Allowed

State Bank of India v. M/S S W Engineering Works and Others

DRT2 Sept 2025OA/1952/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the bank's application for recovery of Rs. 74,55,454.00p against defaulters on loan accounts and NPA status, ordering joint and several liability and recovery from mortgaged or personal assets.

What did the court decide?

Declaration of joint and several liability to pay Rs. 74,55,454.00p with 8% p.a. simple interest; issue of Recovery Certificate.

State Bank of India versus M/S S W Engineering Works and… — Execution and Attachment | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1952/2022

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 06.12.2022

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DATE OF DECISION: 02.09.2025

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State Bank of India, a body corporate, constituted under the State Bank of India Act, 1955 (Act No. 23 of 1955) and the successor to State Bank of Hyderabad vide order dated 22.02.2017 passed by the Central Government under Section 35 of the State Bank of India Act, 1955 and having its Central Office at Madame Cama Road, Nariman Point, Mumbai and one of its Local Head Office at Sector 17-A, Chandigarh and one of its Branches at SME Branch Dholewal Chowk, Ludhiana through its Assistant General Manager, Sh. Jatinder Kumar Jolly for the Applicant.

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……..Applicant

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Versus

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M/s S.W. Engineering Works, a Sole proprietorship concern having its office at 639, Industrial Area-B, Ludhiana through its Sole Proprietor.

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Sh. Gaurav Ghai S/o Late Sh. Ajay Ghai, Sole proprietor M/s S.W. Engineering Works Mills, R/o H. No. 1583, Urban Estate, PhaseII, Jamalpur, Ludhiana.

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Smt. Anjana Rani W/o Sh. Bhupinder Kumar Ghai R/o H. No. 1583, Urban Estate, Phase-II, Jamalpur, Ludhiana.

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……… Defendants

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Advocates:

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Argued by Sh. Yogesh Kumar, Advocate proxy for Sh. Rakesh Gupta, Advocate for Applicant Defendants already ex parte

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FINAL ORDER

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Present Original Application was instituted by the applicant under

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Section 19 of the Recovery of Debts and Bankruptcy Act, 1993, against

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OA NO.1952/2022 STATE BANK OF INDIA VS M/S S.W. ENGINEERING WORKS AND OTHERS

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the defendants for recovery of Rs.74,55,454.00p (Rupees Seventy Four Lacs Fifty Five Thousand Four Hundred Fifty Four Only). The Original Application has been filed through Sh. Sh. Jatinder Kumar Jolly, Assistant General Manager, of the applicant, who is competent to institute the Original Application in terms of Gazette notification published in the Gazette of India dated 27.03.1987 and 17.05.2001 under regulation No.76 & 77 framed in exercise of power conferred by Sub section (3) of Section 50 of the State Bank of India Act, 1955, with the previous sanction of the Central Government. Notifications dated 02.05.1987 and 17.05.2001, which is Annexure A1 (Colly) to this OA. 2. The brief facts of the OA are that the defendant no. 1 through its proprietor defendant no. 2 had approached the applicant for grant of CC Limit of Rs.12.00 Lacs. Defendant no. 3 stood as guarantor. Thereafter, the defendant no. 1 through its proprietor defendant no. 2 approached the applicant for enhancement of CC Limit to Rs. 20.00 Lacs and thereafter, again for its enhancement to Rs. 25.00 Lacs, Rs. 35.00 Lacs and again to Rs. 51.00 Lacs. Thereafter, the defendant no. 1 through its proprietor defendant no. 2 approached the applicant for a loan of Rs. 10.00 Lacs under GECL and a loan of Rs. 4.00 Lacs under SME assist and again for another loan of Rs. 5.00 Lacs under GECL extension. 3. The applicant sanctioned CC Limit of Rs.12.00 Lacs vide letter of arrangement dated 10.08.2010, which is Annexure A2 to this OA. Thereafter, the limit was enhanced to Rs. 20.00 Lacs vide letter of arrangement dated 05.09.2012, which is Annexure A3 to this OA and again enhanced to Rs. 25.00 Lacs vide letter of arrangement dated 16.09.2014, which is Annexure A4 to this OA. Again, the limit was enhanced to Rs. 35.00 Lacs vide letter of arrangement dated 23.09.2015, which is Annexure A5 to this OA and again enhanced to Rs. 51.00 Lacs vide letter of arrangement dated 21.04.2018, which is

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OA NO.1952/2022 STATE BANK OF INDIA VS M/S S.W. ENGINEERING WORKS AND OTHERS

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Annexure A6 to this OA. Thereafter, the applicant sanctioned a Term Loan of Rs. 10.00 Lacs under GECL vide letter of arrangement dated 30.06.2020, which is Annexure A7 to this OA. Thereafter, the applicant sanctioned a Loan of Rs. 10.00 Lacs under SME Assist vide letter of arrangement dated 19.07.2021, which is Annexure A11 to this OA. Thereafter, the applicant sanctioned another Loan of Rs. 5.00 Lacs under GECL extension vide letter of arrangement dated 16.11.2021, which is Annexure A13 to this OA.

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Defendant no. 3 had mortgaged her immovable property i.e. Commercial building 154-2/3 Sq. yards bearing. MC No. B-21/129/1, Industrial Area-B, Ludhiana, through equitable mortgage of title deed bearing vasika no.12678 dated 06.02.2022, along with its translation which are Annexures A16 & A16(T) to this OA and Memorandum of Mortgage dated 16.11.2021 and 17.1.2011 which is Annexure A17(Colly) to this OA.

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Documents executed :- Supplemental agreement of loan-cum– hypothecation, Guarantee Agreement & Link Letter all dated 30.06.2020, which are Annexures A8 to A10 to this OA; Supplemental agreement of loan-cum–hypothecation dated 19.07.2021, which is Annexure A12 to this OA; Supplemental agreement of loan-cum– hypothecation, Guarantee Agreement, both dated 16.11.2021, which are Annexure A14 & A15 to this OA; CERSAI dated 10.12.2021, which is Annexure A18 to this OA; Legal Notice & Notice U/s 13(2), both dated 11.04.2022, which are Annexures A19 & A20 to this OA; Possession Notice dated 15.06.2022, which is Annexure A21 to this OA; Statement of Accounts which are Annexures A22 to A25 to this OA; Valuation Report dated 16.11.2021, which is Annexure A26 to this OA.

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OA NO.1952/2022 STATE BANK OF INDIA VS M/S S.W. ENGINEERING WORKS AND OTHERS

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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.74,55,454.00p, 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 22.04.2024. 7. In support of the OA, affidavit of Sh. Jatinder Kumar Jolly, Assistant General Manager, State Bank of India has been filed. 8. Heard ex-parte 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, the applicant had proved its case. From the perusal of all the Annexures A1 to A26 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.74,55,454.00p (Rupees Seventy Four Lacs Fifty Five Thousand Four Hundred Fifty Four 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. 10. In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @10.80% p.a. in CC Limit, @9.25% p.a. in GECL and @10.05% p.a. in SME assist, plus

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OA NO.1952/2022 STATE BANK OF INDIA VS M/S S.W. ENGINEERING WORKS AND OTHERS

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@2%p.a. penal interest in all with monthly rests from 16.11.2022 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 properties/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 the all 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.74,55,454.00p (Rupees Seventy Four Lacs Fifty Five Thousand Four Hundred Fifty Four 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.

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Any other application pending stands disposed of .

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Issue Recovery Certificate accordingly.

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OA NO.1952/2022 STATE BANK OF INDIA VS M/S S.W. ENGINEERING WORKS AND OTHERS

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Parties to appear before Learned Recovery Officer of this Tribunal on 26.09.2025. 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: 02.09.2025 (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

State Bank of India v. M/S S W Engineering Works and Others

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/S S W Engineering Works and Others

Case brief

What is this about?

What did the court decide?

What the court decided

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