Allowed

Canara Bank v. Shri Industries

DRT11 Nov 2025OA/798/2023

Case brief

AI extract

What is this about?

The DRT allowed the bank's application for recovery of Rs. 29.87 lakhs principal, pendent lite interest, and future interest. The court directed issuance of a recovery certificate and restrained defendants from transferring assets until dues are paid.

What did the court decide?

Recovery certificate issued for Rs. 29,87,281.46 with interest; directions to sell hypothecated/personal assets; defendants restrained from transferring properties.

Canara Bank versus Shri Industries — Banking and Recovery | DRT (2025)

¶1

r \

¶2

DEBTS RECOVERY TRIBUNAL LUC'KNOW

¶3

Dateof orderor lroceedinj	Order withsignatureof court	Officeaction takenwithdate
O.A.No.798/2023 11.11.2025	Judgment is signed and pronounced on separate sheets. Separatelyattachedin06sheets. Order be uploaded on the Tribunal’swebsite -\qb (Pravas Kumar Singh) PresidingOfficer

¶4

IN TIU DEBTS RECOVERY TRIBUNAL AT LUCKNOW

¶5

Present: Pravas Kumar Singh, Presiding Officer

¶6

Case No. Original Application No.798 of 2023

¶7

Dated: 11.11.2025

¶8

Canara Bank, having Branch at Aminabad, Lucknow, UP-2260 18.

¶9

. . . . . . .. Applicant Bank

¶10

Versus

¶11

M/s. Shri Industries, through its Proprietor Khushbu Agarwal, having its Registered Office at Talkatora Industrial Estate, Lucknow, UP-226017.

¶12

Khushbu Agarwal, D/o Sri Pawan Kumar Agarwal, Add: 244/264, Yahiyaganj, Lucknow, UP-226003 .

¶13

. . . . . . .Defendants

¶14

Ld. Counsel for the applicant-bank: Mr. Arun Pratap Singh, Advocate. Ld. Counsel for the defendants: Mr. Uttam Kumar Awasthi, Advocate.

¶15

JUDGMENT

¶16

This Original Application has been filed by the applicant Bank under Section 19 of the Recovery of Debts & Bankruptcy Act, 1993,againstthe defendants for the recovery of Rs.29,87,281.46/-(Rupees Twenty Nine Lac, Eighty Seven Thousand, Two Hundred Eighty One and Paisa Forty Six Only)together with pendent-lite and future interest, costs and other reliefs etc

¶17

The brief facts of case :-The defendant no.1 is proprietorship firm, of which, the defendant no.2 is the sole proprietor. The defendants vide loan application dated 24.3.2021 approached the applicant-bank for grant of

¶18

O.A. No.798 of 2023

¶19

¶20

Term Loan Facility of Rs.13.50 lac and OCC Facility of Rs.10 lac, which were duly considered and sanctioned by the applicant-bank vide sanction memorandum dated 30.3.2021on certain terms and conditions (Exhibit No. A-2& Exhibit No. A-3) to this original application.

¶21

In order to secure the aforesaid Credit facilities, the defendants had executed and signed various security documents in favour of the applicantbank on 30.3.2021 like D.P. Note, Letter of Proprietorship, Cash Credit Agreement, Request for Overdraft Facility, Letter of Undertaking, Deed of Hypothecation, Agreement Cum Deed of Hypothecation& Particulars of Asses Standing in the name of defendant no.2 (Exhibit No. A-4 to Exhibit No. A- 11) to this original application.

¶22

Again, at the request of defendants, applicant-bank sanctioned GECL Loan of Rs.4 lac for business purpose vide sanction memorandum dated 31.12.202 1, for which, the said defendants had further executed and signed various security documents in favour of the applicant-bank on 31.12.2021 (Exhibit No. A- 12 to Exhibit No. A- 19) to this original application.

¶23

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

¶24

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 account of the defendant no.1/firm were classified as NPA on 10.7.202 1 by the applicantbank as per RBI guidelines (Exhibit No. A-20), therefore, the applicant-bank issued Legal Notice dated 20.8.2022 (Exhibit No. A-21),but, the defendants stated no-response and failed to repay the same and the loan accounts of the a

r '1

O. A. No.798 of 2023

defendant no.1/firm are still un-liquidated, hence, this Original Application has been instituted.

¶30

As per books of the bank maintained in the usual and ordinary course of banking business, an outstanding of Rs.29,87,281.46/- (Rupees Twenty Nine Lac, Eighty Seven Thousand, Two Hundred Eighty One and Paisa Forty Six Only) including interest upto 10.7.2023 were 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-22) to this original application.

¶31

The cause of action for filing the present application arose firstly on 30.3.2021 when the abovementioned credit facility was sanctioned by the applicant-bank and necessary documents were executed by the defendants. The cause of action further arose on 20.8.2022when 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.

¶32

The summons was served upon the defendants through registered post. The defendants appeared before this Tribunal to contest the case, but, failed to file WS within statutory period, hence, opportunity to file ws was closed by this Tribunal vide order dated 19.10.20239 however liberty to file written argument was given, which, the defendants have filed stating therein that the applicant is ready and willing to settle the account9 they had approached The Hon’ble High Court but did not pay the amount despite the directions of The Hon’ble Court.

¶33

The only point of consideration before this Tribunal in as to whether the bank is legally entitled to the amount as claimed in Original Application on the basis of documents and pleading submitted by it? .48

¶34

.48

¶35

O.A. No.798 of 2023

¶36

11 . In support of the case Mr. Mohammad Ashraf, Chief Manager of the applicant Bank has supported its case on affidavit.

¶37

On a careful scrutiny of the evidence on affidavit and Exhibit marked as (Exhibit No. A-1 to Exhibit No. A-22 to 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 account in the ordinary course of banking business showing 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 bank’s claim is within limitation against the defendants, therefore, the defendants are liable to pay the dues.

¶38

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 hypothecated property as well as personal properties of the defendants.

¶39

The applicant-bank has claimed interest @11.30% per annum in Loan Account No.8623, interest @10.00% in Loan Account No.003 1 and interest @9.25% in Loan Account No.7544 together. with pendent lite and future interest on contractual rate till the 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 @}8.00% per annum in all the

¶40

O.A. No.798 of 2023

¶41

¶42

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.

¶43

1 find that the bank has proved the execution of loan documents 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 hypothecated assets as well as the personal properties are liable to be sold.

¶44

16.It is, therefore, ordered:-

¶45

(i) That the Original Application No.798 of 2023 of the applicant bank for issuance of Recovery Certificate to the tune of Rs.29,87,281.46/- (Rupees Twenty Nine Lac, Eighty Seven Thousand, Two Hundred Eighty One and Paisa Forty Six Only) together with future and pendent lite interest @8.00% per annum in all the above loan accounts from the date of filing of the Original Application i.e. 01.8.2023 till the loan is fully liquidated and costs succeeds and is hereby allowed against the defendants.

¶46

(ii) 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.

¶47

(iii) The applicant-bank is entitled to recover aforesaid amount by sale of 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 hypothecated assets or

'<br><br>

O.A. No.798 of 2023

otherwise shall be adjusted towards the debt and only the balance amount shall be recoverable. If the dues of the applicantbank still remain unsatisfied, the same shall be recovered by attachment and sale of the personal movable and immovable assets of the defendants. The applicant bank shall provide details of the statement of account.

¶52

(iv) 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.

¶53

(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 12.01.2026 before R.O., DRT, Lucknow.

¶54

Judgment is pronounced in the open court.

¶55

Dated: 11.11.2025

¶56

b \P \ (Pravas Kumar '1) Presiding Offi at

¶57

(Veeresh)

Canara Bank v. Shri Industries

Case brief

What is this about?

What did the court decide?

Canara Bank v. Shri Industries

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Jai Bharat Traders versus Canara Bank

Intiyaz ahmad versus Aadhar Housing Finance Limited

Ruchi Verma versus Hdb Financial Services Ltd.

Aabid versus Smfg India Home Finance Company Ltd.

Bank of India versus M/s Ceecon Enterprises

Patel Advance Jv versus Piramal Capital and Housing Finance Corporation Ltd.