Allowed

State Bank of India v. Messrs M K Hotels and Hospitality and Others

DRT7 Jan 2026OA/1371/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the Original Application filed by State Bank of India to recover Rs. 45,29,618.00 from M/s M.K. Hotels and Hospitality and partners for breach of loan/cash credit terms, ordering an 8% simple interest rate and issuance of a Recovery Certificate.

What did the court decide?

Recovery of Rs.45,29,618.00 with 8% simple interest; issuance of Recovery Certificate; liberty to proceed under SARFAESI Act or attach personal assets.

State Bank of India versus Messrs M K Hotels and Hospitality… — Company and Corporate | DRT (2026)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1371/2024

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 21.11.2024

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DATE OF DECISION: 07.01.2026

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State Bank of India, a body corporate, constituted under the State Bank of India Act, 1955, and having Central Office at Madam Cama Road, Nariman Point, Mumbai and one of its Local Head Office at Sector 17-A, Chandigarh and a specialized branch known as SARB at SCO No. 15, 1^st Floor, Sector 7C, Madhya Marg, Chandigarh 160009 through its Chief Manager Sh. Varun Kumar.

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……..Applicant

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Versus

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M/s M.K. Hotels and Hospitality, a partnership concern situated at Mittal Tower, 3^rd Floor, Street Club Road, Bhupindra Nagar, Civil Lines Patiala through its partners Smt. Uttamjeet Kaur and

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Sh. Noorjot Singh.

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Smt. Uttamjeet Kaur wife of Sh. Amrinder Singh Sidhu, resident of House No. 67, Salaria Vihar, Ph-1, Urban Estate, Patiala, Punjab.

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Sh. Noorjot Singh son of Sh. Sukhvir Singh, resident of House No. 199, North Avenue, Bhadson Road, Patiala, Punjab.

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….……Defendants

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Advocates:

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Argued by Sh. Kaveesh, Advocate proxy for Sh.Gaurav Singla, Advocate for applicant

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Defendant already ex-parte vide order dated 10.06.2025

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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.45,29,618.00 (Rupees Forty

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Five Lacs Twenty Nine Thousand Six Hundred Eighteen Only). The Original Application has been filed through Sh. Varun Kumar, Chief

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OA NO.1371/2024 STATE BANK OF INDIA VS MESSRS M.K. HOTELS AND HOSPITALITY AND OTHERS

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Manager, of the applicant, who is competent to institute the Original Application the terms of Gazette Notification dated 26.09.1959 26.08.1972 and 02.05.1987 issued under Regulation No. 76 & 77 of State Bank of India Regulations framed in Exercise of the powers conferred by Sub section (3) of Section 50 of the State Bank of India Act, 1955, with the previous sanction of the Central Government. 2. The brief facts of the OA are that the defendant no. 1 through its partners defendant nos. 2 and 3 approached the applicant for grant of Cash Credit limit of Rs.50.00 Lacs vide loan application dated 23.06.2022, which is Annexure A1 to this OA. 3. The applicant sanctioned the Cash Credit limit of Rs.50.00 Lacs under CGTMSE Scheme vide letter of arrangement dated 27.06.2022, 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 partners defendant nos. 2 and 3 hypothecated stocks and current assets etc. vide agreement of loan cum hypothecation dated 27.06.2022, which is Annexure A3 to this OA.

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Documents executed: Legal Notice dated 02.05.2024, along with postal receipts, which is AnnexureA4 to this OA; statement of account with closure enquiry and certificate, which is Annexure A5 to this OA. 5. The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in the loan account there was a debit of Rs.45,29,618.00, 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 notices to appear before this Tribunal but no one appeared on behalf of defendants and they were proceeded ex parte vide order dated 10.06.2025.

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OA NO.1371/2024 STATE BANK OF INDIA VS MESSRS M.K. HOTELS AND HOSPITALITY AND OTHERS

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In support of the OA, affidavit of Sh. Varun Kumar, 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 bank had proved its case. From the perusal of all the Annexures A1 to A5 to this OA, it is proved that the defendants approached applicant for availing of the loan facility 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 loan as per terms and conditions of the agreement between the parties. Subsequently, account of the defendants was classified as NPA. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.45,29,618.00 (Rupees Forty Five Lacs Twenty Nine Thousand Six Hundred Eighteen 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.

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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 @11.25%p.a. with 2% penal interest and monthly rests from 13.11.2024 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 mortgaged property/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 @8.00%p.a. in the loan account from the date of filing of the OA till

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OA NO.1371/2024 STATE BANK OF INDIA VS MESSRS M.K. HOTELS AND HOSPITALITY AND OTHERS

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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.45,29,618.00 (Rupees Forty Five Lacs Twenty Nine Thousand Six Hundred Eighteen 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 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. 12. Any other application pending stands disposed of . 13. Issue Recovery Certificate accordingly. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 20.01.2026. 15. 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 . Dated: 07.01.2026. (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

State Bank of India v. Messrs M K Hotels and Hospitality and Others

Case brief

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State Bank of India v. Messrs M K Hotels and Hospitality and Others

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