Allowed

Union Bank of India (Corporation Bank) v. M/s Sameer Bag House

DRT24 Sept 2025OA/97/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the original application by Union Bank of India to defendants of M/s Sameer Bag House. The court ruled in favor of the bank, directing recovery of dues, interest, and enforcement of hypothecated securities.

What did the court decide?

Recovery of ₹12,38,262.90 with interest @ 10.75% from 16.08.2018. Enforcement of hypothecated properties. Issuance of Recovery Certificate.

Union Bank of India (Corporation Bank) versus M/s… — Contract and Commercial Disputes | DRT (2025)

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ORIGINAL APPLICATION NO.97 OF 2022

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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.97 OF 2022

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Date of Institution: 16.08.2018 Date of Decision: 24.09.2025

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TOTAL CLAIM AMOUNT :

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₹ 12,38,262.90/-

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Union Bank of India, A body corporate constituted under the provisions of the Banking Companies (Acquisition and Transfer of Undertakings) Act,1970, (5 of 1970) having their Head Office at Union Bank Bhavan, 239, Vidhan Bhavan Marg, Nariman Point, Mumbai-400 021 and among its Branches a Branch Saras Apartment, 771, Mumbai TPS III Mori Road Mumbai-400 016

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… Applicant

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Versus

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M/s Sameer Bag House (Through its proprietor Mr Abdul Rahim Mohd. Umar Khan) Shop No.19/20, C Sector, G-1 Line Cheeta Camp, Trombay, Mumbai-400 088

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Mr Abdul Rahim Mohd. Umar Khan Shop No.19/20, C Sector, G-1 Line Cheeta Camp, Trombay, Mumbai-400 088

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Mr Mohammed Khalid Shibli

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Page 1 of 9

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ORIGINAL APPLICATION NO.97 OF 2022

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Room No.1, D Sector, A-2 Line, Cheeta Camp, Trombay, Mumbai-400 088 …Defendants

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APPEARANCES For the Applicant : Mr Akash Gupta - 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 ₹12,38,262.90/- (Rupees Twelve Lakhs Thirty Eight Thousand Two Hundred Sixty Two and paisa Ninety Only) with future interest @ 12.75% per annum at present 10.75% with monthly rest thereon from the date of presentation of the Original Application i.e. 16.08.2018 till payment/realization and to enforce the hypothecated securities which was initially filed by the Corporation Bank, later on amalgamated into Union Bank of India i.e. the present Applicant vide the amalgamation scheme notified by the Central Government on 04.03.2020 and came into force on 01.04.2020 i.e. Notification No.G.S.R.154 (E).

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Page 2 of 9

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ORIGINAL APPLICATION NO.97 OF 2022

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The details of the claim amount are as under: -

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Sr	Nature	Principal	Interest	Total o/s. till	ROI
No	of	O/s. as on	O/s. from	06.06.2018	(%)
	Facility	30.06.2016	30.06.2016
		(in Lakhs)	to
			06.06.2018
1	Cash	10,00,000/-	2,38,262.90	12,38,262.90	10.75
	Credit
	Total Amount			12,38,262.90

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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 24.07.2023. Despite service, the defendants did not enter their appearance and therefore, they are set ex-parte on 01.01.2024

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(3) Defendant no.2 is the proprietor of the Defendant No.1 proprietary firm and the principal borrower who approached the Corporation Bank seeking financial assistance by way of Cash Credit Facility and wherein Defendant No.3 stood as Guarantor for the said loan. Pursuant to the loan application dated 06.10.2015 made by defendants under Pradhan Mantri Mudra Yojana, the Applicant sanctioned the loan vide Sanction Letter dated 07.10.2015 for sum of ₹10,00,000/- (Rupees Ten Lakhs Only) payable with interest at the rate of 11% per annum floating interest. The instalments to meet working capital requirements of the unit.

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Page 3 of 9

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ORIGINAL APPLICATION NO.97 OF 2022

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The details of the Sanction amount vide Sanction letter dated 07.10.2015 are as under: -

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Sr N o	Date of Sanction	Nature of Facilit y	Amount	ROI	Security	Collateral Security	Guaranto r
1	07.10.20 15	Cash Credit	10,00,0 00	11% p.a. floatin g rate	hypothec ated Stock consists of Raw Materials and finished Goods of Travelers Bags, Manufact uring Unit, Plant & Machiner y, Furniture & Fixtures	RD account with monthly payment of ₹5,000/-.	Mr Mohamme d Khalid Shibli, S/o Manzural Hussan Md Shibli, Room No.1, D Sector, A- 2 Line Cheetaca mp, Trombay, Mumbai- 400 088
	Amount	-	10,00,0 00	-	-	-	-

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(4) On 06.10.2025 and 07.10.2025, defendants signed and executed the loan and security documents as set out in paragraph nos. 5 E (ii) (page no.6) of the Original Application. Defendants (1) hypothecated Stock consists of Raw Materials and finished Goods of Travelers Bags Manufacturing Unit, Plant & Machinery, Furniture & Fixtures, (2) created Memorandum of Charge/Lien over Deposits and (3) created Personal Guarantee of Mr Mohammed Khalid Shibli, S/o Manzural Hussan

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Page 4 of 9

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ORIGINAL APPLICATION NO.97 OF 2022

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Md Shibli, Room No.1, D Sector, A-2 Line Cheetacamp, Trombay, Mumbai-400 088 i.e. Defendant no.3 to secure the loan.

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

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(a) Loan Application dated 06.10.2015 submitted by Defendant no.1;

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(b) Accepted Sanction Letter dated 07.10.2015;

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(c) Request for Overdraft facilities/Cash Credit limit dated 07.10.2015 executed by Defendant no.1 through Defendant no.2;

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(d) Letter of Proprietorship dated 07.10.2015 executed by Defendant no.1 through Defendant no.2;

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(e) Demand Promissory Note dated 07.10.2015 executed by Defendant no.1 through Defendant no.2 for an amount of ₹10,00,000;

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(f) Take Delivery Letter to D.P.N dated 07.10.2015 executed by Defendant no.1 through Defendant no.2 for an amount of ₹10,00,000;

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(g) Guarantee Agreement dated 07.10.2015 executed by Defendant no.3 for an amount of ₹10,00,000;

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(h) Letter of Undertaking/ Declaration from the borrower dated 07.10.2015 executed by Defendant no.1 through Defendant no.2 for an amount ₹10,00,000;

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Page 5 of 9

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ORIGINAL APPLICATION NO.97 OF 2022

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(i) Common Deed of Hypothecation of Movables/Assets/Debts dated 07.10.2015 executed by Defendant no.1 through Defendant no.2 for an amount ₹10,00,000;

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(j) Monthly Stock Statement for Cash Credit (Hypothecation) Account dated 07.10.2015 executed by Defendant no.1 through Defendant no.2.

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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. Accounts of the borrowers turned N.P.A as per the RBI norms and the date of the same was not declared by the Applicant. Therefore, on 08.06.2018, the applicant, through its advocate, called upon defendants to liquidate the outstanding in the sum of ₹12,12,291.90/(Rupees Twelve Lakh Twelve Thousand Two Hundred Ninety-One and paisa Ninety Only) as on 06.06.2018 together with further interest thereupon from 07.06.2018 due under Cash Credit Facilities extended to the firm till payment and/or realization within 5 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 07.08.2018, there was owing, due and payable by defendants to the applicant the aggregate sum of ₹12,38,262.90/- (Rupees Twelve

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Page 6 of 9

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ORIGINAL APPLICATION NO.97 OF 2022

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Lakhs Thirty-Eight Thousand Two Hundred SixtyTwo and paisa Ninety Only) with future interest @ 10.75% 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 16.08.2018.

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(8) The applicant has filed affidavit (exhibit-7) in lieu of examination in chief of Mr Sanjeev Kumar, Assistant Manager and list of documents (exhibit8) thereby adducing in evidence the documents at AW-1 to AW-20, 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 ₹12,38,262.90/- (Rupees Twelve Lakhs Thirty-Eight Thousand Two Hundred Sixty-Two and paisa Ninety Only) future interest @ 10.75% per annum with monthly rest thereon from the date of presentation of the Original Application i.e. 16.08.2018 till payment/realisation.

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(10) The Tribunal has scrutinised and examined the allegations contained in the Original Application and analysed the evidence adduced by the

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Page 7 of 9

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ORIGINAL APPLICATION NO.97 OF 2022

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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.97 of 2022 is allowed with costs.

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(B) Defendant nos.1 to 3 are ordered and directed to pay to the applicant, either jointly or severally, the aggregate sum of ₹12,38,262.90/- (Rupees Twelve Lakhs Thirty-Eight Thousand Two Hundred SixtyTwo and paisa Ninety Only) with future simple interest @ 10.75 % per annum thereon from the date of presentation of the Original Application i.e. 16.08.2018 till payment/realization.

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(C) The aforesaid adjudicated amount is secured by the valid and subsisting hypothecated movable properties which belong to the Defendant No.1, that is, Stock consists of Raw Materials and finished Goods of Travelers Bags lying in the Unit,

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Page 8 of 9

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ORIGINAL APPLICATION NO.97 OF 2022

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Plant & Machinery, Furniture & Fixtures, Memorandum of Charge/Lien over Deposits and Personal Guarantee of Mr Mohammed Khalid Shibli, S/o Manzural Hussan Md Shibli, Room No.1, D Sector, A-2 Line Cheetacamp, Trombay, Mumbai-400 088 i.e. Defendant no.3.

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

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(E) Issue Recovery Certificate.

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(F) 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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Page 9 of 9

Union Bank of India (Corporation Bank) v. M/s Sameer Bag House

Case brief

What is this about?

What did the court decide?

Union Bank of India (Corporation Bank) v. M/s Sameer Bag House

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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