Allowed

Indian Overseas Bank v. M/S Shri Ganpati Steel Industry and Another

DRT25 Feb 2026OA/1406/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the applicant bank's recovery application against the steel industry defendants. The court fixed a uniform simple interest rate of 8% p.a. and ordered the recovery of the principal sum of approximately Rs. 36.50 lakhs, declaring it joint and several liability. A Recovery Certificate was issued.

What did the court decide?

Defendants to pay Rs. 36,50,895.98 plus costs and simple interest at 8% p.a. from the date of the application till realization. Recovery Certificate issued. Dues to be recoverable from hypothecated or

Indian Overseas Bank versus M/S Shri Ganpati Steel… — Contract and Commercial Disputes | DRT (2026)

¶1

DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

¶2

ORIGINAL APPLICATION NO.1406/2024

¶3

PRESIDED OVER BY MRIDULESH KUMAR SINGH

¶4

DATE OF INSTITUTION: 18.11.2024

¶5

DATE OF DECISION: 25.02.2026

¶6

Indian Overseas Bank, a body corporate constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970, having its Central Office at 762, Anna Salai, Chennai-600002 & amongst other places a branch office at Sangrur, District, Sangrur, through its duly constituted attorney Ms. Ranjana Singla, Assistant Manager, Indian Overseas Bank, Sangrur Branch, District Sangrur

¶7

……..Applicant

¶8

Versus

¶9

M/s Shri Ganpati Steel Industry, VPO Upli, Near Glucose Factory, District Sangrur through its Proprietor Sh. Seva Ram

¶10

Sh. Seva Ram, Proprietor M/s Shri Ganpati Steel Industry, VPO Upli, Near Glucose Factory, District Sangrur

¶11

2^nd Address: Sh. Seva Ram S/o Sh. Jhanda Lal, R/o H. No. 252, Sekhupura Basti, Ward No. 12 District Sangrur.

¶12

…….Defendants

¶13

Advocates:

¶14

Argued by Sh. Rajan Arora, Advocate for the applicant (through VC) None for Defendants

¶15

FINAL ORDER

¶16

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.36,50,895.98 (Rupees Thirty Six Lacs Fifty Thousand Eight Hundred Ninety Five and Paise Ninety Eight Only). The Original Application has been filed through Ms. Ranjana Singla , Assistant Manager o f the applicant, who is competent to institute the Original Application vide Power of Attorney dated 04.09.2015, which is Annexure A1 to this OA.

¶17

2 OA/1406/2024 INDIAN BANK OVERSEAS BANK VS. M/S SHRI GANPATI STEEL INDUSTRY AND ANOTHER

¶18

The brief facts of the OA are that the defendant no.1 through defendant No.2 approached the applicant for the grant of Cash Credit limit of Rs.15.00 Lacs and Term Loan of Rs.28.50 Lacs vide loan application dated 26.10.2022, which is Annexures A3 to this OA.

¶19

The applicant sanctioned CC Limit of Rs.15.00 Lacs and Term Loan of Rs.28.50 Lacs vide Sanction letter dated 31.12.2022, which is Annexure A2 to this OA and the terms and conditions were duly accepted by the defendants.

¶20

Defendant no. 1 through its proprietor defendant no. 2 hypothecated stocks, book debts and machineries i.e. Lathe machine, Adda machine, Grinder, Generator set, Power press, Drum blast, Dies set, etc. vide letter of hypothecation (for securing moveable assets including machinery/goods/book debts) and letter of hypothecation (for open advances), Agreement of Term Loan and hypothecation, all dated 31.12.2022, which are Annexures A6, A7 and A11 to this OA. Documents executed: Revised DP Note, Letter of Continuity for DPN,

¶21

Letter of Hypothecation, Consent cum Authorisation Letter, Undertaking letter from new borrowers after introduction of interest linked with RLRR instead of MCLR/Base Rate, Revised DP Note, Term Loan Agreement, Consent cum Authorisation Letter, Undertaking letter from the new borrows after introduction of interest linked with RLRR instead of MCLR/Base rate, Letter of undertaking repayment in instalment, Letter of authority for payment to dealer, Declarations/undertakings, all dated 31.12.2022 which are Annexures A4, A5, A8 to A10, A12 to A17 to this OA; Demand Notice dated 28.08.2024 u/s 13(2) of SARFAESI Act, with postal receipt, which are Annexures A18 and A19 to this OA; Legal Notice dated 04.11.2024 with Original postal receipts, which are Annexures A20 to A23 to this OA; Statement of accounts with certificate, which are Annexures A24 to A26 to this OA.

¶22

3 OA/1406/2024 INDIAN BANK OVERSEAS BANK VS. M/S SHRI GANPATI STEEL INDUSTRY AND ANOTHER

¶23

The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in loan accounts there was a debit of Rs.36,50,895.98 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.

¶24

The defendants were served notices to appear before this Tribunal. Ms. Gagandeep Kaur, Advocate appeared on behalf of defendants on 10.03.2025 and filed her Power of Attorney. However, WS was not filed by defendants, therefore, their opportunity to file WS was closed and their defense was struck off vide order dated 05.01.2026.

¶25

In support of the OA, affidavit of Ms. Ranjana Singla, Assistant Manager, Indian Overseas Bank has been filed. 8. Heard arguments and perused record. No one appeared on behalf of defendants for arguments. 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 A26 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.36,50,895.98 (Rupees Thirty Six Lacs Fifty Thousand Eight Hundred Ninety Five and Paise Ninety Eight Only) along with interest from the defendants, jointly and

¶26

4 OA/1406/2024 INDIAN BANK OVERSEAS BANK VS. M/S SHRI GANPATI STEEL INDUSTRY AND ANOTHER

¶27

severally, from the date of filing of the present Original Application till realization of the accounts.

¶28

In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @11.15% p.a. with 2% penal interest and monthly rests in CC Limit and @11.40% p.a. with 2% penal interest and monthly rests in Term Loan from 28.09.2024 till the realization.

¶29

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.

¶30

In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.36,50,895.98 (Rupees Thirty Six Lacs Fifty Thousand Eight Hundred Ninety Five and Paise Ninety Eight 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 amounts. Accordingly, the applicant shall be entitled to recover aforesaid amount from the sale of hypothecated assets 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

¶31

5 OA/1406/2024 INDIAN BANK OVERSEAS BANK VS. M/S SHRI GANPATI STEEL INDUSTRY AND ANOTHER

¶32

attachment and sale of personal assets of the defendants. The

¶33

applicant is at liberty to enforce the claim through due process of law.

¶34

12. Any other application pending stands disposed of.

¶35

Issue Recovery Certificate accordingly.

¶36

Parties to appear before Learned Recovery Officer of this Tribunal on 12.03.2026.

¶37

Copy of this order be given dasti to the applicant and be sent to

¶38

defendants through registered/speed post and this order be also uploaded on the official website of this Tribunal and record be consigned.

¶39

Pronounced by me in the open Tribunal. Dated: 25.02.2026.

¶40

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

Indian Overseas Bank v. M/S Shri Ganpati Steel Industry and Another

Case brief

What is this about?

What did the court decide?

Indian Overseas Bank v. M/S Shri Ganpati Steel Industry and Another

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Bank of India versus Sudeep Singh and Others

Reena versus Cent Bank Home Finance Limited

Ms Laavin Polymers and Others versus Punjab National Bank

Bank of India versus Sh. Karnail Singh and Others

Indian Bank versus Sh. Harbhajan Singh and Another

Union Bank of India versus Sh. Balvir Singh