Allowed

Axis Bank Limited v. M/S Shree Medical Projects

DRT28 Jul 2025OA/343/2023

Case brief

AI extract

What is this about?

In an original application under Section 19 of the RDFA filed by Axis Bank against a defaulting partnership firm and partners, the Presiding Officer allowed the application ex-parte. The court awarded principal dues along with interest at 12% per annum instead of the claimed rate, citing a justification based on prevailing interest rate trends, and directed recovery from hypothecated assets and pr

What did the court decide?

Directing respondents to pay Rs. 22,75,058 with interest at 12% p.a. from 08.02.2023, recoverable from hypothecated stocks, books, debts, and properties.

Axis Bank Limited versus M/S Shree Medical Projects — Contract and Commercial Disputes | DRT (2025)

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O.A. No. 343 of 2023

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Debts Recovery Tribunal-I, Delhi 4th floor, Jeevan Tara Building, Parliament Street, New Delhi

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Presiding Officer: Shri Govind Ballabh Sharma

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O.A. No. 343 of 2023

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Axis Bank Limited Retail Lending-Collections & FCU, Axis Bank Limited, 'Axis House' Jaypee Greens Wish Town, 1-14,
Tower-2,2ndFloor, Sector-128,
Noida Expressway, Noida-201301	Applicant
Versus
1. M/s Shree Medical Projects
(Partnership Firm) Shop No. 103-104, 1st Floor, Plot No. CSC, Sector 18, Rohini Delhi-110089
Also at: E-5/112, Ground Floor Near Adhya Shakti Dham, Sector 16, Rohini, Delhi-110089
2.Mr. Alkesh Lata (Partner) Shop No. 103-104, 1st Floor, Plot No. CSC, Sector 18, Rohini Delhi-110089
Also at: E-5/112, Ground Floor Near Adhya Shakti Dham, Sector 16, Rohini, Delhi-110089
3.Ms. Rashmi Lata (Partner) Shop No. 103-104, 1st Floor,
Plot No. CSC, Sector 18, Rohini Delhi-110089

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O.A. No. 343 of 2023

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Also at: E-5/112, Ground Floor Near Adhya Shakti Dham, Sector 16, Rohini, Delhi-110089 Defendants

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Present: Smt. Sunanda Kumari, Counsel for the applicant bank

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Date of Institution: 20.03.2023 Date of Pronouncement: 28.07.2025

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FINAL ORDER

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This original application has been filed by the applicant bank before DRT-I, Delhi on 20.03.2023 through Mr. Naveen Kumar, authorized representative, under Section 19 of Recovery of Debts and Bankruptcy Act, 1993 against the defendants for recovery of a sum of Rs.22,75,058 /- (Rupees Twenty Two Lacs Seventy Five Thousand Fifty Eight only) (Rs.18,25,453/- in the loan account No. BPR01205100795 and Rs.4,49,605/- in the loan account No. BPR012605463646) as on 07.02.2023 along with pendentelite and future interest @17.50% per annum with monthly rests from 08.02.2023 till the date of realization along with costs.

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The brief facts of the case are that on the request of the defendant no.1 through its partners defendant no.2 and 3 vide loan application dated 28.01.2020, the applicant bank sanctioned various loan facilities inclusive of SBB CGTMSE Cash Credit Facility of Rs.20,00,000/- (Rupees Twenty Lacs Only) on 28.02.2020 @17.50% interest per annum and ECGLS facility of Rs.3,64,100/- (Rupees Three Lacs Sixty Four Thousand One

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O.A. No. 343 of 2023

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Hundred Only) on 12.10.2020 @9.25% interest per annum against hypothecation of stocks and book debts, Personal Guarantee of the Defendant and CGTMSE Cover. Further, Defendant No. 2 and 3 stood as guarantors to the loan facility sanctioned in favor of defendant No. 1 by the applicant bank.

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In order to avail the aforesaid credit facilities, the defendants submitted loan application and executed Power of Attorney, Sanction Application, Loan Acknowledgement Form, Business Power Agreement, Demand Promissory Note, End Use Letter, Authorization Letters, CA Certificate, Deed of Guarantee, HDFC Life Group Term Insurance Plan, Beneficial Ownership, PDC Covering Letter and Declaration for Use of Funds in favor of the Applicant Bank.

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It has been submitted by the applicant bank that after availing the aforesaid loan facilities, the defendants failed to comply with the terms and conditions of sanction and failed to regularize the account with the applicant bank. Ultimately, the applicant bank classified the account as NPA on 04.08.2021 as per RBI guidelines and issued notice dated 07.02.2023 but defendants have failed to comply with the notice, hence the applicant bank has approached this Tribunal for recovery of their dues.

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Notices of this O.A. were issued to the defendants and despite of proper service, the defendants have chosen to remain absent from the proceedings. As per order dated 30.01.2025, the defendants have been proceeded ex-parte as they have not appeared before the Tribunal and even written statement, evidence and affidavit of assets have not been filed by the defendants.

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O.A. No. 343 of 2023

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In order to prove its case, the applicant bank has filed its evidence by way of Affidavit of Shri Naveen Kumar as authorized representative of the applicant bank who has proved the documents as General Power of Attorney, Copy of the Application, Loan Acknowledgment Letter, PDC Covering Letter, End Use Letter, Declaration for Use of Funds, Authorization Letters, Confirmation for true copies of bulk documents, CA Certificate, Deed of Guarantee, HDFC Life Group Term Insurance Plan, Authority Letter, Beneficial Ownership, Copy of the Application, Customer Declaration, Link Document Cum Amendment Agreement, Facility Agreement, Demand Promissory Note, Disbursement Request, Post Dated Cheque as Exhibit AW-1/1 to Exhibit AW-1/30.

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As per the provision of Section 19(20) of the Recovery of Debts Due to Banks and Financial Institution Act, 1993 which is analogous to Section 34 of CPC, on filing of the suit/claim, the contract between the parties comes to an end and the Court/Tribunal has a discretion to award the same depending upon the circumstances of each case. Same principle has been laid down by the Hon'ble Apex Court in the case of Central Bank of India Vs. Ravindra & Others. Taking stock of all the circumstances and keeping in view that there is a drastic fall in rates of interest globally and domestically, I am of the opinion that interest of justice will be served if the interest at the rate of 12% p.a. is awarded.

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The applicant bank has fully corroborated the averments made in the O.A. Even otherwise the whole case of the applicant bank is based on the documents and the same have been duly approved.

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O.A. No. 343 of 2023

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The case filed by the applicant bank gone unrebutted and there is no question of disbelieving the case of the applicant bank and the applicant bank has proved its case beyond reasonable doubts.

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In the light of the above discussions, the Original Application deserves to be allowed.

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ORDER

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I, allow this OA and direct the defendants to pay to the applicant bank, jointly or severally, within a period of 30 days, a sum of Rs.22,75,058/- (Rupees Twenty Two Lacs Seventy Five Thousand Fifty Eight only) (Rs.18,25,453/- in the loan account No. BPR01205100795 and Rs.4,49,605/- in the loan account No. BPR012605463646) as on 07.02.2023 along with pendentelite and future interest @12% per annum with monthly rests from 08.02.2023 till the date of realization and costs; failing which the aforesaid amount shall be recovered from the sale of hypothecated stocks and book debts. In case of shortfall, the same shall be recovered from sale of movable and immovable properties of defendants.

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(II) The recovery certificate be issued forthwith and be sent to the Recovery Officer, Debt Recovery Tribunal-I, Delhi.

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(III) Parties are directed to appear before the Recovery Officer, DRT I, Delhi on 06.10.2025.

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O.A. No. 343 of 2023

(IV) Copies of final order as well as Recovery Certificate be sent to all concerned free of cost.

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