Allowed

State Bank of India v. M/s Sandeep and Sons

DRT4 Sept 2025OA/233/2024

Case brief

AI extract

What is this about?

In an original application under Section 19 of RDB Act 1993, the applicant bank sought recovery of a loan amount of Rs. 79,54,443.98 against borrowers who defaulted. The Tribunal rejected the defendants' counter-claim due to lack of proof and allowed the bank's claim, ordering a recovery certificate and attachment of assets.

What did the court decide?

Recovery of debt amounting to Rs. 79,54,443.98 along with pendente-lite and future interest at 10% p.a. simple from 19.04.2024 till realization, with a recovery certificate issued.

State Bank of India versus M/s Sandeep and Sons — Contract and Commercial Disputes | DRT (2025)

OA 233 of 2024jJI

DRT, PATN A

Debts Recovery Tribunal, Patna

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Karpuri Thakur Sadan, Aashiana Digha Road Patna-800025

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Presiding Officer : Shri Kaushalendra Yadav

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OA Case No. 233 of 2024

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State Bank of India, Raxaul Branch, District- East Champaran through the Stressed Assets Recovery Branch, 2"d Floor, Patna Main Branch Building, West of Gandhi Maidan, Patna

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. . . . . . .Applicant11

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Vs.

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M/s Sandeep & Sons, Proprietorship firm (Borrower), Business atPatel Path, Pokhra Road, Raxaul, District- East Champaran- 845305, Bihar represented through its Proprietor

¶13

Hari Pujan Prasad, Proprietor (Borrower), M/s Sandeep & Sons, S/o Sri Ganesh Prasad, Resident of Naga Road, Ward No.22, Raxaul, District- East Champaran- 450305, Bihar

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. . . . . . . Defendants

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Present:

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For the Applicant Shri A. K. Sharan. Advocate For the Defendants Shri Hemant Kumar Karan, Advocate

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Dated:04.09.2025

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JUDGMENT

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The Applicant bank has made this application u/s 19 of the Recovery of Debts and Bankruptcy Act, 1993 (here-in-after referred to as Act) on 19.04.2024 against the defendants to recover its debts from defendants of Rs.79,54,443.98 as on 22.03.2024 along with pendente-lite and future interest at the contractual rate from 23.03.2024 with costs till realization.

¶20

The application has been filed with the contention that the applicant bank, is a body corporate, carries on the business and is competent to file the suit through various branches including the applicant.

¶21

Defendant no.1 is a proprietorship firm engaged in the business of wholesale and retail of readymade garments of which defendant no.2 is the proprietor. Defendants approached the applicant bank for sanction of cash credit facility of Rs.10 lakh under Pradhan Mantri Mundra Yojna Scheme

OA 233 of 2024IJI

DRT1 PATNA

(PMMY) vide loan application dated 06.10.2017, which was sanctioned by the applicant bank on 17.10.2017 on various terms and conditions, as stipulated in the sanction letter, which were duly accepted by the defendants. To secure the loan facilities defendants have executed various loan and security documents.

¶26

Defendants again approached the applicant bank for enhancement / renewal of cash credit facility of Rs.10 lakh to Rs.48 Lakh vide loan application dated 02.05.2019, which was enhanced/sanctioned by the applicant bank on 03.05.2019 on various terms and conditions, as stipulated in the sanction letter, which were duly accepted by the defendants. To secure the loan facilities defendants have executed various loan and security documents. The applicant has also sanctioned WCTL facility under GECL Scheme on 31.05.2020 due to Covid-19 and to secure the overall limit of Rs.58 Lakh, the defendants have executed various loan documents.

¶27

Defendants again approached the applicant bank with a proposal of the restructure of the existing loan facility of cash credit (S) of through application dated 21.06.2021 of overdue amount and after considering the request, the applicant bank restructured the loan account with over all limit of Rs.15.53 Lakh over due amount in FITL limit on 21.06.202 1 on various terms and conditions, as stipulated in the sanction letter, which were duly accepted by the defendants. To secure the loan facilities defendants have executed various loan and security documents. The defendants also executed Revival Letter on 06.04.2022. The charge of the applicant bank was also registered under Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI) over the hypothecated stocks of the borrower firms in favour of the applicant bank on 21.05.2022.

¶28

After availing the sanctioned credit facilities, the defendants became irregular in repayment of their dues as per agreed terms and failed to adhere to the financial norms of the bank and avoiding the repayment of its dues to the bank, in spite of several assurances given by it to the applicant bank resulting in the account turning as NPA on 29.09.2023 .

DRT. PATNA

OA 233 of20241JI

Since, the defendants failed and neglected in spite of several reminders to make payment of the dues recoverable to the bank, hence this application has been filed by the bank.

¶33

The total liability in the loan account is Rs.79,54,443.98 as on 22.03.2024 with pendente-lite and future interest contractual rate from 23.03.2024 till the realization.

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This Tribunal issued summons/notices copies of application & paper book to the defendants by registered/speed post on 16.05.2024, requiring them to show-cause within 30 days of the service U/s 19 (4) of the Act & Rule of the DRT [Procedure] Rules, 1993.

¶35

In response to the notice, the defendants have appeared by filing vakalatnama on 24.06.2024 and also filed written statement-cum-Counter Claim admitting therein that initially the bank sanctioned PMMY C.C. Limit of Rs.10 Lakh on 17.10.2017, which was subsequently enhanced to Rs.48 Lakh on 03.05.2019 and later the applicant bank sanctioned GECL/WCTL for Rs.10 Lakh on 31.05.2020/01.06.2020 and further on 21.06.2021 in terms of the RBI guidelines, the bank restructured the CC+TL accounts and granted FITL for Rs.15.53 Lakh with interest. But the applicant bank did not even bother to comply with the requirements of Central Bank of India Vs. Ravindra & Ors. and followed Banker’s Books of Evidence the transactions regarding interest calculations, capitalization of Principal & Interest in the loan accounts and calculation of deductions wisely on receipt of payment amount from borrower.

¶36

It has fbrther been stated that present OA is barred by law of limitation against the defendants. The loan account of the defendants was not at all NPA on 29.09.2023. The applicant bank while effecting physical possession seized all originals of books of accounts, bills, invoices and inventory records along with all legal papers and loan documents of defendants and those documents have not been returned by the bank till date to the defendants.

¶37

It has further been stated that the value of stocks deposed / sold and the amount realized in lieu du,ring Physical possession required to be set-off against

(L//a\q

OA 233 of20241JI

DRT, PATNA

the applicant’s demand Rs.79,54,443.98 or from the ascertained sum of money recoverable from defendants be set-off in relation to the ascertained sum of money, against the applicants claim in respect of cause of action accruing to the defendants against the applicant in the nature of claim for damages amount of set-off u/s 19(6). The bank has already enjoyed the recoveries and the amount adjusted has changed there exists no cause of action so far to claim the amount and if allowed the bank claim, will inflict injuries to the defendants in abeyance and in contradiction of provisions of RDB and SARFAESI Act and Rules. It is therefore, prayed that the bank’s claim be dismissed with cost and defendant’s counter claim be allowed with set-off Along with the written statement cum counter claim, the defendants have annexed legal notice dated 15.03.2024, bank account statements reflecting interest regularly serviced and accounts within limit, CC of Rs.10 Lakh enhanced under CGTMSE Scheme to Rs.38 Lakh, letter of arrangement dated 21.06.2021 and the notices under the SARFAESI Act

¶43

Reply, to the written statement cum counter claim filed on behalf of the defendants, has been filed by the applicant bank stating that the said written statement cum counter claim is mostly based and aggrieved with the action taken under Securitization Act by the bank, which have no relevant to this Original application and requested to dismiss the written statement cum counter claim filed by the defendants.

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To prove its case, the applicant Bank has referred various certified photocopies of documents before this Tribunal. The applicant bank has also given evidence on affidavit by way of affidavit by Shri Manoj Kumar Ojha, Chief Manager of the applicant bank. The details of documents are as follows :

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Description Documents Photocopies of	1Date of Execution	IAmount (in Lakh)	ISignature Executants of
Loanapplication	06.10.2017	10.00	Defendants
o Letter arrangement		10.00	Bank accepted defendants
Agreement of loan cumhyDothecation	17.10.2017	10.00	Defendants
r PDR	17.10.2017	e

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\r\

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1,rf,1,#ng overYTEDwd Debts ReTAIN A

OA 233 of20241JI

DRT, PATNA

5	Loanapplication	02.05.2019		Defendants		5
6	Sanction confirmation	03.05.2019	48.00	Bank accepted defendants	ma by
7	Letter arrangement o		48.00	Bank accepted defendants	Fa by
8	Supplementary agreement ofloan cumhyDothecation	14.05.2019	48.00	Defendants		8
9	PDR	20.06.2019	48.00	Defendants		9
10	Offer letter	30.05.2020	10.00	Bank accepted defendants	ma by
11	Letter arrangement o		48.00 10.00	Bank accepted defendants	ma by
12	Supplementary agreement ofloan cumhyDothecation	31.05.2020	48.00 10.00	Defendants		12
13	PDR	31.05.2020	58.00	Defendants		13
14	Offer cum acceptanceletter	21.06.2021		Bank accepted defendants	ma by
15	Letter arrangement o		15.53	Bank accepted defendants	ma by
16	Supplementary agreement of loan cumhyDothecation	21.06.2021	15.53	Defendants		16
17	PDR	21 .06.2021	e			17
18	Revival letter	06.04.2022		Defendants		18
19	CERSAI Details					19
20to 23	Interest calculation chart andstatement of accounts					20to 23
24	Notice	17.03.2024		Bank		24
25	Legal notice	15.03.2024		Bank’sadv.		25

¶52

Heard arguments and perused the case record. During the course of arguments, there is no any specific denial on behalf of the defendants with regards to the sanction of loan facilities and its utilization and further there is no any specific denial with regards to the execution of loan and security documents in favour of the applicant bank.

¶53

So far as the request for set-off raised in the written statement-cumcounter claim filed by the defendants is concerned, no documentary evidence/proof of loss has been annexed with it and how the defendants came to the conclusion that they are in loss due to the action of the applicant bank,

raS

OA 233 of20241JI

DRT, PATNA

the documentary evidence/proofs have not been annexed. In absence of it, the B#1 counter claim / set-off i2broved' Accordingly it deserves rejectIon

¶59

As per the averments made in written statement cum counter claim, it appears that there is no any specific denial with regards to the utilization of sanctioned loan amounts and execution of loan and security documents. The defendants are mostly aggrieved with the SARFAESI actions initiated by the applicant bank.

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Ld. Counsel of applicant bank submitted that the defendants have taken the loan and utilized the same and also executed the various loan documents to secure the loan. Further, submitted that the claim of the bank has been proved by documentary evidence. All the transactions were entered in the ledger of the loan accounts in the name of the defendant duly maintained by the applicant bank in its usual course of business. The interest /compound interest has been charged at such rates, and capitalized at such periodical rests as are permitted by and do not run counter to the directives of Reserve Bank of India.

¶61

It is further submitted by Id. Counsel of applicant bank that there is no stay granted by any Higher Court, in respect of the proceedings of the present OA and requested to issue recovery certificate, as claimed for, in OA.

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It has been established that defendants are living and carrying on their business in the state of Bihar. Cause of action also arose in the State of Bihar. The said claim on the date of filing of application exceeded Rs.20 lacs. The applicant bank is functioning within the jurisdiction of this Tribunal. Therefore, this Tribunal has territorial as well as pecuniary jurisdiction to adjudicate upon the present application.

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On the issue of Limitation, to prove it, the applicant bank has submitted that the applicant bank has declared the account as NPA on 29.09.2023, whereas the present application has been filed on 19.04.2024. Even, it is counted for the purpose of Limitation, then it is established that the applicant bank has filed the case within the limitation period. As such, it is established that the present application has been filed well within the period of limitation.

kv<br>

OA 233 of2024jJI

DRT, PATNA

Shri Manoj Kumar Ojha, Chief Manager of the applicant bank has filed the affidavit in support of contents of application and the documents as evidence and proved on oath the pleadings and documents of the applicant bank as stated above.

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Section 19(3) of the Recovery of Debts and Bankruptcy Act, 1993 provides that the application u/s S.19 (1) shall be accompanied with true copies of all the documents relied on in support of the claim.

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The rule 12 (10) of the Debt Recovery Tribunal (Procedure) Rules, 1993, provides that if the defendant denies his liability to pay the claim made by the applicant, the tribunal may act upon the affidavit of the applicant who is acquainted with the facts of the case or who has on verification of the record sworn the affidavit in respect of the contents of the application and the documents as evidence.

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The rule 12 (11) of the aforesaid Rules, provides that the provisions contained in section 4 of the Banker’s Books evidence that Act, 1891 (18 of 1891) shall apply to a certified copy of an entry in a Banker’s Books furnished along with application filed under sub section 1 of section 19 by the applicant.

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Section 4 of Banker’s Books evidence Act, 1891 runs as underS.4. Mode of proof of entries in bankers’ books.–Subject to the provisions of this Act, a certifIed copy of any entry in a banker’s book shall in all legal proceedings be received as prima facie evidence of the existence of such entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case where, and to the same extent as, the original entry itself is now by law admissible, but not further or otherwise.

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As such the certified true copies of the documents are admissible in evidence. The statement of account maintained in the ordinary course of business is not only admissible but shall be taken as the correct statement of account, more so since the entries in the statement of account have not been challenged.

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On perusal of the application, documents, affidavit and on consideration of the arguments, it is proved that the defendants have applied for loan and the bank had sanctioned the loan and to secure the loan and for repayment of loan amount with interests etc., the defendants have executed various loan documents, as stated in the application and proved by aforesaid evidence. Defendants have neither denied the utilization of funds advanced by applicant

OA 233 of 2024[Jl

DRT, PATNA

bank nor have pointed out any specific error and discrepancy in the Statement of Account.

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The evidence discussed above goes to establish that the amount of loan as mentioned in the O.A., was availed by the borrower under the agreed terms and conditions for repayment with interest. The balance amount till 22.03.2024 has been proved to be Rs.79,54,443.98 only by way of statement of accounts. There is nothing to prove the amount more than that disclosed in the aforementioned statement. As such this amount is recoverable till full and final realization of the claim.

¶81

In my view, facts of the case stand proved by evidence of the apblicant bank. Accordingly, the applicant bank is entitled to recover from defendants jointly and severally of Rs.79,54,443.98 along with pendente-lite and future interest @ 10% p.a. simple from 19.04.2024 (The date of filing of this OA) till realization. So the final order may be passed accordingly, to meet the ends of justice.

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ORDER

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In the result, the application of the applicant bank is allowed and debt is determined with costs against the defendants. The defendants are hereby jointly and severally, ordered to pay the applicant bank its debt amounting to Rs.79,54,443.98 along with pendente-lite and future interest @ 10% p.a. simple from 19.04.2024 (The date of filing of this OA) till realization of the entire sum due and recoverable with costs.

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The counter claim/set off is accordingly dismissed. However. it is made clear that any amount deposited by the defendants, be deducted in the claim amount, if not deducted.

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Defendants are debarred from transferring, alienating encumbering or otherwise dealing with or disposing of the mortgaged or hypothecated or any other properties and assets without paying the aforesaid adjudicated dues to the applicant bank to secure the ends of justice. The mortgaged or hypothecated assets to secure the loan in question are hereby attached and shall be subject to the final order under the recovery proceedings in pursuance of the Recovery certificate issued under Section 19(22) of Recovery of Debts and Bankruptcy

OA 233 of20241JI

DRT, PATNA

Act 1993. The applicant may submit the certified copy of this Judgment and the Recovery Certificate before the Registrar/Sub- Registrar to endorse the charge over the secured assets.

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Let a certificate of recovery be drawn up forthwith and put up for signatures in terms of provisions contained in Section 19(22) of the Act to be issued, on the basis of the order of the Tribunal to the Recovery Officer. The Recovery Officer shall realize the amount as per the certificate in the manner and mode prescribed under the Act from the defendants, by sale of mortgaged/ hypothecated assets as well as other personal movable/immovable assets of the defendants. The Recovery Officer will issue demand notice to the Certificate debtors only after the proof of compliance under rule 16 of DRT (Procedure) Rules 1993, is submitted. The copy of this judgment be uploaded in the website of the Tribunal.

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Parties are directed to appear before the Recovery Officer, DRT, Patna on 14.10.2025. The order be communicated accordingly.

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Judgment signed, sealed, dated and pronounced in the open court on 0481 day of September, 2025.

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Dictated &corrected by me.

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B
[Ki LYadav]
/--' Presiding Officer
Debts Recovery Tribund, Patna
D eb!!!!! ::1 1 4 : = wI11 H

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_ , a

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FORM NO. 9

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DEBTS RECOVERY TRIBUNAL PATNA

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[See Regulation 24( 1 )]

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2nd FloorT ( A. B & F Wing) Karpuri Thakur Sadant Kendriya Karanrchari Parisar (GPC)A), Ashidna Digha Road, Patna-800025.

¶100

( ? ?q A

¶101

RC No. 269/2025 IN Case No: OA/233/2024

¶102

In the N’latter of-: (CH- 1) STATE BANK OF iNDIA RAXAUL BRANCH. DISTRICT- EAST CHAMPAR AN. THROUGH STRESSED ASSETS RECOVERY BRANCH, 2ND FLOOR, PATNA MAIN BRANCH BUILDING, W’EST OF GANDHI M AIDAN,

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Applicant(s)

¶104

PATN A .BIHAR -80000 1

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(CD- 1) M/S SANDFFP AND SONS represented tllrough its Proprietor Proprietorslrlp firm. Business at- Patel Path. Pokhra Road, Raxaul. Purba C-halnparan ,BIHAR -845305

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Defendant(s)

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(CD- 2) HARI PUJAN PRASAD (PROPRIETOR) M,'S SANDEEP AND SONS. S/0- SRI GANESH PRASAD RFSIDENT OF - NAGA ROAD. \VARD NO- 32. RAXAUL. DISTRICT- LAST

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C- HA MPA RAN , - 845305 , BIHAR

¶110

Recovery Certificate for Rs 7954443.98 1 Rupees Seventy Nine Lakh$ Fifty Four Thousand$ Four Hundred Forty Three And Pajge Ninety Eight OnI}LI

¶111

In terms of final order dated 04/09/2025 passed by this Tribunal in the above mentioned case, it is ordered that the Applicant Certificate Holder Bank is entitled to recover a sum of Rs. 7954443.98 along with cost, expenses and interest from the 19/04/2024 i.e. date of filing / with efFective date of the OA/233/2024 and future interest from order date till the date of realisation in full, jointly or severally from the Certificate Debtors, hereinaftel referred to as:-

¶112

				Order Date	Amount(Rs.)	Liabilit Type	Interest (ason Order Date)	RC ,mount(Rs.)	Remark
SANDLEr ND SUNS	lnplc Intcrcst \l.trl) )	()	9/o+':o:+	F„(,’9'2(125	E7954443.98	intly ld c\ emIly	nterest IAson iS:T:	r954443,98
IARIPUJAN PRASAD PROPRIETOR)	Fimpie IT:::=;	, -"	9/04/2024	L/09/2025	17954443.98	int ly ;everally	Interest Order	[3.98 r9

¶113

In case of failure to pay the aforementioned adjudicated amount within 30 days. same shall be recovered from the sale of the mortgagcd/hypothecated assets as \’cII as other personal movable/ Immovable assets of the certificate dcbtors

¶114

The mortgaged or hypothecated assets to secure the loan in question are hereby attached and shall be subjedt to the final order undcr the recovery proceeding in pursuance of the Recovery certificate issued under Section 19(22) ofRccovel)' of Debts and Bankruptcy Act 1993. P:lrties are directed to ilppear before ASHISH KUMAR . Recovery OfTicer, DEBTS RECOVERY TRIBUNAL PATN A on 1 4/ 1 0/2025

¶115

The Recovery Officer shall realize the amount as per this Certificate in the manner and mode prescribed under Sections 25 to 28 of the Rccovel'}’ of Debts Due to Banks and Financial Institutions Act, 1993 (as amended from time to time) from the above named Certificate Debtors

¶116

This Certificate has been issued under my signature and seal of the Tribunal on this 10/09/2025

¶117

C', PRESIDING OFFICER DEBTS RECOVERY TRIBUNAL PATNA ,- '?1 8 Re \ IJ I vI ) jb ) b: f : \I BeHan! omeet g1 8):1 b Ft O r/T:II: p][b1 r U:1BB) tL11 a:I

¶118

FORM NO. 10

¶119

[See Regulation 24(2)]

¶120

DEBTS RECO' E R\’ 'l-llIBUN AL PA'I-NA

¶121

2nd Floor. ( A. B & F Wing) KaII)uri 'Fhakur Sadan, Kendriya Karamchari Parisar

¶122

(GPC)A), Ashiana Digha Road, Patna-800025 .

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SCHEDULE TO RECOVERY CERTIFICATE ME FM o o F COSTS

RC No. 269/2025

Case No: OA/233/2024

Applicant(s): STATE BANK OF INDIA Versus

¶128

Defendant(s): M/S SANDEEP AND SONS

¶129

Sr. No	Item ofCosts	Amount inRs
	Feeontheapplication	1 82000
	mT'ees(Inc.Publication)	O
3	IAdvocateFees	h
4	lmLtion/Security Fee	ris
5	jmleous Charges	A
	Total Costs:Rs	82000

¶130

Place: PATNA

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Date: 1 o/09/2025

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N PRESIDING OFFICER 1)1':13TS RI':C'OVI-:RY TRIBUNAL PATNA r Of\cef

¶133

Note: Strike out whichever is not applicable

State Bank of India v. M/s Sandeep and Sons

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/s Sandeep and Sons

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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