Allowed

Union Bank of India v. M/S Prakash Enterprises and Another

DRT1 Sept 2026OA/239/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an Original Application filed by Union Bank of India for recovery of over Rs. 54 lacs against a borrower enterprise. The Tribunal modified the claimed interest rate to 8% p.a. and issued a Recovery Certificate. Execution was directed against hypothecated assets.

What did the court decide?

Declaratory that respondents are liable to pay Rs. 54,58,433.29 with 8% p.a. interest; issued Recovery Certificate for enforcement against hypothecated assets.

Union Bank of India versus M/S Prakash Enterprises… — Contract and Commercial Disputes | DRT (2026)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO. 239/2024

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 30.01.2024

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DATE OF DECISION: 01.09.2026

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Union Bank of India, a Body Corporate constituted under Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Head Office at 239, Vidhan Bhawan Marg, Nariman Point, Mumbai and having a Branch Office inter alia at Kesar Ganj, Ludhiana through duly Authorized Person and Attorney Holder, Sh. Rohit Chhabra, Branch Manager

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……..Applicant

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Versus

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M/S Prakash Enterprises, B-25-1591, New Shivpuri, Near Amar Sweets, Ludhiana, Punjab- 141008 through its Proprietor, Sh. Robin Bajaj

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Sh. Robin Bajaj, S/o Sh. Satish Kumar, R/o House no. B-251591, New Shivpuri, Near Amar Sweets, Ludhiana, Punjab141008 (Proprietor of M/S Prakash Enterprises)

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…Defendants

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Advocates:

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Argued by Sh. Amod Kumar Thakur, Advocate proxy for Sh. R.K. Chauhan, Advocate for applicant

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Sh. Iqbal Mohammed, Advocate proxy for Sh. A.K. Kalsi, Advocate 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. 54,58,433.29 (Rupees Fifty Four Lacs Fifty Eight Thousand Four Hundred Thirty Three and Paise Twenty Nine Only). The Original Application has been filed through Sh. Rohit Chhabra, Branch Manager of the applicant, who is competent to

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2 OA/239/2024 UNION BANK OF INDIA VS. M/S PRAKASH ENTERPRISES AND ANOTHER

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institute the Original Application vide General Power of Attorney dated 25.08.2020, 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 CC Limit of Rs. 50.00 Lacs vide Application Form dated 01.09.2022, which is Annexure A2 to this OA. Thereafter, defendant no. 1 through its Proprietor defendant no. 2 approached the applicant for TOD of Rs.1.40 Lacs vide Request Letter dated 20.09.2023, which is Annexure A17 to this OA. Thereafter, defendant no. 1 through its Proprietor defendant no. 2 again approached the applicant for TOD of Rs.1.20 Lacs vide Request Letter dated 21.09.2023, which is Annexure A18 to this OA.

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The applicant sanctioned CC Limit of Rs. 50.00 Lacs vide Sanction Letter dated 13.09.2022, which is Annexure A8 to this OA and the terms and conditions were duly accepted by the defendants. Thereafter, the applicant sanctioned TOD of Rs. 1.40 Lacs. Thereafter, the applicant again sanctioned TOD of Rs. 1.20 Lacs.

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The said amount of Rs. 1.40 Lacs was deposited by the defendants on 21.09.2023.

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Defendant no. 1 through its Proprietor defendant no. 2 hypothecated their stocks of fabrics, t-shirts, lowers, sweatshirts, yarns and accessories etc. vide Hypothecation Agreement dated 13.09.2022, which is Annexure A11 to this OA.

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Documents executed: Registration Certificate dated 07.06.2022, which is Annexure A3 to this OA; Annexures A and B, which are Annexure A4 and A5 to this OA; Udyam Registration Certificate dated 03.12.2020, which is Annexure A6 to this OA; Memorandum dated 10.09.2022, which is Annexure A7 to this OA; DP Note, Letter of Continuity, AD-02A, Letters of Undertaking and Deed of Guarantee, all dated 13.09.2022, which are Annexure A9, A10 and A12 to A16 to this OA; Letters dated 30.04.2023, 31.05.2023, 30.06.2023,

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3 OA/239/2024 UNION BANK OF INDIA VS. M/S PRAKASH ENTERPRISES AND ANOTHER

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31.07.2023, 31.08.2023, 30.09.2023 and 31.10.2023, which are Annexure A19 to A25 to this OA; Legal Notice dated 23.11.2023 along with postal receipts, which is Annexure A26 (Colly) to this OA and Statement of Account with certificate, which are Annexure A27 and A28 to this OA.

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The CC Limit 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. 54,58,433.29, 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 summons to appear before this Tribunal and after service upon defendants, Sh. Sanjay Sagar, Advocate proxy for Sh. A.K. Kalsi, Advocate appeared on behalf of defendants on 15.06.2024 and filed POA. Paper book was supplied on 04.07.2024. WS on behalf of defendants was filed on 28.08.2024 i.e. beyond stipulated period. WS was taken on record after deposit of cost. Thereafter, the process of admission or denial of documents was completed on 06.12.2025.

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In support of the OA, affidavit of Sh. Rohit Chhabra, Chief Manager , Union Bank of India has been filed.

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Heard arguments and perused record.

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It was argued by learned proxy counsel for applicant that in view of the documentary evidence brought on record, the applicant had proved its case and OA is not barred by limitation or any other law. Learned proxy counsel for defendants submitted that final order may be passed in this OA and prayed that lenient view may be taken while granting interest. No other point was argued/ pressed.

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From the perusal of all the Annexure A1 to A28 to this OA, it is proved that defendant no. 1 through its Proprietor defendant no. 2 approached applicant for availing of the loan facility, which was

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4 OA/239/2024 UNION BANK OF INDIA VS. M/S PRAKASH ENTERPRISES AND ANOTHER

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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 loan as per terms and conditions of the agreement between the parties. Subsequently, the 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. 54,58,433.29 (Rupees Fifty Four Lacs Fifty Eight Thousand Four Hundred Thirty Three and Paise Twenty Nine 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 pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @12.05%p.a. plus 2% additional interest with monthly rests from 01.12.2023 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 instant case including nature of the 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 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.54,58,433.29 (Rupees Fifty Four Lacs Fifty Eight Thousand Four Hundred Thirty Three and Paise Twenty Nine 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

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5 OA/239/2024 UNION BANK OF INDIA VS. M/S PRAKASH ENTERPRISES AND ANOTHER

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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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12. 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

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Tribunal on 16.09.2026.

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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: 01.09.2026

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(MRIDULESH KUMAR SINGH)

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Presiding Officer,

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DRT-III, Chandigarh

Union Bank of India v. M/S Prakash Enterprises and Another

Case brief

What is this about?

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Union Bank of India v. M/S Prakash Enterprises and Another

Case brief

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