Allowed

State Bank of India v. M/S Shree Sai Sports

DRT19 Feb 2025OA/72/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application filed by State Bank of India for recovery of dues totaling Rs. 29,99,222/- along with future interest. The court ex-parte proceedings due to non-appearance of respondents. The bank claimed 10.65% compound interest, but the court directed future interest at 9% per annum simple. Defendants were directed to pay jointly and severally, and the Recovery

What did the court decide?

Defendants to pay Rs. 29,99,222/- with future interest @9% per annum simple from 25.11.2022; Recovery Certificate issued; Authority empowered to sell hypothecated properties.

State Bank of India versus M/S Shree Sai Sports — Contract and Commercial Disputes | DRT (2025)

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Presented on: 25.11.2022 Registered on: 29.04.2023 Decided on: 19.02.2025 Duration: Y M D 02 02 24

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IN THE DEBTS RECOVERY TRIBUNAL AT AURANGABAD (Before Dr. J.R. Chauhan Presiding officer) TOTAL CLAIM AMOUNT – Rs.29,99,222/- ORIGINAL APPLICATION No.72/2023

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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 one of Local Head Office at Synergy, Bandra-Kurla Complex, Bandra (E), Mumbai and Branches amongst the other places at Pipeline Road, Ahmednagar and having Stressed Assets Recovery Branch (SARB) at Plot No.79, N-5, CIDCO Aurangabad-431003 through CCO & Dy. Manager Mr. Sunil Dutt s/o Jagdish Chander, Age : Major, Occu : Service, R/o CIDCO, Aurangabad. Versus

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… Applicant

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M/s. Shree Sai Sports, through its Proprietor Mrs. Pooja Rajendra Wabale, Age : Major, Occu : Business, R/o : L-102, MIDC, Ahmednagar. Ahmednagar 414001.

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AND / OR

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M/s. Shree Sai Sports, through its

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[SBJ] (OA No. 72/2023) Page 1 of 10

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Proprietor Mrs. Pooja Rajendra Wabale, Age : Major, Occu : Business, R/o : Plot no. X-5, Nagapur MIDC, Ahmednagar 414001.

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Mrs. Pooja Rajendra Wabale, Age : Major, Occ: Business, R/o: At Plot No.14, L Block, Survey no.290/B, MIDC, Ahmednagar 414001. AND / OR Mrs. Pooja Rajendra Wabale, Age : Major, Occu: Business, R/o: At Plot No.79, Sy.No.94/1A/1, Chetna Colony, Navanagapur, Ahmednagar 414001. … Defendants

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APPEARANCES For the Applicant For Defendant Nos.1 and 2

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Mr. K.D. Pande - Advocate Ex-parte

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JUDGMENT (Delivered on 19^th February, 2025)

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The Applicant Bank has filed the present application for recovery of the sum of Rs.29,99,222/- (Rupees Twenty-Nine Lacs Ninety-Nine Thousand Two Hundred Twenty-Two only) as on 09.11.2022 alongwith future interest @10.65% per annum with monthly rests compoundable from 10.11.2022 till realization of the entire amount and costs of the application from the defendant nos.1 and 2 jointly and

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severally.

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Brief facts of the application are as under :

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The defendant No.2 being a Proprietor of Defendant No.1, who were in need of financial assistance, approached the applicant bank and requested to sanction a Cash Credit Facility and a Term Loan facility. Considering the representation and request of the defendant, the applicant bank has sanctioned the Cash Credit facility of Rs.9,00,000/(Rs. Nine Lacs only) and Rs.25,00,000/- (Rupees TwentyFive Lacs only) to the defendant vide its Arrangement Letter dated 18.02.2021. The Defendants accepted the credit facilities on the terms and conditions of the Letter of Acknowledgement by acknowledging on the Arrangement Letter dated 18.02.2021.

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In order to secure the aforesaid loan facilities, the defendants signed, executed and accepted and confirmed the terms and conditions of the Arrangement letter. The defendants No.1 has agreed to pay interest @10.25% per annum at monthly rests on the above said repayable credit facilities. It is also submitted that the defendants were to pay interest applied on daily outstanding in the loan

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[SBJ] (OA No. 72/2023) Page 3 of 10

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account computed on daily balance basis, duly compounded and debited to the loan account at monthly rests on last working day of every month in accordance with accounting practice. The defendants also agreed to pay enhanced interest @ 1% cumulatively subject to a maximum of 2% for the period of delay in submission of financial data, annual financial statement etc.

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In order to secure the Cash Credit facility, the defendants executed Agreement of Loan-cum-Hypothecation and Unstamped Letter furnishing particulars of Assets / Vehicles /Equipment, Machineries etc. on 18.02.2021 in favour of the applicant bank thereby created first charge over stock and book debts etc. in favour of the applicant bank.

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In order to secure the aforesaid Cash Credit facility of Rs.9,00,000/- and Term Loan facility of Rs.25,00,000/- the defendant has created charge and security interest in respect of following properties in favour of the applicant bank.

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PRIMARY SECURITY : Hypothecation in respect of all present and future stocks, raw materials, goods, book-debts and vehicles and all other movable assets of the borrower

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(s) including receivables, documents of title of goods, outstanding monies, bills, invoices, documents, contracts, insurance policies, guarantees, engagements, securities, investments and rights and the present machineries listed in SCHEDULE-B of Agreement of Loan-cum-Hypothecation dated 18.02.2021 referred hereinabove and all the future machinery belonging to or in the possession of or control of the borrower (s) wherever lying, stored and kept and whether in possession of the borrower(s) or of the bank or of any third party whether in India elsewhere including all such goods, vehicles, other movable assets may be in the course of shipment transit or delivery and all the machinery, vehicles and other equipment items of whatever nature acquired by the borrower (s) pursuant or subsequent to these presents there-by agreed hereby agreed to be furnished to the Bank.

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The applicant bank contended that the loan account of the defendants have become irregular as the defendants failed to repay the amount of the applicant bank. The defendants have neglected to comply with the terms and conditions of the Arrangement Letter. Since the defendants failed to repay the dues as agreed, have committed default of the

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[SBJ] (OA No. 72/2023) Page 5 of 10

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terms and conditions of the arrangement letter therefore, the account of the defendants classified as Non-Performing Asset on 03.08.2021 as per the guidelines of RBI. The applicant bank has issued legal notice to the defendants through its advocate on 10.11.2022 thereby calling upon to pay the outstanding balance alongwith further interest at the agreed rate with monthly rests and also cost of the notice. Despite legal notice, the defendants failed to comply the same. Hence, the defendants are jointly and severally liable to pay an aggregate amount of Rs.29,99,222/- as on 09.11.2022 alongwith future interest @ 10.65% per annum with monthly rests compoundable from 10.11.2022 till realization of the entire amount and costs of the Original Application.

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The particulars of the claim in the A/c No.40031218469 is as under:

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Sr.	PARTICULARS		Total In Rs.
No.
a)	Cleared Balance		25,11,290.00
B.	Accrued Interest		4,87,932.00
		Total	29,99,222.00

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Hence, the applicant bank has filed this Original Application to recover the dues from the defendants Nos.1

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[SBJ] (OA No. 72/2023) Page 6 of 10

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and 2, jointly and severally.

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In this matter the defendant Nos.1 and 2 failed to appear despite service of summons by hand through Court Commissioner as per the Service Affidavit dated 11.07.2023. Hence, the defendant Nos.1 and 2 are proceeded ex-parte as per Order dated 31^st October, 2023.

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The applicant Bank has filed Claim Affidavit of Evidence (Exhibit-04) of Mr. Sunil Dutt S/o Jagdish Chander, City Case Officer and Dy. Manager of the applicant Bank i.e. State Bank of India, and has produced on record the original loan documents at Sr. Nos.A-1 to A-8 alongwith List (Exhibit-05), which corroborates the case of the applicant Bank.

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I have heard arguments of the learned Advocate for the applicant bank.

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The applicant Bank has claimed further interest at rate 10.65% per annum with monthly rests compoundable from 10.11.2022 till realization of the entire amount and costs of the application from the defendant nos.1 and 2 jointly and severally. However, considering the facts of the case, I am of the opinion that if future interest is granted @9% per

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[SBJ] (OA No. 72/2023) Page 7 of 10

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annum (simple), it would be just and reasonable rate of interest.

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Hence, I pass the following order.

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ORDER

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(A) Original Application No. 72/2023 is allowed with cost.

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(B) Defendant Nos.1 and 2 are ordered and directed to pay jointly and severally to the applicant the aggregate sum of Rs.29,99,222/- (Rupees TwentyNine Lacs Ninety-Nine Thousand Two Hundred Twenty-Two only) along with future interest @9% per annum (simple) from the date of filing of the original application i.e. 25^th November, 2022 till full payment/realization of the amount mentioned in this operative order.

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(C) The aforesaid adjudicated amount is secured by the Agreement of Loan-cum-Hypothecation and Unstamped Letter furnishing particulars of Assets / Vehicles /Equipment, Machineries i.e.

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PRIMARY SECURITY : Hypothecation in respect of all present and future stocks, raw materials,

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goods, book-debts and vehicles and all other movable assets of the borrower (s) including receivables, documents of title of goods, outstanding monies, bills, invoices, documents, contracts, insurance policies, guarantees, engagements, securities, investments and rights and the present machineries listed in SCHEDULE-B of Agreement of Loan-cumHypothecation dated 18.02.2021 referred hereinabove and all the future machinery belonging to or in the possession of or control of the borrower (s) wherever lying, stored and kept and whether in possession of the borrower(s) or of the bank or of any third party whether in India elsewhere including all such goods, vehicles, other movable assets may be in the course of shipment transit or delivery and all the machinery, vehicles and other equipment items of whatever nature acquired by the borrower (s)

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pursuant or subsequent to these presents there-by agreed hereby agreed to be furnished to the Bank as is mentioned in Paragraph No.3-A and Paragraph No.5.4 of the Original Application,.

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(D) The applicant Bank is entitled to sell the hypothecated properties as described in Agreement of Loan-cum-Hypothecation and Unstamped Letter furnishing particulars of Assets / Vehicles /Equipment, Machineries to recover its dues.

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(E) Issue Recovery Certificate accordingly.

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(F) The Registrar is directed to send the copy of Judgment and Recovery Certificate to the applicant and defendants.

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Pronounced in open Court. Date :19.02.2025.

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Sd/(Dr. J.R. Chauhan) Presiding Officer Debts Recovery Tribunal, Aurangabad

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[SBJ] (OA No. 72/2023) Page 10 of 10

State Bank of India v. M/S Shree Sai Sports

Case brief

What is this about?

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State Bank of India v. M/S Shree Sai Sports

Case brief

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