the sole proprietor and the defendant No.3 is the guarantor. The defendant no.2 on behalf of defendant no.1 had approached the Applicant-bank vide loan application dated 30.06.2018 for grant of Cash Credit Facility of Rs.15.00 lacs to purchase stocks of fertilizer, which was duly sanctioned by the applicant bank through which cash credit facility of Rs.10.00 lacs vide its sanction letter dated 06.07.2018 (Exhibit No. A- 1) to this Original Application.

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To secure aforesaid credit facility, defendant No.2 on behalf of the defendant No.1 had executed and signed various security documents in favour of the Applicant-bank on 06.07.2018. The defendant No.3 signed and executed Guarantee Agreement (Exhibit A-2 & Exhibit No.A-3) to this Original Application.

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That the defendant No.2 on behalf of the defendant No.1 had again approached the applicant bank for grant of another Cash Credit Facility. of Rs.22.00 lacs vide its sanction letter dated 14.05.2019.

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To secure aforesaid credit facilities, defendants had signed and executed various security documents in favour of the applicant bank. The nI 1 defendant No.3 had executed and signed Guarantee Agreement dated 14.05.2019 (Exhibit No.A-4 to Exhibit No.A-6) to this Original Application.

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O.A. No. 189 of 2023

In order tO further secure the repayment of the bank dues9 the defendant No.3 created equitable mortgage in respect of property i.e. All that Part and Parcel of Residential Property bearing House No.358/3359 admeasuring 663 square feet situated at Mohalla – Gulam Alipura9 District – Bahraich (UP) in favour of the bank by deposit of title deed (Exhibit A-7) to this Original Application.

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That after availing the aforesaid credit facilities from the applicant bank, the defendants have also executed Revival Letters (SME-11) dated 30.06.2021, 04.04.2022 and 28.08.2022 respectively in favour of the applicant bank. (Exhibit No.A-8) to this Original Application. IElg 8. 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 16.01.2022 by the bank as per RBI guidelines, thereafter the Applicant-bank issued Registered Legal Notice dated 17.01.2023 upon all the defendants (Exhibit No. A-9), but, the ItII ! 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.39,01,792.00/- (Rupees Thirty III i Nine Lacs, One Thousand, Seven Hundred Ninety Two Only)

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f \qU

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O.A. No. 189 of 2023

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[Rs.12,17,693.00/- in Cash Credit Account] [Rs.25,01,930/- in another Cash Credit Account] and Rs.1,82,169.00/in FITL Loan Account] including interest upto 17.01.2023, 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 loan Accounts. (Exhibit No.A-10 to Exhibit No.A-12) to this Original Application.

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The cause of action for filing the present application arose firstly on 06.07.2018 when the aforesaid credit facility were sanctioned by the Applicant-bank and the same were availed by the defendants and necessary documents were executed by the defendants. Again on 14.05.2019 when another Cash Credit Facility of Rs.22.00 lacs was sanctioned by the applicant bank and availed by the defendant No.1, for which necessary documents were executed by defendant No.2 in favour of the applicant bank, personal guarantee was taken by defendant No.3 on 14.05.2019 as well as equitable mortgage was created by defendant No.3 in favour of the applicant bank on 14.05.2019 and subsequently, on 30.06.2021, 04.04.2022 & 25.08.2022 respectively when revival letters were executed by the defendants in favour of the applicant bank and finally on 17.01.2023 when legal notice was served upon the defendants by the applicant bank, but the failed to

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liquidate the bank dues.

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O.A. No.189 of 2023

The summons were served upon the defendants through registered post, but the defendants did not appear before the Tribunal to contest their case, hence the matter proceeded ex- parte against the defendants.

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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 Vishal Maithani, Chief Manager of the

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

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defendants are jointly and severally liable to pay the dues.

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n~-

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O.A. No. 189 of 2023

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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 mortgaged property, hypothecated assets and personal assets/ properties of the defendants.

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The Applicant-bank has claimed [email protected]% in Cash Credit Account, [email protected]% in Cash Credit Account-II and [email protected]% in FITL Loan Account per annum with monthly rest w.e.f. 18.01.2023 till the date of realization and costs. On the basis of foregoing discussion, interest of justice will be served if pendente- lite and future interest is granted [email protected]% in Cash Credit Account-1, interest@ 30% in Cash Credit Account-II and interest@7% in FITL Loan Account per annum with monthly

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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.1 to 3 are joint and several and mortgaged property, hypothecated asset as well as the

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personal properties are to be sold.

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It is, therefore , ordered

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b
\V

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O.A. No. 189 of 2023

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(i) That the Original Application No.189 of 2023 of the Applicant bank for issuance of Recovery Certificate to the tune of Rs.39,01,792.00/(Rupees Thirty Nine Lacs, One Thousand, Seven Hundred Ninety Two Only) [Rs.12,17,693.00/- in Cash Credit Account] [Rs.25,01,930/- in another Cash Credit Account] and Rs.1,82,169.00/- in FITL Loan II I Account] along with the [email protected]% in Cash Credit Account-1, interest@10% in Cash Credit Account-II and interest@7% in FITL Loan Account per annum with monthly rest from the date of filing of the Original Application i.e. 27.01.2023 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 movables and immovable assets of the defendants.

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(iii) The Applicant–bank is entitled to recover aforesaid amount by sale of mortgage property & 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 lIB

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depleting, transferring, encumbering, alienating or in any way dealing

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O.A. No. 189 of 2023

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

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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 02.12.2025 before R.O., DRT, Luckno'

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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: 18.09.2025

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{'>~ (Pravas KumaF Singh) Presiding Officer

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(MK)

State Bank of India v. M/S Gupta Enterprises

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/S Gupta Enterprises

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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Case details

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