Allowed

Central Bank of India v. M/S Malhotra Traders and Others

DRT7 Sept 2026OA/222/2026

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the application filed by Central Bank of India against borrowers and a guarantor for recovery of Rs. 42,04,082.00. The court fixed simple interest at 8% p.a. and ordered issuance of a Recovery Certificate.

What did the court decide?

Recovery Certificate to be issued; defendants to pay Rs. 42,04,082.00 with simple interest at 8% p.a.; allow enforcement through sale of mortgaged property and attachment of personal assets.

Central Bank of India versus M/S Malhotra Traders… — Contract and Commercial Disputes | DRT (2026)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO. 222/2026

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 04.02.2026

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DATE OF DECISION: 07.09.2026

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Central Bank of India (a body corporate, constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970), having its Head Office at Chander Mukhi, Nariman Point, Mumbai and its Branch Office at Central Bank of India, Shivpuri Road, Opposite Kewal Bakery, District Ludhiana–141008, through its Authorized Representative, Sh. Ankur Madaan, Senior Manager, Central Bank of India, Regional Office, Ferozepur Road, Gurdev Nagar, Ludhiana–141001.

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……..Applicant

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Versus

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M/s Malhotra Traders, B-V-1088-D, Ahluwalia Chowk, Brahampuri, Purana Bazar, District Ludhiana–141001

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Sh. Ram Malhotra, S/o Sh. Rajeev Malhotra, H.No. 342/11B, Near PNB, Near Netaji Nagar, Part-1, Salem Tabri, District Ludhiana– 141001

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Sh. Rajeev Malhotra, S/o Sh. Pishori Lal Malhotra, Vandana Hosiery, Purana Bazar, District Ludhiana–141001

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Also at : H.No. 342/11B, Near PNB, Near Netaji Nagar, Part-1,

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Salem Tabri, District Ludhiana–141001

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…….Defendants

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Advocates:

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Argued by Sh. Rehan Chaudhary, Advocate for Applicant (through VC) 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.42,04,082.00 (Rupees Forty Two Lac Four Thousand Eighty Two Only). The Original Application has been filed through Sh. Ankur Madaan, Senior Manager, of the Applicant, who is

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2 OA/226/2026 CENTRAL BANK OF INDIA VS. M/S. MALHOTRA TRADERS AND OTHERS

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competent to institute the Original Application vide Power of Attorney dated 14.12.2017 executed by the Applicant Bank in favour of Sh. Ankur Madaan, which is Annexure A1 to this OA.

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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 OD Limit of Rs.40.00 lacs vide Loan Application dated 07.08.2021, which is Annexure A2 to this OA. Defendant no. 3 stood as guarantor.

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The applicant sanctioned the OD Limit of Rs.40.00 lacs vide Sanction Letter dated 10.08.2021, which is Annexure A3 to this OA and terms and conditions were duly accepted by the defendants.

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Thereafter, the applicant sanctioned the renewal of the OD Limit of Rs.40.00 lacs vide Renewal Sanction Letter dated 14.08.2024, which is Annexure A8 to this OA.

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Defendant no. 3 mortgaged his property measuring 68⁸⁄₉ SqYds situated at MC No. B-TV-483, abadi Ahluwalia Chowk, Kohli Market, Near Mohalla Kazzian, Ludhiana, Punjab, vide deposit of Sale Deed bearing Wasika No. 18795 dated 13.12.2012 in the name of Sh. Rajeev Malhotra S/o Sh. Pishori Lal Malhotra, which is Annexure A7 to this OA; Documents executed: Overdraft Agreement dated 13.08.2024, which is Annexure A4 to this OA; Form of Guarantee for Advances and Credit Generally dated 13.08.2024, which is Annexure A5 to this OA; Declaration and Undertaking dated 13.08.2024, which is Annexure A6 to this OA; Legal Notice dated 14.11.2025 along with postal receipts, which is Annexure A9 to this OA; and Statement of Account, 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 the loan account, there was a debit of Rs.42,04,082.00 (Rupees Forty Two Lac Four Thousand Eighty Two Only), 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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3 OA/226/2026 CENTRAL BANK OF INDIA VS. M/S. MALHOTRA TRADERS AND OTHERS

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The defendants were served summons to appear before this Tribunal and after the service of summons, Sh. Ram Pal Kohle, Advocate appeared on behalf of defendants and filed his Power of Attorney on 02.04.2026. Paper book was supplied to learned counsel for defendants on 21.06.2026. But no WS was filed within or after the stipulate period. Therefore, opportunity to file WS by defendants was closed and defense was struck of vide order dated 27.08.2026.

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In support of the OA, affidavit of Sh. Ankur Madaan, Senior Manager, Central Bank of India, has been filed.

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Heard arguments and perused record.

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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.

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From the perusal of all the Annexures A1 to A10 to this OA, it is proved that the defendant no.1, through its proprietor defendant no.2, approached the applicant for availing of the loan facility, which was granted to them. Defendant no. 3 stood as guarantor. They had executed all the relevant documents in favour of the bank. The defendants failed to pay back the loan as per terms and conditions of the agreement between the parties. Subsequently, account of the defendants was classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.42,04,082.00 (Rupees Forty Two Lac Four Thousand Eighty Two Only), along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the amount.

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In so far as pendente lite and future rate of interest is concerned, the applicant in relief clause has claimed interest @10.50% p.a. plus 2.00% p.a. penal interest with monthly rests from 14.11.2025 till the 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

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4 OA/226/2026 CENTRAL BANK OF INDIA VS. M/S. MALHOTRA TRADERS AND OTHERS

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instant case including nature of the mortgaged property, 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 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.42,04,082.00 (Rupees Forty Two Lac Four Thousand Eighty Two 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 mortgaged property of the defendant no. 3 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 18.09.2026. 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: 07.09.2026. (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Central Bank of India v. M/S Malhotra Traders and Others

Case brief

What is this about?

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Central Bank of India v. M/S Malhotra Traders and Others

Case brief

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