Allowed

Union Bank of India (Corporation Bank) v. M/s Yaas Bags

DRT4 Aug 2025OA/449/2022

Case brief

AI extract

What is this about?

The DRT allowed the Original Application filed by Union Bank of India to recover ₹12,40,328 along with interest from three defaulting defendants who had defaulted on a cash credit facility. The Tribunal observed that the defendants failed to respond to the summons, and the evidence adduced remained uncontroverted.

What did the court decide?

Directed defendants to pay ₹12,40,328 with interest at 10.75% p.a., directed enforcement on hypothecated securities, and issued a Recovery Certificate.

Union Bank of India (Corporation Bank) versus M/s… — Contract and Commercial Disputes | DRT (2025)

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ORIGINAL APPLICATION NO.449 OF 2022

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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.449 OF 2022

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Date of Institution: 17.04.2018 Date of Decision: 04.08.2025

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TOTAL CLAIM AMOUNT : ₹ 12,40,328/-

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Union Bank of India, A body corporate constituted Under the provisions of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, (5 of 1970) having their Head Office at Union Bank Bhavan, 239, Vidhan Bhavan Marg, Nariman Point, Mumbai – 400 021 and among its Branches a Branch Saras Apartment, 771, Mumbai TPS III Mori Road, Mumbai – 400 016 Through its Power of Attorney Mr Ravo Goyal s/o Surinder Kumar … Applicant

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Versus

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M/s. Yaas Bags (Through its Proprietor Mr Yasanullah Sukoor) Room No.13, D Sector, P Line, Cheeta Camp, Trombay, Mumbai – 400 088

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Mr Yasanullah Sukoor Room No.13, D Sector, P Line,

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Page 1 of 8

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ORIGINAL APPLICATION NO.449 OF 2022

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Cheeta Camp, Trombay, Mumbai – 400 088

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Mr Mohideen Sultan Prop. of M/s. S.M.Bags Vetleshwar, Koliwada, Cheeta Camp, Trombay, Mumbai – 400 088

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…Defendants

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APPEARANCES

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For the Applicant : Mr Yogesh Koyale i/b. Mrs - Rathina Maravaraman 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 ₹12,40,328/- (Rupees Twelve Lakh Forty Thousand Three Hundred and Twenty Eight Only) as on 17.04.2018 with further interest at the rate of 10.75% per annum with monthly rest thereon from the date of presentation of the Original Application i.e. 17.04.2018 till payment/realization and to enforce the hypothecated securities filed by erstwhile Corporation Bank and substituted the name of Applicant to Union Bank of India vide order dated 20.04.2022 passed by DRT-2, Mumbai.

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Page 2 of 8

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ORIGINAL APPLICATION NO.449 OF 2022

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The details of the claim amount are as under:-

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S Nature	Amount	Principal	Interest	ROI	Total o/s.
r of	Sanctioned	o/s. as on	o/s. from		as on
N Facility		31.03.2017	31.03.2017		17.04.2018
o			to
			17.04.2018
1 Cash	₹10,00,000/-	₹	₹2,40,328/-	10.7	₹
Credit		10,00,000/-		5	12,40,328/-

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(2) It is undisputed fact in the matter that the Defendant nos. were duly served with the summons vide order-sheet dated 28.04.2023. Despite service, the defendants did not enter their appearance and therefore, they are set ex-parte on 17.08.2023.

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(3) Defendant no. 1 is the borrower who approached the Applicant Bank seeking financial assistance by way of Cash Credit for business purpose. Pursuant to the loan application dated 08.10.2015 made by defendant no.1, the Applicant sanctioned the loan in sum of ₹10,00,000/- with interest at the rate of 11% per annum floating interest rate with monthly rests.

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The details of the Sanction amount are as under:-

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S Date of	Nature	Amount of	ROI	Security
r Sanction	of	Loan
N	Facility
o
1 08.10.2015	Cash Credit	₹ 10,00,000/-	11% p.a. flti	Primary: Hypothecated Stock consists of Raw
			oan g rate	Material such as Cote Mate, Zip, Chain, 2 x 2
				and 1 x 1 lining cloth
				and all other such items
				and finishedgoods of all

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Page 3 of 8

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ORIGINAL APPLICATION NO.449 OF 2022

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types of Travellers Bags, Plant and Machinery, Furniture and Fixtures and Memorandum of Charge/ Lien over Deposits Collateral: RD account with monthly payment of ₹ 5000/-. Guarantors: Mr Mohindeen Sultan Prop:M/s S M Bags.

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(4) On 08.10.2015 and 09.10.2015, defendants signed and executed the loan and security documents as set out in Paragraph nos. E (ii) (page nos.6, 7 and 8) of the Original Application. Defendants hypothecated Stock consists of Raw Material such as Cote Mate, Zip, Chain, 2 x 2 and 1 x 1 lining cloth and all other such items and finished goods of all types of Travellers Bags, Plant and Machinery, Furniture and Fixtures and Memorandum of Charge/ Lien over Deposits to secure the loan.

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The details of the documents executed by the Defendant are as under:-

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(a) Loan Application Form Pradhan Mantri Mudra Yojana dated 08.10.2015;

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(b) Accepted Credit Sanction Intimation dated 08.10.2015;

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Page 4 of 8

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ORIGINAL APPLICATION NO.449 OF 2022

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(d) Letter of Proprietorship dated 09.10.2015;

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(e) Demand Promissory Note dated 09.10.2015 for an amount of ₹10 Lakhs together with interest at the rate of 11% per annum;

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(f) Take Delivery Letter to D.P.N dated 09.10.2015;

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(g) Guarantee Agreement dated 09.10.2015;

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(h) Letter of Undertaking/Declaration from the Borrowers dated 09.10.2015;

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(i) Common Deed of Hypothecation of Movables/Assets/Debts dated 09.10.2015;

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(j) Memorandum of Charge/Lien over Deposits dated 09.10.2015;

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(k) Monthly Stock Statement for Cash Credit (Hypothecation) Account dated 09.10.2015.

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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 account of the borrower was declared as Non-Performing Assets (N.P.A.) on 31.03.2017 as per RBI Guidelines. Therefore, on 09.03.2018, the applicant, through its advocate, called upon defendants to liquidate the outstanding to the sum of ₹12,26,782/- (Rupees Twelve Lakhs Twenty Six Thousand Seven Hundred Eighty Two Only) as on 09.03.2018 together with further interest thereupon from

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Page 5 of 8

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ORIGINAL APPLICATION NO.449 OF 2022

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10.03.2018 within 5 days. Despite notice, defendant nos.1 to 3 failed and neglected to pay.

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(6) As on 17.04.2018, there was owing, due and payable by defendants to the applicant the aggregate sum of ₹12,40,328/- (Rupees Twelve Lakhs Forty Thousand Three Hundred and Twenty Eight Only). 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 17.04.2018.

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(8) The applicant has filed affidavit (exhibit-8) in lieu of examination in chief of Mr Ravi Goyal s/o. Surinder Kumar and list of documents (exhibits-9) thereby adducing in evidence the documents at AW-1 to AW-23, which are admitted in evidence, read, recorded and exhibited.

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(9) Accordingly, the Original Application was filed for the recovery of ₹12,40,328/- (Rupees Twelve Lakh Forty Thousand Three Hundred and Twenty Eight Only) as on 17.04.2018 with further interest at the rate of 10.75% per annum with monthly rest thereon from the date of presentation of the Original Application i.e. 17.04.2018 till payment/realisation.

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Page 6 of 8

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ORIGINAL APPLICATION NO.449 OF 2022

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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.449 of 2022 is allowed with costs.

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(B) Defendant nos.1 to 3 are ordered and directed to pay to the applicant, either jointly or severally, the aggregate sum of ₹12,40,328/- (Rupees Twelve Lakhs Forty Thousand Three Hundred and Twenty Eight Only) as on 17.04.2018 with further interest at the rate of 10.75% per annum with monthly rest thereon from the date of presentation of the Original Application i.e. 17.04.2018 till payment/realization.

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Page 7 of 8

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ORIGINAL APPLICATION NO.449 OF 2022

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the valid and subsisting hypothecated properties, that is, Stock consists of Raw Material such as Cote Mate, Zip, Chain, 2 x 2 and 1 x 1 lining cloth and all other such items and finished goods of all types of Travellers Bags, Plant and Machinery, Furniture and Fixtures and Memorandum of Charge/ Lien over Deposits.

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(D) Defendant nos.1 to 3 are entitled to redeem the mortgage as per law failing which the applicant has right to proceed to sell the hypothecated property and recover dues as per law.

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(E) Issue Recovery Certificate.

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(F) 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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Sd/-

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(Harish Kumar Kaushik)

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Presiding Officer, DRT-2, Mumbai

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Page 8 of 8

Union Bank of India (Corporation Bank) v. M/s Yaas Bags

Case brief

What is this about?

What did the court decide?

Union Bank of India (Corporation Bank) v. M/s Yaas Bags

Case brief

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What did the court decide?

What the court decided

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