Allowed

State Bank of India v. M/S M M Rice Land Private Limited and Others

DRT24 Mar 2026OA/1111/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed the bank's original application filed under Section 19 RDB Act to recover over Rs. 8.5 crores from borrowers and guarantors. The court granted interest at 8% p.a. and ordered execution against assets under SARFAESI Act.

What did the court decide?

Recovery certificate issued; Defendants liable to pay Rs. 8.51 Crores with 8% p.a. interest; Execution allowed against mortgaged properties pursuant to SARFAESI Act.

State Bank of India versus M/S M M Rice Land Private Limited… — Banking and Recovery | DRT (2026)

¶1

DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

¶2

ORIGINAL APPLICATION NO.1111/2024

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

¶4

DATE OF INSTITUTION: 28.08.2024

¶5

DATE OF DECISION: 24.03.2026

¶6

State Bank of India, a body Corporate constituted under the provisions of The State Bank of India Act, 1955 (23 of 1955), having its Corporate Office at Madame Cama Road, Nariman Point, Mumbai (Maharashtra) 400021, carrying on its business of Banking in India and Abroad, having one of its local Head Office at Sector 17-A, Chandigarh, having its Branch, amongst other places, at Kairon Road, Malout, District Sri Muktsar Sahib-152107 (Punjab) and one of the Specialized Branch, known as Stressed Assets Recovery Branch, 3^rd Floor Admin Office Building at Fountain Chowk, Civil Lines, Ludhiana-141001 (Punjab) through its Chief Manager, Sh. Dalip Mahajan.

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……..Applicant

¶8

Versus

¶9

M M Rice Land Private Limited, having Office at Village Aulakh, Near Suraj Brick Company, on Link Road, from Malout- Muktsar Road, Tehsil Malout, District Sri Muktsar Sahib-152107 (Punjab).

¶10

Sh. Surinder Pal S/o Sh. Rikhi Ram, R/o H. No189, Behind S D School, Water Works Road, Street No.03, Krishna Colony, Malout, District Sri Muktsar Sahib-152107 (Punjab).

¶11

Sh. Navdeep Rai S/o Sh. Surinder Pal, H. No.189, Behind S D School, Water Works Road, Street No.03, Krishna Colony, Tehsil Malout, District Sri Muktsar Sahib-152107 (Punjab).

¶12

Smt. Promila Rani W/o Sh. Surinder Pal, R/o H. No.189, Behind S D School, Water Works Road, Street No.03, Krishna Colony, Malout, District Sri Muktsar Sahib-152107 (Punjab).

¶13

Sh. Darshan Kumar S/o Sh. Rikhi Ram, R/o H.No.449, Gali No.2, Ward No.2, Gobind Nagri, Malout, District Sri Muktsar Sahib-152107 (Punjab).

¶14

2 OA NO.1111/2024 STATE BANK OF INDIA VS. M M RICE LAND PRIVATE LIMITED AND OTHERS

¶15

Sh. Parshotam Dass S/o Sh. Raghu Dass, R/o Kothi No.89, Green Valley Colony, Sheku Road, Malout, District Sri Muktsar Sahib-152107 (Punjab).

¶16

Sh. Happy Mittal S/o Sh. Darshan Mittal, R/o H. No.449, Street No.02, Behind Krishna Mandir, Gobind Nagri, Tehsil Malout, District Sri Muktsar Sahib-152107 (Punjab).

¶17

Smt. Suman Lata W/o Sh. Parshottam Dass, R/o Kothi No.89, Green Valley Colony, Sheku Road, Malout, District Sri Muktsar Sahib-152107 (Punjab).

¶18

Sh. Kewal Krishan S/o Sh. Rikhi Ram, R/o H. No.505, Street No.2, Behind Krishna Mandir, Gobind Nagri, Tehsil Malout, District Sri Muktsar Sahib-152107 (Punjab).

¶19

Sh. Ravinder Pal S/o Sh. Mangat Rai, R/o H. No.806, Street No.02, Ward No.05, Mani Bazar, Tehsil Malout, District Sri Muktsar Sahib-152107 (Punjab).

¶20

M/S H M Rice Mills, a Partnership Firm, at Village and Post Office Danewala, Jandwala Road, Tehsil Malout, District Sri Muktsar Sahib (Punjab)-152107 through its Partners Sh. Darshan Kumar S/o Sh. Rikhi Ram and Sh. Surinder Pal S/o Sh. Rikhi Ram.

¶21

M/s M M Rice Mills, having Office at Village Aulakh, Near Suraj Brick Company, on Link Road from Malout-Muktsar Road, Tehsil Malout, District Sri Muktsar Sahib-152107(Punjab), through its Proprietor Sh. Surinder Pal S/o Sh. Rikhi Ram.

¶22

………Defendants

¶23

Advocates:

¶24

Argued by Sh. Vivek Verma, Advocate for the applicant

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None for Defendant Nos.1,3,4 & 7 to 12 (already ex-parte vide order dated 29.05.2025)

¶26

None for Defendant Nos. 2,5 & 6.

¶27

3 OA NO.1111/2024 STATE BANK OF INDIA VS. M M RICE LAND PRIVATE LIMITED AND OTHERS

¶28

FINAL ORDER

¶29

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.8,51,13,644.00 (Rupees Eight Crore Fifty One Lacs Thirteen Thousand Six Hundred and Forty Four Only). The Original Application has been filed through Sh. Dalip Mahajan, Chief Manager of applicant w ho is competent to institute the Original Application vide the Gazette Notification dated 02.05.1987 which is Annexure 1 to this OA.

¶30

The brief facts of the OA that earlier M/s M M Rice Mills through its Partners defendant nos. 2 and 10 approached the applicant in the year 2008 for grant of Credit Facilities of Rs.125.00 Lacs (Cash Credit Limit of Rs.110.00 Lac and SME Credit Plus Loan of Rs.15.00 Lacs). Defendant nos. 2 and 10 stood as guarantors.

¶31

Thereafter, the said firm i.e. M/s M M Rice Mills was taken over by defendant no. 2 and was converted into proprietorship concern (defendant no. 12). Defendant no. 12 through its proprietor defendant no. 2 approached the applicant for Cash Credit Limit of Rs.100.00 Lacs and Term Loan of Rs.40.00 Lacs. Defendant nos. 5, 9 and 10 stood as guarantors. Thereafter, defendant no. 12 through its proprietor approached the applicant for renewal of Term Loan of Rs.40.00 Lacs, renewal and enhancement of CC Limit for Rs.160.00 Lacs and for Fresh Term Loan of Rs.500.00 Lacs. Defendant nos. 5, 8, 9 and 10 stood as guarantors.

¶32

Thereafter, the assets and liabilities of said firm i.e. M/s M M Rice Mills (defendant no. 12) were acquired by defendant no. 1 Company except the property owned by defendant no. 12. The defendant no. 1 through its directors approached the applicant for Fresh as well as renewal of existing facilities. It approached for renewal and enhancement of CC Limit for Rs.395.00 Lacs, renewal of Term Loan-1 of Rs.40.00 Lacs, Fresh Term Loan-2 of Rs.40.00 Lacs and Term Loan-3 of Rs.35.00 Lacs. Thereafter, defendant no. 1

¶33

4 OA NO.1111/2024 STATE BANK OF INDIA VS. M M RICE LAND PRIVATE LIMITED AND OTHERS

¶34

through its directors approached the applicant for grant of Working Capital Demand Loan (WCDL) of Rs.300.00 Lacs against Warehouse receipts and for renewal of existing CC Limit vide loan application, which is Annexure A14 to this OA. Thereafter, defendant no. 1 through its directors approached the applicant for enhancement of CC Limit to Rs.500.00 Lacs, loan against Warehouse receipts to Rs.400.00 Lacs, Term Loan-1 for Rs.11.00 Lacs, Term Loan-2 for Rs.22.00 Lacs, Term Loan-3 for Rs.29.00 Lacs. Thereafter, the defendant no. 1 through its directors approached the applicant for renewal of CC Limit for Rs.500.00 Lacs. D efendant nos. 2 to 12 stood as guarantors. Thereafter, the defendant no. 1 through its directors again approached the applicant for renewal of CC Limit for Rs.500.00 Lacs vide loan application dated 04.11.2019, which is Annexure A23 to this OA. Thereafter, the defendant no. 1 through its directors again approached the applicant for grant of Working Capital Term Loan (WCTL) of Rs.100.00 Lacs under GECL along with renewal of CC Limit for Rs.500.00 Lacs vide application, which is Annexure A26 to this OA. Thereafter, the defendant no. 1 through its director approached the applicant for renewal and restructuring of Credit Facilities vide letter dated 10.06.2021, which is Annexure A31 to this OA.

¶35

The applicant sanctioned the Cash Credit Limit of Rs.110.00 Lacs and Loan of Rs.15.00 Lacs under SME Credit Plus to M/s M M Rice Mills (partnership firm) vide Letter of Arrangement dated 05.09.2008, which is Annexure A2 to this OA.

¶36

Thereafter, the applicant sanctioned Cash Credit Limit of Rs.100.00 Lacs and Term Loan of Rs.40.00 Lacs to M/s M M Rice Mills (proprietorship firm defendant no. 12 through its partner defendant no.2) vide letter of arrangement dated 04.11.2011, which is Annexure A5 to this OA. Thereafter, the applicant sanctioned renewal and enhancement of CC Limit for Rs.160.00 Lacs, Renewal of Term Loan-1 for Rs.40.00 Lacs and sanctioned Fresh Term Loan-2 of Rs.500

¶37

5 OA NO.1111/2024 STATE BANK OF INDIA VS. M M RICE LAND PRIVATE LIMITED AND OTHERS

¶38

Lacs vide letter of arrangement dated 18.10.2012, which is Annexure A8 to this OA.

¶39

Thereafter, the applicant sanctioned renewal and enhancement of Cash Credit Limit for Rs.395.00 Lacs, renewal of Term Loan-1 of Rs.40.00 Lacs, sanction of Fresh Term Loan-2 of Rs.40.00 Lacs and Term Loan-3 of Rs.35.00 Lacs to defendant no. 1 vide letter of arrangement dated 21.10.2013, which is Annexure A11 to this OA. Thereafter, the applicant renewed CC Limit for Rs.395.00 Lacs, reviewed Term Loan-1 for Rs.18.00 Lacs and sanctioned Working Capital Demand Loan (WCDL) of Rs.300.00 Lacs against Warehouse receipts vide letter of arrangement dated 23.12.2014, which is Annexure A15 to this OA. Thereafter, the applicant sanctioned for enhancement of CC Limit to Rs.500.00 Lacs, loan against Warehouse receipts to Rs.400.00 Lacs, Term Loan-1 for Rs.11.00 Lacs, Term Loan-2 for Rs.22.00 Lacs, Term Loan-3 for Rs.29.00 Lacs vide arrangement letter dated 29.01.2016, which is Annexure A18 to this OA. Thereafter, the applicant sanctioned renewal of the CC Limit for Rs.500.00 Lacs vide letter of arrangement dated 19.06.2019, which is Annexure A21 to this OA and again vide letter of arrangement dated 09.12.2019, which is Annexure A24 to this OA. Thereafter, the applicant sanctioned renewal of CC Limit for Rs.500.00 Lacs along with sanction Working Capital Term Loan (WCTL) of Rs.100.00 Lacs under GECL vide letter of arrangement dated 23.07.2020, which is Annexure A27 to this OA. Thereafter, the CC Limit was renewed and restructured by the applicant by sanction of CC Limit of Rs.84.00 Lacs, WCTL (GECL) of Rs.100.00 Lacs, WCTL of Rs.466.00 Lacs, Funded Interest Term Loan (FITL-1) of Rs.22.00 Lacs, Funded Interest Term Loan (FITL-2) of Rs.33.00 Lacs, WCTL (GECL 3.0) of Rs.50.00 Lacs with total Credit Facilities of Rs.755.00 Lacs vide letter of arrangement dated 04.08.2021, which is Annexure A32 to this OA.

¶40

M/s M M Rice Mills (partnership firm) through its partners hypothecated stocks, book debts, current assets, etc. vide agreement

¶41

6 OA NO.1111/2024 STATE BANK OF INDIA VS. M M RICE LAND PRIVATE LIMITED AND OTHERS

¶42

of loan cum hypothecation dated 05.09.2008, which is Annexure A3 to this OA.

¶43

Defendant no. 12 M/s M M Rice Mills (proprietorship firm) through its proprietor defendant no. 2 hypothecated stocks, book debts, current assets, etc. vide agreement of loan cum hypothecation dated 04.11.2011, 18.10.2012, which are Annexures A6, A9 to this OA.

¶44

Defendant no. 1 through its directors hypothecated stocks, book debts, current assets, etc. vide agreement of loan cum hypothecation dated 21.10.2013, 23.12.2014, which are Annexures A12, A16 to this OA; Supplemental agreement of loan cum hypothecation 30.01.2016, which is Annexure A19 to this OA; Supplemental agreement of loan cum hypothecation 23.07.2020, which is Annexure A29 to this OA; Supplemental agreement of loan cum hypothecation 08.08.2021, which is Annexure A33 to this OA.

¶45

Defendants mortgaged their immovable properties detailed as under:

¶46

(i) Defendant no. 2 mortgaged Factory Land and Building measuring 14Kanal-06Marla situated at Village Danewala, Tehsil Malout, District Sri Muktsar Sahib, Punjab through equitable mortgage of Sale Deed bearing vasika no. 344 dated 02.05.2006, along with its translation, which are Annexures A36 and A36T to this OA; Letter dated 04.08.2021 of confirmation of extension of mortgage by deposit of title deeds, which is Annexure A38 to this OA.

¶47

(ii) Defendant no. 2 mortgaged Residential property measuring 09Marla situated at Village Shekhu, Krishna Colony, Water Works Road, Malout, District Sri Muktsar Sahib, Punjab through equitable mortgage of Sale Deed bearing vasika no. 2406 dated 15.01.1991, along with its translation, which are Annexures A37 and A37T to this OA; Letter dated 04.08.2021 of confirmation of extension of mortgage by deposit of title deeds, which is Annexure A39 to this OA.

¶48

7 OA NO.1111/2024 STATE BANK OF INDIA VS. M M RICE LAND PRIVATE LIMITED AND OTHERS

¶49

(iii) Defendant no. 5 mortgaged Residential property measuring 05Marla situated at Village Shekhu, Street No. 2, Gobind Nagri, Near Krishna Mandir, Malout, District Sri Muktsar Sahib, Punjab through equitable mortgage of Sale Deed bearing vasika no. 2002 dated 24.10.2002, along with its translation, which are Annexures A40 and A40T to this OA; Letter dated 04.08.2021 of confirmation of extension of mortgage by deposit of title deeds, which is Annexure A41 to this OA.

¶50

(iv) Defendant nos. 5 and 9 mortgaged Plot measuring 15½Marla (453 sq. yards) situated at Village Danewala, Near Guruduwara Danewala Chowk, Main G.T. Road, Malout, District Sri Muktsar Sahib, Punjab through equitable mortgage of Sale Deed bearing vasika no. 2946 dated 15.02.2001, along with its translation, which are Annexures A42 and A42T to this OA; Letter dated 04.08.2021 of confirmation of extension of mortgage by deposit of title deeds, which is Annexure A43 to this OA.

¶51

(v) Defendant no. 8 mortgaged Residential property bearing Plot no. 89, measuring 206.66 sq. yards situated at Green Valley Colony, Shekhu Road, Malout, District Sri Muktsar Sahib, Punjab through equitable mortgage of Sale Deed bearing vasika no. 1769 dated 11.08.2010, along with its translation, which are Annexures A44 and A44T to this OA; Letter dated 04.08.2021 of confirmation of extension of mortgage by deposit of title deeds, which is Annexure A45 to this OA.

¶52

(vi) Defendant no. 11, through its partners mortgaged Factory Land and Building measuring 17Kanal-04Marla situated at Danewala, Tehsil Malout, District Sri Muktsar Sahib, Punjab through equitable mortgage of Sale Deed bearing vasika no. 2370 dated 16.09.2004, along with its translation, which are Annexures A46 and A46T to this OA; Letter dated 04.08.2021 of confirmation of extension of mortgage by deposit of title deeds, which is Annexure A47 to this OA.

¶53

8 OA NO.1111/2024 STATE BANK OF INDIA VS. M M RICE LAND PRIVATE LIMITED AND OTHERS

¶54

(vii) Defendant no. 12, through its partners mortgaged Factory Land
and Building measuring 19Kanal-16Marla situated at Village Aulakh,
Tehsil Malout, District Sri Muktsar Sahib, Punjab through equitable
mortgage of Sale Deed bearing vasika no. 2020-21/52/1/481 dated
01.07.2020 and vasika no. 1307 dated 24.08.1999, along with its
translation, which areAnnexures A48 and A48T, A49 and A49Tto
this OA; Letter dated 04.08.2021 of confirmation of extension of mortgage by deposit of title deeds, which isAnnexure A50to this OA.
Documents executed:Guarantee Agreement dated 05.09.2008,
which isAnnexure A4to this OA; Guarantee Agreement dated
04.11.2011, which isAnnexure A7to this OA; Guarantee Agreement
dated 18.10.2012, which isAnnexure A10to this OA; Guarantee
Agreement dated 21.10.2013, which isAnnexure A13to this OA;
Guarantee Agreement dated 23.12.2014, which isAnnexure A17to
this OA; Guarantee Agreement dated 30.01.2016, which isAnnexure A20to this OA; Guarantee Agreement dated 19.06.2019, which is
Annexure A22to this OA; Board Resolution dated 07.12.2019, which
isAnnexure A25to this OA; Board Resolution dated 16.07.2020,
which isAnnexure A28to this OA; Guarantee Agreement dated
16.07.2020, which isAnnexure A30to this OA; Guarantee
Agreement dated 04.08.2021, which isAnnexure A34to this OA;
Board Resolution dated 08.08.2021, which isAnnexure A35to this
OA; Revival Letter dated 10.10.2018, which isAnnexure A51to this
OA; Revival Letter dated 12.12.2019 , which isAnnexure A52to this
OA; Statement of Accounts, which areAnnexures A53 to A58to
this OA; Notice dated 11.07.2022 u/s 13(2) of SARFAESI Act, which is
Annexure A59to this OA; Possession Notice dated 19.09.2022 u/s
13(4) of SARFAESI Act, which isAnnexure A60to this OA; Objections
dated 05.09.2022, which isAnnexure A61to this OA; Valuation Reports dated 23.08.2022, which isAnnexure A62to this OA.

¶55

9 OA NO.1111/2024 STATE BANK OF INDIA VS. M M RICE LAND PRIVATE LIMITED AND OTHERS

¶56

The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in loan accounts there was a debit of Rs.8,51,13,644.00, 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.

¶57

The defendants were served summons to appear before this Tribunal. Sh. Ishmeet Singh, Advocate proxy for Sh. Sherry K Singla, Advocate appeared on behalf of defendants nos. 2, 5 and 6 on 03.03.2025 and filed Power of Attorney of Sh. Sherry K Singla, Advocate. Since no WS was filed by defendant nos. 2, 5 and 6 within stipulated period, their opportunity to file WS was closed and their defense was stuck off vide order dated 29.05.2025. Also, since no one appeared on behalf of defendant nos. 1, 3, 4, 7 to 12 despite service of summons, they were proceeded ex-parte vide order dated 29.05.2025.

¶58

In support of the OA, affidavit of Sh. Dalip Mahajan , Chief Manager, of the applicant h as been filed. 8. Heard arguments and perused record.

¶59

It was argued by learned counsel for applicant that in view of the documentary evidence brought on record, the applicant had proved its case.

¶60

No one appeared on behalf of defendants for arguments.

¶61

From the perusal of all the Annexures A1 to A62 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 applicant. 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 is entitled to recover a sum of Rs.8,51,13,644.00 (Rupees Eight Crore Fifty One Lacs Thirteen

¶62

10 OA NO.1111/2024 STATE BANK OF INDIA VS. M M RICE LAND PRIVATE LIMITED AND OTHERS

¶63

Thousand Six Hundred and Forty Four Only), with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the account.

¶64

In so far as pendente lite and future rate of interest is concerned, the applicant in relief clause has claimed interest @11.40%p.a. with monthly rests in CC Limit, @10.40%p.a. with monthly rests in FITL-1, @9.25%p.a. with monthly rests in GECL extension 1.0, @9.25%p.a. with monthly rests in WCTL-1, @9.40%p.a. with monthly rests in FITL-2, @8.90%p.a. with monthly rests in GECL 3.0, plus 2% penal interest in all accounts from 30.09.2023 till the realization.

¶65

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 undertaking of the defendants, quantum of loans 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 @8.00%p.a. in all 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.

¶66

In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.8,51,13,644.00 (Rupees Eight Crore Fifty One Lacs Thirteen Thousand Six Hundred and Forty Four Only), jointly and severally, with costs, current and future simple interest @8.00%p.a. in all 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

¶67

11 OA NO.1111/2024 STATE BANK OF INDIA VS. M M RICE LAND PRIVATE LIMITED AND OTHERS

¶68

attachment and sale of personal assets of the defendants. The applicant is at liberty to enforce the claim through due process of law.

¶69

11. Any other application pending stands disposed of. 12. Issue Recovery Certificate accordingly.

¶70

Parties to appear before Learned Recovery Officer of this Tribunal on 16.04.2026.

¶71

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.

¶72

Pronounced by me in the open Tribunal .

¶73

Dated: 24.03.2026.

¶74

(MRIDULESH KUMAR SINGH)

¶75

Presiding Officer, DRT-III, Chandigarh

State Bank of India v. M/S M M Rice Land Private Limited and Others

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/S M M Rice Land Private Limited and Others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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