Allowed

Union Bank of India v. M/s Sun Star Shoe Pvt. Ltd.

DRT24 Oct 2025TA/385/2022

Case brief

AI extract

What is this about?

In TA No.385 of 2022, the Debts Recovery Tribunal-II, Delhi adjudicated an original application filed by Union Bank of India for recovery of dues of Rs.3.08 crores. The Tribunal rejected defenses regarding blank signatures and interest rates, holding the bank proved its case and allowing the application.

What did the court decide?

Order directed respondents to pay Rs.3,08,93,946.30 with cost and 15% future interest within 30 days; recovery from mortgaged/hypothecated assets in case of default.

Union Bank of India versus M/s Sun Star Shoe Pvt. Ltd. — Public Procurement and Tenders | DRT (2025)

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Beforc SUSHIL KUMAR RASTOGI, Presiding^(fficer Debts Recovery Tribuna!-Il, Delhi

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TA No.385 OF 2022

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UNIOI{ BANK OF INDIA VS M/S SUN STAR^SHOEPvT LTD &ORS

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Reserued on

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: 25.G).2O25

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Pronounced on : 24.1O.2025

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Union Bank of India

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-Applicant bank

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Vs. 1. M/s Sun Star Shoe h Ltd

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Mr. Ajay Sharma 3. Mr. Amit Gupta - Defendants

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Present Ms. Abhinav Shally,^{Counselappears for} applicant bank. Defendants are ex-parte^{since 02.04'2025.}

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FINAL ORDER

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This original application^{has been filed by the} applicant bank, on^{29.07.20t5 through Shri. Pankaj} Kumar, Chief Manager of^{the applicant bank, under} Section 19 of the^{Recovery of Debts and Bankruptcy} Act, 1993 against the^{defendants for recovery of a} sum of Rs.3,08,93,946.30^{together with cost, charges} and^{pendentellite} and^{future interest} @15%^{from date} of filing of this O.A. till^{the realization in full.}

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The brief facts of the^{case are that at the} request of the defendant^{no.1 through its directors} i.e., defendant nos. 2 and 3,^{the applicantbank} sanctioned a credit facility^{i.e., Cash Credit Union} Trade of Rs.290 lacs for^{purpose of workingcapital} and expansion of business,^{vide sanction letter dated} 28.08.2013. The amount of the^{credit facility was}

TANO. 385 of 2022

secured by execution of various documents by the defendants. The defendant no.2 has mortgaged the propety bearing no.WZ-315, Part of Khasra No.709 Abadi of Lal Dora, 1908-09 in the area of village Madipur, New Delhi-l10063 area measuring 121 sq. mtrs. Approx, owned by the defendant no.2.^Thus, the defendant no.2 has mortgaged his^propefi by depositing the sale deeds on 29.07.2013 in favour of the applicant bank. The defendant nos.2 & 3^{stood as} guarantors. The defendants executed the hypothecation agreement of^good and debts.^The defendants executed all necessary^{loaning documents} om 11.12.2013, 26.02.2015 and^14.05.2015. Applicant bank^got the charge^{registered in respect of} the amount sanctioned to the^{defendants in the office} of Registrar of companies against^{the receipt dated} 09.01.2014.

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It is further submitted that^{the defendants} enjoyed and utilized the Loan^{facility, but failed to} maintain the financial discipline and^{failed to repay} the due amounts. The applicant^{bank requested the} defendants to regularize the^{loan accountby visits} and letters, but there was no^{response from the} defendants, hence the account^{was classifiedas NPA} dated 30.06.2015. Therefore, the^{applicantbank} served a recall notice dated^18.07.2015 to^the defendants but failed to^{recover the same.Thus, the} present O.A.ff.A. is preferred by the applicant bank to recover its dues.

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On notice by this Tribunal, defendant^{nos.1 to 3} put appearance through coun*l. The defendant nos. q

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TANO. 385 of 2022

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1 & 2 have flled written statement and evidence. Thereafter, the defendants nos. 1 to 3 failed to put appearance in the matter, despite issuance of default notice. Accordingly, the defendant nos.l to 3 were proceeded against ex-parte on 02.M.2025.

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In the written statement the defendant nos.1 & 2 have denied the fact mentioned in the O.A. It is submitted that the valuation of the secured asset as obtained by the applicant from its own valuer^{is more} than the limit sanctioned and fully covers any amount due in the account. It is fufther submitted that defendants were made to sign on the dotted^{lines on} written/blank papers by the applicant bank without permitting them to read the written documents and without giving a copy thereof^prior to signing for taking appropriate legal advice. Further^these documents^per say do not establish any^liability of^the defendants. It is submifted that as^{per contract} interest is to be levied on the outstanding and^not on the total sanctioned amount @BPLR^prevalent at^the time of currency of facilities. The applicant bank has not brought any documents on record to show^BPLR prevalent at any pafticular time during the currency of the credit facilities the BPLR applicable thereto. It^is further submitted that the statement of account filed with the application, even though not supplied, seems to be a false and fabricated documents and contains entries particularly the debit entries which are factitious. Therefore, the statement of account is baseless and the application is liable to be dismissed on this^ground alone. It^js submitted that the^RBI d..

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TANO.385 of2022

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guidelines require the bank to notiff the debtor to regularize the account prior to classiffing the account as NPA and there are no communications sent to defendants in this regard. It is further submitted that the applicant bank is not entitled to charge any interest more than its^principal lending rate as the facilities were fully secured by immovable property. It is prayed that this Hontle Tribunal may dismissed the original application.

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The applicant bank and the defendant^nos.1 &² have filed their respective evidence.

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Heard the Ld. Counselofthe^{applicant bank and} perused the record.

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The first contention of^{the defendantsis that the} applicant bank has obtained^{signatures on the blank} proformas and there was no opportunity to the defendants to bargain the terms of^{the loanand} therefore, the said^paper cannot be^{relied upon.But} the contention of the defendants^{has no force. The} defendants are well educated^{businessman; therefore,} it cannot be presumed that they have^{signed the} papers without going through the conditions of the sanction letter. Further, the defendant^{has never filed} any complaint before the competent^{forum in this} regard.

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The next contention of^{the defendants is that} the applicant bank has charged exorbitant^{rate of} interest. On the other hand, the Ld.^counsel of^the bank has submitted that the interest^{has been} charged as^per agreement between^{the parties.In} this regard I have^gonelhrough the^{record. From} €)'

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TANO.385of2022 5

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perusal of the statement of account it is clear that the applicant bank is charging rate of interest as per agreement. Therefore, it cannot be said that the applicant bank is charging exorbitant rate of interest. Therefore, there is no force in the contention of the defendant.

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The next contention of the defendants is that the applicant bank has not filed the complete statement of account as required as^per the rules. In this regard I have^perused the record. On^perusal of the record, it is clear that the applicant bank has^filed the complete statement of account.^{Therefore, there} is no force in the contention of the defendants.

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The next contention of the defendant is that NPA has been wrongly declared. In this^regard I^have gone through the statement of account. From^perusal of the statement of account it is clear that^the contention of the defendant is against the^evidence. Therefore, the contention of the defendant has^no force.

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From perusal of the entire evidence, it is^clear that the defendants have failed to^prove their^{case as} claimed in the written statement. On the other^hand, the applicant bank has^proved his case against the defendants and therefore, the defendants^{are liable to} pay jointly and severally the amount claimed by the applicant bank and the OAIIA of the applicant^bankis liable to be allowed.

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In the light of the above discussions, the^present TA deserves to be allowed.

TANO. 385 of 2022

ORDER

I hereby allow this T.A. of the Applicant Bank and direct the defendant nos. 1 to 3 to^{pay jointly} and severally to the applicant bank within 30 days from today, a sum of Rs.3,08,93,946.30 along with cost, expenses and interest @ 15olo from the date of filing of this O.A. which has become T.A till the date of realization.

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In case of failure to deposit the above amount within the stipulated^period, the same shall be recorrered from the sale of hypothecated assets^and the sale of the mortgaged^property bearing no.^WZ- 315, Paft of Khasra No.709 Abadi of^{Lal Dora, 1908-09} in the area of village Madipur, New Delhi-l10063^area measuring 121 sq. mtrs. Approx. In case of shortfall, the same shall be recovered from the sale of^personal movable and immovable assets of the defendant^nos. 1to3.

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Recovery Certificate be issued forthwith and be sent to Recovery Officer, Debts Recovery Tribunal-Il, Delhi.

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The registry of this Tribunal is hereby directed to issue free copy of the order and send the same to both the^parties.

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,)'

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TANO. 385 of 2022 7 5) Parties are directd to appear before the Ld. Recovery Officer, DRT-II, Delhi on 22.t2.2025. Pending LAs, if any, stand disposed of.

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File be consigned to records.

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Date : 24.10.2025

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(SUSHIL KUMAR RASTOGI) PRESIDING OFFICER DRT-II, Delhi

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This^judgement has been signed, dated and pronounced in open court.

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Date : 24.10.2025

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-cJ

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(susHr L KrIruAR^-pusrocr) PRESIDING OFFICER DRT-II, Delhi

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Union Bank of India v. M/s Sun Star Shoe Pvt. Ltd.

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Union Bank of India v. M/s Sun Star Shoe Pvt. Ltd.

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