Allowed

Canara Bank v. Messrs Aarti Traders and Another

DRT12 Sept 2025OA/848/2025

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed the bank's application for recovery of loan dues. The court declared defendants liable for principal, current and future interest at 8% p.a., and granted permission to recover from hypothecated or personal assets under relevant acts.

What did the court decide?

Recovery of Rs. 21,97,405.23p with interest @ 8% p.a. from filing date; liberty to enforce via SARFAESI Act or attachment of personal assets; Recovery Certificate issued.

Canara Bank versus Messrs Aarti Traders and Another — Execution and Attachment | DRT (2025)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.848/2025

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 23.06.2025

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DATE OF DECISION: 12.09.2025

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Canara Bank, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act of 1970 (5 of 1970) having its Head Office at J. C. Road, Bangalore – 560002 and amongst other a Branch Office at Main Road, Kailash Nagar, Basti Jodhewal Ludhiana, District Ludhiana, through its Constituted Attorney and Manager Sh. Lovish Kumar S/o Sh. Lekh Raj.

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……..Applicant Versus

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M/s Aarti Traders situated at 4415, B-34, Near Rajindra School, Durgapuri, Haibowal Kalan, Ludhiana Punjab – 141001 through its Proprietor Smt. Neha Kaushal.

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Smt. Neha Kaushal W/o Sh. Atul Kaushal R/o 4415, B-34, Near Rajindra School, Durgapuri, Haibowal Kalan, Ludhiana Punjab – 141001.

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………. Defendants

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Advocates:

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Argued by Sh. Pushpinder Singh, Advocate for Applicant (through VC) 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.21,97,405.23p (Rupees Twenty One Lacs Ninety Seven Thousand Four Hundred Five and Paise Twenty Three Only). The Original Application has been filed through Sh. Lovish Kumar , Manager, who is competent to institute the Original Application vide Power of Attorney dated 21.01.2021, which is Annexure A1 to this OA. 2. 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 (OCC/ODBD) of Rs.10.00 Lacs vide Loan Application dated 07.06.2022, which is Annexure A4 to this OA. Further, defendants had

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OA NO. 848/2025 CANARA BANK VS MESSRS AARTI TRADERS AND ANOTHER

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again approached the applicant for renewal of OCC Limit of Rs.10.00 Lacs to this OA. Thereafter, the defendant no. 1 through its proprietor defendant no. 2 approached the applicant for enhancement of this Limit from Rs.10.00 Lacs to Rs.20.00 Lacs. 3. The applicant sanctioned CC Limit (OCC/ODBD) of Rs.10.00 Lacs vide Sanction Letter dated 07.06.2022, which is Annexure A5 to this OA and terms and conditions were accepted by defendants vide request for Overdraft facilities dated 10.06.2022, which is Annexure A6 to this OA. Further, this limit was renewed by the applicant vide sanction letter dated 30.11.2023, which is Annexure A9 to this OA and terms and conditions were accepted by defendants vide letter of renewal dated 02.12.2023, which is Annexure A10 to this OA. Further, the applicant sanctioned enhancement of the limit to Rs.20.00 Lacs vide Sanction Letter dated 08.12.2023, which is Annexure A11 to this OA and terms and conditions were accepted by defendants vide link letter in respect of enhancement of credit facilities dated 21.12.2023, which is Annexure A12 to this OA. 4. defendant no. 1 through its proprietor defendant no. 2 had hypothecated its movable assets i.e. Stocks and Books Debts vide Cash Credit agreement dated 10.06.2022, which is Annexure A8 to this OA. Documents executed :- Letter of Proprietorship dated 10.06.2022, which is Annexure A2 to this OA; Udhyam Registration Certificate, which is Annexure A3 to this OA; Pronote dated 10.06.2022,which is Annexures A7 to this OA; Pronote and Supplemental Agreement, both dated 21.12.2023, which are Annexures A12 to A14 to this OA; Legal Notice dated 15.05.2025, which is Annexure A15 to this OA and Loan Account Statement, which is Annexure A16 to this OA. 5. The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in loan account there was a debit of Rs.21,97,405.23p, 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.

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OA NO. 848/2025 CANARA BANK VS MESSRS AARTI TRADERS AND ANOTHER

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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 26.08.2025. 7. In support of the OA, affidavit of Sh. Lovish Kumar, Manager, Canara Bank h as been filed. 8. Heard ex-parte arguments and perused record. 9. It was argued by learned counsel through Video Conferencing 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 A16 to this OA, it is proved that the defendants approached applicant for availing of the loan facility which were granted to them and for that he had executed all the relevant documents in favour of the bank. The defendants failed to pay back the loan as per terms and conditions of the agreement between the parties. Subsequently, account of the defendants was classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.21,97,405.23p (Rupees Twenty One Lacs Ninety Seven Thousand Four Hundred Five and Paise Twenty Three 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 @11.00% p.a. along with penal interest @2% p.a. with monthly rests from 30.04.2025 till the realization. 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/hypothecated assets, undertaking of the defendants, quantum of loan 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

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OA NO. 848/2025 CANARA BANK VS MESSRS AARTI TRADERS AND ANOTHER

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@08.00%p.a. in the loan account 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.21,97,405.23p (Rupees Twenty One Lacs Ninety Seven Thousand Four Hundred Five and Paise Twenty Three Only) jointly and severally, with costs, current and future simple interest @08.00%p.a. in the loan account 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 assets 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 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.

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12. Any other application pending stands disposed of.

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Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 04.10.2025. 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: 12.09.2025

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(MRIDULESH KUMAR SINGH)

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Presiding Officer,

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DRT-III, Chandigarh

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OA NO. 848/2025 CANARA BANK VS MESSRS AARTI TRADERS AND ANOTHER

Canara Bank v. Messrs Aarti Traders and Another

Case brief

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Canara Bank v. Messrs Aarti Traders and Another

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