Allowed

State Bank of India v. M/S v K Creations and Another

DRT6 Jan 2026OA/195/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the Applicant Bank's Original Application for recovery of Rs.1.51 Crore against Defaulting Borrowers. It reduced the claimed interest rate to 8% p.a. and directed issuance of a Recovery Certificate.

What did the court decide?

Recovery Certificate issued; Defendants liable to pay Rs.1.51 Crore with 8% p.a. interest; amenable to attachment and sale of assets.

State Bank of India versus M/S v K Creations and Another — Banking and Recovery | DRT (2026)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.195/2024

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 15.01.2024

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DATE OF DECISION: 06.01.2026

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State Bank of India, a body corporate constituted under the provisions of the State Bank of India Act, 1955 (23 of 1955) having its Corporate Centre at Madame Cama Road, Nariman Point Mumbai (Maharashtra) – 400021, carrying on its Business of Banking in India and Abroad, having one of its Local Head Office at Sector 17, Chandigarh, having its SME Branch amongst other places at Focal Point, Ludhiana-141010 (Punjab) and one of its Specialised Branch known as Stressed Assets Recovery Branch at 3^rd Floor, Admin Office Building at Fountain Chowk, Civil Lines, Ludhiana-141001 (Punjab) through its Chief Manager Sh. Chanchal Singh.

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……..Applicant

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Versus

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M/s V K Creations, a Proprietorship concern, situated at A-7 and A-8, Lower Ground, AC Market, Gandhi Nagar, Ludhiana through its proprietor Sh. Vinay Jindal Son of Sh. Rajesh Jindal. 2^nd Address: At Street No. 4, Bhai Manna Singh Nagar, Ludhiana, Punjab-141013

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3^rd Address: At Backside Chand Cinema, Street No. 2, Mohalla Fatehgarh, Ludhiana, Punjab-141001

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4^th Address: Situated at C-19, Caliber Plaza, AC Market, Near Post Office, Near Chawani Mohalla, Ludhiana, Punjab-141001

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Sh. Vinay Jindal Son of Sh. Rajesh Jindal, Proprietor of M/S V K Creations, Resident of Flat No. 404, Hazal-2, Centra Green, Pakhowal Road, Ludhiana, Punjab-141001

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2^nd Address : Resident of House No. 372, Urban Estate Phase-II, Near Greenland School, Basant Avenue, Dugri, Ludhiana, Punjab-141001

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………Defendants

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2 OA NO.195/2024 STATE BANK OF INDIA VS. M/S V K CREATIONS AND ANOTHER

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Advocates:

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Argued by: Sh. Vivek Verma, Advocate for Applicant Defendants already ex parte vide order dated 09.10.2025

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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 & Bankruptcy Act, 1993, against the defendants for recovery of Rs.1,51,53,260.54 (Rupees One Crore Fifty One Lacs Fifty Three Thousand Two Hundred Sixty and Paise Fifty Four Only). The Original Application has been filed through, Sh. Chanchal Singh, Chief Manager of the applicant, who is competent to institute the Original Application in terms of Gazette Notification published in Gazette of India dated 26.09.1959, 26.08.1972 and 02.05.1987 read with Regulation 76 and 77 of State Bank of India General Regulation framed in exercise of the power conferred subsection 3 of section 50 of State Bank of India Act, 1955 with previous sanction of the Central Government.

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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.1.00 Crore vide loan application, which is Annexure A1 to this OA. Thereafter, the defendant no.1 through its proprietor defendant no. 2 had approached the applicant for Working Capital Term Loan (WCTL) of Rs. 19.50 Lacs under GECL. Thereafter, the defendant no.1 through its proprietor defendant no. 2 approached the applicant for renewal of CC Limit for Rs. 1.00 Crore, Review of WCTL for Rs. 13.00 Lacs and grant of Term Loan of Rs. 10.00 Lacs under GECL 1.0 Extension vide loan application dated 17.12.2021, which is Annexure A5 to this OA. Thereafter, the defendant no.1 through its proprietor defendant no. 2 approached the applicant for renewal of CC Limit for Rs. 1.00 Crore, Review of Term Loan of Rs. 10.00 Lacs under GECL 1.0 Extension and grant of Adhoc Limit of Rs. 30.00 Lacs vide loan application dated 07.01.2023, which is Annexure A8 to this OA.

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3 OA NO.195/2024 STATE BANK OF INDIA VS. M/S V K CREATIONS AND ANOTHER

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The applicant sanctioned the Cash Credit Limit of Rs.1.00 Crore vide letter of arrangement dated 30.01.2019, which is Annexure A2 to this OA and terms and conditions were duly accepted by the defendants. Thereafter, the applicant sanctioned renewal of the CC Limit with sanction of Working Capital Term Loan of Rs.19.50 Lacs under GECL vide letter of arrangement dated 05.06.2020, which is Annexure A4 to this OA. Thereafter, the applicant sanctioned renewal of the CC Limit for Rs. 1.00 Crore, reviewed WCTL under GECL for Rs. 13.00 Lacs and sanctioned Term Loan of Rs. 10.00 Lacs under GECL 1.0 Extension vide letter of arrangement dated 30.03.2020, which is Annexure A6 to this OA. Thereafter, the applicant sanctioned renewal of the CC Limit for Rs. 1.00 Crore, reviewed Term Loan of Rs. 10.00 Lacs under GECL 1.0 Extension and sanctioned Adhoc Limit of Rs.30.00 Lacs vide letter of arrangement dated 07.03.2023, which is Annexure A9 to this OA. 4. Defendant no.1 through its proprietor defendant no. 2 hypothecated current assets, stocks and book debts, etc. vide agreement of loan cum hypothecation dated 30.01.2019 and 30.03.2022 which are Annexure A3 and A7 to this OA; Supplemental agreement of Loan cum hypothecation dated 07.03.2023, which is Annexure A10 to this OA. Documents executed: Letters by Bank dated 02.07.2023 and 19.07.2023, which are Annexures A11 and A12 to this OA; Legal Notices dated 22.07.2023 and 11.09.2023 with postal receipts, which are Annexures A13 and A14 to this OA; Statement of Accounts, which are Annexures A15 to A17 to this OA; Demand Notice dated 05.10.2023 u/s 13(2) of SARFAESI Act, which is Annexure A18 to this OA. 5. 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.1,51,53,260.54 (Rupees One Crore Fifty One Lacs Fifty Three Thousand Two Hundred Sixty and Paise Fifty Four Only), which is recoverable and the defendants were served recall notice but

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4 OA NO.195/2024 STATE BANK OF INDIA VS. M/S V K CREATIONS AND ANOTHER

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defendants 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 notice to appear before this Tribunal but no one appeared on behalf of defendants and they were proceeded ex-parte vide order dated 09.10.2025.

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In support of the OA, affidavit of Sh. Chanchal Singh, 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 counsel 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 A18 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.1,51,53,260.54 (Rupees One Crore Fifty One Lacs Fifty Three Thousand Two Hundred Sixty and Paise Fifty Four 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 interest @13.40%p.a. with with monthly rests in CC Limit and Adhoc Limit and interest @9.25% p.a. in Term Loan under GECL 1.0 Extension with monthly rests from 11.01.2024 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

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OA NO.195/2024 STATE BANK OF INDIA VS. M/S V K CREATIONS AND ANOTHER

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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 @08.00%p.a. in all 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.

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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.1,51,53,260.54 (Rupees One Crore Fifty One Lacs Fifty Three Thousand Two Hundred Sixty and Paise Fifty Four Only), jointly and severally, with costs, current and future simple interest @08.00%p.a. in all 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.

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Any other application pending stands disposed of . 13. Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 19.01.2026.

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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. Pronounced by me in the open Tribunal .

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Dated: 06.01.2026.

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

State Bank of India v. M/S v K Creations and Another

Case brief

What is this about?

What did the court decide?

State Bank of India v. M/S v K Creations and Another

Case brief

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What did the court decide?

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