Allowed

Canara Bank v. M/S M. K. Industries and Another

DRT28 Aug 2026OA/1205/2024

Case brief

AI extract

What is this about?

The Tribunal allowed an Original Application under Section 19 of RDB Act 1993 filed by Canara Bank against borrowers to recover a principal debt of Rs. 22.52 Lakhs. The Court reduced the claimed interest from 10.75%-14.50% to a uniform 8% p.a. and ordered recovery from hypothecated or personal assets.

What did the court decide?

Recovery of Rs. 22,52,900 with costs and uniform simple interest at 8% p.a. from filing date until realization, to be recovered from hypothecated or personal assets.

Canara Bank versus M/S M. K. Industries and Another — Execution and Attachment | DRT (2026)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO. 1205/2024

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 13.08.2024

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DATE OF DECISION: 28.08.2026

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Canara Bank, a Body Corporate and Nationalized Bank under the provisions of the Banking Companies (Acquisition and Transfer of Undertakings) Act of 1970 with its Head Office at J C Road, Bangalore and amongst other a Branch Office at B.R.S. Nagar, Ludhiana, Punjab through its Principal Officer, General Attorney and Branch Officer, Smt. Nisha Mourya

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……..Applicant

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Versus

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M/S M.K. Industries, a sole Proprietorship concern situated at B- 28, Giaspura, Street no. 2, Ludhiana through its Proprietor, Smt. Mehak Maheshwari, W/o Sh. Karan Maheshwari

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Smt. Mehak Maheshwari, W/o Sh. Karan Maheshwari, R/o House no. 202/5, Ward no. 27, Shiv Puri Mohalla, Khanna, Ludhiana

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…..Defendants

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Advocates:

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Argued by Ms. Navita, Advocate proxy for Sh. Sunil Kwatra, Advocate for applicant

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None for defendants (already ex-parte vide order dated 24.08.2026)

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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. 22,52,900.00 (Rupees Twenty Two Lacs Fifty Two Thousand Nine Hundred Only). The Original Application has been filed through Smt. Nisha Mourya, Branch Officer of the applicant, who is competent to institute the Original Application vide Power of Attorney dated 16.05.2024, which is Annexure A1 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 OCC

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2 OA NO. 1205/2024 CANARA BANK VS. M/S M.K. INDUSTRIES AND ANOTHER

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Limit of Rs. 10.00 Lacs vide Loan Application Form dated 18.01.2020, which is Annexure A2 to this OA. Thereafter, defendant no. 1 through its Proprietor defendant no. 2 approached the applicant for grant of GECL- I of Rs. 19.90 Lacs vide Application dated 16.06.2020. Thereafter, defendant no. 1 through its Proprietor defendant no. 2 approached the applicant for grant of GECL- II of Rs. 0.97 Lacs vide Loan Application dated 01.11.2021, which is Annexure A14 to this OA. Thereafter, defendant no. 1 through its Proprietor defendant no. 2 approached the applicant for renewal of OCC Limit of Rs. 10.00 Lacs vide Loan Application dated 12.04.2021, which is Annexure A21 to this OA. Thereafter, defendant no. 1 through its Proprietor defendant no. 2 approached the applicant for enhancement of OCC Limit to Rs.18.00 Lacs vide Loan Application dated 08.04.2022, which is Annexure A24 to this OA.

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The applicant sanctioned OCC Limit of Rs. 10.00 Lacs vide Sanction Letter dated 18.01.2020, which is Annexure A3 to this OA and the terms and conditions were duly accepted by the defendants. Thereafter, the applicant sanctioned GECL- I of Rs. 19.90 Lacs vide Sanction Letter dated 19.06.2020, which is Annexure A8 to this OA. Thereafter, the applicant sanctioned GECL- II of Rs. 0.97 Lacs vide Sanction Letter dated 01.11.2021, which is Annexure A15 to this OA. Thereafter, the applicant sanctioned renewal of OCC Limit of Rs. 10.00 Lacs vide Sanction Letter dated 12.04.2021, which is Annexure A22 to this OA. Thereafter, the applicant sanctioned enhancement of OCC Limit to Rs. 18.00 Lacs vide Sanction Letter dated 29.07.2022, which is Annexure A25 to this OA.

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Defendant no. 1 through its Proprietor defendant no. 2 hypothecated their stocks vide Agreements cum Deeds of Hypothecation dated 19.06.2020 and 01.11.2021, which are Annexure A11 and A18 to this OA. Documents executed: DP Note, Request for OD Facilities, CC Agreement, and Letter of Undertaking, all dated 21.01.2020, which are Annexure A4 to A7 to this OA; Take Delivery Letter, Particulars of Machinery and Letter of Undertaking, all dated 19.06.2020, which are

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3 OA NO. 1205/2024 CANARA BANK VS. M/S M.K. INDUSTRIES AND ANOTHER

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Annexure A9, A10, A12 and A13 to this OA; DP Note, Take Delivery Letter, Undertaking Letter and Letter of Proprietorship, all dated 01.11.2021, which are Annexure A16, A17, A19 and A20 to this OA; Renewal Letter dated 12.04.2021, which is Annexure A23 to this OA; DP Note, Supplemental Agreement, Letter of Proprietorship, Link Letter, Letter of Renewal and Letters of Undertaking, all dated 29.07.2022, which are Annexure A26 to A32 to this OA; Acknowledgment of Debt and Security dated 29.07.2022, 14.06.2023 and 28.06.2023, which are Annexure A33 to A36 to this OA; Notice dated 10.04.2023, which is Annexure A37 to this OA and Statement of Accounts, which are Annexure A38 to A40 to this OA. 5. 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. 22,52,900.00, 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 summons to appear before this Tribunal but no one appeared on behalf of defendants and they were proceeded ex-parte vide order dated 24.08.2026. 7. In support of the OA, affidavit of Smt. Nisha Mourya, Branch Officer, Canara Bank has 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. From the perusal of all the Annexure A1 to A40 to this OA, it is proved that defendant no. 1 through its Proprietor defendant no. 2 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

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4 OA NO. 1205/2024 CANARA BANK VS. M/S M.K. INDUSTRIES AND ANOTHER

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that applicant is entitled to recover a sum of Rs. 22,52,900.00 (Rupees Twenty Two Lacs Fifty Two Thousand Nine Hundred 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. 10. In so far as pendente lite and future rate of interest is concerned, the applicant has claimed interest @10.75%p.a. in OCC Limit Account and @12.50% p.a. in GECL- I and II Accounts plus 2% penal interest with monthly rests from 01.04.2024 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, 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.

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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.22,52,900.00 (Rupees Twenty Two Lacs Fifty Two Thousand Nine Hundred 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 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.

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12. Any other application pending stands disposed of . 13. Issue Recovery Certificate accordingly.

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5 OA NO. 1205/2024 CANARA BANK VS. M/S M.K. INDUSTRIES AND ANOTHER

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Parties to appear before Learned Recovery Officer of this Tribunal on 10.09.2026.

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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.

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Pronounced by me in the open Tribunal .

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Dated: 28.08.2026

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(MRIDULESH KUMAR SINGH)

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Presiding Officer, DRT-III, Chandigarh

Canara Bank v. M/S M. K. Industries and Another

Case brief

What is this about?

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Canara Bank v. M/S M. K. Industries and Another

Case brief

What is this about?

What did the court decide?

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