Allowed

Canara Bank v. M/S Rajat Enterprises

DRT12 Aug 2025TA/1254/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the bank's original application for recovery of dues. The Tribunal rejected the respondents' defenses regarding blank documents and authorized representation, finding the evidence unchallenged. The decree was modified to award interest at 12% per annum. A recovery certificate was directed.

What did the court decide?

Defendants to pay Rs.30,25,925 with future interest at 12% per annum from the date of filing; non-payment to lead to sale of mortgaged and other properties.

Canara Bank versus M/S Rajat Enterprises — Contract and Commercial Disputes | DRT (2025)

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T.A. No.1254 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 T.A. No. 1254 of 2023
Canara Bank SME Branch, B-37, B- Block, Jhilmil INDL Area, New Delhi- 110095 Applicant
Versus
1. M/S Rajat Enterprises (Through its Prop. Sh. Sanjeev Anand) 1/429/11, Gali Friends Colony, G.T. Road, Shandara, Delhi- 110095
2. Sh. Sanjeev Anand A-187, Gali No. 5, Kabir Nagar, Jyoti Nagar, Delhi- 110094 Defendants
Present: Ms. Rekha Rustagi, Counsel for the applicant bank
Date of Institution: 14.06.2017
Date of Pronouncement: 12.08.2025
FINAL ORDER
This original application has been filed by the applicant
bank on 14.06.2017 before DRT-II, Delhi and then transferred
to DRT-I Delhi through authorized representative of the applicant bank under Section 19 of Recovery of Debts and

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T.A. No.1254 of 2023

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Bankruptcy Act, 1993 against the defendants for recovery of a sum of Rs.30,25,925/- (Rupees Thirty Lacs Twenty Five Thousand Nine Hundred Twenty Five only) along with pendente lite and future interest ©13.30% per annum along with ©2% penal interest from the date of filing of this application till the date of its realization and costs.

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The brief facts of the case are that on the request of the defendant No. 2 as a proprietor of defendant no. 1 vide loan application dated 15.09.2014, the applicant bank sanctioned OCC/ OD Limit of Rs.20,00,000/- (Rupees Twenty Lacs Only) ©10.20% interest with base rate of interest being ©1.25%, i.e. 11.45% to be compounded annually vide sanction letter dated 26.09.2014 under CGTMSE Scheme against hypothecation of stocks and book debts. The loan facilities were later renewed on 26.10.2015 on the request of the defendant No. 2 on behalf of defendant No. 1 as its proprietor. Further, an additional accommodation of Rs.4,00,000/- (Rupees Four Lacs Only) was granted by the applicant bank vide enhancing credit limit loan application dated 01.07.2016.

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In order to avail the loan facilities, the defendants submitted the loan application dated 26.09.2014. Further signed and executed Letter of Proprietorship dated 27.09.2014, Request for Overdraft Facilities, Agreement Re: Collateral Security, Cash Credit Agreement, Pronote dated 29.09.2014 and letter of extending/ enhancing credit limits dated 10.12.2015. Further, the additional accommodation was granted by execution of original letter of extending credits limits, supplemental agreement, Original Pronote and Original Link letter in

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T.A. No.1254 of 2023

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respect to enhancement of credit facilities dated 01.07.2016.

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The defendant executed Acknowledgement of Debt and Security thereby acknowledging the debt towards the applicant bank on 26.10.2015.

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It has been submitted by the applicant bank that after availing the loan facilities, the defendants failed to maintain financial discipline and comply with the terms and conditions of loan despite several requests and reminders and defaulted in payment of monthly installments in time to the applicant bank despite a reminder letter issued on 29.09.2016. Ultimately, the applicant bank classified the loan account as NPA on 06.10.2016 in terms of RBI guidelines, further issuing a Demand notice dated 21.12.2016 but defendants failed to regularize the accounts. Hence, the applicant bank has approached this tribunal for recovery of its dues.

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Notices of this O.A. were issued to the defendants and despite proper service the defendants have chosen to absent from the proceedings. As per order dated 27.02.2025, defendants have been proceeded ex-parte as they have not appeared before the Tribunal.

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Defendants have filed their written statements denying claims of the applicant bank. Apparently, defendants have raised the objection that the applicant bank has got the signature of the defendants on blank documents while granting the loan facilities to the defendants. This

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5d-

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T.A. No.1254 of 2023

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Tribunal has gone through the documents which are duly filled and executed by the defendants and this Tribunal is of the view that plea of blank documents is no plea in the eyes of law as has been held by the Hon'ble Delhi High Court in the matter of "Indian Bank Vs. Cheese Wafers (India) Pvt. Ltd. It was held if the defendants have not filed any complaint before higher authorities of the bank or filed any complaint before police authorities ". Thus, the plea of blank documents is not maintainable after filing of the suit and the same is rejected.

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The defendants have raised the objection that the present O.A. is not filed by the authorized officer, but on perusal of the it is observed that the present O.A. has been filed by Mr. Sani Simon Anshuli, the Manager of the bank, whose power of attorney executed by the applicant bank in his favour is Mark A. Therefore, the plea is not maintainable and the same is rejected. The present original application has been filed by the Jhilmil Branch of the applicant bank, which is well within the jurisdiction of this Tribunal.

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As regards to objection of the defendants that the applicant bank has charged the exorbitant rate of interest, this Tribunal is of the view that 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 Section34 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

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T.A. No.1254 of 2023

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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 12% simple is awarded.

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The witness of the applicant bank has fully corroborated the averments made in this O.A. The evidence lead by the applicant bank which consists of mainly written / typed documents has gone unchallenged and there is no question of disbelieving the same based upon the documents. This Tribunal has also observed that no cogent evidence has been led by the defendants against the claim of the applicant bank and has made only submission on fact as stated in the written statement evidence. That in the civil proceedings it cardinal principle, that whosoever alleges a fact he/she has to prove in the court of law by leading evidence mere assertion are not sufficient and nowhere defendants have denied about the availment of the loan.

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In view of the above facts and circumstances, this Tribunal is of the view that the defendants have failed to convince this Tribunal and this Tribunal do not find any merit and reject the contentions of the defendants as baseless. I hereby allow this O.A. as the applicant bank has proved its claim beyond reasonable doubt.

sae-

T.A. No.1254 of 2023

In order to prove its case, the applicant bank has filed its evidence by way of affidavit of Shr. Abdhesh Kumar, as authorized representative of the applicant bank who has proved the Original/Copy documents of Loan Application, Sanction Memorandum, CGTSIApplication for Guarantee Cover, Cash credit Agreement, Agreement Re: Collateral Security, Supplemental Agreement, Request for Overdraft Facility, Certificate of Loan Paper, Letter of Proprietorship, Pronote, Letter of Renewal, Link Letter in respect of Enhancement of Credit Facilities, Letter Enhancing Credit Limit, Letter Evidencing Execution of Documents, Acknowledgement of Debts and Security, Reminder Letter, Letter of NPA, Legal Demand Notice, General Power of Attorney Statement of Accounts and Certificate u/s 2A of The Bankers Book Evidence as Exhibit AW-1/1 to Exhibit AW-1/24.

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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 proved.

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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.

T.A. No.1254 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.30,25,925/- (Rupees Thirty Lacs Twenty Five Thousand Nine Hundred Twenty Five only) along with pendente lite and future interest ©12% per annum from the date of filing of this application till its realization with costs, failing which the aforesaid amount shall be recovered from the sale of hypothecation of stocks and book debts. 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 TribunalI, Delhi.

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(III) Parties are directed to appear before Recovery Officer, DRT I, Delhi on 15.10.2025.

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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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(GOVIND BALLABH SHARMA) PRESIDING OFFICER DRT-I, DELHI

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(Dictated and pronounced in open court) Dated: 12.08.2025

Canara Bank v. M/S Rajat Enterprises

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/S Rajat Enterprises

Case brief

What is this about?

What did the court decide?

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