Allowed

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

DRT8 Jan 2026OA/1241/2025

Case brief

AI extract

What is this about?

In this original application under the RDB Act, the Debts Recovery Tribunal allowed the applicant bank's claim for recovery of ~1.67 Crores from a business unit and its proprietor who failed to repay sanctioned loans, awarding uniform interest of 8% p.a.

What did the court decide?

Recovery of Rs.1,67,24,482.91 with costs and simple interest @8.00% p.a. from filing date; issuance of Recovery Certificate; jurisdiction to attach and sell personal assets if secured assets are insuf

State Bank of India versus M/S Sharma Steel Traders and Another — Banking and Recovery | DRT (2026)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1241/2025

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 07.09.2025

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DATE OF DECISION: 08.01.2026

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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, Chandigarh and having its Branch amongst other places at Link Road, Ludhiana. (Punjab) 141003 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 Shri Sushil Kumar Srivastava.

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……..Applicant

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Versus

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M/s Sharma Steel Traders, a Proprietorship Firm, at B 29 II, Lohara to Eastman Chowk, Bhamrah Power Presses, Lohara, Ludhiana (Punjab) 141014, through its Proprietor Shri Chandra Prakash son of Shri Daudayal Sharma.

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Shri Chandra Prakash son of Shri Daudayal Sharma, Proprietor of M/s Sharma Steel Traders, Resident of Near Mahadev Nagar, GK Kharey Kanda, Giaspura, Lohara, Ludhiana. (Punjab) 141016.

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….……Defendants

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Advocates:

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Argued by Sh. Sanjay Sagar, Advocate proxy for Sh. Vivek Verma, Advocate for applicant

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Defendants already ex-parte vide order dated 06.12.2025

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OA NO.1241/2025 STATE BANK OF INDIA VS. M/S SHARMA STEL TRADERS AND ANOTHER

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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.1,67,24,482.91 (Rupees One Crore Sixty Seven Lacs Twenty Four Thousand Four Hundred Eighty Two and Paisa Ninety One Only). The Original Application has been filed through Shri Sushil Kumar Srivastava, Chief Manager of the applicant, who is competent to institute the Original Application vide Gazette Notification dated 27.03.1987 and 31.08.2005, which are

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Annexure AA to this OA.

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The brief facts of the OA are that the defendant no. 1 through its proprietor approached the applicant for the grant of Cash Credit Limit of Rs.1.20 Crore and Term Loan of Rs.30.00 Lacs for business purpose vide Application for MSME Loan dated 20.11.2023, which is Annexure A2 to this OA. Defendant no. 2 also stood as guarantor.

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The applicant sanctioned the Cash Credit Limit of Rs.1.20 Crore and Term Loan of Rs.30.00 Lacs, vide Letter of arrangement dated 09.01.2024, which is Annexure A2 to this OA and terms and conditions were duly accepted by the defendants.

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Defendant no. 1 through its proprietor defendant no. 2 hypothecated stocks, receivables, all current assets, plant and machinery created from Bank's finance, present and future etc. vide Agreement of Loan cum hypothecation dated 09.01.2024, which is Annexure A3 to this OA.

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Documents executed: Undertakings/Declaration & Guarantee agreement, both dated 09.01.2024, which are Annexures A4 & A5 to this OA; Legal notice dated 19.11.2024 & 13.12.2024, along with postal receipts, which are Annexures A6 & A7 to this OA and Account statements, which are Annexures A8 & A9 to this OA.

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OA NO.1241/2025 STATE BANK OF INDIA VS. M/S SHARMA STEL TRADERS AND ANOTHER

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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.1,67,24,482.91, 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.

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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 06.12.2025.

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In support of the OA, affidavit of Shri Sushil Kumar Srivastava, 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 A9 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 is entitled to recover a sum of Rs.1,67,24,482.91 (Rupees One Crore Sixty Seven Lacs Twenty Four Thousand Four Hundred Eighty Two and Paisa Ninety One 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. 10. In so far as pendente lite and future rate of interest is concerned, the applicant in relief clause has claimed interest @13.40%p.a.in Term Loan and @14.25%p.a. in CC Limit with 5%

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OA NO.1241/2025 STATE BANK OF INDIA VS. M/S SHARMA STEL TRADERS AND ANOTHER

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penal interest in both the accounts with monthly rests from 01.09.2025 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 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 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.1,67,24,482.91 (Rupees One Crore Sixty Seven Lacs Twenty Four Thousand Four Hundred Eighty Two and Paisa Ninety One 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 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 .

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Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this

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Tribunal on 22.01.2026.

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OA NO.1241/2025 STATE BANK OF INDIA VS. M/S SHARMA STEL TRADERS AND ANOTHER

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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: 08.01.2026.

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(MRIDULESH KUMAR SINGH)

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Presiding Officer, DRT-III, Chandigarh

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

Case brief

What is this about?

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

Case brief

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