Allowed

State Bank of India v. M/S Khosla Knits and Others

DRT2 Sept 2025OA/727/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed the bank's application under Section 19 RD&BA 1993 for recovery of dues aggregating Rs. 3.33 crores against the borrower firm and partners, who were absent. The court granted a uniform interest rate and directed issuance of a Recovery Certificate.

What did the court decide?

Recovery of Rs. 3,33,53,548.58 plus costs and simple interest at 8% p.a. from the filing date. Recovery Certificate issued.

State Bank of India versus M/S Khosla Knits and Others — Execution and Attachment | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.727/2023

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 06.05.2023

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DATE OF DECISION: 02.09.2025

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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 Corporate Office at Madame Cama Road, Nariman Point, Mumbai, (Maharashtra) 400021, carrying on its business of banking in India and Abroad having one of its Local Head Office at Sector 17, Chandigarh, having its SME Branch amongst other places at Adjoining Gulzar Petrol Pump, Dholewal Chowk, Ludhiana 141003 (Punjab) through its Assistant General Manager, Sh. Jatinder Kumar Jolly of the Applicant.

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……..Applicant Versus

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M/s Khosla Knits, a Partnership Firm, at B-IV-1859, Mohalla Naughara, Near Dal Bazaar, Ludhiana (Punjab) – 141008 through its Partners Sh. Vishal Khosla S/o Sh. Bhushan Khosla and Sh. Vikas Khosla S/o Sh. Bhushan Khosla.

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Sh. Vishal Khosla S/o Sh. Bhushan Khosla, Partner of M/s Khosla Knits, R/o H. No. P-68, Street No. 1, Basant Vihar Colony, Noorwala Road, Ludhiana (Punjab) – 141008.

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Sh. Vikas Khosla S/o Sh. Bhushan Khosla, Partner of M/s Khosla Knits, R/o H. No. P-68, Street No. 1, Basant Vihar Colony, Noorwala Road, Ludhiana.

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……… Defendants

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Advocates:

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Argued by Sh. Vivek Verma, Advocate for Applicant

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Defendants already 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 and Bankruptcy Act, 1993, against the defendants for recovery of Rs.3,33,53,548.58p (Rupees Three Crore

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OA NO.727/2023

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STATE BANK OF INDIA VS M/S KHOSLA KNITS AND OTHERS

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Thirty Three Lacs Fifty Three Thousand Five Hundred Forty Eight And Paise Fifty Eight Only). The Original Application has been filed through Sh. Jatinder Kumar Jolly, Assistant General Manager, o f the applicant, who is competent to institute the Original Application in terms of Gazette notification published in the Gazette of India dated 26.09.1959, 26.08.1972 and 02.05.1987 read with regulation No.76 & 77 framed in exercise of power conferred by Sub section (3) of Section 50 of the State Bank of India Act, 1955, with the previous sanction of the Central Government.

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The brief facts of the OA are that the defendant no. 1 through its partners defendant nos. 2 & 3 had approached the applicant for grant of CC Limit of Rs.2.00 Crores and Term Loan of Rs. 20.00 Lacs. Thereafter, defendant no. 1 through its partners defendant nos. 2 & 3 approached the applicant for enhancement of CC Limit to Rs.2.45 Crores vide Application for Enhancement of Credit Facility dated 08.09.2014, which is Annexure A12 to this OA. Thereafter, defendant no. 1 through its partners defendant nos. 2 & 3 approached the applicant for fresh Term Loan of Rs. 24.00 Lacs under CCECL. Thereafter, defendant no. 1 through its partners defendant nos. 2 & 3 approached the applicant for GECL Loan of Rs. 49.00 Lacs vide loan application form dated 28.12.2020, which is Annexure A18 to this OA. Thereafter, defendant no. 1 through its partners defendant nos. 2 & 3 approached the applicant for Loan of Rs. 25.00 Lacs under GECL Extension vide loan application form dated 25.03.2022, which is Annexure A20 to this OA. 3. The applicant sanctioned CC Limit of Rs. 2.00 Crores (CC LimitHypothecation of Rs. 2.00 Crores and CC Limit-Book Debts of Rs. 1.00 Crores within overall CC Limit of Rs. 2.00 Crores) and Term Loan of Rs.20.00 Lacs vide Letter of Arrangement dated 04.10.2013, which is Annexure A2 to this OA. Thereafter, the applicant enhanced the CC Limit to Rs. 2.45 Crores vide Letter of Arrangement dated 25.09.2014, which is Annexure A13 to this OA. Thereafter, the applicant sanctioned

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OA NO.727/2023

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STATE BANK OF INDIA VS M/S KHOSLA KNITS AND OTHERS

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Term Loan of Rs. 24.00 Lacs under CCECL vide letter of arrangement dated 20.05.2020, which is Annexure A17 to this OA. Thereafter, the applicant sanctioned loan of Rs. 49.00 Lacs under GECL vide letter of arrangement dated 28.12.2020, which is Annexure A19 to this OA. Thereafter, the applicant sanctioned loan of Rs. 25.00 Lacs under GECL Extension vide letter of arrangement dated 08.04.2022, which is Annexure A21 to this OA.

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Defendants had hypothecated/mortgaged their immovable properties detailed as under:

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(i) Defendant no. 1 through its partners defendant nos. 2 and 3 had hypothecated their movable properties i.e. stock and book debts, all types of current and fixed assets created out of bank finance, both present and future, vide Agreement of Loan-cum-Hypothecation dated 04.10.2013 and 08.04.2022, which are Annexures A3 & A22 to this OA.

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(ii) Defendant nos. 2 & 3 had Mortgaged their immovable property i.e. property bearing MC no. B-XXXII-E-7-929, built upon plot no. P-68-A and P-68-B, total measuring 150 Sq. Yards (100 Sq. Yards + 26-1/2 Sq. Yards + 23-1/2 Sq. Yards) situated at Taraf Sekhewal, Hadbast no. 78, Locality known Basant Vihar Colony, Noorwala Road, Ludhiana, Punjab through equitable mortgage of properties comprising of: -

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(a) Property No. P-68-A, measuring 100 Sq. yards through equitable mortgage of Sale Deed No. 5205 dated 03.08.2000, along with translation, which are Annexures A5 & A5(T) to this OA.

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(b) Property Plot No. 68-B, measuring 26-1/2 Sq. yards through equitable mortgage of Sale Deed bearing Vasika No. 1410 dated 27.04.2005 along with its Translation, which are Annexures A6 & A6(T) to this OA.

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(c) Property Plot No. 68-B, measuring 23-1/2 Sq. yards through equitable mortgage of Sale Deed bearing Vasika No. 20360 dated

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OA NO.727/2023

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STATE BANK OF INDIA VS M/S KHOSLA KNITS AND OTHERS

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04.01.2012, along with its Translation, which are Annexures A7 & A7(T) to this OA.

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(iii) Defendant nos. 2 & 3 had Mortgaged their immovable property i.e. Property House No. B-IV-1860, measuring 25 Sq. yards, situated at Mohalla Naugarha near Katra Noharia, Ludhiana, Punjab, through equitable mortgage of sale deed bearing vasika No. 21730 dated 20.03.2009 along with its Translation, which are Annexures A8 & A8(T) to this OA.

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(iv) Defendant nos. 2 & 3 had Mortgaged their immovable property i.e. Property Plot No. P-69-B, measuring 100 Sq. yards, situated at Basant Vihar Colony, Noorwala Road, Ludhiana, Punjab through equitable mortgage of sale deed bearing vasika No. 13846 dated 30.11.2005 along with its Translation, which are Annexures A9 & A9(T) to this OA.

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(v) Defendant nos. 2 & 3 had Mortgaged their immovable property i.e. Property bearing MC No. B-IV-1856, measuring 66 Sq. yards, situated at Mohalla Naughara, Near Katra Noharia, Ludhiana, Punjab through equitable mortgage of sale deed Sale Deed bearing vasika No. 18319 dated 03.02.2005, along with its Translation, which are Annexures A10 & A10(T) to this OA.

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(vi) Defendant nos. 2 & 3 had Mortgaged their immovable property i.e. Property No. MC B-IV-1857, measuring 60 Sq. Yards, situated at Mohalla Noghara, Near Shaheed Sukhdev Thapar Memorial Trust, Behind Dal Bazar, Tehsil & District Ludhiana, Punjab through equitable mortgage of Sale Deed bearing vasika No. 999 dated 10.04.2013, along with its translation, which are Annexures A14 & A14(T) to this OA.

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Documents executed :- Partnership Deed dated 01.04.2004, which is Annexure A1 to this OA; Guarantee Agreement dated 04.10.2013, which is Annexure A4 to this OA; Letters of Confirmation for creation of mortgage by deposit of title deeds, dated 08.11.2013, which is Annexure A11 to this OA; Letter of Confirmation for creation of

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OA NO.727/2023 STATE BANK OF INDIA VS M/S KHOSLA KNITS AND OTHERS

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mortgage dated 25.09.2014, which is Annexure A15 to this OA; Letter of Confirmation for extension of mortgage by deposit of Title Deeds covering enhanced limits dated 25.09.2014, which is Annexure A16 to this OA; Guarantee Agreement dated 08.04.2022, which is Annexure A23 to this OA; Revival Letters dated 05.10.2016, 30.08.2017 and 23.09.2019, which are Annexures A24 to A26 to this OA; Notices dated 12.09.2022, 06.10.2022, 05.11.2022, 06.01.2023, 07.01.2023, 21.01.2023 and 28.02.2023 which is Annexure A27 to this OA; Legal Notice dated 25.11.2022, along with postal receipts, which is Annexure A28 to this OA; Call up Notice dated 01.12.2022, along with postal receipts, which is Annexure A29 to this OA; Statements of Accounts, which are Annexures A30 to A32 to this OA; Notice U/s 13(2) dated 09.12.2022, which is Annexure A33 to this OA; Possession Notice dated 24.02.2023, which is Annexure A34 to this OA and Valuation Report dated 31.01.2023, which is Annexure A35 to this OA. 5. 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.3,33,53,548.58p, 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 12.04.2024. 7. In support of the OA, affidavit of Sh. Jatinder Kumar Jolly, Assistant General Manager, State Bank of India h as been filed. 8. Heard ex-parte arguments and perused record. 9. It was argued by learned 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 A35 to this OA, it is proved that the defendants approached applicant for

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OA NO.727/2023 STATE BANK OF INDIA VS M/S KHOSLA KNITS AND OTHERS

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availing of the loan facilities which were granted to them 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.3,33,53,548.58p (Rupees Three Crore Thirty Three Lacs Fifty Three Thousand Five Hundred Forty Eight And Paise Fifty Eight 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 @17.25% p.a. in CC Limit, and @9.25% p.a. in GECL Loans along with @2%p.a. penal interest with monthly rests from 06.05.2023 till the realization. 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 properties, 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 all 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. 11. In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.3,33,53,548.58p (Rupees Three Crore Thirty Three Lacs Fifty Three Thousand Five Hundred Forty Eight And Paise Fifty Eight Only) jointly and severally, with costs, current and future simple interest @08.00%p.a. in all the loan accounts from the date of filing of OA till

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OA NO.727/2023

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STATE BANK OF INDIA VS M/S KHOSLA KNITS AND OTHERS

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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 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 . 13. Issue Recovery Certificate accordingly. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 26.09.2025. 15. 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 . Dated: 02.09.2025.

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(MRIDULESH KUMAR SINGH)

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Presiding Officer, DRT-III, Chandigarh

State Bank of India v. M/S Khosla Knits and Others

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/S Khosla Knits and Others

Case brief

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