Allowed

Canara Bank v. Aadinath Plastics

DRT27 Oct 2025OA/620/2023

Case brief

AI extract

What is this about?

The DRT allowed the bank's application for recovery of dues against the defendant who failed to regularize an NPA account. The court awarded principal with interest at 12% per annum and directed sale of assets for recovery.

What did the court decide?

Ordered payment of Rs.29,66,982/- plus interest at 12% p.a. Recovery via sale of assets via Recovery Officer if not paid within 30 days.

Canara Bank versus Aadinath Plastics — Banking and Recovery | DRT (2025)

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O.A. No. 620 of 2023

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Debts Recovery Tribunal-I, Delhi 4th floor, Jeevan Tara Building, Parliament Street, New Delhi

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Presiding Officer: Shri Govind Ballabh Sharma

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J.A. No.620 of 2023

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Canara Bank

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(e-Syndicate Bank) Outram Line Road, GTB Nagar Branch Delhi-110009

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Applicant

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Versus

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M/s Aadinath Plastics

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Kh.No. 39/6, Front portion Bawana Road, Vill-Samaypur Delhi-110042

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Defendant

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Present: Mr. Shailesh Kumar, Counsel for the applicant bank

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Date of Reserve: 07.10.2025 Date of Pronouncement: 27.10.2025

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FINAL ORDER

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This original application has been filed by the applicant bank before DRT-I, Delhi on 11.05.2023 through Shri Prem Niwas Chandan, authorized representative of the applicant bank under Section 19 of Recovery of Debts and Bankruptcy Act, 1993 against the defendant for recovery of a sum of Rs.29,66,982/- (Rupees Twenty Nine Lacs Sixty Six Thousand Nine Hundred Eighty Two only) as on 02.05.2023 along with pendentelite and future interest ©13.5% per annum with monthly rests along with penal interest @2% from 03.05.2023 till the date of realization along with costs.

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O.A. No. 620 of 2023

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The brief facts of the case are that on the request of the defendant through its proprietor Mr. Alok Jain vide loan application dated 08.06.216 along with PAN Card, Aadhar Card, and form GST REG-06, the applicant bank sanctioned Secured Overdraft Facility for a sum of Rs.20,00,000/- (Rupees Twenty Lacs only) on 15.06.2016 @11.400/0 interest per annum against hypothecation of stock and book debts in order to expand the manufacturing business of plastic granules, which was lastly renewed from time to time and enhanced to Rs.23.00 lacs @9.15% interest on 30.04.2022 covered under CGTMSE scheme. Further, the applicant bank sanctioned GECL Term Loan for Rs.2,90,000/- (Rupees Two Lacs Ninety Thousand only) @7.50% interest per annum to be repayable in 36 EMIs of Rs.8,056/- p.m. Further, on the request of the defendant, the applicant bank sanctioned fresh working Capital Term Loan under GECL (MSME) to Covid-19 affected customers for a sum of Rs.3,50,000/- (Rupees Three Lacs Fifty Thousand only) @7.50% interest per annum.

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In order to avail the aforesaid loan facilities, the defendant submitted loan applications and executed Composite Hypothecation Agreement, Sanction Letters, Letters of Undertaking (NF-721), Particular of Hypothecated Stocks (NF 373), Cash Credit Agreement (NF-795), Pronote (NF 480), Letter of Renewals (NF 493), Link Letter (NF 719), Supplemental Agreement (NF 718), Particular of Guarantor, Agreement cum Deed of Hypothecation (NF-855) in favour of the applicant bank on various dates.

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The defendant as proprietor executed Acknowledgement of Debt and Security (NF 760) for the debt towards applicant bank on 30.04.2022.

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O.A. No. 620 of 2023

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It has been submitted by the applicant bank that after availing the aforesaid loan facilities, the defendant failed to comply with the terms and conditions of sanction and failed to route their transactions through the account with the applicant bank. Ultimately, the applicant bank classified the account as NPA on 19.02.2023 as per RBI guidelines and issued a legal notice dated 08.03.2023 but the defendant failed to regularize the account. Hence, the applicant bank has approached this Tribunal for recovery of their dues.

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Notices of this O.A. were issued to the defendant and despite of proper service, the defendant has chosen to absent from the proceedings. As per order dated 26.03.2025, the defendant has been proceeded ex-parte as not appeared before the Tribunal and even written statement, evidence and affidavit of assets have not been filed by the defendant.

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In order to prove its case, the applicant bank has filed its evidence by way of affidavit of Sh. Prem Niwas Chandan, authorized representative of the applicant bank, who have proved the documents Power of Attorney, Loan Application Form, PAN Card of Proprietor, Copy of Aadhar Card, Copy of form GST, Sanction letters, Hypothecation Agreement, Letter of Undertaking, Cash Credit Agreement, Pronote, Letter of Renewal, Link Letter in Respect of Enhancement of Credit Facilities, Supplemental Agreement, Particular of the Guarantor, Particular of Hypothecated Stocks, Undertaking Letter from Borrower, Legal Notice marked as Ex.AW-1/1 to Ex.AW-1/33.

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The applicant bank has fully corroborated the averments made in the O.A. Even otherwise the whole case of the

O.A. No. 620 of 2023

applicant bank is based on the documents and the same have been duly approved.

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As per the provision of Section 19(20) of the Recovery of Debts Due to Banks and Financial Institution Act, 1993 which is analogous to Section 34 of CPC, on filing of the suit/claim, the contract between the parties comes to an end and the Court/Tribunal has a discretion to award the same depending upon the circumstances of each case. Same principle has been laid down by the Hon'ble Apex Court in the case of Central Bank of India Vs. Ravindra & Others. Taking stock of all the circumstances and keeping in view that there is a drastic fall in rates of interest globally and domestically, I am of the opinion that interest of justice will be served if the interest at the rate of 12% p.a. is awarded.

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The case filed by the applicant bank gone unrebutted and there is no question of disbelieving the case of the applicant bank and the applicant bank has proved its case beyond reasonable doubts.

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In the light of the above discussions, the Original Application deserves to be allowed.

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ORDER

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I, allow this OA and direct the defendant to pay to the applicant bank within a period of 30 days, a sum of Rs.29,66,982/- (Rupees Twenty Nine Lacs Sixty Six Thousand Nine Hundred Eighty Two only) as on 02.05.2023 together with pendentelite and future interest @12% per annum from 03.05.2023 till the date of realization and costs; failing which

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O.A. No. 620 of 2023

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the aforesaid amount shall be recovered from the sale of hypothecated stock and book debts etc. In case of shortfall, the same shall be recovered from the sale of movable and immovable properties of the defendant.

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(II) The recovery certificate be issued forthwith and be sent to the Recovery Officer, Debt Recovery Tribunal-I, Delhi.

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(III) Parties are directed to appear before the Recovery Officer, DRT I, Delhi on 26.12.2025.

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(IV) Copies of final order as well as Recovery Certificate be sent to all concerned free of cost.

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n, (GOVIND BALLABIi PRESIDING OFFICER DRT-I, DELHI

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(Dictated and pronounced in open court) Dated: 27.10.2025

Canara Bank v. Aadinath Plastics

Case brief

What is this about?

What did the court decide?

Canara Bank v. Aadinath Plastics

Case brief

What is this about?

What did the court decide?

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