Allowed

Phoenix Arc Pvt. Ltd. v. Gauri Shankar Jewellers

DRT4 Nov 2025TA/903/2023

Case brief

AI extract

What is this about?

The Tribunal allowed the application filed by Phoenix ARC Private Limited against the defendants for recovery of a loan amount. The court reduced the rate of interest to 12% per annum and authorized recovery from mortgaged or hypothecated property.

What did the court decide?

Order directed payment of principal sum with interest at 12% p.a. redeemable from sale of mortgaged/hypothecated properties.

Phoenix Arc Pvt. Ltd. versus Gauri Shankar Jewellers — Banking and Recovery | DRT (2025)

¶1

T.A. No. 903 of 2023

¶2

Debts Recovery Tribunal-I, Delhi 4th floor, Jeevan Tara Building, Parliament Street, New Delhi

¶3

Presiding Officer: Shri Govind Ballabh Sharma

¶4

T.A. No. 903 of 2023

¶5

Phoenix ARC Private Limited (Karnataka Bank Limited — Assignor) 5th Floor, Dani Corporate Park 158, CST Road, Kalina Santacruz (E), Mumbai-400098 Applicant Versus 1. M/s Gauri Shankar Jewelers Through its Proprietor Sh. Deepak Kumar Shop no.5, LGF, Hotel Ahluwalia Palace 2117-18, Bank Street, Karol Bagh New Delhi-110005 2. Sh.Deepak Kumar s/o Sh. Paras Ram Proprietor of M/s Gauri Shankar Jewellers 14A/89, WEA, Karol Bagh New Delhi-110005 3. Mrs. Indu Bala w/o Sh. Paras Ram 14-A/89, WEA, Karol Bagh New Delhi-110005 Defendants Present: Ms. Usha Singh, Counsel for the applicant bank Date of Reserve: 09.10.2025 Date of Pronouncement: 04.11.2025

¶6

FINAL ORDER

¶7

This original application was filed by the Karnataka Bank Ltd., who assigned the debt to the present applicant for recovery from defendant no.1 along with other defendants on 25.02.2019 through Shri Mahesh Malunjkar, authorized representative of the applicant FI under Section 19 of Recovery

¶8

T.A. No. 903 of 2023

¶9

of Debts and Bankruptcy Act, 1993 (As amended up to date) read with Rule 8 of the Debt Recovery (Procedure) Rules 1993 against the defendants for recovery of Rs.3,79,33,786/(Rupees Three Crores Seventy Nine Lacs Thirty Three Thousand Seven Hundred Eighty Six only) as on 23.01.2019 together with pendentelite and future interest @13.35% per annum with monthly rests alongwith penal interest @3% with monthly rests from 24.01.2019 till its realization with costs. The Assignor bank had assigned the debt of defendants to the applicant FI as per Assignment Agreement dated 28.12.2015 and substituted as applicant under Section 5(5) of the SARFAESI Act in place of assignor bank to pursue the present application for recovery of dues.

¶10

The brief facts of the case are that on the request of the defendant no.1 being proprietorship concern of defendant no.2 and defendant no.3 as mortgagor/co-obligants, the Assignor bank sanctioned Overdraft facility for a sum of Rs.200.00 Lacs for the purpose of business on 16.01.2014 @13.75% interest per annum with monthly rests under Vyapar Mitra Scheme against hypothecation of book debts and mortgage of property. The defendants also agreed to pay penal interest @3% per annum in case of default or delay in repayment.

¶11

That in order to avail the credit facility, the defendant no.1 to 3 executed various documents such as Request Letter, Take Delivery Letter, Opening of Current Deposit Account, Cheques in Respect of Financial Assistance Taken, Consent Letter, On Demand Letter, General Power of Attorney for Book Debts, Hypothecation Agreement, Memorandum of Deposit of Title Deeds, Power of Attorney, Undertaking for abiding the terms and conditions with the assignor bank.

54 -

T.A. No. 903 of 2023

That in order to secure the credit facilities availed by defendant no.1, the defendant no.3 mortgaged her property bearing no.14-A/89, W.E.A. situated at Karol Bagh, New Delhi admeasuring 134 sq. yards with the assignor bank on 16.01.2014 vide Memorandum of Title Deeds by depositing original Registered Sale Deed dated 31.07.1967, Release Deed dated 13.08.1991 and Registered Sale Deed dated 21.08.2006.

¶16

It has been submitted by the Applicant FI / Assignor FI that after availing the aforesaid loan facility, the defendant no.1 failed to maintain financial discipline and service the interest and their liabilities with applicant bank/FI. The Assignor bank/FI classified the account as NPA on 29.05.2015 as per RBI guidelines. Hence, the applicant bank FI approached this tribunal for recovery of their dues.

¶17

Notice under section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 dated 02.07.2015 was issued to the defendants calling upon them to clear outstanding dues but defendants failed to do so. Further, the Assignor bank issued Possession Notice dated 01.10.2015 u/s 13(4) of SARFAESI Act duly published in newspapers on 05.10.2015 but defendants failed to clear the dues.

¶18

Notices of this O.A. were issued to the defendants and despite of proper service, the defendants have chosen to absent from the proceedings. As per order dated 10.07.2024, 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 defendants.

¶19

¶20

T.A. No. 903 of 2023

¶21

In order to prove its case, the applicant bank has filed its evidence by way of affidavit of Shri Mahesh Manjlukar, authorized representative of the applicant who has proved the documents as Affidavit in Evidence, Board Resolution, Original Application, Assignment Agreement, Account Opening Form, Sanction Letter, Undertaking, General Power of Attorney for Book Debts, Demand Promissory Note, Hypothecation Agreement, Memorandum of Deposit of Title Deeds, Registered Sale Deeds, Release Deeds, Notice u/s 13(2) of SARFAESI Act, Possession Notice, Statement of Account marked as Ex.AW-1/1 to Ex.AW-1/16.

¶22

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.

¶23

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.

¶24

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

T.A. No. 903 of 2023

bank and the applicant bank has proved its case beyond reasonable doubts.

¶29

In the light of the above discussions, the Original Application deserves to be allowed.

¶30

ORDER

¶31

(I) I, allow this OA and direct the defendants, jointly or severally, to pay to the applicant bank, within a period of 30 days, a sum of Rs.3,79,33,786/- (Rupees Three Crores Seventy Nine Lacs Thirty Three Thousand Seven Hundred Eighty Six only) as on 23.01.2019 together with pendentelite and future interest @12% per annum with monthly rests from 24.01.2019 till the date of realization failing which the aforesaid amount shall be recovered from sale of mortgaged property bearing No.14-A/89, W.E.A., Karol Bagh, New Delhi and hypothecated goods lying at Shop no.5, LGF, 2117-18, Hotel Ahluwalia Palace, Bank Street, Karol Bagh, New Delhi. In case of shortfall, the same shall be recovered from the sale of movable and immovable properties of defendants.

¶32

(II) The recovery certificate be issued forthwith and be sent the Recovery Officer, Debt Recovery Tribunal-I, Delhi.

¶33

(III) Parties are directed to appear before Recovery Officer, DRT I, Delhi on 02.01.2026.

¶34

(IV) Copies of final order as well as Recovery Certificate be sent to all concerned free of cost.

¶35

5d -

¶36

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

¶37

(Dictated and pronounced in open court) Dated: 04.11.2025