Allowed

State Bank of India v. M/S Naib Singh and Sons and Others

DRT26 Dec 2025OA/746/2022

Case brief

AI extract

What is this about?

Applicant bank filed this application under RDB Act to recover loans from sole proprietorship defendants. Tribunal allowed application for Rs.46.47 Lacs, fixing uniform simple interest at 7.75%. Recovery Certificate issued.

What did the court decide?

Declaration that defendants are liable to pay Rs.46,47,589 with costs and simple interest at 7.75% p.a. Recovery certificate issued.

State Bank of India versus M/S Naib Singh and Sons and Others — Banking and Recovery | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.746/2022

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 06.04.2022

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DATE OF DECISION: 26.12.2025

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State Bank of India, a body corporate, constituted under the State Bank of India Act, 1955, and having Central Office at Madam Cama Road, Nariman Point, Mumbai and one of its Local Head Office at Sector 17-A, Chandigarh and one of its Branch at Nihal Singh Wala, Moga, Punjab through Sh. Sanjeev Kumar, Chief Manager of the Applicant.

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……..Applicant Versus

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M/s Naib Singh & Sons, a sole proprietorship concern situated at Village Ranshih Khurd, Tehsil Nihal Singh Wala, District Moga, Punjab through its Proprietor Shinder Pal Singh HUF through its Karta Sh. Shinder Pal Singh S/o Sh. Mukhtiar Singh.

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Sh. Shinder Pal Singh S/o Sh. Mukhtiar Singh R/o House no. 200, Village Ranshih Khurd, Tehsil Nihal Singh Wala, District Moga, Punjab-142055

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Sh. Lal Singh S/o Sh. Mukhtiar Singh R/o House no. 200, Village Ranshih Khurd, Tehsil Nihal Singh Wala, District Moga, Punjab-142055

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……. Defendants

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Advocates:

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Argued by Ms. Seerat Sharma, Advocate proxy for Sh. Pankaj Beri, Advocate for the Applicant (through VC)

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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 & Bankruptcy Act 1993, against the defendant for recovery of Rs.46,47,589.00 (Rupees Forty Six Lacs Forty Seven Thousand Five Hundred Eighty Nine). The Original Application has been filed Sh. Sanjeev Kumar, Chief Manager of the Applicant, who is competent to institute the Original Application under the terms of

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OA NO.746/2022 STATE BANK OF INDIA VS. M/S NAIB SINGH AND SONS AND OTHERS

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Gazette Notification published in the Gazette of India dated 26.09.1959, 26.08.1972 and 02.05.1987 issued under Regulation No. 76 and 77 of State Bank of India Regulations framed in Exercise of the powers conferred by Sub section 3 of Section 50 of the State Bank of India Act, 1955, with the previous sanction of the Central Government. 2. The brief facts of the OA are that the Defendant no.1 through its proprietor represented through its Karta Defendant no.2 approached the applicant for grant of Cash Credit Limit of Rs.60.00 Lacs vide Loan application dated 20.09.2013, which is Annexure A1 to this OA. Defendant no. 3 stood as guarantor. Thereafter, the defendant no. 1 through its proprietor approached for renewal of the limit vide loan application dated 05.11.2014, which is Annexure A10 to this OA. Thereafter, the defendant no. 1 through its proprietor approached the applicant for renewal of the limit with its reduction to Rs. 40 Lacs vide loan application dated 09.12.2016, which is Annexure A12 to this OA. 3. The applicant sanctioned Cash Credit Limit of Rs.60.00 Lacs vide letter of arrangement dated 28.12.2013, which is Annexure A4 to this OA and terms and conditions were duly accepted by the defendants. Thereafter, the applicant renewed the limit vide letter of arrangement dated 06.02.2015, which is Annexure A11 to this OA. Thereafter, the applicant renewed the limit for Rs. 40.00 Lacs vide letter of arrangement dated 16.12.2016, which is Annexure A13 to this OA. Thereafter, the limit was again renewed vide letter of arrangement dated 08.04.2019, which is Annexure A14 to this OA. Further, due to COVID-19, the interest accrued for the period March 2020 to August 2020 was converted by the applicant to Funded Interest Term Loan of Rs. 1,81,323/-. 4. Defendant no.1 through its proprietor defendant no. 2 hypothecated book debts vide agreement of loan cum hypothecation dated 28.12.2013, which is Annexure A5 to this OA. Defendant no. 3 mortgage his immovable property i.e. land measuring 4K-10M detailed situated at Ransih Khurd, Tehsil Nihal Singh

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OA NO.746/2022 STATE BANK OF INDIA VS. M/S NAIB SINGH AND SONS AND OTHERS

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Wala, District Moga, Punjab through equitable mortgage of Sale Deed bearing vasika no. 916 dated 10.08.2009, along with its translation, which is Annexure A7 to this OA; Letter evidencing constructive deposit of title deeds dated 21.12.2013 which is Annexure A8 to this OA; Valuation Report dated 11.03.2022 which is Annexure A9 to this OA. Documents executed: - D.P. Note, D.P. Note Delivery cum Continuity Letter, Guarantee Agreement, all dated 28.12.2013 which are Annexures A2, A3 and A6 to this OA; Balance Confirmation Letter dated 17.12.2016 which is Annexure A15 to this OA; Revival Letter dated 06.04.2019 which is Annexure A16 to this OA; Notice dated 07.08.2021, which is Annexure A17 to this OA; Statement of Accounts which are Annexures A18 and A19 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.46,47,589.00, 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.

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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 29.05.2024.

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In support of the OA, affidavit of Sh. Sanjeev Kumar, Chief Manager, State Bank of India, has been filed.

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Heard ex-parte arguments and perused record.

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It was argued by learned proxy counsel through video conferencing 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 A19 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 the bank. The defendants failed to pay back the loans as per terms and conditions of the agreement

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OA NO.746/2022 STATE BANK OF INDIA VS. M/S NAIB SINGH AND SONS AND OTHERS

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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.46,47,589.00 (Rupees Forty Six Lacs Forty Seven Thousand Five Hundred Eighty Nine) along with interest from the defendants, from the date of filing of the present Original Application till realization of the accounts. 10. In so far as pendente lite and future rate of interest is concerned, the applicant in relief clause has claimed interest @8.15%p.a. in CC Limit and @7.75%p.a. in FITL, with monthly rests plus 2% penal interest in both, from 24.02.2022 till the date of 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/hypothecated assets, 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 @7.75%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.46,47,589.00 (Rupees Forty Six Lacs Forty Seven Thousand Five Hundred Eighty Nine) with costs, current and future simple interest @7.75%p.a. in both 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 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

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OA NO.746/2022 STATE BANK OF INDIA VS. M/S NAIB SINGH AND SONS AND OTHERS

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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. 13. Issue Recovery Certificate accordingly. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 09.01.2026. 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: 26.12.2025.

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

State Bank of India v. M/S Naib Singh and Sons and Others

Case brief

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State Bank of India v. M/S Naib Singh and Sons and Others

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