Allowed

Hdfc Bank Limited v. Mahavir Auto Industries

DRT3 May 2025OA/838/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the bank's application for recovery of dues of approx. Rs. 65.56 lacs arising from a cash credit and term loan. Since the defendant did not appear, the Tribunal awarded interest at 12% p.a. instead of the claimed 18% in view of falling global rates.

What did the court decide?

Directed defendants to pay Rs.65,56,924.78 with interest at 12% p.a. from date of filing and costs within 30 days; recovery from hypothecated or movable properties if unpaid.

Hdfc Bank Limited versus Mahavir Auto Industries — Banking and Recovery | DRT (2025)

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O.A. No. 838 of 2023

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Debts Recovery Tribunal-I, Delhi 4th floor, Jeevan Tara Building, Parliament Street, New Delhi

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Presiding Officer: Shri Govind Ballabh Sharma

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O.A. No.838 of 2023

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HDFC Bank ltd. Plot No.31, Najafgarh Road Industrial Area Tower A, 1st Floor, Shivaji Marg, Moti Nagar, New Delhi-110015 Applicant Versus 1. Mahavir Auto Industries Proprietorship concern of Mr. Vinod Kumar Jain Entire Building I-125, Sector-1 DSIDC Industrial Area, Bawana North West, Delhi-110029 Also at: Hanuman Dharh Kanta Entire Building, Khasra No.44/23/53/3/144/20/1223 Bawana Road, Pehladpur Nagar Delhi-110041 2. Mr. Vinod Kumar Jain (Guarantor) 95, Dipin Apartment Road no.44, Pitampura North West Delhi-110034 Defendants resent: Ms Amita Kumari, Counsel for the applicant hank Date of Institution: 17.10.2023 Date of Pronouncement: 03.05.2025 FINAL ORDER

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This original application has been filed by the applicant bank on 17.10.2023 through Sh.Bhuwan Singh, authorized

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O.A. No. 838 of 2023

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epresentative of the applicant bank under Section 19 of ecovery of Debts and Bankruptcy Act, 1993 against the efendants for recovery of a sum of Rs.65,56,924.78 (Rupees ixty Five Lacs Fifty Six Thousand Nine Hundred Twenty Four nd paisa Seventy Eight only) as on 29.09.2023 along with endentelite and future interest @18% per annum from the ate of filing this application till the date of realization along ith costs.

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The brief facts of the case are that on the request of the I efendant no.1 through its proprietor and guarantor being I efendant no.2, the applicant bank sanctioned Cash Credit acility of Rs.60,C0,000/- (Rupees Sixty lacs only) @9.00% interest per annum and Term Loan of Rs.5,38,000/- (Rupees we Lacs Thirty Eight Thousand only) @9.25% interest per nnum to be repayable in 47 EMIs of Rs.16,921/- on 1.11.2020 which were renewed from time to time till 3.11.2023 against hypothecation of stock in trade, book debts nd receivables covered under CGTMSE scheme. The applicant ank shall charge interest @2% over existing rate of interest ID n account of default in payment of interest/installment and on-submission of financial statements.

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In order to avail the loan facilities, the defendant no.2 as II roprietor of defendant no.1 submitted Loan Application on 4.09.2020 and executed Master Facility Agreement, Term oan Agreement, Letter of Guarantee, Power of Attorney and I g eed of Hypothecation on 11.11.2020 in favour of the applicant ank.

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O.A. No. 838 of 2023

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That in order to secure the loan facilities, the defendants hypothecated stock in trade and book debts / receivables in favour of applicant bank on 11.11.2020.

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It has been submitted by the applicant bank that after availing the aforesaid loan facility, the defendants failed to comply with the terms and conditions of sanction and failed to regularize the account with the applicant bank. Ultimately, the applicant bank classified the account as NPA on 13.07.2023 as per RBI guidelines due to non-adherence to financial discipline and applicant bank issued legal notice dated 29.09.2023 but neglected by the defendants. Hence, the applicant bank approached this tribunal for recovery of their dues.

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Notices of this O.A. were issued to the defendant and despite of proper service, the defendant has chosen to absent from the proceedings. As per order dated 09.08.2024, the defendant has been proceeded ex-parte as they have not appeared before the Tribunal and even written statement, evidence and affidavit of assets have not been filed by the defendant.

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In order to prove its case, the applicant bank has filed its evidence by way of Affidavit of Sh.Bhuwan Singh, authorized representative of the applicant bank, who has submitted the documents as Board Resolution Ex.AW-1/1, Application forms Ex.AW-1/2, Sanction Letter Ex.AW-1/3, Agreement dated 11.11.2020 Ex.AW-1/4(Colly), Letter of guarantee Ex.AW-1/5, Deed of Hypothecation Ex.AW-1/6(Colly), Notice dated 29.09.2023 along with postal receipts Ex.AW-1/7(Colly), Delivery reports downloaded from Indian Postal Department Ex.AW-1/8(Colly), Statement of Account duly certified under Banker's Book of Evidence Act Ex.AW-1/9(Colly).

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O.A. No. 838 of 2023

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The applicant bank has fully corroborated the averments ade in the O.A. Even otherwise the whole case of the pplicant bank is based on the documents and the same have een duly approved.

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As per the provision of Section 19(20) of the Recovery of ebts Due to Banks and Financial Institution Act, 1993 which s analogous to Section 34 of CPC, on filing of the suit/claim, he contract between the parties comes to an end and the ourt/Tribunal has a discretion to award the same depending pon the circumstances of each case. Same principle has been aid down by the Hon'ble Apex Court in the case of Central Bank •^{f India Vs. Ravindra & Others. Taking stock of all the} ircumstances and keeping in view that there is a drastic fall in rates of interest globally and domestically, I am of the opinion hat interest of justice will be served if the interest at the rate f 12% p.a. is awarded.

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10.^{The case filed by the applicant bank gone unrebutted and} there is no question of disbelieving the case of the applicant bank and the applicant bank has proved its case beyond reasonable doubts.

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11.^{In the light of the above discussions, the Original} Application deserves to be allowed.

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ORDER

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I, allow this OA and direct the defendants to pay to the applicant bank, jointly or severally, within a period of 30 days, a sum of Rs.65,56,924.78 /- (Rupees Sixty Five Lacs Fifty Six Thousand Nine Hundred Twenty Four and Paisa Seventy Eight

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5d-

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O.A. No. 838 of 2023

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nly) together with pendentelite and future interest @12% per nnum with monthly rests from the date of filing this pplication till the date of realization and costs; failing which

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t e aforesaid amount shall be recovered from the sale of ypothecated stocks and book debts, etc. In case of shortfall,

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t e same shall be recovered from the sale of movable and i movable properties of the defendants.

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(i I) The recovery certificate be issued forthwith and be sent t• the Recovery Officer, Debt Recovery Tribunal-I, Delhi.

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II) Parties are directed to appear before the Recovery fficer, DRT I, Delhi on 02.07.2025.

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V) Copies of final order as well as Recovery Certificate be nt to all concerned free of cost.

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(GOVIND BALLABH SHiUtftlA) PRESIDING OFFICER DRT-I, DELHI

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• ictated and pronounced in open court) ated: 03.05.2025

Hdfc Bank Limited v. Mahavir Auto Industries

Case brief

What is this about?

What did the court decide?

Hdfc Bank Limited v. Mahavir Auto Industries

Case brief

What is this about?

What did the court decide?

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