Allowed

Punjab National Bank v. Messrs Azad Bakers and Others

DRT23 Jul 2025OA/80/2022

Case brief

AI extract

What is this about?

Defrecovery Tribunal allowed an application filed by Punjab National Bank against borrowers who defaulted on loans and failed to repay despite notices. The court adjudicated the principal amount and standardized the interest claim to 8% per annum.

What did the court decide?

Recovery of Rs. 86,90,426.32 with future simple interest @ 8% p.a. from mortgaged/movable properties or attachment of personal assets.

Punjab National Bank versus Messrs Azad Bakers and Others — Banking and Recovery | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.80/2022

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 21.12.2021

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DATE OF DECISION: 23.07.2025

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Punjab National Bank, a body corporate, constituted under the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970, having its Head Office at Plot No.4, Sector-10, Dwarka, New Delhi-110075, and the successor of United Bank of India by Scheme of Amalgamation of United bank of India dated 04.03.2020 passed by Central Government under section 9 of the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1980 having one of its Branch Office at Rishi Nagar, Tehsil and District Ludhiana (Punjab), through Sh. Sonu, Chief Manager, Punjab National Bank, Circle Sastra Centre, Ludhiana West, Ferozepur Road, Ludhiana, Punjab, through its Principal Officer and duly constituted Attorney of the Applicant. (Erstwhile United Bank of India, Branch office Rishi Nagar, District Ludhiana, Punjab)

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……..Applicant Versus

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M/s Azad bakers through proprietor Sh. Raman Arora, S/o Late Sh. Joginder Pal Arora R/o House No. 111, Street No. 5, Bhai Himmat Singh Nagar, Block C, Tehsil Gill, Ludhiana West, Ludhiana, Punjab.

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Sh. Raman Arora S/o Late Sh. Joginder Pal Arora, R/o House No. 111, Street No. 5, Bhai Himmat Singh Nagar, Block C, Tehsil Gill, Ludhiana West, Ludhiana, Punjab.

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Smt. Navpuneet W/o Sh. Raman Arora S/o Late Sh. Joginder Pal Arora, R/o House No. 111, Street No. 5, Bhai Himmat Singh Nagar, Block C, Tehsil Gill, Ludhiana West, Ludhiana, Punjab.

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………. Defendants

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2 OA/80/2022 PUNJAB NATIONAL BANK VS MESSRS AZAD BAKERS AND OTHERS

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Advocates:

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Argued by Sh. Amandeep Singh Sobti, Advocate for the applicant 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.86,90,426.32p (Rupees Eighty Six Lacs Ninety Thousand Four Hundred Twenty Six and Paisa Thirty Two Only). The Original Application has been filed through Sh. Sonu, Chief Manager o f the applicant, who is competent to institute the Original Application vide General Power of Attorney dated 22.11.2014, which are Annexure A2 to this OA.

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The brief facts of the OA are that the defendant no. 1 through its proprietor defendant no. 2 had approached the applicant for grant of CC Limit of Rs.25.00 Lacs vide Loan application dated 02.08.2011, which is Annexure A3 to this OA. Thereafter, the defendants approach the applicant of grant of Term Loan of Rs 15.00 Lacs vide Loan application dated 29.11.2011, which is Annexure A12 to this OA. Thereafter, the defendants approached the applicant for Enhancement of CC Limit from Rs. 25.00 Lacs to Rs. 40.00 Lacs and again for its enhancement to Rs. 45.00 Lacs. Thereafter, the defendants approached the applicant for a Car Loan of Rs. 6.95 Lacs. Defendant no. 3 stood as Guarantor. 3. The applicant sanctioned CC Limit of Rs.25.00 Lacs vide sanction letter dated 18.10.2011, which is Annexure A4 to this OA. Thereafter, the applicant sanctioned Term Loan of Rs 15.00 Lacs vide sanction letter dated 05.12.2011, which is Annexure A13 to this OA. Thereafter, the applicant Enhancement of CC Limit to Rs. 40.00 Lacs vide Sanction dated 22.06.2012, which is Annexures A18 to this OA. Thereafter, the applicant enhanced the CC Limit to Rs. 45.00 Lacs vide sanction letter dated 13.01.2024, which is Annexure A26 to this OA. Thereafter, a Car Loan of Rs. 6.95 Lacs was sanctioned by the applicant to the defendants

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3 OA/80/2022

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PUNJAB NATIONAL BANK VS MESSRS AZAD BAKERS AND OTHERS

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vide sanction letter dated 01.05.2014, which is Annexures A36 to this OA. The terms and conditions were duly accepted by the defendants. 4. Defendants had mortgaged their immovable and moveable properties as under: -

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(i) Double Story building constructed on Land measuring 400 Sq. Yards situated at village Gill No. 2, Hadbast no. 263, Bhai Himmat Singh Nagar, Block C, Tehsil and District Ludhiana West, Ludhiana, Punjab vide equitable mortgage of Title Deed of 200 sq. yards in name of defendant no. 2 bearing vasika no. 747 dated 09.04.2003 and Title deed of 200 sq. yards in name of defendant no. 3 bearing vasika no. 13929 dated 21.11.2007, along with their translations, which are A nnexures A8, A8A, A10, A10A to this OA.

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iii) Hypothecation of Plant and Machinery, Stock and Book Debts and vehicle and other movable assets.

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Documents executed:- Gazette Notification dated 04.03.2020, which is which is Annexures A1 to this OA; D.P. Note, Hypothecation Agreement, Agreement of Guarantee , all dated 20.08.2021 which are Annexures A5 to A7, to this OA, Letters regarding deposit of Title Deeds dated 10.08.2021 and 10.08.2011, which are Annexure A9 and A11 , to this OA; Letter of Continuity, Agreement of Guarantee, Letter of Continuity for extension of equitable mortgage, all dated 05.12.2011 which are Annexures A14 to A17 , to this OA; D.P. Note, Letter of Continuity, Hypothecation Agreement, Letter of Lien, Agreement of Guarantee, Letter of Extension of equitable mortgage, all dated 26.06.2012, which are Annexures A19 to A25 , to this OA; D.P. Note, Hypothecation Agreement, Agreement of Term Loan, Letter of Lien, Letter of Continuity, Agreement of Charging Interest, Letter of Extension of equitable mortgage, all dated 13.01.2014 which are Annexures A27 to A35 , to this OA; Notices dated 08.10.2015, 07.12.2015, 12.09.2017, which are Annexures A37, A38, A42 to this OA; Balance confirmation letter dated 25.06.2012, 30.06.2015 and 23.09.2017 which are

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4 OA/80/2022

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PUNJAB NATIONAL BANK VS MESSRS AZAD BAKERS AND OTHERS

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Annexures A39 to A41 to this OA; Notice dated 10.10.2017 under Section 13(2) of SARFAESI Act, which is Annexures A43 to this OA; Reply dated 08.12.2017 by defendants to notice of 13(2), which is Annexure A44 to this OA; Replication dated 21.12.2017 filed by applicant to reply, which is Annexure A45 to this OA; Possession notice dated 19.12.2017, which is Annexure A46 to this OA; Notice dated 09.04.2018 for physical possession, which is Annexure A47 to this OA; Letter by Defendants dated 25.05.2018, which is Annexure A48 to this OA; Statement of Account, which are Annexures A49 and A50 to this OA; Calculation Sheet, which is Annexure A51 to this OA; Order of Hon’ble Supreme Court of India, dated 23.09.2021, which is Annexure A52 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.86,90,426.32p, 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 19.07.2025. 7. In support of the OA, affidavit of Sh. Sonu, Chief Manager, Punjab National Bank 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 A52 to this OA, it is proved that the defendants approached applicant for availing of the loans 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

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5 OA/80/2022

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PUNJAB NATIONAL BANK VS MESSRS AZAD BAKERS AND OTHERS

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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 Rs.86,90,426.32p (Rupees Eighty Six Lacs Ninety Thousand Four Hundred Twenty Six and Paisa Thirty Two Only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the account. 10. In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest in CC Limit @11.75%p.a. and in Term Loan @10.75%p.a., with monthly rests, plus penal interest @2%p.a. from 01.11.2021 till the 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, 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.

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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.86,90,426.32p (Rupees Eighty Six Lacs Ninety Thousand Four Hundred Twenty Six and Paisa Thirty Two Only) jointly and severally, with costs, current and future simple interest @08.00%p.a. in 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

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OA/80/2022

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PUNJAB NATIONAL BANK VS MESSRS AZAD BAKERS AND OTHERS

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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. 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 28.08.2025. 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: 23.07.2025 (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Punjab National Bank v. Messrs Azad Bakers and Others

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. Messrs Azad Bakers and Others

Case brief

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What did the court decide?

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