Allowed

Bank of Baroda v. M/S Arun International and Others

DRT24 Jun 2026OA/1097/2023

Case brief

AI extract

What is this about?

The Tribunal allowed an ex-parte Original Application filed by Bank of Baroda against M/S Arun International and its proprietor/guarantor for recovery of a debt of Rs. 34.64 lakhs. Due to the defendants' non-appearance, the debtor was declared liable to repay the principal along with simple interest at 8% p.a. while affirming the right to recover via hypothecated/mortgaged assets.

What did the court decide?

Declaration of liability to pay Rs. 34,64,460.45 jointly and severally with costs and future simple interest at 8% p.a., with directions for issue of Recovery Certificate.

Bank of Baroda versus M/S Arun International and Others — Banking and Recovery | DRT (2026)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO. 1097/2023

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 24.08.2023

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DATE OF DECISION: 24.06.2026

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Bank of Baroda (Erstwhile Dena Bank), a Body Corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Head Office at Mandvi, Baroda and one of its Branch situated at Clock Tower, Ludhiana, Punjab through its Principal Officer, Sh. Rakesh Kumar Gagneja, Branch Manager, Bank of Baroda, Clock Tower Branch, Ludhiana, Punjab

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……..Applicant

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Versus

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M/S Arun International through its sole Proprietor, Sh. Arun Kumar Jain, S/o Sh. Parkash Jain, 313 Mehak Tower, Kialash Cinema Road, Ludhiana, Punjab

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Sh. Arun Kumar Jain, S/o Sh. Parkash Jain, sole Proprietor, M/S Arun International, R/o 313 Mehak Tower, Kialash Cinema Road, Ludhiana, Punjab

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2^nd Address: Flat no. 1, Orbit Tower Building, 5^th Floor, Kailash Cinema Chowk, Ludhiana, Punjab

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3^rd Address: B-34-224, Inder Vihar, Chander Nagar, Ludhiana, Punjab

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Smt. Rupam Jain, W/o Sh. Arun Kumar Jain, R/o Flat no. 1, Orbit Tower Building, 5^th Floor, Kailash Cinema Chowk, Ludhiana, Punjab

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2^nd Address: B-34-224, Inder Vihar, Chander Nagar, Ludhiana, Punjab

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….……Defendants

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Advocates:

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Argued by Sh. Ankit Kaushal, Advocate proxy for Sh. Varun Verma, Advocate for applicant

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None for defendants (already ex-parte vide order dated 20.06.2026)

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2 OA/1097/2023 BANK OF BARODA VS. M/S ARUN INTERNATIONAL AND OTHERS

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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 and Bankruptcy Act, 1993, against the defendants for recovery of Rs. 34,64,460.45 (Rupees Thirty Four Lacs Sixty Four Thousand Four Hundred Sixty and Paise Forty Five Only). The Original Application has been filed through Sh. Rakesh Kumar Gagneja, Branch Manager of the applicant, who is competent to institute the Original Application vide Board Resolution dated 14.11.2017, which is Annexure A2 to this OA.

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The brief facts of the OA are that defendant no. 1 through its Proprietor defendant no. 2 approached the applicant for grant of CC Limit of Rs. 10.00 Lacs. Thereafter, defendant no. 1 through its Proprietor defendant no. 2 approached the applicant for enhancement of CC Limit to Rs. 15.00 Lacs. Thereafter, defendant no. 1 through its Proprietor defendant no. 2 approached the applicant for grant of fresh CC Limit of Rs. 5.50 Lacs. Thereafter, defendant no. 1 through its Proprietor defendant no. 2 approached the applicant for enhancement of CC Limit to Rs. 9.00 Lacs. Thereafter, defendant no. 1 through its Proprietor defendant no. 2 approached the applicant for enhancement of CC Limit to Rs. 22.50 Lacs.

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The applicant sanctioned CC Limit of Rs. 10.00 Lacs. Thereafter, the applicant sanctioned enhancement of CC Limit to Rs. 15.00 Lacs. Thereafter, the applicant sanctioned fresh CC Limit of Rs. 5.50 Lacs. Thereafter, the applicant sanctioned enhancement of CC Limit to Rs.9.00 Lacs vide Sanction dated 27.08.2012, which is Annexure A34 to this OA and the terms and conditions were duly accepted by the defendants. Thereafter, the applicant sanctioned enhancement of CC Limit to Rs. 22.50 Lacs vide Sanction Letter dated 26.11.2014, which is Annexure A46 to this OA. Defendant no. 3 stood as guarantor. 4. Defendant no. 3 mortgaged her immovable properties which are:

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3 OA/1097/2023

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BANK OF BARODA VS. M/S ARUN INTERNATIONAL AND OTHERS

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i. Land measuring 15 Sq. Yards situated at Unit no. B-I-392, Mehak Tower, Majhar Road, Civil Lines, Ludhiana, Punjab vide Title Deed dated 01.04.1999, Declarations dated 07.02.2007 and 16.12.2005 and Extension of Equitable Mortgage dated 18.10.2012, which are Annexure A11, A12, A21, A33 and A45 to this OA;

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ii. Land measuring 17 Sq. Yards situated at Citi Palace, Chauri Sadak, Ludhiana, Punjab vide Title Deed bearing vasika no. 7152 dated 05.08.2013, Letter of Extension of Mortgage and Declaration, both dated 26.11.2014, which are Annexure A58 to A60 to this OA;

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Defendant no. 1 through its Proprietor defendant no. 2 hypothecated their all stocks of raw materials, goods in process and finished goods such as knitted cloths and fabrics etc. vide Agreements of Hypothecation dated 02.08.2004, 07.02.2007, 27.08.2012 and 26.11.2014, which are Annexure A4, A29, A38A and A48 to this OA. Documents Executed: Notification dated 02.01.2019, which is Annexure A1 to this OA; DP Note and Letter of General Lien and Set Off, both dated 02.08.2004, which are Annexure A3 and A5 to this OA; Power of Attorney, Undertakings, Letter of General Lien and Set Off and Letter of Guarantee, all dated 03.08.2004, which are Annexure A6 to A10 to this OA; Letter of Credit Facility Agreement of Hypothecation, Letters of General Lien and Set Off, Power of Attorney, Undertakings, Letter of Continuing Security and Letter of Guarantee, all dated 16.12.2005, which are Annexure A13 to A20 to this OA; Linkage Letter, DP Note, Letter of Continuity, Undertakings, Power of Attorney, General Undertaking, Letters of General Lien and Set Off and Letter of Guarantee, all dated 07.02.2007, which are Annexure A22 to A28 and A30 to A32 to this OA; Letter of Acknowledgement of Debt dated 06.10.2009, 10.11.2017, 07.11.2019 and 01.09.2020 which are Annexure A33A and A61 to A63 to this

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4 OA/1097/2023

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BANK OF BARODA VS. M/S ARUN INTERNATIONAL AND OTHERS

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OA; DP Note, Letter of Continuity, Undertakings, Power of Attorney, General Undertaking, General Letters of Lien and Set Off and Letter of Guarantee, all dated 27.08.2012, which are Annexure A35 to A38 and A39 to A44 to this OA; DP Note, Letter of Continuity, Undertakings, Power of Attorney, General Undertaking, Specific Undertaking, Unattested Memorandum of Modification of Hypothecation Agreement, Guarantor’s Consent Letter and Letter of Guarantee, all dated 26.11.2014, which are Annexure A47 and A49 to A47 to this OA; Notice dated 10.02.2020 along with postal receipts, which are Annexure A64 to A69 to this OA and Statement of Account, which is Annexure A70 to this OA.

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The CC Limit- II account became irregular and was classified as NPA and after adjusting debit and credit entries in loan account there was a debit of Rs. 34,64,460.45 which is recoverable and the defendants were served recall notice 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 summons to appear before this Tribunal but no one appeared on behalf of defendants and they were proceeded ex-parte vide order dated 20.06.2026. 7. In support of the OA, affidavit of Sh. Rakesh Kumar Gagneja, Branch Manage r, Bank of Baroda, h as been filed. 8. Heard ex-parte arguments and perused record. 9. 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.

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From the perusal of all the Annexure A1 to A70 to this OA, it is proved that the defendant no. 1 through its Proprietor defendant no. 2 approached applicant for availing of the loan facility which was granted to them. Defendant no. 3 stood as guarantor. Defendants had executed all the relevant documents in favour of the applicant. The defendants failed to pay back the loan as per terms and conditions of

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5 OA/1097/2023

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BANK OF BARODA VS. M/S ARUN INTERNATIONAL AND OTHERS

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the agreement between the parties. Subsequently, account of the defendants was classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs. 34,64,460.45 (Rupees Thirty Four Lacs Sixty Four Thousand Four Hundred Sixty and Paise Forty Five Only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the amount.

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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 @11.35%p.a. with monthly rests from 27.07.2023 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 hypothecated assets/mortgaged properties, 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 simple interest @8.00% p.a. in the loan account 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.34,64,460.45 (Rupees Thirty Four Lacs Sixty Four Thousand Four Hundred Sixty and Paise Forty Five Only) jointly and severally, with costs, current and future simple interest @8.00% p.a. in the loan account 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 hypothecated assets of defendant nos. 1 and 2 and mortgaged properties of defendant no. 3 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

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6 OA/1097/2023 BANK OF BARODA VS. M/S ARUN INTERNATIONAL AND OTHERS

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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 09.07.2026. 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: 24.06.2026 (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Bank of Baroda v. M/S Arun International and Others

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Bank of Baroda v. M/S Arun International and Others

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