Allowed

Uco Bank v. M/S Varun Enterprises

DRT1 Oct 2025TA/724/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the original application filed by UCO Bank for recovery of Rs. 21,73,150.51 against M/s Varun Enterprises. Finding the case unrebutted and noting that the contract ended upon filing, the court awarded interest at 12% per annum instead of the claimed rate, directing recovery from hypothecated assets or the defendants' properties.

What did the court decide?

Order directed defendants to pay Rs. 21,73,150.51 with interest at 12% per annum from the date of filing, recoverable from sale of hypothecated stocks and defendant properties.

Uco Bank versus M/S Varun Enterprises — Banking and Recovery | DRT (2025)

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T.A. No.724 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

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T.A. No. 724 of 2023

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UCO Bank D-2/4, Phase 3 Model town, Delhi-110009 Applicant

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Versus

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1. M/s Varun Enterprises House no.649, Street no.8

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Near Shanti Palace

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1St Pusta, Sonia Vihar

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Near Karawal Nagar, Delhi-110094

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Also at:

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680/7, Ground Floor Gali Phoolwali, Chitla Gate Near Jama Masjid, Chawri Bazar Delhi-110006

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2. Shri Varun Sharma Proprietor of M/s Varun Enterprises House no.649, Street no.8 Near Shanti Palace

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1st Pusta, Sonia Vihar Near Karawal Nagar, Delhi-110094

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Also at:

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680/7, Ground Floor Gali Phoolwali, Chitla Gate Near Jama Masjid, Chawri Bazar Delhi-110006 Defendants

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Present: Shri Kamal Khurana, Counsel for the applicant bank

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Date of Institution: 05.10.2021

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Date of Pronouncement: 01.10.2025

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T.A. No.724 of 2023

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FINAL ORDER

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This original application has been filed by the applicant bank on 05.10.2021 before DRT-III Delhi & DRT-I Delhi through Ms. Himanshi Tyagi, authorized representative of the applicant bank under Section 19 of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 against the defendants for recovery of a sum of Rs.21,73,150.51 (Rupees Twenty One Lacs Seventy Three Thousand One Hundred Fifty and paisa Fifty One only) along with pendentelite and future interest @13.45% per annum with monthly rest from the date of filing this application till the date of realization and costs.

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2. The brief facts of the case are that at the request of defendant no.1 through its proprietor being defendant no.2, the applicant bank sanctioned Cash Credit limit of Rs.20,00,000/- (Rupees Twenty Lacs only) under MSME on 23.03.2016 @9.60 interest per annum against hypothecation of stocks under Prime Minister Mudra Loan scheme for stationery printing and FITL of Rs.1,09,466/- on 06.09.2020.

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3. That in order to avail the said loan facility, the defendant submitted loan application under Prime Minister Mudra Yojana and executed Loan Agreement and Hypothecation of Goods to Secure a Demand Cash Credit and Demand Promissory Note with the applicant bank.

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4. It has been submitted by the applicant bank that after availing the aforesaid loan facility, the defendants failed to maintain financial discipline and failed to pay the interest as per terms of sanction. The applicant bank issued legal notice dated 15.03.2021 and classified the account as NPA on

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„sd

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T.A. No.724 of 2023

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31.03.2021 as per RBI guidelines but defendants failed to clear the dues. Hence, the applicant bank has approached this Tribunal for recovery of their dues.

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5. Notices of this O.A. were issued to the defendants and despite of proper service the defendant has chosen to absent from the proceedings. As per order dated 09.09.2024, the defendants have been proceeded ex-parte as not appeared before the Tribunal nor written statement, evidence and affidavit of assets have been filed.

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6. In order to prove its case, the applicant bank has filed its evidence by way of affidavit of Ms. Himanshi Tyagi, authorized representative of the applicant bank who has proved the documents Copy of Loan Application, Loan Agreements with Receipts, KYC documents, Hypothecation of Goods to Secure a Demand Cash Credit, Demand Promissory Note, Bank Statements, Letters and other Correspondences, Legal Notice marked as Ex.PW-1/1 to Ex.PW-1/7.

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7. 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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8. 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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9. As per the provision of Section 19(20) of the Recovery of Debts Due to Banks and Financial Institution Act, 1993 which 5c(--

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T.A. No.724 of 2023

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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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10. 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 within a period of 30 days, a sum of Rs.21,73,150.51 (Rupees Twenty One Lacs Seventy Three Thousand One Hundred Fifty and paisa Fifty One only) together with pendentelite and future interest @12% per annum with monthly rests from the date of filing of this application till the date of realization with costs, failing which the aforesaid amount shall be recovered from the sale of the 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 defendants.

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(II) The recovery certificate be issued forthwith and be sent 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 29.11.2025.

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T.A. No.724 of 2023

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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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