Allowed

Union Bank of India v. M/S Kiran Knitting Works and Another

DRT5 Jun 2025OA/379/2024

Case brief

AI extract

What is this about?

In an ex-parte proceeding, the Tribunal allowed the applicant bank's application for recovery of debt. The court granted a uniform interest rate and directed the issuance of a recovery certificate, enabling enforced sale of hypothecated or personal assets.

What did the court decide?

Recovery of Rs.39,67,172.51 with 7.50% p.a. interest; liberty to sell hypothecated/mortgaged properties and personal assets; issuance of Recovery Certificate.

Union Bank of India versus M/S Kiran Knitting Works and… — Execution and Attachment | DRT (2025)

¶1

DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

¶2

ORIGINAL APPLICATION NO.379/2024

¶3

PRESIDED OVER BYMRIDULESH KUMAR SINGH

¶4

DATE OF INSTITUTION: 23.02.2024

¶5

DATE OF DECISION: 05.06.2025

¶6

Union Bank of I ndia, body corporate constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970 having its Head Office at 239, Vidhan Bhawan Marg, Nariman Point, Mumbai and having a Branch Office inter-alia at, Kesar Ganj, Ludhiana, through duly authorized person and attorney holder Sh. Rohit Chhabra, Branch Manager.

¶7

……..Applicant Versus

¶8

M/s Kiran Knitting Works, B-II-2259-A, Street No.6, Ward No. 33, Basant Nagar, Shivpuri, Ludhiana 141008. (Through its prop. Sh. Abhilash Jain defendant no.2)

¶9

Sh. Abhilash Jain son of Sh. Bhagwan Dass Jain, resident of house no. B-II-2259-A, Street no.6, Ward no.33, Basant Nagar, Shivpuri, Ludhiana 141008. (prop. of M/s Kiran Knitting Works, defendant no.1)

¶10

….……Defendants

¶11

Advocates:

¶12

Present: Sh. Amod Kumar Thakur, Advocate proxy for Sh. R.K. Chauhan, Advocate for Applicant Defendants are ex parte

¶13

FINAL ORDER

¶14

Present Original Application was instituted by the applicant under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of Rs.39,67,172.51p (Rupees Thirty Nine Lacs Sixty Seven Thousand One Hundred Seventy Two And Paise Fifty One Only). The Original Application has been filed through Mr. Rohit Chhabra, Credit Manager and Principal Officer of the applicant, who is competent to institute the

¶15

2 OA NO.379-2024 UNION BANK OF INDIA VS M/S KIRAN KNITTING WORKS AND ANOTHER

¶16

Original Application vide Authority Letter dated 25.08.2020, which is Annexure A1 to this OA.

¶17

The brief facts of the OA are that the defendant no.1 had approached the applicant for the grant of CC Limit of Rs.15.00 Lac and Term Loan of Rs.07.00 Lacs vide Application Form dated 12.02.2019, which is Annexure A2 to this OA and further for enhancement of CC Limit to Rs.27.00 Lacs and fresh Term Loan of Rs.6.70 Lacs. Thereafter defendants again approached the applicant for grant of UGCL Term Loan of Rs.4.60 Lacs and further CELC Term Loan of Rs.2.70 Lacs vide Request Letters dated 30.05.2020 and 14.07.2020, which are Annexures A43 and A46 to this OA. Later defendants approached the applicant for renewal of credit facilities.

¶18

The applicant sanctioned Agricultural Loan of Rs.15.00 Lac and further term loan of Rs.07.00 Lacs vide Sanction letter dated 12.02.2019 and 20.02.2020, which are Annexure A7 & A26 to this OA and further sanction enhancement of CC Limit to Rs.27.00 Lacs and sanctioned fresh Term Loan of Rs.6.17 Lacs. Thereafter applicant sanctioned the UGCL Term Laon of Rs.4.60 Lacs and further CELC Term Loan of Rs.2.70 Lacs vide Sanction Letters dated 01.06.2020 and 14.07.2020, which are Annexures A44 and A47 to this OA. Later applicant sanctioned the renewal of Credit facilities vide Sanction Letters dated 25.06.2021, which is Annexure A63 to this OA and the terms and conditions were duly accepted by the defendants vide Terms and condition of Sanction dated 24.02.2020, which is Annexure A27 to this OA. 4. Defendant No.1 had hypothecated its movable properties/assets i.e. Stocks and Book Debts and Machineries etc. vide Composite Agreement of Hypothecation dated 16.02.2019, which is Annexure A18 to this OA.

¶19

3 OA NO.379-2024 UNION BANK OF INDIA VS M/S KIRAN KNITTING WORKS AND ANOTHER

¶20

Documents executed:- Copy of GST Registration Certificate, Annexure A, Annexure B all dated 23.09.2017, which are Annexures A3 to A5 to this OA; Udyog Aadhar Registration certificate dated 05.02.2019, which is Annexure A6 to this OA; Demand Promissory Notes, Letter of continuities, General Term Loan Agreements, Letter of undertaking of hypothecated assets, Undertaking by Borrower, Interest Agreement, AD-02A, Annexure-IA, Annexure-IB, Letter of Borrowers and translation all dated 16.02.2019, which are Annexure A8 to A17 and A19 to A24 to this OA; Letter by Borrowers and translation dated 18.02.2019, which is Annexure A25 to this OA;, Demand promissory notes, Letter of continuities, Hypothecation agreement of goods & Debts, Letter of undertaking of hypothecated goods, Annexure-1A, Annexure-1B, Ad-02A, Undertaking by borrower, Interest Agreement and Request Letter all dated 24.02.2020, which are Annexure A28 to A42 to this OA; Undertaking Letter by Borrower, Demand Promissory Notes, Letter of Continuities, Letter of undertaking of hypothecated goods, Term Loan agreements, Composite Hypothecation agreement AD-02 A, Annexure-1A and Undertaking by borrower all dated 15.07.2020, which are Annexure A45, A48 to A60 to this OA; Letter by borrower to bank dated 10.03.2021, which is Annexure A61 to this OA; Credit Information dated 25.06.2021, which is Annexure A62 to this OA; Letter by S.S.I. Finance dated 04.01.2022, which is Annexure A64 to this OA; Copy of cash deposit voucher dated 06.04.2021, 02.07.2021 and 24.03.2023, which are Annexure A65, A66 & A67 to this OA; Letter for adjustments all dated 03.01.2020, 09.06.2021, 03.09.2021 and 01.03.2023, which are Annexure A68, A69, A70 & A71 to this OA; Statements of accounts with Certificate u/s 65 of Indian Evidences dated 21.02.204, which are Annexures A72 to A77 to this OA.

¶21

4 OA NO.379-2024 UNION BANK OF INDIA VS M/S KIRAN KNITTING WORKS AND ANOTHER

¶22

The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in all the loan accounts there was a debit of Rs.39,67,172.51p, which is recoverable and the defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant bank requested to accept the application and to issue Recovery Certificate accordingly.

¶23

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 27.05.2025.

¶24

In support of the OA, affidavit of Mr. Rohit Chhabra, Credit Manager , Union Bank of India has been filed.

¶25

Heard arguments and perused record.

¶26

It was argued by learned proxy counsel that in view of the documentary evidence brought on record which had gone unrebutted, the applicant bank had proved its case. From the perusal of all the Annexure A1 to A77 to this OA, it is proved that the defendants approached applicant bank 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 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 bank is entitled to recover a sum of Rs.39,67,172.51p (Rupees Thirty Nine Lacs Sixty Seven Thousand One Hundred Seventy Two And Paise Fifty One Only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of both the accounts.

¶27

In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest detailed as:

¶28

5 OA NO.379-2024 UNION BANK OF INDIA VS M/S KIRAN KNITTING WORKS AND ANOTHER

¶29

a. interest @12.80%p.a. in CC Limit

¶30

b. interest @10.05%p.a. in Term Loan

¶31

c. interest @7.50%p.a. in UGECL Term Loan

¶32

with monthly rests from 01.02.2024 till the realization.

¶33

The Tribunal is of the considered opinion that sometimes inappropriate 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 defendant, quantum of loan 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 @07.50%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.

¶34

In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.39,67,172.51p (Rupees Thirty Nine Lacs Sixty Seven Thousand One Hundred Seventy Two And Paise Fifty One Only) jointly and severally, with costs, current and future simple interest @7.50%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 bank 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 bank 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.

¶35

Any other application pending stands disposed of.

¶36

Issue Recovery Certificate accordingly.

¶37

6 OA NO.379-2024 UNION BANK OF INDIA VS M/S KIRAN KNITTING WORKS AND ANOTHER

¶38

Parties to appear before Learned Recovery Officer of this Tribunal on 27.06.2025.

¶39

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.

¶40

Pronounced by me in the open Tribunal .

¶41

Dated: 05.06.2025

¶42

(MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Union Bank of India v. M/S Kiran Knitting Works and Another

Case brief

What is this about?

What did the court decide?

Union Bank of India v. M/S Kiran Knitting Works and Another

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

Coram

Case details

Similar cases

State Bank of India versus Sh. Malkit Singh

State Bank of India versus Sh. Jaswinder Singh and Another

Axis Bank Ltd. versus Yogesh Kumar Chawla and Others

State Bank of India versus M/S Pact Industries Limited and Others

State Bank of India versus M/S Shivanga Corrugators and Others

Hdfc Bank Limited versus Sh. Pankaj Sanchar S/o Sh. Rattan Pal