Allowed

Edelweiss Asset Reconstruction Company Limited v. M/S Car Clinic

DRT4 Aug 2025OA/997/2024

Case brief

AI extract

What is this about?

The DRT allowed a bank's recovery application against borrowers and guarantors. Rejecting contentions regarding invalid authority, lack of mortgage, and interest capitalization, the Court held the borrowers jointly liable. A Recovery Certificate was issued for Rs. 2.22 Crores after adjusting sale proceeds.

What did the court decide?

Defendants jointly and severally liable to pay Rs. 2,22,92,792.74 plus future interest @ 10% simple from 09.05.2024. Recovery Certificate issued from mortgaged property and personal assets.

Edelweiss Asset Reconstruction Company Limited versus M/S Car Clinic — Money Laundering | DRT (2025)

¶1

“ORIGINALAPPLICATION” No. 997 of 2024

¶2

BEFORE THE DEBTS RECOVERY TRIBUNAL, JAIPUR

¶3

PRESENT- SHRI VIMAL GUPTA

¶4

PRESIDING OFFICER

¶5

O.A. NO. 997 OF 2024

¶6

DATE OF DELIVERY OF ORDER 04.08.2025

¶7

Edelweiss Asset Reconstruction Company Limited having its registered office at Edelweiss House Off C.S.T. Road, Kalina, Mumbai-400098 and one of its Branch Office at Incuspaze, A- 68, Sector-64,Noida, U.P.- 201301, India through its Authorized Signatory Mr. V. K. Tiwari.

¶8

…..Applicant Bank…..

¶9

VERSUS

¶10

1. M/s Car Clinic through its proprietor Mr. Harsh Wardhan, Address: Show Room No. CC-211, Type A, Ground Floor, Gole Market, Jawahar Nagar, Jaipur-302004, Rajasthan.

¶11

Also At:

¶12

M/s Car Clinic through its proprietor Mr. Harsh Wardhan, Address: House No. 2-GA-8, Sector 2, Jawahar Nagar, Housing Estate at Jaipur, Near Saraswati School, Jaipur302004, Rajasthan.

¶13

Also At:

¶14

M/s Car Clinic through its proprietor Mr. Harsh Wardhanm Address : A502, Southend Homes, Neelkanth Apartment, Opposite Suresh Gyanvihar University, Jagatpura, Jaipur-302017, Rajasthan.

¶15

2. Mr. Harsh Wardhan S/o Lt. Sh. Mohan Lal Thakar, Address: House No. 2-GA-8, Sector 2, Jawahar Nagar, Housing Estate at Jaipur, Near Saraswati School, Jaipur302004, Rajasthan.

Also At:-

OA No. 997 of 2024

Mr. Harsh Wardhanm S/o Lt. Sh. MohanLal Thakar, Address : A 502, Southend Homes, Neelkanth Apartment, Opposite Suresh Gyanvihar University, Jagatpura, Jaipur302017, Rajasthan

¶21

3. Mrs. Chandra Kanta Thakar W/o Lt. Sh. Mohan Lal Thakar, Address: House No. 2-GA-8, Sector 2, Jawahar Nagar, Housing Estate at Jaipur, Near Saraswati School, Jaipur-302004, Rajasthan.

¶22

Also At:-

¶23

Mrs. Chandra Kanta w/o Lt. Sh. MohanLal Thakar, Address : A 502, Southend Homes, Neelkanth Apartment, Opposite Suresh Gyanvihar University, Jagatpura, Jaipur302017, Rajasthan

¶24

4. Mrs. Bharti Thakar W/o sh. Harsh Wardhan, House No. 2-GA-8, Sector 2, Jawahar Nagar, Housing Estate at Jaipur, Near Saraswati School, Jaipur-302004, Rajasthan.

¶25

Also At:

¶26

Mrs. Bharti Thaka r W/o Mr. Harsh Wardhanm, Address : A 502, Southend Homes, Neelkanth Apartment, Opposite Suresh Gyanvihar University, Jagatpura, Jaipur-302017, Rajasthan.

¶27

……Defendants…..

¶28

Counsel for the Applicant Bank Sh. Vineet Sharma Counsel for the Defendants Sh. Akshansh Singal

¶29

JUDGMENT

¶30

This Original Application was filed by the applicant bank on 20.06.2024 for recovery of outstanding amount of Rs. 3,01,58,405.74 from the Defendants.

¶31

As per the pleadings, Defendant No. 1 represented as principal borrower and Defendant no. 2 & 3 its CoBorrower & Mortgagor and Defendant no. 4 in the capacity

OA No. 997 of 2024

of co-borrower had approached the applicant bank for availing loan against property facility. After due consideration, loan against property facility of Rs. 2,23,45,000/- was sanctioned by the Applicant Bank vide loan agreement dated 29.11.2016. Defendants failed to maintain financial discipline and therefore, their loan account was classified as NPA on 06.11.2021. Applicant Bank has therefore, filed this original application for recovery of its dues against the Defendants.

¶36

Counsel for the applicant bank submits that the bank has sold one property i.e. showroom no. CC-211, Type A, Gole Market, Opposite Sector 2 Jawahar Nagar, Jaipur-302004, Rajasthan admeasuring 98.40 Sq. Mtr. and adjust the amount of Rs. 78,65,613/- in this loan account.

¶37

Summons were issued to the Defendants on 14.08.2023 and Sh. Akshansh Singhal has filed Vakalatnama on behalf of the Defendants. Reply to the Original Application was filed by the Defendants on 13.02.2025.

¶38

In the reply defendants submitted that the original application has filed on the basis of wrong facts and law and liable to be dismissed. It is further submitted that Sh. V.K. Tiwari is not authorized to file the present OA as the Board Resolution dated 09.11.2023 filed on behalf of the “EARCL” pertains to the authority delegated to Sh. V.K. Tiwari to act as an Authorized Officer for pursuing the proceedings under the SARFAESI Act, 2002. Therefore, Mr. V.K. Tiwari did not authorized to file the present

OA No. 997 of 2024

Original application, signing the Original Application, swearing of Affidavit and the appointment of Advocate.

¶43

It is further submitted that the Board Resolution filed by the “EARCL” has been signed by the Company Secretary namely Mr. Deepak Nautiyal and it has not been stated in the Board Resolution that Mr. Deepak Nautiyal is director of the Company at the time of putting his signatures neither any reference is furnished in the Board Resolution as to how, Mr. Deepak Nautiyal is competent to sign the Board Resolution on behalf of the “EARCL”. It is further submitted that at no stretch of imagination the Company Secretary has any authority to sign the Board Resolution on behalf of the Directors and nor such reference is recorded in Board Resolution that how, the Company Secretary is authorized and competent to sign the Board Resolution.

¶44

It is submitted that Ms. Shruit Kumar, Executive Vice President & Head FRR of Indusind Bank Ltd. had authorized Mr. Vipin Jagawat, Sr. Vice President vide authority letter dated 26.04.2022. It is pertinent to mention here that the date of execution of Assignment Agreement is 29.12.2021 and as on the date execution of the Assignment Agreement, Mr. Vipin Jagawat was not authorized to sign and execute the said Assignment Agreement. It submitted that signing and execution of document on 29.12.2021 and registration of document with concerned registered office on dated 26.04.2022 are completely different acts. As the “EARCL” has admitted the date of execution of the assignment agreement in pleadings to be 29.12.2021 which

OA No. 997 of 2024

is an admitted position. Therefore, the Assignment Agreement is not validly executed and do not confer any rights upon Mr. V.K. Tiwari to present this Original Application on behalf of “EARCL”.

¶49

It is submitted that the original application is barred by limitation as EARCL did not file any title document with regard to the mortgaged immovable properties as alleged in the O.A. No valid mortgaged of the alleged immovable properties has been created in favor of the applicant and its alleged assignor bank. Therefore, the original applicant is not maintainable and liable to be dismissed.

¶50

It is submitted that EARCL has filed the Statement of Account from 07.02.2021 to 08.05.2024 and no balance confirmation or statement of account has been filed by EARCL for the duration 29.11.2016 to 06.02.2021, the amount of Rs. 2,24,96,772.87 as alleged is completely wrong and without any basis. It is further submitted that EARCL did not file the sanction letter issued by the erstwhile Indusind Bank to ascertain the terms & conditions of the financial assistance originally sanctioned to the borrowers. Therefore, the defendants are not entitled to pay the illegal and malafide demands of the EARCL.

¶51

10.It is submitted that Original Application has been signed and delivered by affixing stamp of EARCL Delhi. However, the office address mentioned in the original application is Noida and attestation done at Jaipur on 19.06.2024, all at the same day which is not possible.

OA No. 997 of 2024

11.It is further submitted that it is the established position of the law as held by the Hon’ble Supreme Court of India that the interest/ penalty cannot be capitalized, but the EARCL has admitted in the Para no. 5.9 of the OA that they have capitalized the interest on the grab of the RBI directives, but no such RBI circular has been filed. It is a settled position of law that the interest cannot be capitalized in any manner whatsoever.

¶56

12.It is submitted that original lender i.e. Indusind Bank declared the account as NPA on 06.11.2021 malafidly and against the directive of the Reserve Bank of India as the account was classified as NPA before expiration of 90 days. It is stated that EARCL has malafidly concealed the material facts from the Tribunal as to correctness of NPA, furnishing complete statement of account, filing all the title documents including the mortgaged documents etc.

¶57

13.It is submitted that the immovable properties were not mortgaged by Harshwardhan and Mrs. Chandra Kanta. No evidence of creation of valid mortgaged has been brought on record as per requirement of law. Therefore, the EARCL is not entitled to recover its dues from the person or other personal movable and immovable properties of the defendants in any manner.

¶58

14.Heard arguments and perused the record.

¶59

15.There is no contrary evidence about non-creation of mortgage. It was duty of the applicant to prove no mortgage was created. Attestation done at Jaipur is possible on the

OA No. 997 of 2024

same day as Delhi is not far off. There is no requirement of account to be declared NPA. Taking of loan and disbursement is not denied.

¶64

16.As stated supra, the Applicant Bank filed the evidence affidavit coupled with the recitals in the documents, viz Exhibit A/1 to A/10 marked on behalf of the applicant bank, clinches the claim of the applicant bank against the Defendants. Hence, I hold that the Defendants are jointly & severally liable to pay to the applicant bank the claim made in O.A. with future interest and costs.

¶65

17.In the result, this O.A. No. 997 of 2024 is allowed declaring that:-

¶66

a) As the applicant bank has sold one property and adjust the amount of Rs. 78,65,613/- in the loan, therefore, after adjusting the amount the Defendants are jointly & severally liable to pay to the applicant bank a sum of Rs. 2,22,92,792.74 (Rupees Two Crore Twenty Two Lac Ninety Two Thousand Seven Hundred Ninety Two and Seventy Four Paisa only) with future interest @ 10.00% (Simple) from 09.05.2024 till the date of realization.

¶67

b) The applicant bank is entitled to recover the above amount from the sale of equitable mortgaged properties i.e. all that plot of land appurtenant to House No. 2-GA-8, Sector 2, Jawahar Nagar, Housing Estate at Jaipur, Near

OA No. 997 of 2024

Saraswati School, Jaipur, Rajasthan-302004 admeasuring 220 Sq. Mtr. in the name of defendant no. 3 as well as from the personal movable and immovable properties/assets of Defendants. The applicant bank is entitled to proceed against the same towards recovery of its debt.

¶72

c) The applicant bank is entitled to the costs of the O.A.

¶73

18.The recovery certificate be issued forthwith and be sent to the Recovery Officer, DRT, Jaipur.

¶74

19.Parties are directed to appear before the Recovery Officer, DRT, Jaipur on 30.10.2025 .

¶75

20.Prepare Recovery Certificate accordingly.

¶76

21.A copy of the Judgment and Recovery Certificate be given or sent by registered post to each of the parties free. A copy of the Recovery Certificate be sent to the Recovery Officer of this Tribunal for necessary action as per the law.

¶77

(Vimal Gupta) Presiding Officer, Debts Recovery Tribunal, Jaipur

¶78

Order pronounced in the open court today i.e. 04.08.2025 .

¶79

(Vimal Gupta) Presiding Officer, Debts Recovery Tribunal, Jaipur

OA No. 997 of 2024

BEFORE THE DEBTS RECOVERY TRIBUNAL, JAIPUR PRESENT- SHRI VIMAL GUPTA

¶84

PRESIDING OFFICER

¶85

O.A. NO. 997 OF 2024

¶86

DATE OF DELIVERY OF ORDER 04.08.2025

¶87

RECOVERY CERTIFICATE

¶88

(UNDER SUB Section 22 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (Act 51 of 1993)

…..Applicant Bank…..

VERSUS

1. M/s Car Clinic through its proprietor Mr. Harsh Wardhan, Address: Show Room No. CC-211, Type A, Ground Floor, Gole Market, Jawahar Nagar, Jaipur-302004, Rajasthan.

¶93

Also At:

¶94

M/s Car Clinic through its proprietor Mr. Harsh Wardhan, Address: House No. 2-GA-8, Sector 2, Jawahar Nagar, Housing Estate at Jaipur, Near Saraswati School, Jaipur302004, Rajasthan.

¶95

Also At:

¶96

M/s Car Clinic through its proprietor Mr. Harsh Wardhanm Address : A502, Southend Homes, Neelkanth Apartment, Opposite Suresh Gyanvihar University, Jagatpura, Jaipur-302017, Rajasthan.

OA No. 997 of 2024

2. Mr. Harsh Wardhan S/o Lt. Sh. Mohan Lal Thakar, Address: House No. 2-GA-8, Sector 2, Jawahar Nagar, Housing Estate at Jaipur, Near Saraswati School, Jaipur302004, Rajasthan.

¶101

Also At:-

¶102

Mr. Harsh Wardhanm S/o Lt. Sh. MohanLal Thakar, Address : A 502, Southend Homes, Neelkanth Apartment, Opposite Suresh Gyanvihar University, Jagatpura, Jaipur302017, Rajasthan

¶103

3. Mrs. Chandra Kanta Thakar W/o Lt. Sh. Mohan Lal Thakar, Address: House No. 2-GA-8, Sector 2, Jawahar Nagar, Housing Estate at Jaipur, Near Saraswati School, Jaipur-302004, Rajasthan.

¶104

Also At:-

¶105

Mrs. Chandra Kanta w/o Lt. Sh. MohanLal Thakar, Address : A 502, Southend Homes, Neelkanth Apartment, Opposite Suresh Gyanvihar University, Jagatpura, Jaipur302017, Rajasthan

¶106

4. Mrs. Bharti Thakar W/o sh. Harsh Wardhan, House No. 2-GA-8, Sector 2, Jawahar Nagar, Housing Estate at Jaipur, Near Saraswati School, Jaipur-302004, Rajasthan.

¶107

Also At:

¶108

Mrs. Bharti Thaka r W/o Mr. Harsh Wardhanm, Address : A 502, Southend Homes, Neelkanth Apartment, Opposite Suresh Gyanvihar University, Jagatpura, Jaipur-302017, Rajasthan.

¶109

……Defendants…..

¶110

Recovery Certificate for Rs. 2,22,92,792.74

¶111

In terms of final order dated 04.08.2025 passed by this Tribunal in the above mentioned case, it is ordered that the-

OA No. 997 of 2024

a) As the applicant bank has sold one property and adjust the amount of Rs. 78,65,613/- in the loan, therefore, after adjusting the amount the Defendants are jointly & severally liable to pay to the applicant bank a sum of Rs. 2,22,92,792.74 (Rupees Two Crore Twenty Two Lac Ninety Two Thousand Seven Hundred Ninety Two and Seventy Four Paisa only) with future interest @ 10.00% (Simple) from 09.05.2024 till the date of realization.

¶116

b) The applicant bank is entitled to recover the above amount from the sale of equitable mortgaged properties i.e. all that plot of land appurtenant to House No. 2-GA-8, Sector 2, Jawahar Nagar, Housing Estate at Jaipur, Near Saraswati School, Jaipur, Rajasthan302004 admeasuring 220 Sq. Mtr. in the name of defendant no. 3 as well as from the personal movable and immovable properties/assets of Defendants. The applicant bank is entitled to proceed against the same towards recovery of its debt.

¶117

c) The applicant bank is entitled to the costs of the O.A.

¶118

Parties are directed to appear before the Recovery Officer, DRT, Jaipur on 30.10.2025.

¶119

The Recovery Officer shall realize the amount as per this Certificate in the manner and mode prescribed under Section 25 and 28 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (as amended from time to time) from the above named Certificate Debtor.

OA No. 997 of 2024

This Certificate has been issued under my signatures and seal of the Tribunal on 04.08.2025 .

¶124

(Vimal Gupta) Presiding Officer, Debts Recovery Tribunal, Jaipur

OA No. 997 of 2024

BEFORE THE DEBTS RECOVERY TRIBUNAL, JAIPUR

¶129

PRESENT- SHRI VIMAL GUPTA

¶130

PRESIDING OFFICER

¶131

O.A. NO. 997 OF 2024

¶132

DATE OF DELIVERY OF ORDER 04.08.2025

¶133

SCHEDULE TO RECOVERY CERTIFICATE

MEMO OF COST

…..Applicant Bank…..

VERSUS

1. M/s Car Clinic through its proprietor Mr. Harsh Wardhan, Address: Show Room No. CC-211, Type A, Ground Floor, Gole Market, Jawahar Nagar, Jaipur-302004, Rajasthan.

¶139

Also At:

¶140

M/s Car Clinic through its proprietor Mr. Harsh Wardhan, Address: House No. 2-GA-8, Sector 2, Jawahar Nagar, Housing Estate at Jaipur, Near Saraswati School, Jaipur302004, Rajasthan.

¶141

Also At:

¶142

M/s Car Clinic through its proprietor Mr. Harsh Wardhanm Address : A502, Southend Homes, Neelkanth Apartment, Opposite Suresh Gyanvihar University, Jagatpura, Jaipur-302017, Rajasthan.

OA No. 997 of 2024

2. Mr. Harsh Wardhan S/o Lt. Sh. Mohan Lal Thakar, Address: House No. 2-GA-8, Sector 2, Jawahar Nagar, Housing Estate at Jaipur, Near Saraswati School, Jaipur302004, Rajasthan.

¶147

Also At:-

¶148

Mr. Harsh Wardhanm S/o Lt. Sh. MohanLal Thakar, Address : A 502, Southend Homes, Neelkanth Apartment, Opposite Suresh Gyanvihar University, Jagatpura, Jaipur302017, Rajasthan

¶149

3. Mrs. Chandra Kanta Thakar W/o Lt. Sh. Mohan Lal Thakar, Address: House No. 2-GA-8, Sector 2, Jawahar Nagar, Housing Estate at Jaipur, Near Saraswati School, Jaipur-302004, Rajasthan.

¶150

Also At:-

¶151

Mrs. Chandra Kanta w/o Lt. Sh. MohanLal Thakar, Address : A 502, Southend Homes, Neelkanth Apartment, Opposite Suresh Gyanvihar University, Jagatpura, Jaipur302017, Rajasthan

¶152

4. Mrs. Bharti Thakar W/o sh. Harsh Wardhan, House No. 2-GA-8, Sector 2, Jawahar Nagar, Housing Estate at Jaipur, Near Saraswati School, Jaipur-302004, Rajasthan.

¶153

Also At:

¶154

Mrs. Bharti Thaka r W/o Mr. Harsh Wardhanm, Address : A 502, Southend Homes, Neelkanth Apartment, Opposite Suresh Gyanvihar University, Jagatpura, Jaipur-302017, Rajasthan.

¶155

……Defendants…..

¶156

S.No.	Item of Costs	Amount (Rs.)
1	Fee on the Application	1,50,000.00

OA No. 997 of 2024

2	Process Fee (Inc. Publication)	318.00
3	Advocate Fee	1,250.00
4	Commission/Receiver/Valuation	NIL
5.	Miscellaneous Charges	NIL
	Total	1,51,568.00

¶161

(Vimal Gupta) Presiding Officer, Debts Recovery Tribunal, Jaipur

OA No. 997 of 2024

Date : 04.08.2025

¶166

Counsel:

¶167

Sh. Vineet Sharma, Counsel for Applicant Bank Sh. Akshansh Singal, Counsel for the Defendants

¶168

Judgment dictated separately and pronounced in the open court. As per order the O.A. is allowed. Recovery Certificate be prepared accordingly and the Registry is directed to verify the Recovery Certificate as per Regulation 24(1) and (2) of Debts Recovery Tribunal Jaipur Regulation 2015 and after verification place the same before the Tribunal.

¶169

(Vimal Gupta) Presiding Officer, Debts Recovery Tribunal, Jaipur

OA No. 997 of 2024

Date : 04.08.2025

¶174

Counsel:

¶175

Sh. Vineet Sharma, Counsel for Applicant Bank Sh. Akshansh Singal, Counsel for the Defendants

¶176

The Tribunal vide order dated 04.08.2025 , directed the Registrar to verify the Recovery Certificate as per Regulation 24(1) and (2) of Debts Recovery Tribunal Jaipur Regulation 2015.

¶177

The Registrar vide order dated 04.08.2025 verified the Recovery Certificate as per Regulation 24(1) and (2) of Debts Recovery Tribunal Jaipur Regulation 2015. Recovery Certificate be prepared accordingly. Copy of the Judgment and Recovery Certificate be given free to the concerned parties as well as be sent to the Recovery Officer for further proceedings. File be put up before the Registrar for compliance. After compliance file be consigned to record.

¶178

(Vimal Gupta) Presiding Officer, Debts Recovery Tribunal, Jaipur

¶179

Edelweiss Asset Reconstruction Company Limited v. M/S Car Clinic

Case brief

What is this about?

What did the court decide?

Edelweiss Asset Reconstruction Company Limited v. M/S Car Clinic

Case brief

What is this about?

What did the court decide?

What the court decided

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