Allowed

State Bank of India v. M/s Ashirwad Chain House (P) Ltd.

DRT16 Sept 2025TA/905/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the bank's recovery application against a company and its directors. The court rejected defenses regarding blank signatures and account objections. It awarded the claimed principal sum plus interest at a reduced rate of 12% p.a. from the date of NPA.

What did the court decide?

Defendants directed to pay Rs.12,45,21,220 with pendentelite and future interest @12% p.a. from 28.12.2013, recoverable from properties or sale of assets.

State Bank of India versus M/s Ashirwad Chain House (P) Ltd. — Money Laundering | DRT (2025)

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T.A. No.905 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. 905 of 2023

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State Bank of India

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(e-State Bank of Bikaner & Jaipur SARB-II Branch, 18/4, 2nd & 3rd Floor, Arya Samaj Road, Karol Bagh, New Delhi-110005 Applicant

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Versus

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Ashirwad Chain House P.Ltd. 1165, 3rd Floor, Kucha Mahajani Chandni Chowk, Delhi-110006

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Also at: G-32, Lawrence Road Industrial Area Delhi-110035

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Also at:

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A-2/4, Saraswati Colony, Ashok Vihar Phase III, Delhi-52

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Also at: G-71/1, Part H, 2nd Floor, Lawrence Road Industrial Area, Delhi-110035

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Sh.Amit Singla A-2/4„ Saraswati Colony, Ashok Vihar Phase III, Delhi-52

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Ms Anjali Singla A-2/4, Saraswati Colony, Ashok Vihar Phase III, Delhi-52

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Ms Sumitra Devi A-2/4, Saraswati Colony, Ashok Vihar Phase III, Delhi-52

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Sh.Roshan Lal Singla A-2/4, Saraswati Colony, Ashok Vihar Phase III, Delhi-52

Defendants

T.A. No.905 of 2023

Present: Shri Vipin Jai, Counsel for the applicant bank Shri Dev Bhardwaj, Counsel for the defendants

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Date of Institution: 30.06.2014

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Date of Pronouncement: 16.09.2025

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FINAL ORDER

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This original application has been filed by the applicant bank on 30.06.2014 before �Delhi and then transferred to DRT-I, Delhi through Shri Ashok Shukla, authorized representatives of the applicant banks, under Section 19 of Recovery of Debts Due to Bank and Financial Institutions Act, 1993 against the defendants for recovery of a sum of Rs.12,45,21,220/- (Rupees Twelve Crores Forty Five Lacs Twenty One Thousand Two Hundred Twenty only) as on date 30.06.2014, out of which, Rs.2,53,99,951/- in Term Loan account along with interest @13.75% and Rs.9,91,21,269/- in Cash Credit Account along with interest @12.75% per annum per annum from 28.12.2013 till the date of realization along with costs.

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The brief facts of the case are that the defendant no.1 being private company (earlier in the name of Ashirwad Jewellery House as Partnership firm and later on taken over by Ashirwad Chain House P.Ltd. on 20.03.2012) in the business of gold jewellery. The defendant no.2 and 3 as directors of defendant no.1 and defendant no.2 to 4 are mortgagors was sanctioned Cash Credit facility of Rs.5.00 crores and Term Loan of Rs.3.30 crores on 13.01.2012. On the request of defendant no.1, the limit was enhanced to Rs.12.30 crores on 21.06.2012 @11.50% in Term Loan and @13.00% in Cash Credit account

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T.A. No.905 of 2023

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against hypothecation of entire current assets, stock, raw materials etc. and Mortgage of property owned by defendant no.3. The limits were duly accepted vide Board Resolution of defendant no.1 dated 31.03.2012, 03.05.2012 and 20.06.2012 to avail the credit facilities from the applicant bank.

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That in order to avail the loan facilities, the defendants submitted loan applications and executed Agreement of Loan cum Hypothecation (Form No.SME-2), Partnership Letter, Guarantee Agreement, Annexure-B, Consent Clause, Annexure-II, Annexure C on 16.01.2012. Further, defendant no.1 submitted Board Resolution dated 03.05.2012, Agreement of Loan cum Hypothecation, Link Letter, Guarantee Agreement, Consent Clause, Balance Confirmation on 04.05.2012. In consideration of enhancement of limits, the defendants executed Supplemental Agreement of Loan, Supplemental Deed of Guarantee, Guarantee Agreements, Supplemental Agreement of Hypothecation of Goods and Assets, Consent Clause, Annexure-IV, Undertaking, Annexure-II, B, C, Affidavits of Guarantee etc. on 22.06.2012.

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In order to secure the credit facilities availed by the defendant no.1, the following properties were equitable mortgage created on 20.01.2012 which was further extended on 21.06.2012 and 22.06.2012 by depositing documents of title, evidences, deeds, writings etc. by defendant no.2, 3 and 4 by executing Memorandum of Mortgage and confirmation letters for creation of mortgage situated at:

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B-71/1, Part-H, 2nd Floor portion of Lawrence Road Industrial Area, Delhi owned by defendant no.2;

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T.A. No.905 of 2023

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Southern-Western portion of Basement & ground Floor, 47/2, Block-C, Lawrence Road Industrial Area, Delhi owned by defendant no.2;

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B-71/1, Part-I,^{2nd Floor portion of Lawrence Road} Industrial Area, Delhi owned by defendant no.2; B-71/1, Part-I, Ground Floor (without terrace rights) Lawrence Road Industrial Area, Delhi owned by defendant no.3;

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Southern portion of Basement & Ground Floor, 47/2, Block-C, Lawrence Road Industrial Area, Delhi owned by defendant no.2;

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The applicant bank also got registered the charge with 5. Registrar of Companies on 04.05.2012 on the mortgaged properties.

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It has been submitted by the applicant banks that after 6. availing the aforesaid loan facilities, the defendants miserably failed and neglected to route their transactions through the account and maintain financial discipline as per terms and conditions of sanction despite various requests, personal visits etc. The applicant bank classified the account as NPA on 28.12.2013 as per RBI guidelines but defendants failed to regularize the account, hence, the applicant bank has approached this tribunal for recovery of its dues.

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Notice under Section 13(2) of the Securitisation and 7. Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 dated 17.02.2014 was issued by applicant bank.

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Notices of this O.A. were issued and defendant no. 1 filed 8. their written statement praying for dismissal and rejection sc(

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T.A. No.905 of 2023

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including relief in toto of this application stating that debts have been restricted by the applicant bank hence earlier contract is liable to be dismissed as per provision of Section 62 of Indian Contract Act 1872. The defendant no.1 to 5 submitted that applicant bank obtained signatures on blank printed forms without discussion in monopolistic manner and such contract is void, abinitio and non-est in the eyes of law. Further, applicant bank not supplied legible documents of interest charged in excess in the account, filed incomplete statement of account not certified under Bankers' Books of Evidence Act. The application is barred under Section 13(10) of Securitization Act as is only entitled to instate the OA after taking recourse under Section 13 of Securitization Act as possession of properties taken and also by Rule 10 of DRT rules which states that an application shall not seek reliefs on more than a single cause of auction in one single application unless prayed for consequential to one another. The OA is legally not maintainable as account was declared NPA without making due compliance of RBI circulars not given due credit of amount deposited by defendants and wrongly issued notice u/s 13(2) against the defendants without any legal sanction and authority of law. It is submitted that the applicant bank not issued notices to all the parties supplying stocks, charged excessive interest which was to be calculated on reducing balance @11.50% simple, not signed Memorandum of Recording of Mortgage and confirmation letters for fresh mortgage and there was no irregularity in the account for NPA classification in the account in violation of RBI guidelines. The amount claimed by applicant bank not in consonance of the documents as on account of non-disbursement of facilities including interest, therefore requested to dismiss the OA as applicant bank has taken possession of properties and waived

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T.A. No.905 of 2023

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its right to claim any amount after dues satisfaction of properties.

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In order to prove its case, the applicant bank has filed its evidence by way of affidavit of Shri Charan Singh, authorized representative of the applicant bank who have proved the documents as Gazette of India, Agreements of Loan cum Hypothecation, Partnership Letter, Guarantee Agreements, Annexure-B, Consent Clauses, Annexure-II, Annexure-C, Affidavits of Defendant no.2, Letters of Confirmations & Recital, Takeover Agreement, Link Letter, Memorandum and Confirmation Letters, Balance Confirmations, Sanction Letters, Supplemental Agreements, Supplemental Deed of Agreement, Supplemental Deed of Guarantee, Supplemental Agreement of Hypothecation, Annexure IV, Undertakings, Annexure-II, Annexure B, Annexure C, Affidavits of Guarantors, Board Resolutions, ROC Charge, Notice under Section 13(2), Certified Statement of Accounts under Bankers' Book Evidence Act, marked as Exhibit A-1 to Exhibit A-38.

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Heard and perused the pleadings. Apparently, defendants no.1 to 5 have raised the objection that the applicant bank has got signed the blank documents from them while granting the loan facilities to the defendants. This Tribunal has gone through the documents which are duly filled and executed by the defendants no.1 to 5 and this Tribunal is of the view that plea of blank documents is no plea in the eyes of law as has been held by the Hon'ble Delhi High Court in the matter of "Indian Bank Vs. Cheese Wafers (India) Pvt. Ltd. It was held if the defendants have not filed any complaint before higher authorities of the bank or filed any complaint before police authorities ". Thus, the plea of blank documents is

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T.A. No.905 of 2023

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not maintainable after filing of the suit and the same is rejected.

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The witness of the applicant bank has fully corroborated the averments made in this O.A. The evidence lead by the applicant bank which consists of mainly written / typed documents has gone unchallenged and there is no question of disbelieving the same based upon the documents. This Tribunal has also observed that not an iota evidence/documents has been led by the defendants against the claim of the applicant bank and has made only submission on fact as stated in the written statement evidence. In the civil proceedings it cardinal principle, that whosoever alleges a fact he/she has to prove in the court of law by leading evidence mere assertion are not sufficient and nowhere defendants have denied about the availment of the loan.

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In view of the above facts and circumstances, this Tribunal is of the view that the defendants have failed to convince this Tribunal and this Tribunal do not find any merit and reject the contentions of the defendants as baseless. I hereby allow this O.A. as the applicant bank has proved its claim beyond reasonable doubt.

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The defendants have also challenged the statement of account of the bank but this Tribunal is of the view that statement of account is duly certified under Section 4 of the Bankers Books of Evidences Act and the same cannot be challenged unless specific entry is pointed by the defendants. Hence, the said objection is not maintainable and the same is hereby rejected.

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T.A. No.905 of 2023

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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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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, jointly or severally, to pay to the applicant bank within a period of 30 days, a sum of Rs.12,45,21,220/- (Rupees Twelve Crores Forty Five Lacs Twenty One Thousand Two Hundred Twenty only) together with pendentelite and future interest @12.00% per annum interest from 28.12.2013 till the date of realization, failing which the aforesaid amount shall be recovered from the sale of hypothecated stocks, book debts, Receivable etc. of defendant no.1 as well as sale of following mortgaged properties:

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B-71/1, Part-H, 2nd Floor portion of Lawrence Road Industrial Area, Delhi owned by defendant no.2;

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T.A. No.905 of 2023

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Southern-Western portion of Basement & ground Floor, 47/2, Block-C, Lawrence Road Industrial Area, Delhi owned by defendant no.2;

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B-71/1, Part-I, 2nd Floor portion of Lawrence Road Industrial Area, Delhi owned by defendant no.2; B-71/1, Part-I, Ground Floor (without terrace rights) Lawrence Road Industrial Area, Delhi owned by defendant no.3,

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Southern portion of Basement & Ground Floor, 47/2, Block-C, Lawrence Road Industrial Area, Delhi owned by defendant no.2;

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In case of shortfall, the same shall be recovered from sale of movable and immovable properties of defendant no. 1 to 4.

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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 14.11.2025.

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

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