Allowed

State Bank of India v. M/S R S Engg Works and Another

DRT15 Apr 2026OA/1497/2022

Case brief

AI extract

What is this about?

The DRT allowed the applicant bank's Original Application for recovery of Rs. 24,01,977. The court held the claim was valid, documents were admitted by the respondent, and granted recovery of principal and future simple interest at 7.40% p.a. via enforcement of hypothecated assets.

What did the court decide?

Recovery of Rs. 24,01,977 plus future simple interest at 7.40% p.a. via sale of hypothecated or personal assets.

State Bank of India versus M/S R S Engg Works and Another — Banking and Recovery | DRT (2026)

¶1

DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

¶2

ORIGINAL APPLICATION NO.1497/2022

¶3

PRESIDED OVER BY MRIDULESH KUMAR SINGH

¶4

DATE OF INSTITUTION: 29.06.2022

¶5

DATE OF DECISION: 15.04.2026

¶6

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 one of its SMEC Branch AO, Plot No.8990, Near M.C. Building, Sector 68, S.A.S. Nagar, Mohali, Punjab through its Chief Manager Sh. Vikash

¶7

……..Applicant

¶8

Versus

¶9

M/s R S Engg. Works, a sole proprietorship concern situated at Plot No. D-5, Industrial Area, Phase I, Mohali, Punjab through

¶10

its proprietor Sh. Som Nath Saini S/o Sh. Nasib Chand

¶11

Sh. Som Nath Saini S/o Sh. Nasib Chand, Resident of Kothi No.

¶12

56, First Floor, Phase IV, Mohali, Punjab.

¶13

……….Defendants

¶14

Advocates:

¶15

Argued by Sh. R.S. Bhatia, Advocate for applicant

¶16

None for defendants

¶17

FINAL ORDER

¶18

Present Original Application was instituted by the applicant under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993,

¶19

against the defendants for recovery of Rs.24,01,977.00 (Rupees Twenty Four Lacs One Thousand Nine Hundred Seventy Seven Only). The Original Application has been filed through Sh. Vikash, Chief Manager of the applicant, who is competent to institute the Original Application in terms of Gazette Notifications published in Gazette of India dated 26.09.1959, 26.08.1972 and 02.05.1987 issued under Regulation no. 76 and 77 of State Bank of India Regulations framed in

¶20

2 OA NO. 1497/2022 STATE BANK OF INDIA VS. M/S R.S. ENGG. WORKS AND ANOTHER

¶21

exercise of the powers conferred by sub-section 3 of section 50 of the State Bank of India Act, 1955 with previous sanction of Central Government. Copy of Gazette Notification dated 02.05.1987, which is Annexure A1 to this OA.

¶22

The brief facts of the OA are that the defendant no.1 through its proprietor defendant no. 2 approached the applicant for grant of Cash Credit Limit of Rs.10.00 Lacs, vide Loan Application dated 27.08.2014, which is Annexure A2 to this OA. Thereafter, defendant no.1 through its proprietor defendant no. 2 approached the applicant for renewal cum enhancement of limit for Rs.16.00 Lacs. Thereafter, during COVID-19 pandemic, defendant no.1 through its proprietor defendant no. 2 approached the applicant for grant of Working Capital Term Loan (WCTL) of Rs.3.22 Lacs under GECL.

¶23

The applicant sanctioned the Cash Credit Limit of Rs.8.00 Lacs (Cash Credit Hypothecation Limit of Rs.8.00 Lacs with Cash Credit Book Debts Limit of Rs.4.00 Lacs within overall Credit Limit of Rs.8.00 Lacs) under CGTMSE Scheme vide sanction letter dated 11.09.2014, which is Annexure A3 to this OA and Letter of Arrangement dated 25.09.2014, which is Annexure A4 to this OA and the terms and conditions were duly accepted by the defendants. Thereafter, the limit was enhanced by the applicant to Rs.16.00 Lacs vide letter of arrangement dated 04.05.2015, which is Annexure A6 to this OA. Thereafter, the applicant sanctioned Working Capital Term Loan (WCTL) of Rs.3.22 Lacs under GECL vide sanction resolution dated 01.06.2020, which is Annexure A8 to this OA and Letter of Arrangement dated 01.06.2020, which is Annexure A9 to this OA. 4. Defendant no. 1 through its proprietor defendant no. 2 hypothecated stock, book debts, receivables and machinery created out of Bank Finance vide Agreement of Loan cum Hypothecation dated 25.09.2014, which is Annexure A5 to this OA; Supplemental of Loan cum Hypothecation dated 04.05.2015, which is Annexure A7 to this

¶24

3 OA NO. 1497/2022 STATE BANK OF INDIA VS. M/S R.S. ENGG. WORKS AND ANOTHER

¶25

OA; Supplemental of Loan cum Hypothecation dated 01.06.2020, which is Annexure A10 to this OA.

¶26

Documents executed: Balance Confirmation Letter dated 31.03.2018, which is Annexure A11 to this OA; Revival Letter dated 01.05.2017, which is Annexure A12 to this OA; Revival Letter dated 18.03.2019, which is Annexure A13 to this OA; Revival Letter dated 24.06.2021, which is Annexure A13A to this OA; Notice dated 23.12.2021, which is Annexure A14 to this OA; Statement of accounts, which are Annexures A15 and A16 to this OA.

¶27

The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in loan accounts there were a debit of Rs.24,01,977.00, 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.

¶28

The defendants were served summons to appear before this Tribunal. Sh. Mohan Prasad, Advocate proxy for Sh. Jatin Khurana, Advocate appeared on 27.12.2023 and filed Power of Attorney of Sh. Jatin Khurana, Advocate on behalf of defendants. WS on behalf of defendants was filed on 19.07.2024. Since, the WS was filed beyond stipulated period, the same was taken on record vide order dated 22.07.2024 subject to payment of cost of Rs.8,000/- which was paid by defendants and receipt of the same was filed on 14.11.2024. The process of admission or denial of documents was completed on 11.09.2025 wherein Ms. Neeti Sharma, Manager of applicant produced original documents which were seen by defendant no. 2 who admitted the signatures on documents but denied theirs contents.

¶29

Thereafter, matter was posted for arguments on 09.04.2026 wherein the arguments of learned counsel for applicant were heard but no one appeared on behalf of defendants for arguments and matter was posted for final orders for today.

¶30

4 OA NO. 1497/2022

¶31

STATE BANK OF INDIA VS. M/S R.S. ENGG. WORKS AND ANOTHER

¶32

Sh. Jatin Khurana, Advocate filed an IA no. 706/2026 today vide diary no. 6528 on behalf of defendants for recalling the order dated 09.04.2026. Sh. Jatin Khurana, Advocate appeared on behalf of defendants today. This IA was heard today and vide separate order of even date, the same was dismissed today.

¶33

The brief fact of WS filed by defendants are that the OA is not maintainable as the applicant bank has not approached this Tribunal with clean hands and has suppressed true and material facts. It was further stated that OA is liable to be dismissed on the ground that interest on loan is highly exaggerated because the same was not settled at time of advancing loan and blank format from the defendants was got signed by bank official. It was further stated that the OA is liable to be dismissed on the ground that the same is barred by limitation. It was further stated that the applicant has not adopted proper procedure and even the amount so paid by defendants have not been credited in the account and claimed false outstanding against defendants. It was further stated that the defendants regularly paid the amount but due to COVID-19 in the year 2020 and 2021, they could not pay some installments in time and as such the applicant initiated proceedings under SARFAESI Act and also never intimated the defendants regarding declaring account as NPA.

¶34

In support of the OA, affidavit of Sh. Vikash, Chief Manager, State Bank of India has been filed. 9. Heard arguments and perused record. 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. It was further argued that OA was filed within limitation. No one appeared on behalf of defendants for arguments. From the perusal of all the Annexure A1 to A16 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

¶35

5 OA NO. 1497/2022

¶36

STATE BANK OF INDIA VS. M/S R.S. ENGG. WORKS AND ANOTHER

¶37

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.24,01,977.00 (Rupees Twenty Four Lacs One Thousand Nine Hundred Seventy Seven 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.

¶38

The defendants in their written statement had stated that Bank Official got blank formats signed by them. However, the defendants did not lodge any complaint before any Higher Forum of the Bank or Court of Law. Therefore, it is inferred that cock and bull story was prepared by the defendants before this Tribunal.

¶39

Further, the present application was filed by applicant on 29.06.2022 and is not barred by Limitation as per the Revival Letter dated 24.06.2021 (Annexure A13).

¶40

Learned counsel for defendants has not produced any evidence which could create any doubt on the claim of the applicant. Contents of WS are vague and contradictory. Therefore, there is no reason to disbelieve the documentary evidence produced by the applicant from Annexures A1 to A16.

¶41

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. plus 2% penal interest with monthly rests in CC Limit and interest @7.40%p.a. plus 2% penal interest with monthly rests in WCTL (GECL) from 28.06.2022 till the realization.

¶42

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 hypothecated assets, undertaking of the defendants, quantum of loans and prevalent market rates of interest which have gone drastically downhill in yester years, while

¶43

6 OA NO. 1497/2022

¶44

STATE BANK OF INDIA VS. M/S R.S. ENGG. WORKS AND ANOTHER

¶45

exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @07.40%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. 12. In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.24,01,977.00 (Rupees Twenty Four Lacs One Thousand Nine Hundred Seventy Seven Only), jointly and severally with costs, current and future simple interest @07.40%p.a. in both the loan accounts 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 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.

¶46

Any other application pending stands disposed of. 14. Issue Recovery Certificate accordingly. 15. Parties to appear before Learned Recovery Officer of this Tribunal on 05.05.2026. 16. 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.

¶47

Pronounced by me in the open Tribunal .

¶48

Dated: 15.04.2026

¶49

(MRIDULESH KUMAR SINGH)

¶50

Presiding Officer,

¶51

DRT-III, Chandigarh

State Bank of India v. M/S R S Engg Works and Another

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/S R S Engg Works and Another

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Bank of India versus Sh. Bakhshish Singh And Another

Kotak Mahindra Bank Limited versus Smt. Saranjit Kaur and Others

Bank of India versus Sh. Surinder Singh and Another

Bank of India versus M/s Estofers Enterprises LLP and Others

Hdfc Bank versus Sh. Nirbhay Singh and Others

Kotak Mahindra Bank Limited versus Ms Vijay Enterprises and Others