Allowed

State Bank of India v. M/S Universal Traders and Another

DRT12 Jan 2026OA/106/2024

Case brief

AI extract

What is this about?

The Tribunal allowed the Original Application filed by State Bank of India for recovery of Rupees 58,31,642 against M/s Universal Traders and Mitanshu Garg. The debt was unsecured by performance. The Tribunal reduced the interest rate to 8% per annum.

What did the court decide?

Defendants declared liable to pay Rupees 58,31,642 plus costs with simple interest at 8% p.a. until realization; Recovery Certificate issued.

State Bank of India versus M/S Universal Traders and Another — Company and Corporate | DRT (2026)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.106/2024

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 29.11.2023

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DATE OF DECISION: 12.01.2026

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State Bank of India a body corporate constituted under the State Bank of India Act, 1955, and having its Corporate Office at Madame Cama Road, Nariman Point Mumbai and one of its Local Head Office at Sector -17, Chandigarh and branches all over India including one of its specialized Branch known as Stressed Assets Recovery Branch is situated at S.C.O. 70, Sector 5, Panchkula, through its Authorized Officer Sh. Prem Kumar Arora, Chief Manager.

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……..Applicant

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Versus

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M/s Universal Traders, Plot No.8, Shiv Nagar, Peer Muchalla, Zirakpur, S.A.S. Nagar, Punjab-140603, through its Proprietor Sh. Mitanshu Garg

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Second Address: Plot No.33, Shuttering Market, Sanouli, Zirakpur, SAS Nagar, Mohali

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Third Address: House No.176, Hill View Colony, Dhakoli, Panchkula

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Sh. Mitanshu Garg S/o Sh. Sandeep Garg R/o House No. 337, Sector 15, Panchkula

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….……Defendants

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Advocates:

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Argued by Ms. Komal Tuteja, Advocate proxy for Sh. Ajay Singla, Advocate for Applicant

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Defendants already ex parte vide order dated 04.08.2023

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FINAL ORDER

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Present Original Application was instituted by the applicant under Section 19 of the Recovery of Debts & Bankruptcy Act, 1993, against the defendants for recovery of Rs.58,31,642.00 (Rupees Fifty Eight Lakh Thirty One Thousand Six Hundred Forty Two only). The Original Application has been filed through Sh. Prem Kumar Arora,

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OA/106/2024 STATE BANK OF INDIA Vs. MESSRS UNIVERSAL TRADERS AND ANOTHER

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Chief Manager, of the applicant, who is competent to institute the Original Application in the terms of notification dated 29.09.1959, 26.08.1972 and 27.03.1987 issued by the Executive Committee of the Central board of Directors in exercise of powers conferred on it and regulation no. 76 and 77 of State Bank of India General Regulations framed by Reserve Bank of India in exercise of powers conferred by sub-section 3 section 50 of the State Bank of India Act, 1955, with the previous sanction of the Central Government. Notification dated 02.05.1987, which is Annexure A1 to this OA. 2. The brief facts of the OA are that the defendant no.1 through its proprietor defendant no.2 approached the applicant for grant of Cash Credit Limit of Rs.48.00 Lacs vide loan application dated 02.07.2019, which is Annexure A2 to this OA. Thereafter, the defendant no.1 through its proprietor defendant no.2 approached the applicant for grant of Working Capital Term Loan of Rs.9.68 Lacs under GECL during COVID-19 pandemic vide request letter dated 28.05.2020, which is Annexure A9 to this OA and thereafter, for renewal of the limit vide request letter and revival letter dated 01.02.2021, which is Annexure A16 to this OA. 3. The applicant sanctioned the Cash Credit Limit of Rs.48.00 Lacs vide Letter of arrangement dated 31.07.2019, which is Annexure A3 to this OA and terms and conditions were duly accepted by the defendants. Thereafter, the applicant sanctioned Working Capital Term Loan of Rs.9.68 Lacs under GECL vide letter of arrangement dated 02.06.2020, which is Annexure A10 to this OA. 4. Defendant no. 1 through its proprietor defendant no. 2 hypothecated stock vide agreement of loan cum hypothecation dated 31.07.2019, which is Annexure A4 to this OA; Supplemental agreement of loan cum hypothecation dated 02.06.2020, which is Annexure A11 to this OA.

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OA/106/2024 STATE BANK OF INDIA Vs. MESSRS UNIVERSAL TRADERS AND ANOTHER

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Defendant no. 2 mortgaged his immovable properties i.e. detailed as under:

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(i) House No.39, 1^st and 2^nd Floor, Krishna Enclave, Sadhe Majra, Tehsil Derabassi, District S.A.S. Nagar, Mohali, Punjab through equitable mortgage of sale deed bearing no. 2019-20/14/1/1861 dated 09.07.2019, along with its translation, which is Annexure A5 to this OA; Memorandum dated 31.07.2019 of deposit title deed, which is Annexure A7 to this OA; Letter dated 02.06.2020 of confirmation of extension of mortgage by deposit of title deeds, which is Annexure A13 to this OA; CERSAI registration is Annexure A15 to this OA. (ii) House No.64, Ground, 1^st and 2^nd Floor, Krishna Enclave, Sadhe Majra, Tehsil Dera Bassi, District S.A.S. Nagar, Mohali, Punjab through equitable mortgage of sale deed bearing no. 2019-20/14/1/1135 dated 31.05.2019, along with its translation, which is Annexure A6 to this OA; Memorandum dated 31.07.2019 of deposit title deed, which is Annexure A8 to this OA; Letter dated 02.06.2020 of confirmation of extension of mortgage by deposit of title deeds, which is Annexure A12 to this OA; CERSAI registration is Annexure A14 to this OA. Documents executed: Notice dated 17.05.2023 u/s section 13(2) of SARFAESI Act, which is Annexure A17 to this OA and statement accounts along with certificate, which are Annexures A18 & A19 to this OA.

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The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in the loan accounts there was a debit of Rs.58,31,642.00, which is recoverable and the defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant requested to accept the application and to issue Recovery Certificate accordingly. 6. The defendants were served notices to appear before this Tribunal but no one appeared on behalf of defendants and they were proceeded ex-parte vide order dated 04.08.2025.

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OA/106/2024 STATE BANK OF INDIA Vs. MESSRS UNIVERSAL TRADERS AND ANOTHER

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In support of the OA, affidavit of Sh. Prem Kumar Arora, Chief Manager, State Bank of India, has been filed.

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Heard ex-parte arguments and perused record.

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It was argued by learned proxy counsel that in view of the documentary evidence brought on record which had gone unrebutted, the applicant had proved its case. From the perusal of all the Annexures A1 to A19 to this OA, it is proved that the defendants approached applicant for availing of the loan facilities which were granted to them and for that they had executed all the relevant documents in favour of the bank. The defendants failed to pay back the loans as per terms and conditions of the agreement between the parties. Subsequently, accounts of the defendants were classified as NPA. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.58,31,642.00 (Rupees Fifty Eight Lakh Thirty One Thousand Six Hundred Forty Two only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the accounts.

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In so far as pendente lite and future rate of interest is concerned, the applicant in relief clause has claimed interest @11.15%p.a.in CC limit and interest @9.25%p.a.in WCTL with 2% penal interest and monthly rests in both accounts from 23.11.2023 till the realization.

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The Tribunal is of the considered opinion that sometimes in appropriate cases the prerogative of mercy is the brightest jewel in the crown of the Judge. Keeping in view the facts and circumstances of the instant case including nature of the mortgaged property/hypothecated assets, undertaking of the defendants, quantum of loan and prevalent market rates of interest which have gone drastically downhill in yester years, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest

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OA/106/2024 STATE BANK OF INDIA Vs. MESSRS UNIVERSAL TRADERS AND ANOTHER

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@8.00%p.a. in both the loan accounts from the date of filing of the OA till realization of the amount ordered vide this final order. It is ordered accordingly.

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In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.58,31,642.00 (Rupees Fifty Eight Lakh Thirty One Thousand Six Hundred Forty Two only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in both the loan accounts from the date of filing of OA till the date of realization of the amount. Accordingly, the applicant shall be entitled to recover aforesaid amount from the sale of mortgaged properties/hypothecated assets of defendants in execution proceedings if not sold earlier under the provisions of the SARFAESI Act, 2002. If the dues of the applicant still remain unsatisfied, it shall be entitled to recover the same by attachment and sale of personal assets of the defendants. The applicant is at liberty to enforce the claim through due process of law. 12. Any other application pending stands disposed of . 13. Issue Recovery Certificate accordingly. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 28.01.2026. 15. Copy of this order be given dasti to the applicant and be sent to defendants through registered/speed post and this order be also uploaded on the official website of this Tribunal and record be consigned. Pronounced by me in the open Tribunal . Dated: 12.01.2026 (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

State Bank of India v. M/S Universal Traders and Another

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State Bank of India v. M/S Universal Traders and Another

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