Allowed

Canara Bank (Syndicate Bank) v. The Big City Clothing Company

DRT28 Nov 2025OA/869/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the bank's original application for recovery of a loan of ₹49.60 lakhs. It observed the evidence was unchallenged and issued a recovery certificate, directing payment of the principal and future interest with enforcement rights over hypothecated stock.

What did the court decide?

Recovery of ₹49,60,149.04 with future interest @ 12% p.a., issuance of recovery certificate, and enforcement over hypothecated stock.

Canara Bank (Syndicate Bank) versus The Big City Clothing… — Banking and Recovery | DRT (2025)

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ORIGINAL APPLICATION NO.869 OF 2023

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DEBTS RECOVERY TRIBUNAL No.2, MUMBAI

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PRESIDING OFFICER: HARISH KUMAR KAUSHIK

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ORIGINAL APPLICATION NO.869 OF 2023

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Date of Institution: 29.10.2020 Date of Decision: 28.11.2025

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TOTAL CLAIM AMOUNT : ₹ 49,60,149.04/-

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Canara Bank (Erstwhile Syndicate Bank) A Body Corporate constituted under the Banking Companies (Acquisition & Transfer of Under Takings) Act, 1970, having its Head Office at 112, JC Road, Bengaluru-560002 and amongst other places, a Branch Office at Faizan Apartment, Ground Floor, S.V. Road, Jogeshwari West, Mumbai-4000 102 Through: Mr. Arun J Likhite Branch Manager, Holding Proper Power of Attorney … Applicant

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Versus

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M/s. The Big City Clothing Company (Partnership Firm) At: Gala No.7, 1st Floor, Model Indl. Colony, Vikas Estate, Off. Araey Road, Vishweshwar Nagar, Goregaon East, Mumbai-400063

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Page 1 of 8

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ORIGINAL APPLICATION NO.869 OF 2023

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Ms. Saloni Pradeep Kumar Mukhi (Partner- M/s. The Big City Clothing Co.) At: Flat No.102, 1st Floor, Om Prakash Mulund CHS Ltd., Off Devidayal Road, Mulund West, Mumbai-400 080. 3. Mrs. Sunita Pradeep Kumar Mookhey (Partner- M/s. The Big City Clothing Co.) At: Flat No.102, 1st Floor, Om Prakash Mulund CHS Ltd., Off Devidayal Road, Mulund West, Mumbai-400 080. …Defendants

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APPEARANCES For the Applicant : Ms Sushila Vichare i/b. M/s. B.M Gupta & Associates - Advocate For Defendants : None – Advocate

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J U D G M E N T

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(1) This is an application under Section 19(1) of the Recovery of the Debts due to Banks and Financial Institutions Act, 1993 renamed as Recovery of the Debt and Bankruptcy Act, 1993 (for short, ‘the 1993 Act’) to recover ₹49,60,149.04/- (Rupees Forty Nine Lakhs Sixty Thousand One Hundred Forty Nine and paisa Four Only) with future interest @ 18.10% per annum with monthly rest

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Page 2 of 8

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ORIGINAL APPLICATION NO.869 OF 2023

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thereon from the date of presentation of the Original Application i.e. 29.10.2020 till payment/realization and to enforce the hypothecated securities.

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The details of the claim amount are as under:-

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Sr	Nature of Facility	Principle	Unrealized	Total Amount
No		O/s.	Interest from
			04.07.2018 to 30.09.2020 @
			1% p.a. to 18.10% p.a.
1	SOD(H) Synd Mahila	34,45,146.	15,15,002.80/-	49,60,149.04/
	Shakti/Overdraft Loan A/c.50571400000427	24/-		-

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(2) It is undisputed fact in the matter that the Defendant nos.1 to 3 were duly served with the summons vide order-sheet dated 04.07.2025. Despite service, the defendants did not enter their appearance and therefore, they are set ex-parte on 31.07.2025.

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(3) Defendant no.1, a Partnership Firm are the borrowers who approached the Applicant Bank seeking financial assistance by way of Overdraft Credit Facility wherein Defendant nos.2 and 3 are the partners of the said Partnership firm. Pursuant to the loan application made by defendants, the Applicant sanctioned the loan vide Sanction Letter dated 04.05.2016 in sum of ₹40,00,000/- (Rupees Forty Lakhs Only) payable

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Page 3 of 8

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ORIGINAL APPLICATION NO.869 OF 2023

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with interest at the rate of 11.40% per annum floating interest. The said loan is covered under CGTMSE Scheme.

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The details of the Sanction amount are as under:-

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Sr	Date of	Amount	ROI	Security
No	Sanction
1	04.05.2016	40,00,000/-	MCLR+2.	Hypothecation of S	tock	& Book
			00%-	debts worth ₹80.	95 L	akhs &
			0.25%	machinery Value	at	₹15.25
			i.e.11.40	Lakhs as per Valu	ation	Report
			% p.a.	dated 05.03.2016	by	M/s.
				Perfect Valuati	ons	and
				Consultants and under CGTMSE Sch	is eme.	covered
	Total	40,00,000/-	-	-
	Amount

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(4) On the dates given below, defendants signed and executed the loan and security documents as set out in paragraph nos.5 of the Original Application. Defendants hypothecated Stock of Jeans Garments kept at Gala No.07 Vikas Estate off Arey Road, Vishweshwar Nagar, Goregaon €, Mumbai – 400 063 to secure the loan.

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The details of the documents executed by the Defendant are as under: -

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(a) Accepted Sanction Letter dated 04.05.2016 under Synd MSME SOD for an amount ₹40,00,000/-;

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(b) Composite Hypothecation Agreement dated 05.05.2016 inrespect to Stock of Jeans

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ORIGINAL APPLICATION NO.869 OF 2023

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Garments kept at Gala No.07 Vikas Estate off Arey Road, Vishweshwar Nagar, Goregaon (E), Mumbai – 400 063;

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(d) Stamped Charge and Hypothecation of Book Debts Agreement dated 05.05.2016;

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(e) Notarized Power of Attorney for Collection of Bills, Book Debts and other Receivables dated 05.05.2016;

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(f) Renewal Letter for All Facilities dated 10.08.2017.

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(5) After availing the loan, defendants did not adhere to the financial discipline and committed default in payment of instalments and repayment of the loan and accordingly the accounts of the borrowers were declared as Non-Performing Assets (N.P.A.) on 28.01.2019 as per RBI Guidelines. Therefore, on 09.08.2019, the applicant, through its advocate, called upon defendants to liquidate the outstanding in the sum of ₹40,94,702/(Rupees Forty Lakhs Ninety-Four Thousand Seven Hundred Two Only) with further interest thereon within 15 days from receipt of this notice. Despite notice, defendant nos. 1 to 3 failed and neglected to pay.

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(6) As on 30.09.2020, there was owing, due and payable by defendants to the applicant the

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ORIGINAL APPLICATION NO.869 OF 2023

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aggregate sum of ₹49,60,149.04/- (Rupees FortyNine Lakhs Sixty Thousand One Hundred FortyNine and paisa Four Only) with future interest @ 18.10% per annum with monthly rest. The applicant has maintained the loan ledger extract and the entries posted therein are made in the usual and ordinary course of the banking business.

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(7) Since, defendants failed and neglected to make the payment, the applicant was left with no other alternate but to file the Original Application which was presented on 29.10.2020.

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(8) The applicant has filed affidavit (exhibit-6) in lieu of examination in chief of Mr Ashwin Kumar, Senior Manager and list of documents (exhibit-7) thereby adducing in evidence the documents at AW-1 to AW-16, which are admitted in evidence, read, recorded and exhibited.

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(9) Accordingly, in the Original Application was filed for the recovery of ₹49,60,149.04/- (Rupees FortyNine Lakhs Sixty Thousand One Hundred FortyNine and paisa Four Only) with future interest @ 18.10% per annum with monthly rest thereon from the date of presentation of the Original Application i.e. 29.10.2020 till payment/realisation.

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(10) The Tribunal has scrutinised and examined the allegations contained in the Original Application

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ORIGINAL APPLICATION NO.869 OF 2023

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and analysed the evidence adduced by the applicant which has gone unchallenged, uncontroverted and unrebutted.

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(11) Upon careful scrutiny and the examination of the Original Application, analysing the evidence and giving due weightage to the documentary evidence adduced by the applicant, the Tribunal views that there is no reason to disbelieve the claim made by the applicant bank.

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(12) In view of the observations made hereinabove, Original Application filed by the applicant deserves to be allowed.

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(13) Hence, the following order:

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ORDER

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(A) The Original Application No.869 of 2023 is allowed with costs.

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(B) Defendant nos.1,2 and 3 are ordered and directed to pay to the applicant, either jointly or severally, the aggregate sum of ₹49,60,149.04/- (Rupees Forty-Nine Lakhs Sixty Thousand One Hundred Forty-Nine and paisa Four Only) with future interest @ 12% per annum till payment/realization.

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(C) The aforesaid adjudicated amount is secured by the valid and subsisting hypothecated properties, that is, Stock of Jeans Garments kept at Gala No.07, Vikas Estate, Off Arey Road, Vishweshwar Nagar, Goregaon (E), Mumbai – 400 063.

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Page 7 of 8

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ORIGINAL APPLICATION NO.869 OF 2023

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(D) Defendant nos.1,2 and 3 are entitled to redeem the hypothecated properties as per law failing which the applicant has right to proceed to sell the hypothecated properties and recover dues as per law.

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(E) The Applicant is also hereby directed to submit the details of claim amount received from the Central Government since the facility is granted under CGTMSE Scheme and provide with the current status of the hypothecated properties

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(F) Issue Recovery Certificate.

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(G) The learned Registrar is directed to send a copy of the judgment and recovery certificate to (i) the applicant, (ii) defendant and (iii) the Recovery Officer by post and email.

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Sd/-

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(Harish Kumar Kaushik)

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Presiding Officer, DRT-2, Mumbai

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Canara Bank (Syndicate Bank) v. The Big City Clothing Company

Case brief

What is this about?

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Canara Bank (Syndicate Bank) v. The Big City Clothing Company

Case brief

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