Allowed

Canara Bank v. M/S Avtar Bag Factory

DRT18 Sept 2025TA/372/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the bank's original application for recovery of outstanding dues from borrowers and guarantors under a Mudra loan. Proceeding ex-parte due to respondent absence, the court enforced repayment via hypothecated assets and property.

What did the court decide?

Directed defendants to jointly or severally pay Rs.23,62,533/- with pendentelites and future interest at 10.20% per annum and costs within 30 days.

Canara Bank versus M/S Avtar Bag Factory — Banking and Recovery | DRT (2025)

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T.A. No. 372 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.372 of 2022

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Canara Bank
Aggarwal Central Plaza Gf-Pf, Plot 7, DDA Community Centre Sector-9, Rohini, Delhi-110085 Applicant
Versus
1. M/s Avtar Bag Factory (Borrower) 10853, Nabi Karim Jhandewalan Road, Delhi-110055
2. Mr. Harminder Singh Bhatia (Guarantor) S/o Sh. Avtar Singh House no.8, Madan park East Punjabi Bagh, Delhi-110026 Defendants
Present: Shri Puneet Pankaj, Counsel for the applicant bank
Date of Institution: 24.12.2021
Date of Pronouncement: 18.09.2025

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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 24.12.2021 and then transferred to DRT-I Delhi through Shri Rajesh Kumar, authorized representative of the applicant bank under Section 19 of Recovery of Debts and Bankruptcy Act, 1993 against the defendant for recovery of a sum of Rs.23,62,533/- (Rupees Twenty Three Lacs Sixty Two Thousand Five Hundred Thirty

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T.A. No. 372 of 2022

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Three only) along with pendentelite and future interest @10.20% per annum with monthly rests along with penal interest @2% from the date of filing this application 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 defendant no.2 as proprietor of defendant no.1 vide loan application dated 29.02.2016, the applicant bank sanctioned Cash Credit facility for a sum of Rs.10,00,000/- (Rupees Ten lacs only) under Pradhan Mantri Mudra Yojana (PMMY) against hypothecation of stocks and book debts on 01.03.2016 which was enhanced to Rs.15,00,000/- (Rupees Fifteen Lacs only) @10.20% interest per annum and @2% penal interest on account of default in interest on 03.03.2017 on the request of the defendant no.1.

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In order to avail the loan facility, the defendants submitted Application for loan under PMMY scheme and executed Cash credit Agreement, Agreement cum Deed of Hypothecation, Request for Overdraft Facilities, Letter of Undertaking, Letter of Proprietorship, Pronote, Letter evidencing Execution of Documents, Certificate of Loan Papers, Link Letter and Supplemental Agreement on 01.03.2016 and 03.03.2017 in favour of the applicant bank.

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The defendants also executed Acknowledgement of debt and Security dated 30.01.2018 acknowledging the debt in favour of the applicant bank.

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It has been submitted by the applicant bank that after availing the aforesaid loan facility, the defendants failed to comply with the terms and conditions of sanction and failed to regularize the account with the applicant bank. Ultimately, the

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T.A. No. 372 of 2022

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applicant bank classified the account as NPA on 18.05.2019 as per RBI guidelines, but the defendant failed to regularize the account. 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 13.06.2022, 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 Sh. Rajesh Kumar, authorized representative of the applicant bank, who have proved the documents as Power of Attorney, Application for Loan, Cash Credit Agreement, Agreement cum Deed of Hypothecation, Request for Overdraft Facilities, Letter of Undertaking, Letter of Proprietorship, Pronote, Letter evidencing Execution of Documents, Certificate of Loan Papers, Letter of Renewal, Supplemental Agreement, Link Letter, Acknowledgement of Debt and Security, NPA Certificate, Certificate u/s 2A of Bankers' Book Evidence Act, Certified Statement of Account marked as Ex.AW-1/1 to Ex.AW-1/8. .

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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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The case filed by the applicant bank gone unrebutted and there is no question of disbelieving the case of the applicant

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T.A. No. 372 of 2022

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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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.23,62,533/- (Rupees Twenty Three Lacs Sixty Two Thousand Five Hundred Thirty Three only) together with pendentelite and future interest @10.20% 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 stocks and book debts etc. In case of shortfall, the same shall be recovered from the sale of movable and immovable properties of the defendant.

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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 17.11.2025.

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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: 18.09.2025

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Canara Bank v. M/S Avtar Bag Factory

Case brief

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Canara Bank v. M/S Avtar Bag Factory

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