Allowed

South Indian Bank v. Shashank

DRT7 Oct 2025OA/942/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the Original Application filed by South Indian Bank for recovery of dues. The bank had advanced credit facilities which the borrowers defaulted on. The Tribunal reduced the interest rate to 12% per annum and awarded recovery against hypothecated and mortgaged properties.

What did the court decide?

Directing the defendants to pay Rs.11,93,42,489.72 with future interest at 12% per annum from the date of filing, recoverable from hypothecated and mortgaged properties.

South Indian Bank versus Shashank — Banking and Recovery | DRT (2025)

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O.A. No. 942 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.942 of 2023

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South Indian Bank

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Plot no.18, Pusa Road

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Opp. Metro Pillar No.94, Karol Bagh

New Delhi-110005

Applicant

Versus

Shashank Atom

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H.No.38-D, Arjun Apartment Vikaspuri, New Delhi-110018

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Preeti Sharma

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H.No.38-D, Arjun Apartment Vikaspuri, New Delhi-110018 Defendants

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Present: Shri S.K. Garg, Counsel for the applicant bank

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Date of Reserve: 23.09.2025

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Date of Pronouncement: 07.10.2025

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FINAL ORDER

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This original application has been filed by the applicant bank before DRT-I, Delhi on 19.12.2023 through Sh. Kaushik Basak, authorized representative of the applicant bank under Section 19 of Recovery of Debts and Bankruptcy Act, 1993 against the defendants for recovery of a sum of Rs.11,93,42,489.72 (Rupees Eleven Crore Ninety Three Lacs Forty Two Thousand Four Hundred Eighty Nine and paisa Seventy Two only), out of which Rs.9,57,14,743.29 with further

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O.A. No. 942 of 2023

interest @13.20% per annum with monthly rests and Rs.2,36,27,746.43 with further interest @10.70% per annum with monthly rests along with penal interest @2% per annum from 09.12.2023 till the date of realization along with costs.

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The brief facts of the case are that on the request of the defendants, the applicant bank sanctioned Credit Facility i.e. SIB Rental for a sum of Rs.940.00 Lacs on 22.02.2019 @10.95% per annum with monthly rests to be repayable in 84 Equated Monthly Installments of Rs.16,07,050/- per month for the purpose of investment in the business/closure of existing credit facility with Deutsche bank AG against hypothecation of rent receivables from M/s Alternative Learning Systems Ltd. and equitable mortgage of commercial property owned by defendants. Further, on the request of the defendants, the applicant bank restructured the debt and sanctioned SIB Rental-I of Rs.850.38 lacs and FITL for a sum of Rs.260.12 Lacs @10.70% per annum with monthly rests on 29.06.2021 subject to change. The SIB Rental-I was to be repayable in 91 EMI of Rs.16,91,370/- with holiday period from 15.03.2021 to 15.02.2023 and FITL (with moratorium of 24 months) to be repaid in 60 EMIs, both starting from 15.03.2023. As per sanction, the Repo rate/Operating cost shall be reset on 1st day of January, April, July and October which may vary due to change in other components. Defendants also agreed to pay penal interest @2% per annum in case of default or delay in repayment of installments / non compliance of terms and conditions of sanction.

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In order to avail the loan facilities, the defendants submitted loan applications and executed Loan cum Hypothecation Agreement, Tripartite Agreement, Request from

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O.A. No. 942 of 2023

Lessor to Lessee, Agreement to Mortgage, Acknowledgement of Receipt, Power of Attorney, Intimation regarding Restructuring/ Rehabilitation Debt Repayment Plan, Application for Continuance of Security, Term Loan Restructuring/ Rescheduling Agreement, Credit Facility Agreement for FITL and Acknowledgement of Receipt of copy of Document with the applicant bank on 07.03.2019 and 29.06.2021.

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The Defendants also executed Acknowledgement of debt and security dated 29.06.2021 acknowledging their debt towards the applicant bank.

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In order to secure the loan facilities, the defendants created equitable mortgage of the Commercial property bearing Unit no.202, Aggarwal Auto Mall, Second Floor having built up area admsg. 10650 sq. ft. built on Plot No. Site-II, District Centre, Shalimar Palace, Shalimar Bagh, Delhi together with all buildings existing and/or to be constructed thereon in future along with proportionate rights of land attached thereto on 12.04.2019 by depositing Sale Deed No.14296 Book No.1 dated 28.10.2016 registered with Sub-Registrar VIA, New Delhi and confirming vide letter dated 15.04.2019.

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The above property is also mortgaged with applicant bank for credit facilities sanctioned in favour of Alternative Learning Systems Ltd. with exposure of Rs.467.36 lacs and ALS Satellite Education Pvt.Ltd. with exposure of Rs.2016.65 lacs as on 23.06.2021 wherein defendants are guarantors and applicant bank has filed OA NO.2223/2023 dated 08.06.2013 and OA No.3359/2023 dated 16.11.2023 for recovery of its dues before the Hon'ble Tribunal, Delhi.

O.A. No. 942 of 2023

It has been submitted by the applicant bank that after availing the aforesaid loan facilities, 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 29.05.2023 as per RBI guidelines and issued a legal recall notice dated 14.06.2023 but the defendants failed to regularize the account.

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Notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 dated 31.07.2023 was issued by the applicants to the defendants for repayment of entire dues but defendants failed to repay entire dues. Hence, the applicant bank has 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 28.11.2024, the defendants have 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 Shri Kaushik Basak, authorized representative of the applicant bank who has proved the documents as Power of Attorney, Sanction Intimation letter, Loan cum Hypothecation Agreement, Tripartite Agreement, Request from the Lessor to Lessee, Agreement to Mortgage for Takeover Loans, Acknowledgement of Receipt, Power of Attorney, Declaration from the Mortgagor, Sale Deed, Letter Confirming Deposit of Title Deeds, Intimation regarding Restructuring/Rehabilitation Debt Payment Plan, Application

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O.A. No. 942 of 2023

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for Continuance of Security, Term Loan Restructuring/ Rescheduling Agreement, Recall Notice along with Postal Receipts, Tracking Reports, Notice u/s 13(2) of SARFAESI Act, Statement of Accounts duly certified under Banker's Book Evidence Act as Ex.AW-1/1 to Ex.AW-1/25.

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

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

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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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In the light of the above discussions, the Original Application deserves to be allowed.

O.A. No. 942 of 2023

ORDER

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.11,93,42,489.72 (Rupees Eleven Crores Ninety Three Lacs Forty Two Thousand Four Hundred Eighty Nine Paisa Seventy Two only) together with pendentelite and future interest @12% per annum with monthly rests from the date of filing this application till the date of realization and costs; failing which the aforesaid amount shall be recovered from hypothecated rent receivables and sale of mortgaged property being Commercial property bearing Unit no.202, Aggarwal Auto Mall, Second Floor, Area admeasuring 10650 sq. ft. built on Plot No. Site-II, District Centre, Shalimar Palace, Shalimar Bagh, Delhi together with all buildings existing and/or to be constructed thereon in future along with proportionate rights of land attached thereto. In case of shortfall, the same shall be recovered from the sale of movable and immovable properties of the defendants.

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

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(III) Parties are directed to appear before the Recovery Officer, DRT I, Delhi on 04.12.2025.

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(IV) Copies of final order as well as Recovery Certificate be sent to all concerned free of cost.

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cc/

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(GOVIND BALLABH SHARMA) PRESIDING OFFICER DRT-II DELHI

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(Dictated and pronounced in open court) Dated: 07.10.2025