Allowed

State Bank of India v. M/S Shri Durga Rice Mill

DRT23 Sept 2025OA/761/2022

Case brief

AI extract

What is this about?

The DRT upheld the bank's original application ex-parte due to the non-appearance of defendants. The court found proof of loan execution and disbursement via banker's books as per the Banking Books of Evidence Act, confirming the defendants' joint and several liability. The application to recover the debt was allowed.

What did the court decide?

Recovery of Rs.75,47,818.00 plus pendent lite and future interest; injunction restraining disposal of assets; direction to pay dues within two months; issuance of Recovery Certificate.

State Bank of India versus M/S Shri Durga Rice Mill — Contract and Commercial Disputes | DRT (2025)

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DEBTS RECOVERY TRIBUNAL LUCKNOW

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Date of order or
Order with signature of court Office action
proceeding taken with
date
O.A. No.761/2022
23.09.2025 The Judgment is signed and
pronounced on separate sheets. Separately
attached in 09 sheets
Order be uploaded on the Tribunal’s
website.
(Dictated)
C
q_//
J
(Pravas Kumar g'iTigh)
Presiding Officer
(MK)

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IN THE DEBTS RECOVERY TRIBUNAL AT LUCKNOW

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Present: Pravas Kumar Singh, Presiding Officer

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Case No. Original Application No.761 of 2022

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Dated: 23.09.2025

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	StateBankof India,havingBranch at2ndFloor,
	2-Tilak Marg, Near National PGCollege, Hazratganj,Lucknow–226001. .-	.......Applicant-bank
	Versus
1.	M/s Shri DurgaRiceMill (Borrower)(Through Proprietor Shri Mahesh Chandra &Smt. Suman Rani)Village –Bhaipur,Post –Shareef Nagar Tehsil – Thakurdwar Moradabad, U.P.- 244601.
2.	ShriMaheshChandra,S/o Shri RamKaran Singh(Proprietor of M/s Shri Durga RiceMill) (Borrower & Guarantor), HouseNo.110-A, Mohalla– Gujratiyan Ward –Anshik Jaspur, UdhamSinghNagar, Uttarakhand–244712.
3.	Smt. Suman Rani, W/o Shri MaheshChandra (Borrower & Guarantor) House No.110-A, Mohalla– Gujratiyan Ward –Anshik Jaspur, UdhamSinghNagar, Uttarakhand–244712. .	.....Defendants

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Ld. Counsel for Applicant-bank: Shri Shivanshu Bajpai, Advocate Ld. Counsel for the Defendants: None.

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JUDGEMENT

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This Original Application has been filed by the Applicant-bank under

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Section 19(1) of the Recovery of Debts & Bankruptcy Act, 1993, against the

O.A. No.761 of 2022

defendants for the recovery of Rs.75,47,818.00/- (Rupees Seventy Five Lacs, Forty Seven Thousand, Eight Hundred Eighteen Only) [Rs.54,89,894.00/- in Cash Credit Loan Account] [Rs.9,48,367.00/- in Working Capital Term Loan (WCTL) and Rs.11,09,557.00/- in Housing Loan (TL)] together with pendentlite and future interest, costs and other reliefs etc.

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The brief facts of case are that the defendants No.1 is a proprietorship firm of which defendant no.2 & 3 is the borrower and guarantor. The defendant no 3 is the wife of the defendant no2. The defendant No.2 & 3 on behalf of defendant no.1 had approached the Applicant-bank for grant of Cash Credit Loan of Rs.40.00 lacs vide its letter of arrangement dated 28.05.2014 on certain terms and conditions (Annexure No. A-2 & Annexure

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No. A-3) to this Original Application.

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3 . Thereafter, defendant No.2 & 3 as Borrower again approached the applicant bank for grnat of Housing Lona of Rs.15.00 lacs vide its Letter of Arrangement dated 20.06.2014 on certain and terms and conditions, a copy of which is being annexed as (Annexure No. A-4) to this Original Application. 4. In order to further secure the repayment of the bank dues, the defendant No.3 created equitable mortgage in respect of property i.e. Residential Building at Khasra No.254, Mohalla Jaspur Patti Netram, Now Laxminagar Near Parinay Vatika Banquet Hall, Thakurdwar Road, Jaspur, Udham Singh Nagar, Uttarakhand – with an area of 250.65 square meter.,in favour of the bank by deposit of title deed (Annexure No. A-5 & Annexure No. A-6) to this Original Application.

:\h 1:

O.A. No.761 of 2022

That in the year 2015, the defendants again approached the applicant bank and requested for further renewal and enhancement of the sanctioin limit of Cash Credit Loan to Rs.60.00 laos and also for the grant of Rs.12.00 laos under facility through letter of arrangement dated 28.12.2015, a copy of which is being qnnexed as (Annexure No. A-7) to this Original Application.

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To secure aforesaid credit facilities, defendants had executed and signed various security documents in favour of the Applicant-bank on 28.12.2015. The defendant No.2 & 3 signed and executed Guarantee Agreement dated 28.12.2015, a copy of which is being annexed as (Annexure No.A-8 and Annexure No.A-9) to this Original Application.

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That in the year 2018, the defendants approached the applicant bank for revival and requested for further renewal of the sanction limit of Cash Credit Loan to Rs.60.00 lacs and Rs.12.00 lacs under the SME Credit Plus Scheme of the Applicant Bank. On the request of Defendants, the applicant bank further did revival of the account and sanctioned the said aforesaid facility through letter of arrangements dated 26.04.2018. That in consideration thereto, the defendants signed and executed Letter of Arrangement dated 26.04.2018, a copy of which is being annexed as (Annexure No.A-10 and Annexure No.A-11) to this Original Application.

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Subsequently, at the request of the defendants had approached the applicant bank for grant of Cash Credit Loan of Rs.50.00 lacs and Rs.10.00 laos under the Working Capital Term Loan (WCTL) of the Applicant Bank vide its sanctioned letter dated 30.05.2019 (Annexure No.A-12) to this Original Application.

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O.A. No.761 of 2022

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That again in the year 2020, the defendants approached the applicant bank for revival and requested for further renewal of the sanction limit of Cash Credit Loan to Rs.50.00 las and Rs.10.00 lacs under the Working Capital Term Loan (WCTL) of the applicant bank. On the request of defendants, the applicant sanctioned the said facility through letter of arrangement dated 03.06.2020. That in consideration thereto, the defendants signed and executed Letter of Arrangement dated 03.06.2020, a iI copy of which is being annexed as (Annexure No.A-12 and Annexure No.A-

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to this Original Application.

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That the applicant bank has also registered charge on the property equitably mortgaged with the Bank with the Central Registry of Securitization Asset and Security Interest of India on 28.11.2017, a copy of which is being annexed as (Annexure No.A-14) to this Original Application.

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To avail the aforesaid credit facility, the Applicant-bank had opened three loan accounts in the name of defendant No. 1 in order to maintain the credit facilities.

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After availing the aforesaid credit facility, the defendants failed to maintain financial discipline and also failed to comply with the terms and 11 conditions of the loan agreement, consequently, the loan account of the llIH I defendant no.1/firm was classified as NPA on 01.03.2022 by the bank as per RBI guidelines (Annexure No. A-15), thereafter the Applicant-bank issued recall-cum-demand Notice dated 30.06.2022 to the defendants (Annexure No. A-16), but, the defendants stated no-response and they failed to repay the

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A
r
//

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5 O.A. No.761 of 2022

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same and the loan accounts of the defendants are still un_liquidated9 hence2 this Original Application has been instituted.

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13' As per books of the bank maintained in the usual and ordinary course of banking business, an outstanding of Rs.75/47/818.00/_ (Rupees Seventy Five Lacs, Forty Seven Thousand/ Eight Hundred Eighteen Only) IRs.54J89/894.00/- in Cash Credit Loan ACCOUnt] [Rs.9,48,367.00/- in Working Capital Term Loan (WCTL) and Rs.ll,09f 557.00/- in Housing Loan (TL)] including interest upto 14.07.2022, were lying due for payment/ for which the defendants are jointly and severally liable to repay the same/ which they did not pay despite repeated requests and demand. The Applicant-bank filed the Statement of loan Accounts. (Annexure No.A-17) to this Original Application.

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The cause of action for filing the present application arose firstly on 28.05.2014, 28.12.2015, 26.04.2018, 30.05.2019 and 03.06.2020 when the aforesaid credit facility were sanctioned by the Applicant-bank and the same were availed by the defendants and necessary documents were executed by the defendants. The cause of action further arose on when recall-cumdemand Notice dated 30.06.2022 was sent to the defendants, recalling the

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entire outstanding dues and they failed to pay the same.

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The summons were served upon the defendants through registered post, the defendants through counsels have appeared before this Tribunal on 01.02.2024 and filed preliminary objection, it is admitted that the applicant bank sanctioned cash credit facility of Rs 50 lakhs, working capital

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6 O.A. No.761 of 2022

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loan of Ten lakhs and housing loan of Rs 15 lakhs/ it is stated that in order to override limitation all the three loans have been clubbed together. 16. 1 find no illegalitY in the same. Another set of objections being that the bank has manipulated the security documents, however any specific pleading or proof has not been brought on record. The case is proceeded against the defendants.

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From the perusal of the record, it is evident that the defendants were provided with fair opportunities to contest the claim of the bank. As the defendants opted not to contest the case, so only point of consideration before this Tribunal is as to whether bank is legally entitled to the amount as claimed in Original Application on the basis of documents and pleading submitted by it.

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In support of the case Shri Anupam Saxena, Chief Manager of the

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Applicant-bank has filed an affidavit.

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On a careful scrutiny of the evidence on affidavit and Exhibits marked as Exhibit No.A-1 to Exhibit No.A-17, it is proved that defendants had availed the credit facilities from the Applicant-bank by executing loan and security documents detailed as above in favour of the Applicant-bank. A perusal of the application, evidence and documents relied upon clearly show that defendant had utilized the above loan facilities as granted to them. The Applicant-bank had maintained the Books of account in the ordinary course of banking business showing disbursal of the loan amount. The Bank had also charged interest from time to time and the entries are

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7 O.A. No.761 of 2022

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relevant u/s 4 of the Banker Books of Evidence Act. It is also proved that the Applicant-bank’s claim is within limitation against defendants, therefore/ the defendants are jointly and severally liable to pay the dues.

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Accordingly, the defendants are directed to pay the balance dues to the Applicant-bank within a period of 2 months from the date of judgement failing which the Applicant-bank will be entitled to sell the mortgaged property, hypothecated assets and personal assets/ properties of the defendants.

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The Applicant-bank has claimed [email protected]% in Cash Credit Loan Account, [email protected]% in Working Capital Term Loan (WCTL) and [email protected]% in Housing Loan (TL) per annum with monthly rest w.e.f. 14.07.2022 till the date of realization and costs. On the basis of foregoing discussion, interest of justice will be served if pendent- lite and future interest is granted @8% in above the three loan accounts per annum with monthly rest reducing balance from the date of filing of the O.A. till the date of realization with costs.

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1 find that the bank has proved the execution of loan documents and creation of mortgage in its favour. In the result, the Original Application succeeds as ex-parte against the defendants with costs. The bank has proved the loan execution of loan documents in favour of the bank and availment of credit facility. The liability of the defendant Nos.1 to 3 are joint and several and mortgaged property, hypothecated asset as well as the personal properties are to be sold.

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*(b/

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O.A. No.761 of 2022

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It is, therefore , ordered

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(i) That the Original Application No.761 of 2022 of the Applicant bank for issuance of Recovery Certificate tO the tune of Rs.75/47l818.00/_ (Rupees Seventy Five Lacs, Forty Seven Thousand, Eight Hundred Eighteen Only) [Rs.54,89,894.00/- in Cash Credit Loan Account] [Rs.9,48,367.00/- in Working Capital Term Loan (WCTL) and Rs.11,09,557.00/- in Housing Loan (TL)] along with the interest per annum with monthly rest from the date of filing of the Original Application i.e. 29.07.2022 till the loan is fully liquidated and costs succeeds ex-parte against the defendants.

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(ii) The defendant Nos.1 to 3 are directed to pay the dues within a period of two months from the date of judgement, failing which the Applicant-bank will be entitled to recover the same from the secured assets, personal movabIes and immovable assets of the defendants.

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(iii) The Applicant–bank is entitled to recover aforesaid amount by sale of mortgage property & hypothecated assets (if not sold earlier under the provision of the S.A.R.F.A.E.S.I. Act 2002). The amount, if any already recovered by sale of any hypothecated assets or otherwise shall be recoverable, if the dues of the Applicant-bank still remain unsatisfied, the same shall be recovered by attachment and sale of the personal movable assets of the defendant jointly and severally.

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(iV) The defendants are hereby restrained by means of injunction from depleting, transferring, encumbering, alienating or in any way dealing

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O.A. No.761 of 2022

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with their properties/estates without first paying the claim of the

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Applicant-bank

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(V) Let Recovery Certificate be issued immediately u/s 19(22) of the Recovery of Debts Due to Banks and Financial Institution Act, 1993 by fixing 23.12.2025 before R.O., DRT, Lucknow.

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(vi) The Applicant-bank is directed to file a memo of cost for preparing Recovery Certificate u/s 19(22) of the Recovery of Debts Bankruptcy Act, 1993 .

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Judgment is pronounced in the open court.

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Dated : 23.09.2025

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r ( 1 (Pravas Kumar SiSi) Presiding Officer

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(M K)

State Bank of India v. M/S Shri Durga Rice Mill

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/S Shri Durga Rice Mill

Case brief

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What did the court decide?

What the court decided

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