Allowed

Indian Bank v. M/S Jai Mahadev Hosiery and Others

DRT20 Mar 2026OA/1348/2025

Case brief

AI extract

What is this about?

The DRT allowed a recovery application filed by Indian Bank against M/s Jai Mahadev Hosiery and directors. The tribunal disgarded claimed penal interest, granting 8% simple interest from the date of filing until realization of the decretal amount.

What did the court decide?

Directed defendants to pay Rs. 2,19,47,514.00 with 8% simple interest from date of filing. Issued Recovery Certificate and directed appearance before Recovery Officer.

Indian Bank versus M/S Jai Mahadev Hosiery and Others — Banking and Recovery | DRT (2026)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO. 1348/2025

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 02.08.2025

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DATE OF DECISION: 20.03.2026

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Indian Bank, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, having its Head Office at 254-260, Avvai Shanmugam Salai, Royapeetah, Chennai, having its Zonal Office at Ludhiana and amongst other places a branch at Vardhman Branch, District Ludhiana, Punjab through its Authorized Officer, Sh. Amit Bansal, Senior Manager, Indian Bank, Vardhman Branch, District Ludhiana, Punjab

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……..Applicant Versus

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M/S Jai Mahadev Hosiery, having its office 1559/2B, Street no. 5, Kirpal Nagar, Mohalla New Madhopuri, Ludhiana, Punjab 141007 through its proprietor

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Sh. Ketan Kumar Maggo S/o Sh. Vijay Kumar Maggo S/o Sh. Nanak Chand, R/o H. no. 153/54, Gali no. 6, New Madhopuri, Ludhiana, Punjab

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2^nd Address: 653, Block-D, Pakhowal Road, Dad, Palam Vihar, Ludhiana

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3^rd Address: 1587, Sector 32A, Urban Estate, Chandigarh Road, Ludhiana

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Sh. Vijay Kumar Maggo S/o Sh. Nanak Chand Maggo, H. No. 153/54, Gali no. 6, New Madhopuri, Ludhiana, Punjab

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2^nd Address: 653, Block-D, Pakhowal Road, Dad, Palam Vihar, Ludhiana

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3^rd Address: 1587, Sector 32A, Urban Estate, Chandigarh Road, Ludhiana

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………. Defendants

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2 OA/1348/2025 INDIAN BANK VS. M/S JAI MAHADEV HOSIERY & OTHERS

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Advocates:

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Argued by Ms. Manjari Joshi, Advocate for Applicant None for defendants

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FINAL ORDER 1. 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.2,19,47,514.00 (Rupees Two Crores Nineteen Lacs Forty Seven Thousand Five Hundred Fourteen Only). The Original Application has been filed through Sh. Amit Bansal, Senior Manager of the applicant, who is competent to institute the Original Application vide Letter of Authorization dated 31.07.2025, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant no.1 through its proprietor defendant no. 2 approached the applicant for Takeover of Cash Credit Limit being availed from other Bank and grant of Cash Credit Limit of Rs.25.00 Lacs vide loan application dated 06.05.2013, which is Annexure A2 to this OA. Defendant nos. 2 and 3 stood as guarantors. Thereafter, the defendant no. 1 through its proprietor defendant no. 2 approached the applicant for enhancement of the limit to Rs.40.00 Lacs vide loan application dated 02.02.2015, which is Annexure A10 to this OA. Thereafter, defendant no. 1 through its proprietor defendant no. 2 approached the applicant for enhancement of the limit to Rs.51.00 Lacs vide loan application dated 01.05.2018, which is Annexure A18 to this OA. Thereafter, defendant no. 1 through its proprietor defendant no. 2 approached the applicant for enhancement of the Cash Credit Limit to Rs.71.00 Lacs vide loan application dated 15.02.2021, which is Annexure A27 to this OA. Thereafter, defendant no. 1 through its proprietor defendant no. 2 approached the applicant for enhancement of the Cash Credit Limit to Rs.95.00 Lacs vide loan application dated 05.03.2022, which is Annexure A36 to this OA. Thereafter, defendant no. 1 through its

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3 OA/1348/2025 INDIAN BANK VS. M/S JAI MAHADEV HOSIERY & OTHERS

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proprietor defendant no. 2 approached the applicant for enhancement of the Cash Credit Limit to Rs.150.00 Lacs vide loan application dated 04.02.2023, which is Annexure A45 to this OA. Thereafter, defendant no. 1 through its proprietor defendant no. 2 approached the applicant for enhancement of the Cash Credit Limit to Rs.210.00 Lacs vide loan application dated 24.10.2024, which is Annexure A56 to this OA.

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The defendant no. 1 through its proprietor defendant no. 2 also approached for Working Capital Term Loan (WCTL) of Rs.5.10 Lacs under GECL vide loan application dated 12.05.2020, which is Annexure A64 to this OA and Working Capital Term Loan (WCTL) of Rs.13.60 Lacs under GECL 1.0 vide loan application dated 18.11.2021, which is Annexure A69 to this OA

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The applicant sanctioned the Takeover with enhancement of Cash Credit Limit of Rs.25.00 Lacs vide Sanction Letter dated 18.06.2013, which is Annexure A3 to this OA and terms and conditions were duly accepted by the defendant no. 1 through its proprietor defendant no. 2 vide Letter dated 18.06.2013, accepting terms and conditions of Sanction, which is Annexure A4 to this OA. Thereafter, the applicant sanctioned enhancement of the Cash Credit Limit to Rs.40.00 Lacs vide sanction letter dated 10.02.2015, which is Annexure A11 to this OA and terms and conditions were duly accepted by defendants. Acknowledgment of sanction letter dated 21.02.2015, which is Annexure A12 to this OA. Thereafter, the limit was enhanced by the applicant vide sanction letter dated 09.05.2018, which is Annexure A19 to this OA. Acknowledgment of sanction letter dated 10.05.2018, which is Annexure A20 to this OA. Thereafter, the limit was enhanced by the applicant to Rs.71.00 Lacs vide sanction letter dated 12.03.2021, which is Annexure A28 to this OA. Letter dated 25.03.2021, acknowledging terms and conditions, which is Annexure A29 to this OA. Thereafter, the limit was enhanced by the applicant to Rs.95.00 Lacs vide sanction letter dated 16.04.2022,

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4 OA/1348/2025 INDIAN BANK VS. M/S JAI MAHADEV HOSIERY & OTHERS

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which is Annexure A37 to this OA. Letter dated 20.04.2020, acknowledging terms and conditions, which is Annexure A38 to this OA. Thereafter, the limit was enhanced by the applicant to Rs.145.00 Lacs vide sanction letter dated 10.03.2023, which is Annexure A46 to this OA. Letter dated 17.03.2023, acknowledging terms and conditions, which is Annexure A47 to this OA. Thereafter, the limit was enhanced by the applicant to Rs.210.00 Lacs vide sanction letter dated 18.11.2024, which is Annexure A57 to this OA.

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The applicant also sanctioned Working Capital Term Loan of Rs.5.10 Lacs under GECL vide sanction letter dated 08.06.2020, which is Annexure A65 to this OA and sanctioned Working Capital Term Loan of Rs.13.60 Lacs under GECL 1.0 vide sanction letter dated 15.12.2021, which is Annexure A70 to this OA. Acknowledgment of sanction dated 23.12.2021, which is Annexure A71 to this OA. As per the OA these accounts stand closed by the defendants. 4. Defendant no. 1 through its proprietor defendant no. 2 hypothecated Current Assets of the Firm, Stocks, Book Debts and other Current Assets, vide Letter of hypothecation dated 18.06.2013, which are Annexure A6 to this OA; Letter of hypothecation dated 21.02.2015, which is Annexure A14 to this OA; Supplemental Letter of hypothecation dated 10.05.2018, which is Annexure A22 to this OA; Agreement of hypothecation of movables dated 25.03.2021, which is Annexure A31 to this OA; Agreement of hypothecation of movables dated 20.04.2022, which is Annexure A40 to this OA; Agreement of hypothecation of movables dated 17.03.2023, which is Annexure A49 to this OA; Agreement of hypothecation of movables dated 18.11.2024, which is Annexure A59 to this OA; Agreement of hypothecation of movables dated 08.06.2020, which is Annexure A67 to this OA; Agreement of hypothecation of movables dated 23.12.2021, which is Annexure A73 to this OA

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5 OA/1348/2025 INDIAN BANK VS. M/S JAI MAHADEV HOSIERY & OTHERS

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Defendant no. 3 mortgaged his immovable property i.e. all that Part and Parcel of property measuring 100 sq. yards situated at Taraf Saidan, Hadbast no. 172, Abadi Mohalla New Madhopuri, New Kirpal Nagar, Tehsil and District Ludhiana, Punjab through equitable mortgage of sale deed bearing Sale Deed bearing vasika no. 4695 dated 11.06.2007, along with its translation, which is Annexure A8 to this OA; Letter dated 19.06.2013 confirming deposit of title deeds for mortgage, which is Annexure A9 to this OA; Supplemental Letter of Mortgagor dated 21.02.2015, which is Annexure A17 to this OA; Supplemental Letter of Mortgagor dated 10.05.2018 which is Annexure A26 to this OA; Letter dated 26.03.2021, for extension of mortgage, which is Annexure A35 to this OA; Letter dated 21.04.2022, for extension of mortgage, which is Annexure A44 to this OA; Letter dated 18.03.2023, for extension of mortgage, which is Annexure A55 to this OA; Letter dated 19.11.2024, for extension of mortgage, which is Annexure A63 to this OA; Letter dated 23.12.2021, for extension of mortgage, which is Annexure A75 to this OA; CERSAI Registration, which is Annexure A76 to this OA.

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Documents Executed: DP Note and Agreement of guarantee, both dated 18.06.2013, which are Annexures A5 and A7 to this OA; DP Note and Agreement of guarantee, both dated 21.02.2015, which are Annexures A13 and A16 to this OA; DP Note, Letter of undertaking, Undertaking of margin, Deed of guarantee, all dated 10.05.2018, which are Annexures A21, A23 to A25 to this OA; DP Note, Agreement for open Cash Credit, Letter of Continuity, Agreement of Guarantee, all dated 25.03.2021, which are Annexure A30, A32 to A34 to this OA; DP Note, Agreement for open Cash Credit, Letter of Continuity, Agreement of Guarantee, all dated 20.04.2022, which are Annexure A39, A41 to A43 to this OA; DP Note, Annexure to loan document, Agreement for Open Cash Credit, Letter of Continuity, Declaration by sole proprietor, Agreement of guarantee, all dated

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6 OA/1348/2025 INDIAN BANK VS. M/S JAI MAHADEV HOSIERY & OTHERS

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17.03.2023, which are Annexures A48, A50 to A54 to this OA; DP Note, Agreement for Open Cash Credit, Letter of Continuity, Agreement of guarantee, all dated 18.11.2024, which are Annexures A58, A60 to A62 to this OA; DP Note, Agreement of guarantee, both dated 08.06.2020, which are Annexures A66 and A68 to this OA; DP Note, Agreement of guarantee, both dated 23.12.2021, which are Annexures A72 and A74 to this OA; Statement of account with certificate, which is Annexure A77 to this OA; Demand Notice dated 30.06.2025 u/s 13(2) of SARFAESI Act, which is Annexure A78 to this OA.

¶33

The CC Limit loan account became irregular and was classified as NPA and after adjusting debit and credit entries in the account there was a debit of Rs.2,19,47,514.00 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.

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The defendant was served notices to appear before this Tribunal. Sh. Yasin Sethi, Advocate appeared on behalf of defendants on 06.11.2025 and filed his memo of appearance. Power of Attorney of of Sh. I.P.S. Jaswal, Advocate, Sh. Yasin Sethi, Advocate and Ms. Abshita Nanda, Advocate was filed on behalf of defendants on 18.11.2025. However, no WS was filed by defendants and therefore, opportunity to file WS by defendants was closed and their defense was struck off vide order dated 11.02.2026.

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In support of the OA, affidavit of Sh. Sh. Amit Bansal, Senior Manager, Indian Bank has been filed. 9. Heard arguments and perused record. No one appeared on behalf of defendants for arguments. 10. It was argued by learned counsel for applicant that in view of the documentary evidence brought on record, the applicant had proved its case. From the perusal of all the Annexure A1 to A78 to this OA,

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7 OA/1348/2025 INDIAN BANK VS. M/S JAI MAHADEV HOSIERY & OTHERS

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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 CC Limit loan as per terms and conditions of the agreement between the parties. Subsequently, account of the defendant was classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.2,19,47,514.00 (Rupees Two Crores Nineteen Lacs Forty Seven Thousand Five Hundred Fourteen Only), along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the account.

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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 @11.10%p.a. with 2% penal interest from 03.08.2025 till 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 properties/ hypothecated assets, 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 uniform simple interest @08.00%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.2,19,47,514.00 (Rupees Two Crores Nineteen Lacs Forty Seven Thousand Five Hundred Fourteen 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

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8 OA/1348/2025 INDIAN BANK VS. M/S JAI MAHADEV HOSIERY & OTHERS

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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 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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13. 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 13.04.2026.

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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: 20.03.2026

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(MRIDULESH KUMAR SINGH)

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Presiding Officer, DRT-III, Chandigarh

Indian Bank v. M/S Jai Mahadev Hosiery and Others

Case brief

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Indian Bank v. M/S Jai Mahadev Hosiery and Others

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