Allowed

Indian Overseas Bank v. M/S Chamunda Creation

DRT16 Apr 2026OA/240/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the bank's application under Section 19(1) of the 1993 Act to recover a debt of approximately ₹94 lakhs. The court held the debt admissible and directed the defaulting borrowers and guarantors to pay the amount with interest, relying on valid hypothecation and mortgage of securities.

What did the court decide?

Payment of ₹94,88,851 plus 12% annual interest; enforcement of hypothecated and mortgaged securities; issuance of Recovery Certificate.

Indian Overseas Bank versus M/S Chamunda Creation — Banking and Recovery | DRT (2026)

¶1

ORIGINAL APPLICATION NO.240 OF 2022

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DEBTS RECOVERY TRIBUNAL No.2, MUMBAI

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PRESIDING OFFICER: HARISH KUMAR KAUSHIK

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ORIGINAL APPLICATION NO.240 OF 2022

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Date of Institution: 29.01.2020 Date of Decision: 16.04.2026

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TOTAL CLAIM AMOUNT :

¶7

₹ 94,88,851/-

¶8

INDIAN OVERSEAS BANK,

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a body Corporate Constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970 having its having its Central Office at 763 Anna Salai Chennai-600 002, Regional Office At 5^th Floor, E- Wing, Maker Tower Cuffe Parade, Mumbai-400 005 and Branch office amongst others at CRJ Plaza, Ground floor, Lamington Road, Mumbai-400 007.

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… Applicant

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Versus

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M/S. CHAMUNDA CREATION, Proprietary concern having its address at D/404 Amrat CHS Ltd. Jaywant Sawant Road, Dahisar (West), Mumbai-400068.

¶13

SHRI. MEGHAL M. MEHTA, Prop. of M/s. Chamunda Creation An adult, Indian Inhabitant residing at D/404 Amrat CHS Ltd., Jaywant Sawant Road, Dahisar (West), Mumbai-400068.

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SHRI. BIRAJ M. MEHTA, Guarantor of M/s. Chamunda Creation An adult, Indian

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Page 1 of 11

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ORIGINAL APPLICATION NO.240 OF 2022

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Inhabitant residing at D/404 Amrat CHS Ltd., Jaywant Sawant Road, Dahisar (West), Mumbai-400068.

¶18

…Defendants

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APPEARANCES

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For the Applicant : Ms Salma Ghaswala - Advocate For Defendants : None

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J U D G M E N T

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(1) This is an application under Section 19(1) of the Recovery of the Debts due to Banks and Financial Institutions Act, 1993 renamed as Recovery of the Debt and Bankruptcy Act, 1993 (for short, ‘the 1993 Act’) to recover ₹94,88,851.00/- (Rupees Ninety-Four Lakhs Eighty-Eight Thousand Eight Hundred Fifty-One Only) with pendentelite and future interest @ 16% interest plus 2% monthly rest as an additional interest from the date of presentation of the Original Application i.e. 29.01.2020 till payment/realization and to enforce the hypothecated and mortgaged securities.

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The details of the claim amount are as under:-

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Sr	Nature	O/s. amount	Accrued		Total
N	Facility		unapplied
o			interest
1	PC/PCFC	as on	from		₹22,98,668.00/
	Loan	28.02.2019	01.03.2019	to	-
		₹20,00,000.00/-	28.01.2020

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Page 2 of 11

¶26

ORIGINAL APPLICATION NO.240 OF 2022

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			₹2,98,668.00/-
2	RUBF	as on	From	₹70,87,227.00/
		27.03.2019	28.03.2019 to	-
		₹58,15,670.00/-	28.01.2020 ₹12,71,557.00/-
3	CD	As on	From	₹1,02,956.00/-
		28.02.2019	01.03.2019 to
		₹89,598.00/-	28.01.2020 ₹13,358.00/-
	Grand Total	-	-	₹94,88,851.00/ -

¶28

(2) It is undisputed fact in the matter that the Defendant nos.1 to 3 were duly served with the summons vide order-sheet dated 15.05.2023. Despite service, the defendants did not enter their appearance and therefore, they were set ex-parte on 02.12.2025.

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(3) Defendant no.1, a proprietary concern acting through its proprietor i.e. defendant no.2 are the borrowers who approached the Applicant Bank and sought financial assistance by way of Cash PC/PCFC Credit Facility. Pursuant to the loan application made by defendant no.2, the Applicant sanctioned the loan vide Sanction Letter dated 05.10.2011 in sum of ₹15,00,000/(Rupees Fifteen Lakhs Only) against hypothecation of stocks of the firm and Post Shipment facility against bills to the extent of ₹50,00,000/- (Rupees Fifty Lakhs Only) with interest as given in the table below. Further, on 09.03.2013, the Applicant bank on the request made by the

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Page 3 of 11

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ORIGINAL APPLICATION NO.240 OF 2022

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defendants, sanctioned a sum of ₹20,00,000/(Rupees Twenty Lakhs Only) against Packing Credit Facility and a sum of ₹65,00,000/- (Rupees Sixty-Five Lakhs Only) with interest as given in the table below. Further, vide Sanction Letters dated 19.09.2016 and 09.01.2018 the Applicant revised the said facilities.

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The details of the Sanctioned amount are as

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under: -

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S r N D a t e of S a nc t i o n	N a t ur e o f Fa c i l i t i e s	A m o u n t	P r i m ar y S e c u r i t y	C o l l a t e r a l S ec u r i t y.
o
1 0 5 . 0 1 . 2 0 11	S ec u r ed R u p e e/ F o r e i gn cu r r e n cy P a c k i n g C r e d i t a g a i n st co n f ir m e d O r d e r s t o b e a d j u s t e d w i t h i n 1 8 0 d a y s L i m i t ( R s. i n L a c s )	₹1 5 . 0 0 (R up ee s F i f t e en lac s o n l y ) M a r g i n/ Se c u r i t y I n t er e s t/ o n M ar g i n - 2 5% s t o c k s m ean t f o r e x po r t s. I n t er e s t B as e R a t e ( 1 0. 7 5 % ) + 0 . 7 5 % a t p r es e nt f o r R up e e Pa c k in g c r e d i t . 1 1. 5% . F o r ei gn c u r r e nc y : L I B OR p l us 2% S e cu r i t y : pai d s t o c k s m ean t f o r e xp or t s.	As s et s cr ea ted o u t o f B a nk f i n a n ce / S t o c k s	E q u i t a b l e M o r t g a g e o f Fl a t no . 4 0 4 A m r ut B u i l d i n g J a y w a nt S a w a n t M ar g, D a h i s ar W M u m b a i 4 0 0 a d m ea s ur i ng 4 2 5 sq . f t c a r p e t ar e a V a l u e d a t R s . 65 . L a c s F or ce d s a l e v a l u e o f R s . 5 5. 2 5 L a c s. a s p er v a l u a t i o n r e p or t of M /S . K a n t i K a r m se y & c o G ua r a n to r s: Mr . M e g h a l M u k e s h M eh t a M r . B i r a j M u k e s h M e ht a ( a s o w n er s o f t h e p r o p e r t y m or t g a g e d ).
	P o s t s h i p m e n t c r e d i t i n r u p ee / F o r ei gn cu r r e n cy 1 8 0 da ys U sa n ce ( F D D B P / R DB F / F D U B D / R U B F / A d va n ce a g a i n st c o l l e c t i o n b i l l s	₹5 0 . 0 0 (R up ee s F i f t y la c s o n l y )	M a r g i n F D DB P / R D B F 1 0 % M a r g i n 1 0 % R u p ee : F D U B D / F D U B D / L A B C I nt e r es t B a s e R a t e ( 1 0 . 7 5 % ) + 0 . 7 5 % a t p r e se n t. 1 1 . 5 % F . C: R D B F / R U B F : LI B O R p l u s 2 % 1

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Page 4 of 11

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ORIGINAL APPLICATION NO.240 OF 2022

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			D o c um e n t s of t i t l e t o go o d s/ A cc e p t e d H u n d i e s .
	F o r wa r d p ur ch a s e /f o r w ar d sa l es c o n t r a c t	₹1 0 0 la cs	M a r g i n NI L C o m m i s s i o n: R s . 5 0 0 p er co n t ra p l u s a p p l i c a b l e s e r v i c e ch a r ge s.
T o t a l A m o u n t	-	₹1 6 5 L a k hs	- -

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(4) On the dates given below, defendants signed and executed the loan and security documents as set out in paragraph nos. 5.3 to 5.10 of the Original Application. Defendants hypothecated Assets created out of bank finance/Stocks and mortgaged Residential Flat No. 404/D Wing , 4% Floor adm. about 425 sq/f/t carpeat aree in the building knowit as Amrat Co.Op.Hag. Society situated at Jaywant Sawant Road, Dahisar (W), Mumbai400 068 bearing Survey No.255,256 C.T.S.No. 925, 926,926/1 to 926/14 of Mumbai Suburban to secure the loan.

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The details of the documents executed by the Defendants are as under: -

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(a) Sanction letter dated 05.10.2011; (b) F-14-A, Demand Promissory Note for ₹15,00,000/- (Rupees Fifteen Lakhs Only) dated 07.10.2011; (c) F-14-A, Demand Promissory Note for ₹50,00,000/- (Rupees Fifty Lakhs Only) dated

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Page 5 of 11

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ORIGINAL APPLICATION NO.240 OF 2022

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07.10.2011;

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(d) F-16, Letter of Continuity for ₹65,00,000/(Rupees Sixty-Five Lakhs Only) dated 07.10.2011; (e) F-251B, Advances against Goods awaiting shipment, dated 07.10.2011;

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(f) F-107A, Hypothecation of Book Debts dated 07.10.2011;

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(g) F-110E, Letter of Hypothecation dated 07.10.2011;

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(h) F-111, Guarantee for all over facilities of ₹65,00,000/(Rupees Sixty-Five Lakhs Only) executed by Defendant No.2 and 3, dated 25.11.2013;

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(i) Memorandum of deposit of Equitable Mortgage dated 05.10.2011;

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(j) Declaration cum Deed of Confirmation dated 04.05.2006 alongwith Agreement for Sale dated 30.04.2004 between Mrs. Anuja Anil Revadekar as the "Vendor" and Mr Biraj Mukesh Mehta and Mr. Meghal Mukesh Mehta as the "Purchasers" registered under No.BDR-2/3258/2006;

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(k) Agreement for Sale dated 10.03.1999 between Mrs. Anuja Anil Revadekar as the "Purchaser" and Mr. Chandu Tahilram Tolani as the "Developer" registered under No.PBDR-2/1335/1999;

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(l) NOC issued by the Society dated 03.10.2011;

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(m) Share Certificate No.16 issued by the Society dated 14.01.2007;

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Page 6 of 11

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ORIGINAL APPLICATION NO.240 OF 2022

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(n) Declaration, Affidavit and Power of Attorney executed by the Defendant No.2 as a Mortgagor in favour of the Bank dated 22.12.2011;

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(o) F-379, Confirmation letter of Deposit of title Deeds, dated 8.10.2011;

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(p) Renewal sanction letter dated 09.03.2013; (q) F-14-A, Demand Promissory Note, for ₹15,00,000/- dated 23.04.2013;

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(r) F-14-A, Demand Promissory Note, for ₹5,00,000/(Rupees Five Lakhs Only) dated 23.04.2013;

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(s) F-16, Letter of Continuity dated 23.04.2013;

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(t) F-16, Letter of Continuity dated 14.8.2013;

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(u) F-251B, Advances against Goods awaiting shipment dated 23.04.2013;

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(v) F-110E, Letter of Hypothecation dated 23.04.2013;

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(w) F-111, Guarantee for all over facilities of ₹85,00,000/- (Rupees Eighty-Five Lakhs Only) executed by Defendant No.2 and 3 dated 01.08.2013;

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(x) F-379, Confirmation letter of Deposit of title Deeds, dated 08.10.2011.

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(5) After availing the loan, defendants did not adhere to the financial discipline and committed default in payment of instalments and repayment of the loan and accordingly the accounts of the

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Page 7 of 11

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ORIGINAL APPLICATION NO.240 OF 2022

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borrowers were declared as Non-Performing Assets (N.P.A.) on 28.02.2019 as per RBI Guidelines. Therefore, on 13.09.2019, the applicant, through its advocate, called upon defendants to liquidate the outstanding in the sum of ₹90,84,472.24/(Rupees Ninety Lakhs Eighty-Four Thousand Four Hundred Seventy-Two and paisa Twenty-Four Only) as on 05.09.2019 alongwith future interest payable thereon from 06.09.2019 @ 16% plus 2% additional interest per annum with monthly rests till payment and/or realization within 1 week from receipt of the said notice. Despite notice, defendant nos. 1 to 3 failed and neglected to pay.

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(6) As on 28.01.2020, there was owing, due and payable by defendants to the applicant the aggregate sum of ₹94,88,851/- (Rupees NinetyFour Lakhs Eighty-Eight Thousand Eight Hundred Fifty-One Only) with pendentelite and future interest @ 16% interest plus 2% monthly rest as an additional interest. The applicant has maintained the loan ledger extract and the entries posted therein are made in the usual and ordinary course of the banking business.

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(7) Since, defendants failed and neglected to make the payment, the applicant was left with no other alternate but to file the Original Application which was presented on 28.01.2020.

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(8) The applicant has filed affidavit (exhibit-6) in lieu

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Page 8 of 11

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ORIGINAL APPLICATION NO.240 OF 2022

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of examination in chief of Mrs Vijayalaxmi Amit Bali, Senior Manager and list of documents (exhibit-7) thereby adducing in evidence the documents at AW-1 to AW-38, which are admitted in evidence, read, recorded and exhibited.

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(9) Accordingly, in the Original Application was filed for the recovery of ₹94,88,851/- (Rupees NinetyFour Lakhs Eighty-Eight Thousand Eight Hundred Fifty-One Only) with pendentelite and future interest @ 16% interest plus 2% monthly rest as an additional interest from the date of presentation of the Original Application i.e. 29.01.2020 till payment/realisation.

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(10) The Tribunal has scrutinised and examined the allegations contained in the Original Application and analysed the evidence adduced by the applicant which has gone unchallenged, uncontroverted and unrebutted.

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(11) Upon careful scrutiny and the examination of the Original Application, analysing the evidence and giving due weightage to the documentary evidence adduced by the applicant, the Tribunal views that there is no reason to disbelieve the claim made by the applicant bank.

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(12) In view of the observations made hereinabove, Original Application filed by the applicant deserves to be allowed.

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(13) Hence, the following order:

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Page 9 of 11

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ORIGINAL APPLICATION NO.240 OF 2022

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ORDER

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(A) The Original Application No.240 of 2022 is allowed with costs.

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(B) Defendant nos.1 to 3 are ordered and directed to pay to the applicant, either jointly or severally, the aggregate sum of ₹94,88,851/(Rupees Ninety-Four Lakhs Eighty-Eight Thousand Eight Hundred Fifty-One Only) with pendentelite and future simple interest @ 12% per annum from the date of presentation of the Original Application i.e. 29.01.2020 till payment/realization after adjusting the recoveries made by the Applicant under SARFAESI Act, 2002 or any other amount paid by the borrowers after filing of this present

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O.A. No.240 of 2022.

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(C) The aforesaid adjudicated amount is secured by the valid and subsisting hypothecated properties, that is, Assets created out of bank finance/Stocks.

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(D) The aforesaid adjudicated amount is secured by the valid and subsisting mortgaged immovable property, that is, Residential Flat No. 404/D Wing , 4^th Floor adm. about 425 sq/f/t carpeat aree in the building known as Amrat Co.Op.Hag. Society situated at Jaywant Sawant Road, Dahisar (W), Mumbai400 068 bearing Survey No.255,256 C.T.S.No. 925, 926,926/1 to 926/14 of Mumbai Suburban.

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Page 10 of 11

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ORIGINAL APPLICATION NO.240 OF 2022

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(E) Defendant nos. 1 to 3 are entitled to redeem the hypothecated and mortgaged property as per law failing which the applicant has right to proceed to sell the hypothecated and mortgaged property and recover dues as per law.

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(F) Issue Recovery Certificate.

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(G) The learned Registrar is directed to send a copy of the judgment and recovery certificate to (i) the applicant, (ii) defendant and (iii) the Recovery Officer by post and email.

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Sd/-

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(Harish Kumar Kaushik) Presiding Officer, DRT-2, Mumbai

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Page 11 of 11

Indian Overseas Bank v. M/S Chamunda Creation

Case brief

What is this about?

What did the court decide?

Indian Overseas Bank v. M/S Chamunda Creation

Case brief

What is this about?

What did the court decide?

What the court decided

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