Allowed

Central Bank of India v. M/S Indu Hosiery

DRT17 Jun 2025TA/1883/2022

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed the applicant bank's original application for recovery of a debt of approximately Rs. 3.66 crores from defaulting borrowers. The respondent defendants failed to appear. The Tribunal directed payment with interest at 12% per annum and authorized recovery from hypothecated assets and mortgaged property.

What did the court decide?

Directed respondents to pay Rs.3,66,58,897/- with future interest at 12% per annum recoverable from sale of hypothecated stock and mortgaged property.

Central Bank of India versus M/S Indu Hosiery — Banking and Recovery | DRT (2025)

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T.A. No. 1883 of 2022

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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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T.A. No.1883 of 2022

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Central Bank of India Near Ghonda Chowk Ghonda Village, Delhi-110053 Applicant

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Versus

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M/s Indu Hosiery IX/1908, Gali no.3 Kailash Nagar, Delhi-110031

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Also at: 9/97, Banarasi Dass Building Subhash Road, Delhi-1110031

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Mrs. Indu Jain w/o Sh. Mukesh Jain Proprietor of M/s Indu Hosiery IX/1908, Gali No.3, Kailash Nagar Delhi-110031

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Mrs. Kamla Jain w/o Late Kanwar San Jain IX/1908, Gali No.3, Kailash Nagar Delhi-110031 Defendants

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Present: Sh.S.A.Khan, Counsel for the applicant bank

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Date of Institution: 08.07.2021 Date of Pronouncement: 17.06.2025

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FINAL ORDER

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This original application has been filed by the applicant bank before DRT-III„ Delhi on 08.07.2021 and then transferred to DRT-I Delhi, through Sh. Piyush Dewangan, authorized Sd'

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T.A. No. 1883 of 2022

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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.3,66,58,897/- (Rupees Three Crores Sixty Six Lacs Fifty Eight Thousand Eight Hundred Ninety Seven only) as on 15.06.2021, out of which a sum of Rs.46,70,912/- in OD account @13.50%, Rs.76,83,867/- in Cash Credit account @12.50% and Rs.2,42,04,118/- in Export Bill Purchase account @10.50% interest per annum plus @2% 2% penal interest with monthly rests.

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The brief facts of the case are that on the request of the defendant no.1 as proprietorship firm of defendant no.2, the applicant bank sanctioned initially Overdraft limit of Rs.20,00,000/- (Rupees Twenty Lacs only) on 23.01.2010 under Cent Mortgage Scheme which was renewed / enhanced to Rs.50.00 lacs on 06.06.2012. Further, on the request of defendant no.1 through its proprietor, the applicant bank sanctioned Overdraft Limit, Cash Credit Limit and Export Bill Purchased Limit in favour of defendant no.1 aggregating to Rs.260.00 lacs as on 07.07.2015 @12.95% rate of interest for trading of readymade garments and export of groceries etc. against hypothecation of readymade garments, stock of groceries and mortgage of property at Kailash Nagar, Delhi owned by defendant no.3, who stood as guarantor for the credit facilities availed by defendant no.1.

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In order to avail the loan facilities, the defendant no.1 through its proprietor submitted loan applications and executed Sanction Letters, Demand Note, Overdraft Agreement, Letter of Continuity, Letter of Interest, Letter of Waiver, Consent Clause, Declaration and Undertakings, Form of Guarantee for

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Sd'

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T.A. No. 1883 of 2022

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Advances and Credit, Undertaking cum Affidavit, Agreement of Hypothecation, Supplementary Agreement, Letter of Waiver, Certificate of Importer & Exporter, Demand Pronote, Packing Credit Hypothecation Agreements, Agreement — Bill Discounted, Supplementary Agreement OD & PC in favour of the applicant bank on 23.01.2010 and thereafter on various dates during enhancement/renewal of limits lastly on 07.07.2015.

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In order to secure the loan facilities, the defendant no.1 hypothecated the stock in trade / stocks of readymade garments and groceries as well as personal guarantees of defendant no.2 and 3 in favour of applicant bank.

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That in order to secure the loan facilities, the defendant no.3 created equitable mortgage of West Side Portion of three story Residential Property bearing Old no.995/188, New no.IX/1908, Plot No.74, Gali No.3 situated at Kailash Nagar, Near Jain Mandir, Gandhi Nagar, Shandara, Delhi-110031, area measuring 75 sq. yards by depositing Certified copy of Sale Deed dated 12.05.1958 and Original Sale Deed dated 11.01.1972 with the applicant bank on 15.01.2010, 26.03.2011 and further extended from time to time.

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The defendants acknowledged the debt of Rs.2,60,00,000/- as on 07.07.2015 towards the applicant bank vide letter dated 02.02.2018.

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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 were irregular in maintaining the account. The defendants failed to

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serve interest timely despite repeated requests made by the applicant bank and defaulted in repayment of their liabilities with the applicant bank. Ultimately, the applicant bank classified the accounts as NPA on 31.12.2018 as per RBI guidelines and hence the applicant bank has approached this Tribunal for recovery of their dues.

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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 21.01.2019 for Rs.2,66,64,515/- as on 21.01.2019 with interest was issued to the defendants. The applicant bank took physical possession of mortgaged property as per order dated 24.05.2019 passed by Ld. CMM(East), Delhi under Section 14 and issued Sale Notice dated 18.08.2020 duly published in newspapers.

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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 20.01.2025, the defendant has 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 Sh.Piyush Dewangan, authorized representative of the applicant bank who has proved the documents as Power of Attorney, Sanction letters, Demand notes, Overdraft agreements, Letters of continuity, Letters of Interest, Letter of Waiver, Consent Clause, Declaration and Undertakings, Form of Guarantee, Undertaking cum Affidavit, Demand Pronotes, Loan Applications, Packing

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Credit hypothecation, Agreements of Hypothecation, Application for enhancement of facility, Supplementary agreements, Letters, Sale deeds, Notice u/s 13(2), Possession Notice along with Postal Receipts, Ld CMM Order dated 24.05.2019, Sale Notice dated 18.08.2020, Copies of Statements marked as Ex.AW-1/1 to Ex.AW-1/79.

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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.

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T.A. No. 1883 of 2022

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ORDER

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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.3,66,58,897/- (Rupees Three Crores Sixty Six Lacs Fifty Eight Thousand Eight Hundred Ninety Seven only) as on 15.06.2021 together with pendentelite and future interest @12% per annum from the date of filing this application till the date of realization and costs; failing which the aforesaid amount shall be recovered from the sale of hypothecated stock of readymade garments, stock of groceries etc., book debts and mortgaged property being West Side Portion of three story building Residential Property bearing Old no.995/188, New no.IX/1908, Plot No.74, Gali No.3, situated at Kailash Nagar, Near Jain Mandir, Gandhi Nagar, Shandara, Delhi-110031, area measuring 75 sq. yards owned by defendant no.3. 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 18.08.2025.

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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: 17.06.2025

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