Allowed

Bank of India v. J P Apparels

DRT9 Sept 2025OA/385/2023

Case brief

AI extract

What is this about?

The Tribunal allowed an application by Bank of India to recover ₹53.84 lakhs with future interest against borrowers who failed to repay a cash credit facility. The claim was unopposed, and the recovery certificate was issued alongside a direction to secure the amount via hypothecated assets.

What did the court decide?

Decree for payment of ₹53,84,304.65 with future interest; direction to submit CGTMSE details; issuance of Recovery Certificate.

Bank of India versus J P Apparels — Contract and Commercial Disputes | DRT (2025)

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ORIGINAL APPLICATION NO.385 OF 2023

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DEBTS RECOVERY TRIBUNAL No.2, MUMBAI

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PRESIDING OFFICER: HARISH KUMAR KAUSHIK

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ORIGINAL APPLICATION NO.385 OF 2023 IN

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ORIGINAL APPLICATION (D) NO.563 OF 2022

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Date of Institution: 17.05.2022 Date of Decision: 09.09.2025

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TOTAL CLAIM AMOUNT : ₹ 53,84,304.65/-

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Bank Of India,

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A Bank, a body corporate Constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act) V of 1970, having their Head Office at Star House, C-5, G-Block, Bandra Kurla Complex, Bandra (East), Mumbai-400 051, and one of its Branch office Amongst other known as Vile Parle (West) Branch, situated at 377, Smit Kiran Building, S.V. Road, Vile Parle (West), Mumbai - 400 056, through its Constituted Attorney, Mr. Rajesh Kumar Tiwari, Chief Manager of the Applicant

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p… Applicant

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Versus

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M/s. J. P. Apparels A Proprietorship concern having address at Flat No. 603, 6th Floor, B-3, Lohiya Nagar, Opp. Patel Park, Behind LIC Colony, Milan Subway,

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Page 1 of 9

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ORIGINAL APPLICATION NO.385 OF 2023

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Vile Parle (W), Mumbai-400 056.

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Mr. Shamjibhai Pethabhai Gandhi Proprietor of M/s. J. P. Apparels Indian Inhabitant, having address at Flat No. 603, 6th Floor, B-3, Lohiya Nagar, Opp. Patel Park, Behind LIC Colony, Milan Subway, Vile Parle (W), Mumbai - 400 056.

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…Defendants

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APPEARANCES

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For the Applicant : Mr Prashant Shinde i/b Mr A.B. Shinde - Advocate For Defendants : None – Advocate

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J U D G M E N T

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(1) This is an application under Section 19(1) of the Recovery of the Debts due to Banks and Financial Institutions Act, 1993 renamed as Recovery of the Debt and Bankruptcy Act, 1993 (for short, ‘the 1993 Act’) to recover ₹53,84,304.65/- (Rupees Fifty Three Lakhs Eighty Four Thousand Three Hundred Four and paisa Sixty Five Only) with future interest @ 10.05% per annum with monthly rest thereon from the date of presentation of the Original Application i.e. 17.05.2022 till payment/realization and to enforce the hypothecated securities.

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ORIGINAL APPLICATION NO.385 OF 2023

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The details of the claim amount are as under:-

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Sr N	Nature of Facility	Principle Amount	Unapplied interest	Penal Interes	O/s. inclusive of Unapplied
o			@10.05% per	t	interest
			annum from
			16.10.2020 to 07.05.2022
1	Cash Credit	47,51,236.53	6,33,068.12	@ 2% per annum	53,84,304.65
	Total Claim Amount				53,84,304.65

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(2) It is undisputed fact in the matter that the Defendant nos.1 and 2 were duly served with the summons vide order-sheet dated 14.03.2024. Despite service, the defendants did not enter their appearance and therefore, they are set ex-parte on 21.07.2025.

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(3) Defendant no.1, a Proprietorship Firm through its Proprietor i.e. Defendant No.2, is the borrower who approached the Applicant Bank seeking financial assistance by way of Cash Credit Facility. Pursuant to the loan application made by defendants, the Applicant sanctioned the loan vide Sanction Letter dated 11.01.2018 in sum of ₹25,00,000/- (Rupees Twenty-Five Lakhs Only) under Cash Credit (Hypothecation of Stocks and Book Debts) towards working capital requirement for business purpose with interest as given in the table below. Further, on the request made by the Defendants, the aforesaid Cash Credit facility was

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Page 3 of 9

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ORIGINAL APPLICATION NO.385 OF 2023

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enhanced / reviewed by the Applicant vide Letter of Sanction dated 05.01.2019 wherein an amount of ₹40,00,000/- (Rupees Forty Lakhs Only) with interest as given in the table below (the said limit increased from ₹25,00,000/- to ₹40,00,000/-). The said loan is covered under CGTMSE Scheme.

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The details of the Sanction amounts are as

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under:-

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S r N o	Date of Sanction	Nature of Facility	Amount In₹	ROI	Securi	ty
1	11.01.2018	Cash Credit	25,00,000.00	equivalent to 11.10% per annum with monthly rests and annual rests.	Hypoth Stock debts days under Schem	ecat and up C e.	ion of Book- to 90 covered GTMSE
	Total		25,00,000.00
2	05.01.2019 (enhanced)	Cash Credit	40,00,000.00	2.50% above annual MCLR equivalent to 11.50%	Hypoth Stock debts under Schem	ecat and C e.	ion of Book- covered GTMSE
	Total		40,00,000.00
	Total Amount Sanctioned		40,00,000.00

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(4) On the dates given below, defendants signed and executed the loan and security documents as set out in paragraph nos.5.C and 5.E (Page nos.7 & 8) of the Original Application. Defendants hypothecated Stocks of Textiles, Fabrics, Cotton Readymade Garments, Book Debts/Receivables etc

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ORIGINAL APPLICATION NO.385 OF 2023

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to secure the loan.

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The details of the documents executed by the Defendants vide Sanction Letter dated 11.01.2018 are as under: -

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(a) Accepted Sanction Letter dated 11.01.2018;

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(b) Demand Promissory Note for ₹25,00,000/dated 19.01.2018 in respect of Cash Credit limit;

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(d) Non-Relationship Declaration dated 19.01.2018;

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(e) Hypothecation cum Loan Agreement (Plant and Machinery, Stocks and Book Debts) dated 19.01.2018 between the borrowers and the Applicant bank;

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(f) Composite Agreement (L-516) dated 19.01.2018;

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(g) Letter of Declaration, Undertaking and Authority dated 19.01.2018;

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(h) Undertaking from the borrower in respect of advance facilities dated 19.01.2018.

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The details of the documents executed by the Defendants vide Sanction Letter dated 05.01.2019 are as under: -

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(a) Accepted Sanction Letter dated 05.01.2019;

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ORIGINAL APPLICATION NO.385 OF 2023

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(b) Demand Promissory Note dated 08.01.2019 for ₹15,00,000/-;

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(d) Non-Relationship Declaration dated

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08.01.2019;

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(e) Format for MCLR Agreement-New Loans dated 08.01.2019;

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(f) Supplemental Deed of Hypothecation dated 08.01.2019 between the borrowers and the Applicant bank;

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(g) Composite Agreement dated 08.01.2019;

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(h) Acknowledgement of Debt / Security dated 06.11.2020 for Cash Credit limit of ₹4408342.70/executed by the Defendants.

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(5) After availing the loan, defendants did not adhere to the financial discipline and committed default in payment of instalments and repayment of the loan and accordingly the accounts of the borrowers were declared as Non-Performing Assets (N.P.A.) on 31.03.2021 as per RBI Guidelines. Therefore, on 27.10.2021, the applicant, through its advocate, called upon defendants to liquidate the outstanding in the sum of ₹47,08,211.53/(Rupees Forty-Seven Lakhs Eight Thousand Two Hundred Eleven and paisa Fifty-Three Only) due under Cash Credit with further interest at the rate of 10.15% p.a. with monthly rest plus 2% p.a. penal interest due from 31.03.2021 till payment

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ORIGINAL APPLICATION NO.385 OF 2023

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and/or realization within 7 days from receipt of this notice. Despite notice, defendant nos. 1 and 2 failed and neglected to pay.

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(6) As on 17.05.2022, there was owing, due and payable by defendants to the applicant the aggregate sum of ₹53,84,304.65/- (Rupees FiftyThree Lakhs Eighty-Four Thousand Three Hundred Four and paisa Sixty-Five Only) with future interest @ 10.05% per annum with monthly rest. The applicant has maintained the loan ledger extract and the entries posted therein are made in the usual and ordinary course of the banking business.

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(7) Since, defendants failed and neglected to make the payment, the applicant was left with no other alternate but to file the Original Application which was presented on 17.05.2022.

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(8) The applicant has filed affidavit (exhibit-6) in lieu of examination in chief of Mr Ranvir Kumar, Chief Manager and list of documents (exhibit-7) thereby adducing in evidence the documents at AW-1 to AW-24, which are admitted in evidence, read, recorded and exhibited.

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(9) Accordingly, in the Original Application was filed for the recovery of ₹53,84,304.65/- (Rupees FiftyThree Lakhs Eighty-Four Thousand Three Hundred Four and paisa Sixty-Five Only) with future interest @ 10.05% per annum with monthly

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ORIGINAL APPLICATION NO.385 OF 2023

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rest thereon from the date of presentation of the Original Application i.e. 17.05.2022 till payment/realisation.

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(10) The Tribunal has scrutinised and examined the allegations contained in the Original Application and analysed the evidence adduced by the applicant which has gone unchallenged, uncontroverted and unrebutted.

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(11) Upon careful scrutiny and the examination of the Original Application, analysing the evidence and giving due weightage to the documentary evidence adduced by the applicant, the Tribunal views that there is no reason to disbelieve the claim made by the applicant bank.

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(12) In view of the observations made hereinabove, Original Application filed by the applicant deserves to be allowed.

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(13) Hence, the following order:

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ORDER

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(A) The Original Application No.385 of 2023 is allowed with costs.

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(B) Defendant nos.1 and 2 are ordered and directed to pay to the applicant, either jointly or severally, the aggregate sum of ₹53,84,304.65/- (Rupees FiftyThree Lakhs Eighty-Four Thousand Three Hundred Four and paisa Sixty-Five Only) with future interest @ 10.05% per annum with simple interest thereon from the date of presentation of the

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Page 8 of 9

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ORIGINAL APPLICATION NO.385 OF 2023

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Original Application i.e. 17.05.2022 till payment/realization.

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(C) The aforesaid adjudicated amount is secured by the valid and subsisting movable hypothecated properties, that is, Stocks of Textiles, Fabrics, Cotton Readymade Garments, Book Debts/Receivables etc.

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(D) Defendant nos.1 and 2 are entitled to redeem the hypothecated properties as per law failing which the applicant has right to proceed to sell the hypothecated properties and recover dues as per law.

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(E) The Applicant is also hereby directed to submit the details of claim amount received from the Central Government since the facility is granted under CGTMSE Scheme.

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(F) Issue Recovery Certificate.

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(G) The learned Registrar is directed to send a copy of the judgment and recovery certificate to (i) the applicant, (ii) defendant and (iii) the Recovery Officer by post and email.

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(Harish Kumar Kaushik)

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Presiding Officer, DRT-2, Mumbai

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Page 9 of 9

Bank of India v. J P Apparels

Case brief

What is this about?

What did the court decide?

Bank of India v. J P Apparels

Case brief

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What did the court decide?

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