Allowed

Capital Small Finance Bank Limited v. Late Sh. Varinder Singh through His Legal Heirs and Another

DRT5 Jan 2026OA/1380/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the bank's application for recovery of Rs.25.20 lakhs against defaulting borrowers. The court modified the claimed interest rate to 8% p.a. and directed the issuance of a Recovery Certificate based on uncontradicted documentary evidence.

What did the court decide?

Recovery Certificate issued; recovery of Rs.25,20,662.30 with costs and 8% simple interest directed from sale of mortgaged assets.

Capital Small Finance Bank Limited versus Late Sh. Varinder… — Banking and Recovery | DRT (2026)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1380/2024

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 22.11.2024

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DATE OF DECISION: 05.01.2026.

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Capital Small Finance Bank Ltd. (Earlier known as Capital Local Area Bank Ltd.) a body corporate established under the Companies Act, 1956 and having its Registered Office at MIDAS, Corporate Park, 3^rd Floor, 37 G.T. Road, Jalandhar, District Jalandhar, Punjab and branch office amongst other places at Pathankot, Punjab through its General Power of Attorney Sh. Munish Sharma posted at Registered & Head Office at Jalandhar.

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……..Applicant

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Versus

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Sh. Varinder Singh (since deceased) Through his LRs:

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(i) Sh. Digvijay S/o Late Sh. Virander Singh R/o VPO Pinjore, Tehsil & District Pathankot. (ii) Smt. Poonam W/o Late Sh. Virander Singh R/o VPO Pinjore, Tehsil & District Pathankot.

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Sh. Khushal Singh S/o Sh. Shiv Charan R/o VPO Pinjore, Tehsil & District Pathankot.

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……….Defendants

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Advocates:

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Argued by Sh. Vikas Sharma, Advocate for the applicant (through VC)

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Defendants already ex-parte vide order dated 23.10.2025

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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 and Bankruptcy Act, 1993, against the defendants for recovery of Rs.25,20,662.30 (Rupees Twenty Five Lacs Twenty thousand Six Hundred Sixty Two & Paise Thirty Only). The Original Application has been filed through Sh. Munish Sharma, General Power of Attorney Holder of the applicant,

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OA NO.1380/2024 CAPITAL SMALL FINANCE BANK LIMITED VS. VARINDER SINGH THROUGH HIS LEGAL HEIRS AND ANOTHER

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who is competent to institute the Original Application Vide General power of attorney dated 20.04.2019, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant no. 1 (since deceased) approached the applicant for the grant of KCC Limit of Rs.20.00 Lacs vide Loan application dated 28.02.2022, which is Annexure A2 to this OA. Defendant no. 2 stood as guarantor.

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The applicant sanctioned the KCC Limit of Rs.20.00 Lacs vide Letter of arrangement dated 19.04.2022 which is Annexure A3 to this OA and the terms and conditions were duly accepted by the defendant no. 1 (since deceased) and defendant no. 2.

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Defendant no.1 (since deceased) mortgaged his immovable properties i.e. Land measuring 40Kanal situated at Village Panjore, Hadbast no. 206, Tehsil & District Pathankot vide Declaration U/s 4(1) of the Punjab Agriculture Credit Operations & Miscellaneous Provisions (Banks) Act dated 13.04.2022, which is Annexure A8 to this ОА. Documents executed: Agreement of hypothecation of standing crops and other movable assets, DP Note, Letter of continuity, guarantee deed, all dated 04.01.2020, which are Annexures A4 to A7 to this OA; Legal notice dated 14.10.2024, which is Annexure A9(Colly) to this OA and Statement of account with certificate, which is Annexure A10 to this OA.

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The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in loan account there was a debit of Rs.25,20,662.30, 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 23.10.2025.

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OA NO.1380/2024 CAPITAL SMALL FINANCE BANK LIMITED VS. VARINDER SINGH THROUGH HIS LEGAL HEIRS AND ANOTHER

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In support of the OA, affidavit of Sh. Munish Sharma, General Power of Attorney Holder, Capital Small Finance Bank Ltd, has been filed. 8. Heard ex-parte arguments and perused record. 9. It was argued by learned counsel through Video Conferencing 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 A10 to this OA, it is proved that the defendant no. 1 (since deceased) and defendant no. 2 approached applicant for availing of the loan facility which was granted to them and for that they had executed all the relevant documents in favour of the bank. They failed to pay back the loan as per terms and conditions of the agreement between the parties. Subsequently, account of the was classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.25,20,662.30 (Rupees Twenty Five Lacs Twenty Thousand Six Hundred Sixty Two & Paise Thirty 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. 10. In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @12.45%p.a. along with 2% penal interest with half yearly rests from 01.10.2024 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 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

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OA NO.1380/2024 CAPITAL SMALL FINANCE BANK LIMITED VS. VARINDER SINGH THROUGH HIS LEGAL HEIRS AND ANOTHER

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@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.25,20,662.30 (Rupees Twenty Five Lacs Twenty Thousand Six Hundred Sixty Two & Paise Thirty Only) jointly and severally, with costs, current and future simple interest @08.00%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/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. 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 15.01.2026. 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: 05.01.2026. (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Capital Small Finance Bank Limited v. Late Sh. Varinder Singh through His Legal Heirs and Another

Case brief

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Capital Small Finance Bank Limited v. Late Sh. Varinder Singh through His Legal Heirs and Another

Case brief

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