Allowed

State Bank of India v. M/s Chandigarh Automobile and Another

DRT25 Sept 2025OA/388/2025

Case brief

AI extract

What is this about?

The DRT allowed the applicant's original application for recovery of a credit card overdraft against a proprietorship firm and its proprietor, granting a uniform simple interest rate of 8% p.a.

What did the court decide?

Declaration of defendants' liability to pay Rs.37,58,645.66P jointly and severally with simple interest @8.00%p.a.; issuance of Recovery Certificate; liberty to enforce through SARFAESI Act and attach

State Bank of India versus M/s Chandigarh Automobile and Another — Banking and Recovery | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.388/2025

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 26.03.2025

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DATE OF DECISION: 25.09.2025

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State Bank of India, a Body Corporate constituted under the provisions of the State Bank of India Act, 1955 (23 of 1955), having its Corporate Office at Madame Cama Road, Nariman Point, Mumbai, (Maharashtra) 400021, carrying on its Business of Banking in India and Abroad having one of its Local Head Office at Sector 17, Chandigarh, having its Branch amongst other places at Adda Market, Nangal Township, District Rupnagar, (Punjab) 140124 through its Branch Manager Sh. Sanjeev Bhatia.

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……..Applicant

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Versus

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M/s Chandigarh Automobile, a Proprietorship Firm, at Plot No. 69, Rampur Sahni, Partap Nagar, Nangal, District Rupnagar (Punjab) 140125 through its Proprietor Sh. Ashwani Kumar S/o Sh. Janak Raj.

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Sh. Ashwani Kumar S/o Sh. Janak Raj, Proprietor of M/s Chandigarh Automobile, R/o Plot No. 69, Rampur Sahni, Partap Nagar, Nangal, District Rupnagar (Punjab).

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….……Defendants

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Advocates:

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Argued by Sh. Sanjay Sagar, proxy for Sh. Vivek Verma, Advocate for Applicant

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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.37,58,645.66P (Rupees Thirty Seven Lacs Fifty Eight Thousand Six Hundred Forty Five and Paise Sixty Six

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2 OA NO.388/2025 STATE BANK OF INDIA Vs MESSRS CHANDIGARH AUTOMOBILE AND ANOTHER

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only). The Original Application has been filed through Sh. Rakesh Kumar, Branch Manager o f the applicant, who is competent to institute the Original Application vide in terms of Notification dated 26.09.1959, 26.08.1972 and 27.03.1987 issued by Executive Committee of Central Board in exercise of powers conferred on its under regulations no.76 & 77 of the State Bank of India General Regulations with previous sanction of Central Government.

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The brief facts of the OA are that the defendant no. 1 through its Proprietor of Defendant no. 2 firm had approached the applicant for the grant of CC Limit of Rs.50.00 Lacs vide Loan Application dated 17.08.2022, which is Annexure A1 to this OA. 3. The applicant sanctioned the CC Limit of Rs.50.00 Lacs vide Letter of Arrangement dated 31.08.2022, which is Annexure A2 to this OA. The terms and conditions were duly accepted by the defendants. 4. Defendant no. 1 through its Proprietor of Defendant no. 2 firm had hypothecated its movable properties i.e. Stocks vide Agreement of Loan-cum-Hypothecation dated 31.08.2022, which is Annexure A3 to this OA. Documents executed : Legal Notice dated 12.12.2024, along with postal receipts, which is Annexure A4 to this OA and Statement of Account, which is Annexure A5 to this OA. 5. The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in loan account there was a debit Rs.37,58,645.66P, 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 12.09.2025.

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3 OA NO.388/2025 STATE BANK OF INDIA Vs MESSRS CHANDIGARH AUTOMOBILE AND ANOTHER

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In support of the OA, affidavit of Sh. Sanjeev Bhatia, Branch Manager, State Bank of India, h as been filed.

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Heard ex-parte arguments and perused record.

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It was argued by learned proxy counsel for applicant 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 A5 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, account of the defendants was classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.37,58,645.66P (Rupees Thirty Seven Lacs Fifty Eight Thousand Six Hundred Forty Five and Paise Sixty Six only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the account.

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In so far as pendente lite and future rate of interest is concerned, the applicant in relief clause has claimed interest @12.50% per annum with @2% p.a. with monthly rests from 25.03.2025 till the realization. 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/hypothecated assets, undertaking of the defendants, 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 @8.00%p.a. in the loan account from the date of filing of the OA till

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OA NO.388/2025

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STATE BANK OF INDIA Vs MESSRS CHANDIGARH AUTOMOBILE AND ANOTHER

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realization of the amount ordered vide this final order. It is ordered accordingly.

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In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.37,58,645.66P (Rupees Thirty Seven Lacs Fifty Eight Thousand Six Hundred Forty Five and Paise Sixty Six only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in the loan account 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 assets 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. 13. Issue Recovery Certificate accordingly. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 17.10.2025. 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: 25.09.2025 (MRIDULESH KUMAR SINGH) Presiding Officer,

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DRT-III, Chandigarh

State Bank of India v. M/s Chandigarh Automobile and Another

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State Bank of India v. M/s Chandigarh Automobile and Another

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