Allowed

Punjab National Bank v. Messrs Sharman Woollens and Others

DRT10 Sept 2025OA/207/2025

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the bank's application for recovery of Rs. 2.12 crores against a proprietorship firm and guarantors who failed to repay sanctioned loans and failed to appear in the ex-parte proceedings.

What did the court decide?

Recovery certificate issued; order for payment of principal, costs, and simple interest at 8% p.a. Enforcement via Recovery Officer.

Punjab National Bank versus Messrs Sharman… — Contract and Commercial Disputes | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.207/2025

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 21.02.2025

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DATE OF DECISION: 10.09.2025

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Punjab National Bank, a Body Corporate constituted under Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970 having its Head Office at Plot No. 4, Sector 10, Dwarka, New Delhi 110075 and Branch Office at MCC 2, PNB Bhawan, Main Road, Industrial Area, Near Majnu Cinema, Ludhiana through its recovery vertical i.e. Circle Office, Circle Sastra Centre, Plot No. 5, Ferozepur Road, Ludhiana through its General Power of Attorney Holder Sh. Naveen Kumar Bansal, Senior Manager of the Applicant.

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……..Applicant

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Versus

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M/s Sharman Woollens, a proprietorship concerns with principal business place at Plot No. 1133, Sonia Street, Purana Bazar, Ludhiana – 141008 through its proprietor Sh. Mukesh Kumar Jain S/o Sh. Ram Rachpal.

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Sh. Mukesh Kumar Jain S/o Sh. Ram Rachpal R/o H. No. B-V1133, Purana Bazar Mohalla Sonia, Ludhiana - 141008

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2^nd Address: H. No. 428, College Road, Civil Lines, Ludhiana - 141008

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Smt. Preeti Jain S/o Sh. Mukesh Kumar Jain R/o H. No. 428, College Road, Civil Lines, Ludhiana – 141008.

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….……Defendants

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Advocates:

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Argued by Sh. Himanshu Sharma, Advocate for the Applicant (Through VC)

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Defendants already 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 and Bankruptcy Act, 1993, against the defendants for recovery of Rs.2,12,01,443.89p (Rupees Two Crore Twelve Lacs One Thousand Four Hundred Forty Three and Paise Eighty

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2 OA NO. 207/2025 PUNJAB NATIONAL BANK VS MESSRS SHARMAN WOOLLENS AND OTHERS

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Nine Only). The Original Application has been filed through Sh. Naveen Kumar Bansal, Senior Manager o f the applicant, who is competent to institute the Original Application vide Power of Attorney dated 05.12.2005, which is Annexure A2 to this OA. 2. The brief facts of the OA are that the defendant no. 1 through its proprietor defendant no. 2 was availing the facility of CC Limit of Rs. 1.10 Crore form the applicant. The defendant nos. 2 and 3 stood as the guarantors. Defendant no. 1 through its proprietor defendant no. 2 approached the applicant for grant of fresh facilities i.e. Working Capital Term Loan of Rs. 21.50 Lacs under the GECL vide loan application dated 03.06.2020, which is Annexure A3 to this OA, a Demand Loan of Rs. 25.00 Lacs under Stand by Line of Credit (SLC), and another Working Capital Term Loan of Rs. 11.50 Lacs under GECL vide loan application dated 29.10.2021, which is Annexure A15 to this OA. 3. The applicant sanctioned Working Capital Term Loan of Rs. 21.50 Lacs under the GECL vide sanction dated 12.06.2020, which is Annexure A4 to this OA. The applicant further sanctioned a Demand Loan of Rs. 25.00 Lacs under Stand by Line of Credit (SLC), vide sanction dated 07.09.2021, which is Annexure A9 to this OA and further, sanctioned were another Working Capital Term Loan of Rs. 21.50 Lacs under the GECL vide sanction letter dated 02.11.2021, which is Annexure A16 to this OA. Further, the CC Limit of Rs. 1.10 Crore was renewed vide sanction letter dated 23.06.2022, which is Annexure A20 to this OA.

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Defendant no. 1 through its proprietor defendant no. 2 had hypothecated their movable assets i.e. Stock of raw materials, stock in process, semi-finished and finished goods, consumable stores and spares, receivables, all other current assets vide agreement of hypothecation of current assets dated 12.06.2020, which is Annexure 7 to this OA. Further, defendant nos. 2 & 3 had mortgaged their immovable properties i.e. Property/House Bearing M.C. No. B-V-1133 (New) and B- IV-61 (Old) measuring 284 Sq. yards situated at Purana Bazar, Mohalla

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3 OA NO. 207/2025 PUNJAB NATIONAL BANK VS MESSRS SHARMAN WOOLLENS AND OTHERS

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Sonia, Near Punjab National Bank, Saidan Chowk, Tehsil and District Ludhiana, Punjab, vide equitable mortgage of sale deed bearing vasika no. 19384 dated 25.01.1993 (pertaining to 142 sq. yards in the name of defendant no. 3) and sale deed bearing vasika no. 19385 dated 25.01.1993 (pertaining to 142 sq. yards in the name of defendant no. 2), along with their translations, which is Annexure A22 to this OA and title deed deposit register which is Annexure A21 to this OA.

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Documents executed : - Valuation Report dated 30.03.2023, which is Annexure A1 to this OA; Master Agreement and Agreement for Working Capital Term Loan (WCTL), Agreement of Guarantee, all dated 12.06.2020, which is Annexure A5, A6 and A8 to this OA; Demand Promissory Note, Master Agreement and Undertaking to be obtained from the Guarantor, Agreement for Working Capital Demand Loan, Agreement of guarantee, all dated 07.09.2021, which are Annexures A10 to A14 to this OA; Agreement of Working Capital Term Loan (WCTL), Demand Promissory Note and Master Agreement all dated 01.12.2021, which are Annexures A17 to A19 to this OA; Balance & Security Confirmation Letter date 24.02.2022, which is Annexure A23 to this OA; Notice u/s 13(2) of SARFAESI Act, dated 13.03.2023, which is Annexure A24 to this OA; Statements of Accounts dated 31.01.2025, which are Annexure A25 to A28 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 loan accounts there was a debit of Rs.2,12,01,443.89p, 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 25.08.2025. 7. In support of the OA, affidavit Sh. Naveen Kumar Bansal, Senior Manager, Punjab National Bank, h as been filed. 8. Heard ex-parte arguments and perused record.

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4 OA NO. 207/2025 PUNJAB NATIONAL BANK VS MESSRS SHARMAN WOOLLENS AND OTHERS

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It was argued by learned counsel through Video Conferencing 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 A28 to this OA, it is proved that the defendants approached applicant for availing of the loan facility which was granted to them and for that they had executed all the relevant documents in favour of the applicant. The defendants failed to pay back the loan 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.2,12,01,443.89p (Rupees Two Crore Twelve Lacs One Thousand Four Hundred Forty Three and Paise Eighty Nine 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 @13.50% p.a. in CC Limit, @10.00% p.a. in WCTL under GECL, @10.15%p.a. in WCTL-II under GECL and @12.50%p.a. in Demand Loan under SLC, all with monthly rests from 01.02.2025 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 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 @8.00%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. 11. In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.2,12,01,443.89p (Rupees Two Crore Twelve Lacs One Thousand Four

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5 OA NO. 207/2025 PUNJAB NATIONAL BANK VS MESSRS SHARMAN WOOLLENS AND OTHERS

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Hundred Forty Three and Paise Eighty Nine Only) jointly and severally, with costs, current and future simple interest @8.00%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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12. 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 01.10.2025. 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: 10.09.2025

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(MRIDULESH KUMAR SINGH)

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Presiding Officer, DRT-III, Chandigarh

Punjab National Bank v. Messrs Sharman Woollens and Others

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. Messrs Sharman Woollens and Others

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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