Allowed

Bank of India v. Ms R- 7 Creations

DRT3 Sept 2025OA/79/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an Original Application filed by Bank of India to recover dues of Rs. 84.45 lakhs from the defendants. The court held that the legal heir is liable for the deceased proprietor's debts to the extent of the inherited estate and directed the issuance of a Recovery Certificate.

What did the court decide?

Original Application allowed; Recovery Certificate issued; Defendants directed to pay dues with 10% interest within two months or face sale of secured assets.

Bank of India versus Ms R- 7 Creations — Banking and Recovery | DRT (2025)

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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.79 of 2022 Dated: 03.9.2025

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	Bank of India, having Branch Situated at 31, Khun Khun Ji Road, Chowk Lucknow, UP. .. . Versus	.. ...ApplicantBank
1.	M/s. R-7 Creations, Address- NearMadarsa Lil Bauat Raushanabad Aheerankhera Dubbaga, Lucknow,UP-226003. Also At: 409/82 Darzi Ki Baghiya, Near Kali Ji Mandir, ChowkLucknow-226003.
2.	Mohd. Rashid,S/oAbdul Gaffar, Legal Heir of Proprietor Mrs. Kahkashan Rashid, W/o Mohd. Rashid,Address-NearMadarsaLil Bauat Raushanabad Aheerankhera Dubbaga, Lucknow,UP-226003 . Also At: 409/82 Darzi Ki Baghiya, Near Kali Ji Mandir, ChowkLucknow-226003. . . .	. ...Defendants
Ld. Ld.	Counsel for the applicant-bank: Ms. Ruby Chaudh Counsel for the defendants: Mr.SandeepK. Bajpa	ary, Advocate. i, Advocate.

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JUDGMENT

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This Original Application has been filed by the applicant Bank under Section 19 of the Recovery of Debts & Bankruptcy Act, 1993, against the defendants for the recovery of Rs.84,45,667.45/-(Rupees Eighty Four Lac, Forty Five Thousand, Six Hundred Sixty Seven and Paisa Forty Five Only) (Rs.37,32,060/- in Cash Credit Loan Account) & (Rs.47,13,607.45/- in

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Term Loan Account) together with pendent-lite and future interest, costs and other reliefs etc.

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The brief facts of case is that the defendantno.1 is proprietorship of which Kahkashan Rashid (now deceased) was proprietor and the defendant no.2 is her legal heir. The said defendants approached the applicant-bank for grant of Cash Credit Loan of Rs.30 lac and Term Loan of Rs.50 lac, which FBI I were duly considered and sanctioned by the applicant-bank on 08.5.2017on certain terms and conditions (Exhibit No. A-2& Exhibit No.A-3) to this original application.

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In order to secure the aforesaid Credit facilities of total Rs.80 lac, Kahkashan Rashid (now deceased) on behalf of the defendant no. 1/firm had executed and signed Demand Promissory Note, A Bearer Letter, Debit Authority Letter, MCLR Agreement, Installment Letter, Term Loan Agreement, Agreement of Hypothecation to secured Demand Loan/Cash Credit, Declaration Letter and Multipurpose Document (Exhibit No. A-4 to Exhibit No. A-20) to this original application.

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Further, in order to secure the repayment of bank dues, Kahkashan Rashid (now deceased) had created her immovable property i.e. House No.409/82 Darzi Ki Bagiya Chowk Lucknow area 64.126 Square Meter., as detailed in the petition in favour of the bank(Exhibit No.A-21 & Exhibit No. A-22) to this original application.

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The defendant no.2 being legal heirs of late Kahkashan Rashid had also executed and signed Balance and Security Confirmation Letter dated 22.8.2019 confirming balance in the loan account. Kahkashan Rashid died in the year 2019 (Exhibit No. A-23& Exhibit No.A-27) to this original application.

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O.A. No.79 of 2022

To avail the aforesaid credit facilities, the applicant-bank had opened two loan accounts in the name of defendant no.1/firm in order to maintain the credit facilities.

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After availing the aforesaid credit facilities, the defendants failed to maintain financial discipline and also failed to comply with the terms and conditions of the loan agreement, consequently, the loan accounts of the defendant no.1/firm were classified as NPA on 29.02.2020 by the applicantbank as per RBI guidelines, therefore, the applicant-bank issued Demand Notice dated 04.4.2020 under Section 13(2) of the SARFAESI Act 2002 (Exhibit No. A-24). Since, the defendants were not coming forward for repayment of dues, the applicant-bank issued Legal Notice dated 19.4.2021 to the defendants (Exhibit No. A-25), but, the defendants stated no-response and failed to repay the same and the loan accounts of the defendant no.1/firm are still un-liquidated, hence, this Original Application has been instituted.

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As per books of the bank maintained in the usual and ordinary course of banking business, an outstanding of Rs.84,45,667.45/- (Rupees Eighty Four Lac, Forty Five Thousand, Six Hundred Sixty Seven and Paisa Forty Five Only) (Rs.37,32,060/- in Cash Credit Loan Account) & (Rs.47,13,607.45/in Term Loan Account)including interest upto 14.7.202 lwere lying due for payment, which they did not pay despite repeated requests and demands. The applicant Bank has filed the copy of Statement of Accounts (Exhibit No. A-26) to this original application.

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The cause of action for filing the present application arose firstly on 08.5.2017 when the abovementioned credit facilities were sanctioned by the applicant-bank and necessary documents were executed by the defendants.

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The cause of action further arose on 19.4.2021 when the applicant-bank had issued legal notice recalling the defendants to repay the dues of the applicant-bank, but, the defendants failed to pay the same.

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The summons was served upon the defendants through registered post. The defendant no.2 appeared through counsel and filed preliminary objection.

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It is submitted that OA be dismissed as it has been filed on the basis of false, concocted & misconceived facts and grounds supported by 11 fabricated documents. Further, the OA also suffers from non-joinder of necessary parties to the proceeding and having no merits and is highly time barred, hence, not maintainable. It is further submitted that the applicantbank had not approached this Tribunal with clean hand and has manipulate.d the loan & security documents to mislead the tribunal. The defendantno.2had never ever availed any credit facility from the applicantbank and neither executed and signed any security documents in favour of the applicant-bank. It is stated that defendant no.2 is not sole proprietor of the defendant no. 1/firm. It is also stated that the applicant-bank after death of Kahkashan Rashid, details of all legal heirs of late Khakashan Rashid was provided the applicant-bank.

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1 have gone through the record.

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1 find that defendant no.1 and Kahkashan Rashid (now deceased) had availed credit facilities from the applicant-bank and had executed and signed various security documents and had also created mortgage of 11 immovable property, which has been proved by the applicant-bank through O. A. The defendant no.2 is legal heir of Late Kahkashan Rashid, who was

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proprietor of the defendant no. 1/firm and mortgagor towards the credit facilities, hence, the defendant no.2 cannot be exonerated from the liability. 14. In view of above discussion, the defendant no.2 being legal heir of late Kahkashan Rashid is also liable to pay the dues of the applicant-bank to the extent of he inherited the estate of late Kahkashan Rashid, hence, the present OA is allowed.

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From perusal of the record, it is evident that the defendants were provided 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 in as to whether the bank is legally entitled to the 11 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 Sachin Pooranchand Joshi, Assistant General Manager of the applicant-Bank has supported its case on affidavit. 17. On a careful scrutiny of the evidence on affidavit and Exhibit marked as (ExhibitNo. A-1 to ExhibitNo.A-27to this original application), it stands proved that the 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 establishes that defendants had utilized the above loan facilities as granted to them. The applicant bank has maintained the Books of accounts in the ordinary course of banking business showing 11 disbursal of the loan amount. It further shows that bank had regularly credited the amount paid by the defendants in the books of accounts. The Bank had also charged interest from time to time and the entries is relevant u/s 4 of the Bankers Book Evidence Act. It is also proved that the applicant

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bank’s claim is within limitation against the defendants, therefore, the defendants are 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 two months from the date of judgment failing which the applicant bank will be entitled to sell the mortgage property/hypothecated assets as well as personal properties of the defendants.

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The applicant-bank has claimed interest @12.20% per annum in the above Loan Accounts together with pendent lite and future interest till the lllIF i actual date of its realization and costs. On the basis of the foregoing discussion, interest of justice will be served if pendent-lite and future interest is granted @10.00%per annum in the above loan accounts with monthly rest on 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 v \ creation of mortgage in its favour. In the result, the Original Application succeeds against the defendants with costs. The defendants are jointly and severally liable to pay the dues of the applicant-bank and the mortgage property/hypothecated assets as well as the personal properties are liable to be sold.

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21.It is, therefore, ordered :

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(i) That the Original Application No.79 of 2022 of the applicant bank for issuance of Recovery Certificate to the tune of Rs.84,45,667.45/- (Rupees Eighty Four Lac, Forty Five Thousand, Six Hundred Sixty Seven and Paisa Forty Five Only)

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(Rs.37,32,060/in Cash Credit Loan Account) ( NW & \ --+\cb

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&(Rs.47,13,607.45/- in Term Loan Account) together with the interest @10.00% per annum in the loan accounts from the date of filing of the Original Application i.e. 28.12.2021 till the loan 11 is fully liquidated and costs succeeds and is hereby allowed against the defendants.

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(ii) The liability of defendant no.2 being legal heir of late Kahkashan Rashid who was proprietor of defendant no.1/firm and IIU

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mortgagor toward the credit facilities and had also executed and III I

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signed various security documents in favour of the applicantbank as proved by bank from the OA. The defendant no.2 is also liable to pay the dues of the applicant-bank to the extent he inherited estate of deceased defendant.

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(111) The defendants are directed to pay the dues within a period of two months from the date of judgment, failing which the applicant bank will be entitled to recover the same from the secured assets, personal movables and immovable assets of the defendants.

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(iv) The applicant-bank is entitled to recover aforesaid amount by sale of mortgage property/hypothecated assets (if not sold earlier under the provisions of the S.A.R.F.A.E.S.I. Act 2002). The amount, if any, already recovered by sale of any mortgage property/hypothecated assets or otherwise shall be adjusted towards the debt and only the balance amount shall be recoverable. If the dues of the applicant-bank still remain unsatisfied, the same shall be recovered by attachment and sale IHI I

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of the personal movable and immovable assets of the defendants.

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(v) The defendants are hereby restrained by means of injunction from depleting, transferring, encumbering, alienating or in any way dealing with their properties/estates without first paying the claim of the applicant bank.

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