Allowed

Indian Bank v. M/S Ketan Fabrics and Others

DRT23 Mar 2026OA/1402/2025

Case brief

AI extract

What is this about?

The Tribunal allowed the Original Application filed by Indian Bank against M/s Ketan Fabrics and others for recovery of Rs. 2,19,54,380. The court directed repayment with simple interest at 8% p.a. and authorized recovery through sale of mortgaged properties or attachment of assets.

What did the court decide?

Directing defendants to pay Rs. 2,19,54,380 with simple interest at 8% p.a. and issuing Recovery Certificate.

Indian Bank versus M/S Ketan Fabrics and Others — Company and Corporate | DRT (2026)

¶1

DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.1402/2025

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 01.08.2025

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DATE OF DECISION: 23.03.2026

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Indian Bank, a Body Corporate constituted under Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Head Office at 254-260, Avvai Shanmugam Salai, Royapettah, 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.

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……..Applicant

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Versus

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M/s Ketan Fabrics having its Office at 1559/9A, Gali no. 5, New Kirpal Nagar, Ludhiana, Punjab through its Proprietor

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Sh. Vijay Kumar Maggo, S/o Sh. Nanak Chand, R/o H. no. 153/54, Gali no. 6, New Madhopuri, Ludhiana, Punjab (Proprietor of defendant no. 1)

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

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

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Sh. Ketan Kumar Maggo, S/o Sh. Vijay Kumar Maggo, R/o

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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, Punjab

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

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……….Defendants

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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

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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.2,19,54,380.00 (Rupees Two Crores Nineteen Lacs Fifty Four Thousand Three Hundred Eighty Only). The Original Application has been filed through Shri Amit Bansal, Senior Manager, who is competent to institute the Original Application

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2 OA NO.1402/2025 INDIAN BANK VS. M/S KETAN FABRICS AND OTHERS

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vide Letter of Authorization dated 30.06.2025, which is Annexure A1 to this OA.

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The brief facts of the OA are that defendant no. 1 through its proprietor defendant no. 2 approached the applicant for grant of Cash Credit Limit of Rs.5.00 Lacs vide Loan Application dated 28.07.2006, which is Annexure A2 to this OA. Defendant nos. 2 and 3 stood as guarantors. Thereafter, defendant no. 1 through its proprietor defendant no. 2 approached the applicant for enhancement of CC Limit to Rs. 12.00 Lacs vide Loan Application dated 03.03.2010, which is Annexure A13 to this OA. Thereafter, defendant no. 1 through its proprietor defendant no. 2 approached the applicant for enhancement of CC Limit to Rs. 25.00 Lacs vide Loan Application dated 13.02.2013, which is Annexure A23 to this OA. Thereafter, defendant no. 1 through its proprietor defendant no. 2 approached the applicant for enhancement of CC Limit to Rs. 40.00 Lacs vide Loan Application dated 03.02.2015, which is Annexure A30 to this OA. Thereafter, defendant no. 1 through its proprietor defendant no. 2 approached the applicant for enhancement of CC Limit to Rs. 51.00 Lacs vide Loan Application dated 01.05.2018, which is Annexure A38 to this OA. Thereafter, defendant no. 1 through its proprietor defendant no. 2 approached the applicant for enhancement of CC Limit to Rs. 71.00 Lacs vide Loan Application dated 15.02.2021, which is Annexure A47 to this OA. Thereafter, defendant no. 1 through its proprietor defendant no. 2 approached the applicant for enhancement of CC Limit to Rs. 95.00 Lacs vide Application dated 04.03.2022, which is Annexure A59 to this OA. Thereafter, defendant no. 1 through its proprietor defendant no. 2 approached the applicant for enhancement of CC Limit to Rs.146.00 Lacs vide Loan Application dated 04.02.2023, which is Annexure A68 to this OA. Thereafter, defendant no. 1 through its proprietor defendant no. 2 approached the applicant for enhancement of CC Limit to Rs.210.00 Lacs vide Loan Application dated 24.10.2024, which is Annexure A77 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

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3 OA NO.1402/2025 INDIAN BANK VS. M/S KETAN FABRICS AND OTHERS

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Annexure A86 to this OA and Working Capital Term Loan (WCTL) of Rs.9.63 Lacs under GECL extension vide loan application dated 18.11.2021, which is Annexure A93 to this OA.

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The applicant sanctioned the amount of Rs. 4.50 Lacs vide Sanction Letter dated 21.08.2006, which is Annexure A3 to this OA and terms and conditions were duly accepted the defendant no. 1 through its proprietor defendant no. 2 vide Letter dated 21.08.2006, accepting terms and conditions of Sanction, which is Annexure A4 to this OA. Thereafter, the applicant sanctioned the enhancement of the CC Limit to Rs.12.00 Lacs vide Sanction Letter dated 03.03.2010, which is Annexure A14 to this OA and terms and conditions were duly accepted by defendant no. 1 through its proprietor vide Letter dated 03.03.2010 acknowledging Terms and Conditions, which is Annexure A15 to this OA. Thereafter, the applicant sanctioned the enhancement of the CC Limit to Rs.25.00 Lacs vide Sanction Letter dated 14.02.2013, which is Annexure A24 to this OA and terms and conditions were duly accepted by defendant no. 1 through its proprietor defendant no. 2 vide Letter dated 23.02.2013 acknowledging Terms and Conditions, which is Annexure A25 to this OA. Thereafter, the applicant sanctioned the enhancement of the CC Limit to Rs.40.00 Lacs vide Sanction Letter dated 13.02.2015, which is Annexure A31 to this OA and terms and conditions were duly accepted by defendant no. 1 through its proprietor defendant no. 2 vide Letter dated 21.02.2015 acknowledging Terms and Conditions, which is Annexure A32 to this OA. Thereafter, the applicant sanctioned the enhancement of the CC Limit to Rs.51.00 Lacs vide Sanction Letter dated 09.05.2018, which is Annexure A39 to this OA and terms and conditions were duly accepted by defendant no. 1 through its proprietor defendant no. 2 vide Letter dated 10.05.2018 acknowledging Terms and Conditions, which is Annexure A40 to this OA. Thereafter, the applicant sanctioned the enhancement of the CC Limit to Rs.70.00 Lacs vide Sanction Letter dated 13.05.2021, which is Annexure A48 to this OA and terms and conditions were duly accepted by defendant no. 1 through its proprietor defendant no. 2 vide Letter dated 15.05.2021 acknowledging Terms and Conditions,

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4 OA NO.1402/2025 INDIAN BANK VS. M/S KETAN FABRICS AND OTHERS

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which is Annexure A49 to this OA. Thereafter, the applicant sanctioned the enhancement of the CC Limit to Rs.90.00 Lacs vide Sanction Letter dated 16.04.2022, which is Annexure A60 to this OA and terms and conditions were duly accepted by defendant no. 1 through its proprietor defendant no. 2 vide Letter dated 20.04.2022 acknowledging Terms and Conditions, which is Annexure A61 to this OA. Thereafter, the applicant sanctioned the enhancement of the CC Limit to Rs.146.00 Lacs vide Sanction Letter dated 22.03.2023, which is Annexure A69 to this OA and terms and conditions were duly accepted by defendant no. 1 through its proprietor defendant no. 2 vide Letter dated 30.03.2023 acknowledging Terms and Conditions, which is Annexure A70 to this OA. Thereafter, the applicant sanctioned the enhancement of the CC Limit to Rs.210.00 Lacs vide Sanction Letter dated 12.11.2024, which is Annexure A78 to this OA and terms and conditions were duly accepted by defendant no. 1 through its proprietor defendant no. 2 vide Letter dated 12.11.2024 acknowledging Terms and Conditions, which is Annexure A79 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 30.06.2020, which is Annexure A87 to this OA and sanctioned Working Capital Term Loan of Rs.9.63 Lacs under GECL extension vide sanction letter dated 20.11.2021, which is Annexure A94 to this OA. Acknowledgment of sanction dated 24.11.2021, which is Annexure A95 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 stocks and book debts, receivables vide General Letter of Hypothecation dated 17.03.2010, 23.02.2013, 21.02.2015 which are Annexure A17, A27, A34 to this OA; Supplemental Letter of hypothecation dated 10.05.2018, which is Annexure A42 to this OA; Agreement of hypothecation of movable dated 15.05.2021, 30.04.2022, 30.03.2023, 12.11.2024, 30.06.2020, 24.11.2021 which are Annexures A51, A63, A72, A82, A89, A97 to this OA. Defendant no. 2 mortgaged his immovable property i.e. All that part and parcel of property measuring 100 sq. yards situated at Taraf

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5 OA NO.1402/2025 INDIAN BANK VS. M/S KETAN FABRICS AND OTHERS

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Saidan, Hadbast no. 172, Abadi Kirpal Nagar, Ludhiana through equitable mortgage of Sale Deed bearing vasika no. 21572 dated 10.03.2006, along with translation, which is Annexure A10 to this OA; Declaration by borrower/mortgagor on affidavit dated 01.09.2006, which is Annexure A11 to this OA; Letter dated 01.09.2006 from mortgagor confirming deposit of title deeds, which is Annexure A12 to this OA; Declaration on affidavit dated 06.03.2010, which is Annexure A20 to this OA; Supplemental Letter dated 17.03.2010 confirming deposit of title deeds, which is Annexure A22 to this OA; Supplemental Letter dated 23.02.2013 confirming deposit of title deeds, which is Annexure A29 to this OA; Supplemental Letter dated 21.02.2015, confirming deposit of title deeds, which is Annexure A37 to this OA; Supplemental Letter dated 10.05.2018, confirming deposit of title deeds, which is Annexure A46 to this OA; Letter dated 15.05.2021 confirming extension of mortgage, which is Annexure A58 to this OA; Letter dated 21.04.2022 confirming extension of mortgage, which is Annexure A67 to this OA; Letter dated 30.03.2023 confirming extension of mortgage, which is Annexure A76 to this OA; Letter dated 12.11.2014 confirming extension of mortgage, which is Annexure A85 to this OA. Letter dated 30.06.2020 confirming extension of mortgage, which is Annexure A92 to this OA; Letter dated 24.11.2021 confirming extension of mortgage, which is Annexure A99 to this OA; CERSAI charge, which is Annexure A100 to this OA.

¶34

Documents executed : DP Note, Agreement of Loan, Consent clause, Power of Attorney and Insurance Indemnity, all dated 01.09.2026, which are Annexure A5 to A9 to this OA; DP Note, Undertaking and consent clause, Deed of Guarantee, all dated 17.03.2010, which are Annexure A16, A18, A19 and A21 to this OA; DP Note, Deed of Guarantee, both dated 23.02.2013, which are Annexure A26 and A28 to this OA; DP Note, Undertaking, Deed of Guarantee, all dated 21.02.2015, which are Annexure A33, A35 and A36 to this OA; DP Note, Undertaking, Letter of Undertaking, Deed of Guarantee, all dated

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6 OA NO.1402/2025 INDIAN BANK VS. M/S KETAN FABRICS AND OTHERS

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10.05.2018, which are Annexure A41, A43, A44 and A45 to this OA; DP Note, Agreement for Open Cash Credit, Letter of Continuity, Declaration by Sole Proprietor, Letter from Borrower for disclosure of information, Letter to Guarantor and Reply, Deed of Guarantee, all dated 15.05.2021 which are Annexure A50, A52 to A57 to this OA; DP Note, Agreement of Open Cash Credit, Letter of Continuity and Agreement of Guarantee, all dated 20.04.2022, which are Annexure A62, A64 to A66 to this OA; DP Note, Agreement for Open Cash Credit, Letter of Continuity, Agreement of Guarantee, all dated 30.03.2023, which are Annexure A71, A73 to A75 to this OA; DP Note, Letter of Continuity, Agreement for Open Cash Credit and Deed of Guarantee, all dated 12.11.2024, which are Annexure A80, A81, A83 and A84 to this OA; DP Note, Declaration/Undertaking, Deed of Guarantee, all dated 30.06.2020, which are Annexure A88, A90, A91 to this OA; DP Note, Agreements of Guarantee, both dated 24.11.2021, which are Annexure A96 and A98 to this OA; Statement of Account, which is Annexure A101 to this OA and Demand Notice dated 20.06.2025 u/s 13(2) of SARFAESI Act, which is Annexure A102 to this OA. 5. 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.2,19,54,380.00, 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 defendants were 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 and was directed to file Power of Attorney. 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. 7. 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.

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¶39

OA NO.1402/2025 INDIAN BANK VS. M/S KETAN FABRICS AND OTHERS

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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 A102 to this OA, it is proved that the defendants 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. 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.2,19,54,380.00 (Rupees Two Crores Nineteen Lacs Fifty Four Thousand Three Hundred Eighty 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.

¶41

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 02.08.2025 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.2,19,54,380.00 (Rupees Two Crores Nineteen Lacs Fifty Four Thousand Three Hundred Eighty 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

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8 OA NO.1402/2025 INDIAN BANK VS. M/S KETAN FABRICS AND OTHERS

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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 15.04.2026.

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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: 23.03.2026.

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(MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Indian Bank v. M/S Ketan Fabrics and Others

Case brief

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Indian Bank v. M/S Ketan Fabrics and Others

Case brief

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