Allowed

Union Bank of India v. M/S Eshan Yarns Private Limited and Others

DRT14 May 2026OA/1234/2024

Case brief

AI extract

What is this about?

The DRT allowed the bank's recovery application against a borrower and guarantors who failed to repay loans. Declaring them jointly and severally liable, the court ordered recovery of the principal sum plus interest, reducing the claimed rate to a uniform 7.50% per annum.

What did the court decide?

Recovery of Rs. 18,40,31,062.86 with costs and simple interest @ 07.50% p.a. from filing date till realization. Recovery certificate issued.

Union Bank of India versus M/S Eshan Yarns Private… — Contract and Commercial Disputes | DRT (2026)

¶1

DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO. 1234/2024

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 20.05.2024

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DATE OF DECISION: 14.05.2026

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Union Bank of India, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act no. V of 1970, carrying on Banking Business and having its Head Office at 239, Vidhan Bhavan Marg, Nariman Point, Mumbai-400021 in the State of Maharashtra and its Branch Office inter-alia at UMFB Branch, Industrial Area-A, Cheema Chowk, Ludhiana, Punjab-141003, through its Chief Manager-Cum-Duly Constituted Attorney, Sh. Amit Ranjan Kumar.

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……..Applicant

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Versus

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1. M/s Eshan Yarns Private Limited, Registered Office at Village Lall Kalan, Near Neelon Bridge, Tehsil Samrala, District Ludhiana, Punjab through, its Directors Sh. Sanjeev Makkar and Smt. Shweta Makkar 2^nd Address: Unit-2, Plot No. 21 min and Plot No. 808, Street No. 2, Guru Vihar, Rahon Road, Taraf Gehlewal, Ludhiana.

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1. Sh. Sanjeev Makkar S/o Sh. Ashok Kumar, Village Lall Kalan, Near Neelon Bridge, Tehsil Samrala, District Ludhiana.

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Smt. Shweta Makkar W/o Sh. Sanjeev Makkar, Village Lall Kalan, Near Neelon Bridge, Tehsil Samrala, District Ludhiana, Punjab

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Sh. Ashok Makkar S/o Sh. Gobind Ram, B-XIX-625, Malerkotla House, Civil Lines, Near Old DMC Hospital, Ludhiana.

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Smt. Banita Makkar W/o Sh. Manoj Kumar Makkar, 625, Malerkotla House, Civil Lines, Near Old DMC Hospital, Ludhiana.

¶14

Sh. Manoj Makkar S/o Sh. Ashok Makkar, B-XX-625, Malerkotla House, Civil Lines, Near Old DMC Hospital, Ludhiana. … …. .Defendants

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Advocates:

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Argued by Sh. Kamal Satija, Advocate for the applicant (through VC) None for Defendants (already ex-parte vide order dated 10.02.2025)

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OA NO. 1234/2024 UNION BANK OF INDIA VS. M/S ESHAN YARNS PVT. LTD. 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.18,40,31,062.86 (Rupees Eighteen Crore Forty Lacs Thirty One Thousand Sixty Two and Paise Eighty Six Only). The Original Application has been filed through Sh. Amit Ranjan Kumar, Chief Manager o f the applicant who is competent to institute the Original Application vide Power of Attorney dated 20.05.2015, which is Annexure A1 to this OA.

¶21

The brief facts of the OA are that the defendant no.1, through its directors, defendant nos. 2 & 3, approached the applicant for grant of various credit facilities as under in the table with aggregating amount of Rs. 2095.18 lacs vide Board Resolution dated 20.09.2021, which is

¶22

Annexure A2 to this OA. Defendant nos. 2 to 6 stood as Guarantors.

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S. No.	Nature of Limit	Amount (in Lacs)
01	Cash Credit (Hypothecation)	600.00
02	PC/PCFC (180 DAYS)	525.00
03	W/w FDBP/FUDBP	(525.00)
04	Term Loan-1	328.26
05	Term Loan-2	147.97
06	Term Loan-3	37.67
07	Term Loan-4	50.98
08	WCTL under UGECL	329.00
09	Letter of Guarantee	76.30
	Total	2095.18

¶24

The applicant sanctioned the various credit facilities with aggregating amount of Rs. 2095.18 lacs vide Sanction Letter dated 20.09.2021, which is Annexure A3 to this OA and terms and conditions were duly accepted by the defendants.

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¶26

OA NO. 1234/2024 UNION BANK OF INDIA VS. M/S ESHAN YARNS PVT. LTD. AND OTHERS

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4. Defendants mortgaged their various properties as under:

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i. Defendant no.1, through its directors, defendant nos. 2 & 3, mortgaged its Industrial Land measuring 3253.50 SqYds, situated at Plot no.21(min) and Plot no.808, street no.2, Guru Vihar, Rahon Road, taraf Gehlewal, Ludhiana, vide Registered Sale Deed bearing Vasika No. 2019-20/106/1/13684 dated 05.09.2019. Declaration in respect of properties mortgaged, which is Annexure A26 to this OA; Memorandum of Deposit of Title Deeds dated 21.11.2019, which is Annexure A27 to this OA; Board Resolution dated 13.11.2019, which is Annexure A28 to this OA;

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ii. Defendant no.3 mortgaged her Residential Property measuring 800 SqYds, situated at Plot No. 88, Shamsher Avenue, Opposite Raj Guru Nagar, Ferozepur Road, Ludhiana, vide Registered Sale Deed bearing Vasika No. 76 dated 06.04.2017 (200 Sq Yds), Vasika No. 78 dated 06.04.2017 (200 Sq Yds), Vasika No. 1168 dated 27.04.2017 (200 Sq Yds) & Vasika No. 1169 dated 27.04.2017 (200 Sq Yds). Declaration in respect of properties mortgaged, which is Annexure A30 to this OA; Supplementary Memorandum (Equitable Mortgage) dated 17.12.2019, which is Annexure A31 to this OA;

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iii. Defendant nos. 2,4 & 6 mortgaged their Residential Property measuring 607 SqYds, situated at MC No. B-19-625, Malerkotla House, Civil Lines, Hambran Road, Ludhiana, vide Registered Sale Deed bearing Vasika No. 7879 dated 10.08.2010 (195SqYds), Vasika No. 7881 dated 10.08.2010 (206SqYds) & Vasika No. 7882 dated 10.08.2010 (206SqYds); Declaration in respect of properties mortgaged, which is Annexure A33 to this OA; Memorandum of Deposit of Title Deeds dated 26.10.2018, which is Annexure A34 to this OA; Memorandum of Deposit of Title Deeds dated 26.10.2018, which is Annexure A35 to this OA; Memorandum of Deposit of Title Deeds dated 26.10.2018, which is Annexure A36 to this OA;

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¶32

OA NO. 1234/2024 UNION BANK OF INDIA VS. M/S ESHAN YARNS PVT. LTD. AND OTHERS

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iv. Defendant no.6 mortgaged his Industrial Property measuring 514 SqYds (0K-17M), situated at Village Jamalpur Awana, Hadbast No. 177, abadi Mahavir Jain Colony, Opposite Maharaja Dyeing, Near Central Jail, Tajpur Road, Ludhiana, vide Registered Sale Deed bearing Vasika No. 134 dated 05.04.2000; Declaration in respect of properties mortgaged, which is Annexure A38 to this OA; Memorandum of Deposit of Title Deeds dated 21.11.2019, which is Annexure A39 to this OA;

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v. Defendant nos. 3, 5 & 6 mortgaged their Residential Plot measuring 1187 Sq Yds, situated at behind Maharaja Dyeing, Near Central Jail, Tajpur Road, Ludhiana, vide Registered Sale Deed bearing Vasika No. 18759 dated 05.03.2010 (527 Sq Yds), Vasika No. 18761 dated 05.03.2010 (527 Sq Yds), Vasika No. 6178 dated 17.07.2015 (66.50 Sq Yds) & Vasika No. 5362 dated 03.06.2016 (66.50 Sq Yds); Declaration in respect of properties mortgaged, which is Annexure A41 to this OA; Memorandum of Deposit of Title Deeds dated 21.11.2019, which is Annexure A42 to this OA; Memorandum of Deposit of Title Deeds dated 21.11.2019, which is Annexure A43 to this OA; Memorandum of Deposit of Title Deeds dated 21.11.2019, which is Annexure A44 to this OA; Memorandum of Deposit of Title Deeds dated 21.11.2019, which is Annexure A45 to this OA;

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vi. Defendant nos. 2 & 4 mortgaged their Industrial Plot & Factory Building measuring 4123.98 Sq Yds ie. 6K-16-1/3M, situated at MC No. B-31-2220/2B & B-31-2220/2B/2, situated at Village Jamalpur Awana, abadi Mahavir Jain Colony, Near Central Jail, Tajpur Road, Ludhiana, vide Registered Sale Deed bearing Vasika No. 112 dated 05.04.2000 (998.25 Sq Yds) & Vasika No. 2710 dated 31.05.2001 (998.25 Sq Yds), Vasika No. 4985 dated 30.07.2002 (1008.23 Sq Yds) & Vasika No. 25932 dated 21.02.2000 (1119.25 Sq Yds); Declaration in respect of properties mortgaged, which is Annexure

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¶37

OA NO. 1234/2024 UNION BANK OF INDIA VS. M/S ESHAN YARNS PVT. LTD. AND OTHERS

¶38

A47 to this OA; Memorandum of Deposit of Title Deeds dated 23.02.2018, which is Annexure A48 to this OA; Supplementary Memorandum (Equitable Mortgage) dated 17.12.2019, which is Annexure A49 to this OA; Memorandum of Deposit of Title Deeds dated 23.02.2018, which is Annexure A50 to this OA; Supplementary Memorandum (Equitable Mortgage) dated 17.12.2019, which is Annexure A51 to this OA; Memorandum of Deposit of Title Deeds dated 23.02.2018, which is Annexure A52 to this OA; Supplementary Memorandum (Equitable Mortgage) dated 17.12.2019, which is Annexure A53 to this OA; Memorandum of Deposit of Title Deeds dated 23.02.2018, which is Annexure A54 to this OA; Supplementary Memorandum (Equitable Mortgage) dated 17.12.2019, which is Annexure A55 to this OA.

¶39

Title Deeds of mortgaged properties filed vide I.A. No. 3/2026 as allowed vide Order dated 21.04.2026.

¶40

Title Deed bearing Vasika No. 13684 dated 05.09.2019 has not been filed since it already redeemed and sold by the defendants after seeking permission from the applicant.

¶41

Documents executed: Demand Promissory Note dated 20.09.2021, which is Annexure A4 to this OA; Letter of Continuity dated 20.09.2021, which is Annexure A5 to this OA; Demand Promissory Note dated 20.09.2021, which is Annexure A6 to this OA; Letter of Continuity dated 20.09.2021, which is Annexure A7 to this OA; Demand Promissory Note dated 20.09.2021, which is Annexure A8 to this OA; Letter of Continuity dated 20.09.2021, which is Annexure A9 to this OA; Demand Promissory Note dated 20.09.2021, which is Annexure A10 to this OA; Letter of Continuity dated 20.09.2021, which is Annexure A11 to this OA; Demand Promissory Note dated 20.09.2021, which is Annexure A12 to this OA; Letter of Continuity dated 20.09.2021, which is Annexure A13 to this OA; Demand

¶42

¶43

OA NO. 1234/2024 UNION BANK OF INDIA VS. M/S ESHAN YARNS PVT. LTD. AND OTHERS

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Promissory Note dated 20.09.2021, which is Annexure A14 to this OA; Letter of Continuity dated 20.09.2021, which is Annexure A15 to this OA; Demand Promissory Note dated 20.09.2021, which is Annexure A16 to this OA; Letter of Continuity dated 20.09.2021, which is Annexure A17 to this OA; Demand Promissory Note dated 20.09.2021, which is Annexure A18 to this OA; Letter of Continuity dated 20.09.2021, which is Annexure A19 to this OA; Letter of Undertaking Not To Alienate Hypothecated Goods dated 20.09.2021, which is Annexure A20 to this OA; Agreement dated 20.09.2021, which is Annexure A21 to this OA; Request Letter dated 20.09.2021, which is Annexure A22 to this OA; Composite Hypothecation Deed dated 20.09.2021, which is Annexure A23 to this OA; Interest Agreement dated 20.09.2021, which is Annexure A24 to this OA; Deed of Guarantee dated 20.09.2021, which is Annexure A25 to this OA; Valuation Report dated 08.08.2022, which is Annexure A29 to this OA; Valuation Report dated 15.09.2021, which is Annexure A32 to this OA; Valuation Report dated 15.09.2021, which is Annexure A37 to this OA; Valuation Report dated 30.04.2018, which is Annexure A40 to this OA; Valuation Report dated 30.11.2019, which is Annexure A46 to this OA; Valuation Report dated 03.03.2021, which is Annexure A56 to this OA; ROC Charge, which is Annexure A57 to this OA; Notice, which is Annexure A58 to this OA; Statement of Accounts with certificate, which are Annexures A59 to A66 to this OA.

¶45

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.18,40,31,062.86, 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.

¶46

¶47

OA NO. 1234/2024 UNION BANK OF INDIA VS. M/S ESHAN YARNS PVT. LTD. AND OTHERS

¶48

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 10.02.2025 7. In support of the OA, affidavit of Sh. Amit Ranjan Kumar, Chief Manager, Union Bank of India h as been filed. 8. Heard arguments and perused record. No one appeared on behalf of defendants for arguments. 9. It was argued by learned counsel, through video conferencing, for applicant 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 A66 to this OA, it is proved that the defendant no.1, through its directors, defendant nos. 2 & 3, approached applicant for availing of the loan facilities which was granted to them. Defendant nos. 2 to 6 stood as guarantors. 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, loan accounts were classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.18,40,31,062.86 (Rupees Eighteen Crore Forty Lacs Thirty One Thousand Sixty Two and Paise Eighty Six 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 in relief clause has claimed interest @13.05%p.a. in CC Limit, @13.55%p.a. in Term Loan-I, Term Loan-II, Term Loan-III, Term Loan-IV, @7.50%p.a. in Term Loan-IV, and interest @13.05%p.a. in Packing Credit with monthly rests from 17.02.2023 till the realization. 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

¶49

¶50

OA NO. 1234/2024 UNION BANK OF INDIA VS. M/S ESHAN YARNS PVT. LTD. AND OTHERS

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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 @07.50%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.18,40,31,062.86 (Rupees Eighteen Crore Forty Lacs Thirty One Thousand Sixty Two and Paise Eighty Six Only), jointly and severally, with costs, current and future simple interest @07.50%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/mortgaged properties of the 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.

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Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 05.06.2026

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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. Pronounced by me in the open Tribunal .

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Dated: 14.05.2026.

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(MRIDULESH KUMAR SINGH)

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Presiding Officer, DRT-III, Chandigarh

Union Bank of India v. M/S Eshan Yarns Private Limited and Others

Case brief

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Union Bank of India v. M/S Eshan Yarns Private Limited and Others

Case brief

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