Allowed

Central Bank of India v. M/S Chauhan Departmental Store and Others

DRT18 Jul 2025OA/500/2024

Case brief

AI extract

What is this about?

The Tribunal allowed the applicant's recovery application. It held the defendants liable to pay the outstanding debt of Rs. 34,64,586.10 with simple interest at 8% p.a., permitting recovery through asset sale.

What did the court decide?

Recovery Certificate issued for Rs. 34,64,586.10 plus costs and simple interest at 8% p.a.; authorized recovery from sale of mortgaged or personal assets.

Central Bank of India versus M/S Chauhan Departmental… — Execution and Attachment | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.500/2024

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 30.03.2024

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DATE OF DECISION: 18.07.2025

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Central Bank of India, a body corporate, constituted under Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Head Office at Chander Mukhi Building, Nariman Point, Mumbai 400021 and having one of its Branch situated at Central Bank of India, Brown Road, Near Subhani Building, District Ludhiana, Punjab through Sh. Ankur Gandhi who is presently working as Senior Manager, Central Bank of India, Brown Road, Near Subhani Building, District Ludhiana, Punjab constituted Power of attorney of the Bank and Principal Officer.

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……..Applicant

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Versus

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M/s Chauhan Departmental Store, Through its Proprietor Smt. Reshma Chauhan, Shop No. 07, 08, Jain Homes, Bhamian Khurd, Jain Villa Colony, Ludhiana, Punjab.

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Smt. Reshma Chauhan, Proprietor M/s Chauhan Departmental Store W/o Sh. Sunil Kumar Chauhan,

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Address

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(i) Shop No. 07,08 Jain Homes, Bhamian Khurd, Jain Villa Colony, Ludhiana, Punjab.

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(ii) House No. 94, Street No. 05, Bhamian Road, Jain Villa Colony, Bhamian Kalan, Ludhiana, Punjab.

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Sh. Sunil Kumar Chauhan S/o Sh. Ram Pher Chauhan, R/o House No. 94, Street No. 05, Bhamian Road, Jain Villa Colony, Bhamian Kalan, Ludhiana, Punjab.

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…….Defendants

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Advocates:

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Argued by Ms. Ritika Kansal, Advocate proxy for Sh. Surinder Nath Sharma, Advocate for the applicant

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Defendants are already ex-parte

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2 OA/500/2024 CENTRAL BANK OF INDIA VS M/S CHAUHAN DEPARTMENTAL STORE AND OTHERS

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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.34,64,586.10P (Rupees Thirty Four Lacs Sixty Four Thousand Five Hundred Eighty Six and Paisa Ten Only). The Original Application has been filed through Sh. Ankur Gandhi, Senior Manager o f the applicant, who is competent to institute the Original Application vide General Power of Attorney dated 13.02.2020, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant no. 1 through its proprietor defendant no. 2 had approached the applicant for grant of CC Limit of Rs.23.00 Lacs vide loan application dated 29.10.2019 which is Annexure A2 to this OA. Defendant no. 3 stood as guarantor. Thereafter, the defendants approach the applicant for grant of FITL of Rs. 2.83 Lacs vide loan application dated 28.06.2021, which is Annexure A19 to this OA. 3. The applicant sanctioned CC Limit of Rs.23.00 Lacs vide Sanction Letter dated 07.11.2019, which is Annexure A3 to this OA; and thereafter sanctioned Rs. 2.83 Lacs for restructuring of Loan under FITL Scheme dated 28.062021, which is Annexure A19 to this OA, and the terms and conditions were duly accepted by the defendants. 4. Defendant no. 3 had mortgaged his immovable properties i.e. House measuring 80 Sq. Yards, situated at Bhamian Khurd, Hadbast No. 180, known as Jain Villa, Tehsil and District Ludhiana, Punjab, vide equitable Mortgage of Title Deed bearing vasika no. 201920/106/1/8543 dated 05.07.2019, along with English Translations, which are Annexures A6 and A6(T) to this OA. Documents executed:- Advocate Report on Title and Affidavit by Sh. Sunil Kumar Chauhan, both dated 07.11.2019, which are Annexures A4 and A5 this OA; Non Encumbrance Certificate dated 14.11.2019, which is Annexure A7 this OA; Memorandum of Entry, Declaration from

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3 OA/500/2024 CENTRAL BANK OF INDIA VS M/S CHAUHAN DEPARTMENTAL STORE AND OTHERS

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Sole Proprietor, Declaration and Undertaking by Sh. Sunil Kumar Chauhan, letter declaring acceptance of consent clause by the Borrower, Hypothecation Agreement, Supplementary Agreement, D.P. Note, Letter of Waiver, Letter of Continuity all dated 08.11.2019, which are Annexures A8 to A13 and A15 to A17 to this OA; Guarantor’s consent letter, dated 31.10.2019, which is Annexure A14 this OA; Acknowledge of debt, dated 28.06.2021, which is Annexure A18 this OA; Letter of Interest Variation, Agreement for funded term loan, both dated 28.06.2021, which are Annexures A20 and A21 this OA; Notice dated 31.04.2022 U/S 13(2) SARFAESI Act, 2002, which is Annexure A22 to this OA; Possession Notice dated 06.09.2022, which is Annexure A23 to this OA; Statements of Accounts, which are Annexures A24 and A25 to this OA.

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The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in loan accounts there was a debit of Rs.34,64,586.10P., 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 16.07.2025. 7. In support of the OA, affidavit of Sh. Ankur Gandhi, Senior Manager, Central Bank of India h as been filed. 8. Heard ex-parte arguments and perused record. 9. It was argued by learned proxy counsel 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 A25 to this OA, it is proved that the defendants approached applicant for availing of the loan facilities which were granted to them and for that they had executed all the relevant documents in favour of

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4 OA/500/2024 CENTRAL BANK OF INDIA VS M/S CHAUHAN DEPARTMENTAL STORE AND OTHERS

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the bank. The defendants failed to pay back the loans 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 is entitled to recover a sum of Rs.34,64,586.10P (Rupees Thirty Four Lacs Sixty Four Thousand Five Hundred Eighty Six and Paisa Ten Only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the accounts. 10. In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @10.30%p.a. with monthly rests along penal interest @2%p.a. from 21.03.2024 till the realization.

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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, undertaking of the defendants, quantum of loans 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 @08.00%p.a. in 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.

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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.34,64,586.10P (Rupees Thirty Four Lacs Sixty Four Thousand Five Hundred Eighty Six and Paisa Ten Only) jointly and severally, with costs, current and future simple interest @08.00%p.a. in the loan accounts 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/mortgaged properties of the defendants in execution proceedings if not sold earlier under the provisions of the

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5 OA/500/2024 CENTRAL BANK OF INDIA VS M/S CHAUHAN DEPARTMENTAL STORE AND OTHERS

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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.

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Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 25.08.2025.

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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 .

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Dated: 18.07.2025

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(MRIDULESH KUMAR SINGH)

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Presiding Officer, DRT-III, Chandigarh

Central Bank of India v. M/S Chauhan Departmental Store and Others

Case brief

What is this about?

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Central Bank of India v. M/S Chauhan Departmental Store and Others

Case brief

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