Allowed

Union Bank of India v. Ms Mahadev Industries and another

DRT9 Jul 2025OA/625/2025

Case brief

AI extract

What is this about?

In Original Application No.625/2025, Union Bank of India sought recovery of Rs.39,25,756 from M/s Mahadev Industries for NPA loans. The Tribunal allowed the application, directing payment of principal with simple interest at 8% p.a. instead of claimed rates due to market conditions.

What did the court decide?

Recovered from Defendants jointly and severally: Principal sum of Rs.39,25,756 plus costs and simple interest at 8% p.a. from the date of filing; entitlement to enforce via sale of hypothecated proper

Union Bank of India versus Ms Mahadev Industries and another — Banking and Recovery | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.625/2025

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PRESIDED OVER BYMRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 13.05.2025

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DATE OF DECISION: 09.07.2025

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Union Bank of India, a body corporate, constituted under Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 having its Head Office at 239, Vidhan Bhawan Marg, Nariman Point, Mumbai and having a Branch office inter-alia at Old Jail Road, Field Ganj, Ludhiana, through its duly authorized person and Power of Attorney Holder Sh. Ashish Kumar, Branch Manager.

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……..Applicant Versus

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M/s Mahadev Industries, House no. 1338, Street no. 12/6, Dashmesh Nagar, Opposite Gill Road, Ludhiana, Punjab 141003 (through its proprietor Sh. Sarwesh Kumar Rai)

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Sh. Sarwesh Kumar Rai son of Sh. Vishun Deo Rai R/o House no. 1057, Urban Estate, Phase -2, Dugri, Ludhiana 141013 (proprietor of M/s Mahadev Industries)

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…….Defendants

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Advocates:

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Argued by Sh. Amod Kumar Thakur, Advocate proxy for Sh. R.K. Chauhan, Advocate for the applicant Defendants are 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 Due to Banks and Financial Institutions Act, 1993, against the defendants for recovery of Rs.39,25,756.00 (Rupees Thirty Nine Lacs Twenty Five Thousand Seven Hundred Fifty Six Only). The Original Application has been filed through Sh. Ashish Kumar, Branch Manager o f the applicant, who is competent to institute the Original Application vide General Power of Attorney dated 17.08.2022, which is Annexure A1 to this OA.

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2 OA NO.625-2025 UNION BANK OF INDIA VS M/S MAHADEV INDUSTRIES AND ANOTHER

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The brief facts of the OA are that the defendant no. 2 as sole proprietor of defendant no. 1 had approached the applicant for grant of CC Limit of Rs.09.95 Lacs and further for Term Loan of Rs.12.30 Lacs vide Loan application dated 25.10.2022 and 14.12.2022, which are Annexures A2 and A16 this OA to this OA. Thereafter defendants again approached the applicant for enhancement of CC Limit to Rs.25.00 Lacs vide Loan Application dated 12.06.2023, which is Annexure A29 to this OA. Later for temporary overdraft of Rs. 02.50 Lacs vide Request Letter by borrower dated 01.03.2024, which is Annexure A37 this OA to this OA.

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The applicant sanctioned CC Limit of Rs.09.95 Lacs vide Sanction advice and Sanction Letter both dated 31.10.2022 which are Annexures A8 and A9 to this OA and further sanctioned Term Loan of Rs.12.30 Lacs vide Sanction advice and Sanction Letter dated 17.12.2022, which are Annexures A19 and A20 to this OA. Thereafter applicant sanctioned the enhancement of CC Limit to Rs.25.00 Lacs vide Sanction Letter dated 13.06.2023, which is Annexure A30 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendant no.1 had hypothecated its properties/assets i.e. Stock Book Debts, Machinery and Stocks etc. vide Hypothecation Agreement dated 31.10.2022, 17.12.2022 and 12.06.2023, which are Annexures A12, A23 and A33 to this OA

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Documents executed:- GST Registration Certificate and Udyam Registration Certificate dated 25.09.2017 and 05.02.2022, which are Annexures A3 to A4 this OA; Credit information report, Pre Sanction Inspection Report, memorandum of Sanction all dated 228.10.2022, which are Annexures A5(Colly) to A7 this OA; D.P. Note, Letter of Continuity, AD-02, Letter of undertaking from borrower, Letter of undertaking not to alienate hypothecated goods, all dated 31.10.2022, which are Annexures A10, A11, A13 to A15 to this OA; Pre Sanction

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3 OA NO.625-2025 UNION BANK OF INDIA VS M/S MAHADEV INDUSTRIES AND ANOTHER

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Inspection Report, Due Diligence report of borrowers by the branch, D.P. Note, Letter of Continuity, General Term Loan Agreement, AD-02, Letter of undertaking from borrower, Letter of undertaking not to alienate hypothecated goods, Undertaking from borrower (Annex II) all dated 17.12.2022, which are Annexures A17, A18, A21, A22, A24 to A28 to this OA; D.P. Note, Letter of Continuity, AD-02, Undertaking from borrower, Letter of undertaking from borrower, all dated 12.06.2023, which are Annexures A31, A32, A34 to A36 to this OA; Letter by bank for renewal dated 21.11.2024 with postal receipts, which is Annexure A38(colly) to this OA; Legal Notice by Ravinder Kumar Chauhan dated 22.01.2025, which is Annexure A39(colly) to this OA and postal receipts, Statement of Accounts, certificates u/s 63 of BSA 2023 dated 03.05.2025, which are Annexures A40 to A43 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 both the loan accounts there was a debit of Rs.39,25,756.00, 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 01.07.2025. 7. In support of the OA, affidavit of Sh. Ashish Kumar, Branch Manager, Union Bank of India h as been filed. 8. Heard 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 A43 to this OA, it is proved that the defendants approached applicant for availing of the loan facilities which were granted to them

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4 OA NO.625-2025 UNION BANK OF INDIA VS M/S MAHADEV INDUSTRIES AND ANOTHER

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and for that they had executed all the relevant documents in favour of 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.39,25,756.00 (Rupees Thirty Nine Lacs Twenty Five Thousand Seven Hundred Fifty 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 accounts.

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In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @11.05%p.a. with monthly rests plus penal interest @2.00%p.a. in Term Loan and interest @10.80%p.a. with monthly rests plus penal interest @2.00%p.a. in CC Limit and with monthly rests from 01.05.2025 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 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 @08.00%p.a. in both 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.39,25,756.00 (Rupees Thirty Nine Lacs Twenty Five Thousand Seven Hundred Fifty Six Only) jointly and severally, with costs, current and future simple interest @08.00%p.a. in both the loan accounts from the date of filing of OA till the date of realization of the amount. Accordingly,

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5 OA NO.625-2025 UNION BANK OF INDIA VS M/S MAHADEV INDUSTRIES AND ANOTHER

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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 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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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 29.07.2025.

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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.

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Pronounced by me in the open Tribunal .

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Dated: 09.07.2025

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(MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Union Bank of India v. Ms Mahadev Industries and another

Case brief

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Union Bank of India v. Ms Mahadev Industries and another

Case brief

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