Allowed

State Bank of India v. Sahil Garg and Ors.

DRT27 Jul 2026OA/254/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the application filed by State Bank of India against two defendants for recovery of dues. The defendants, engaged in the trading of pulses and cereals and a guarantor, defaulted on sanctioned Cash Credit and GECL facilities. The account was classified as NPA, and a Section 13(2) SFA notice was issued. The defendants did not appear. The Tribunal confirmed the bank's evidence and ordered payment of the principal amount along with interest and costs, directing recovery from hypothecated and mortgaged assets if payment is not made within 30 days.

What did the court decide?

Directed defendants to pay Rs.5,82,60,735.25 as on 11.04.2024 with interest within 30 days jointly or severally; failing which, recovery from sale of hypothecated stocks, book debts, and mortgaged property; issuance of Recovery Certificate.

State Bank of India versus Sahil Garg and Ors. — Banking and Recovery | DRT (2026)

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O.A. No.254 of 2024

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Debts Recovery Tribunal-I, Delhi 4th floor, Jeevan Tara Building, Parliament Street, New Delhi

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Presiding Officer: Shri Govind Ballabh Sharma

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O.A. No. 254 of 2024

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State Bank of India Stressed Assets Management Branch-I Tolstoy Marg, STC Building, 12th Floor, Janpath Road, Jawahar Vyapar Bhawan, New Delhi-110001

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Applicant

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Versus

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Sh.Sahil Garg s/o late Sh.Tara Chand Proprietor of M/s Jyoti International C-37, 2nd Floor, Lawrence Road Indl. Area Delhi-110035

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Also at:

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Sh.Sahil Garg s/o late Sh.Tara Chand House No.288, Tarun Enclave Pitampura, Delhi-110034

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Mrs.Savitri Devi w/o late Sh.Tara Chand House No.288, Tarun Enclave Pitampura, Delhi-110034 Defendants

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Present: Sh.Himanshu Lilani, Counsel for the applicant bank

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Date of Reserve: 09.07.2026

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Date of Pronouncement: 27.07.2026

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FINAL ORDER

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This original application has been filed by the applicant bank on 15.04.2024 through Mrs.Sheenu Dinesh, authorized representatives of the applicant banks under Section 19 of Recovery of Debts and Bankruptcy Act, 1993 against the

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501--

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O.A. No.254 of 2024

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defendants for recovery of a sum of Rs.5,82,60,735.25 (Rupees Five Crores Eighty Two Lacs Sixty Thousand Seven Hundred Thirty Five & paisa Twenty Five only) as on 11.04.2024 along with pendentelite and future interest @12.25% per annum in Cash Credit Account and @7.40% interest in CECL/GECL account along with @5% penal interest in Cash Credit account from the date of filing this application till the date of its realization with costs.

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The brief facts of the case are that on the request of defendant no.1 as proprietor of M/s Jyoti International engaged in the business of trading of pulses and cereals, the applicant bank sanctioned the Cash Credit facility to Rs.300.00 lacs (Rupees Three crores only) @10.05% interest per annum vide Letter of Arrangement dated 21.03.2020 against hypothecation of entire current assets including stock, book debts and mortgage of property owned by defendant no.2 who stood as guarantor for the credit facility sanctioned in favor of defendant no.1. On the request of defendant no.1, the applicant bank sanctioned GECL facility of Rs.30.00 lacs (Rupees Thirty lacs only) @7.40% interest on 29.06.2020 due to Covid 19 pandemic as per Government of India guidelines. The applicant bank renewed and enhanced Cash Credit facility from Rs.300.00 lacs to Rs.450.00 lacs (Rupees Four Crores Fifty Lacs only) on 25.11.2021 along with CCECL facility of Rs.13.00 lacs @8.90% interest. On the request of defendant no.1, the applicant bank renewed Cash credit facility of Rs.450.00 lacs and GECL-1 of Rs.65.00 lacs vide letter of arrangement dated 13.01.2022.

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That in order to avail the credit facilities, the defendants as proprietor & guarantor executed Letter of Arrangement,

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O.A. No.254 of 2024

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Agreements of Loan cum Hypothecation, Undertakings and Confirmations, Guarantee Agreements, Declarations/ Acknowledgements, Letters of Undertakings, Affidavits, Acknowledgements, End Use Certificate, Supplemental Agreements of Loan cum Hypothecation at the time of sanction and renewal/ enhancement of limits on various dates.

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That in order to secure the credit facilities, the defendant no.1 created exclusive first charge by way of hypothecation of entire current assets, stocks, book debts/receivables, vehicles and entire assets created out of bank's finance in favour of applicant bank.

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Further, the defendant no.2 created equitable mortgage of her property by depositing title deed along with chain of documents of residential property bearing House No.288, Tarun Enclave, Pitampura, Delhi measuring 160 sq.yds. with the applicant bank on 29.01.2020 by executing Memorandum for Recording of Mortgage by Deposit of Title Deeds and vide Letters of Confirmation and extension of mortgage on 23.03.2020 and 27.11.2021. The mortgaged property also cross-collatarized to secure credit facilities granted to M/s Garg Dal & Besan Mills and housing loan to defendants and one Ashok Kumar.

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It has been submitted by the applicant bank that after availing the credit facilities, the account became highly irregular and defendants failed to maintain financial discipline as per terms and conditions of sanction despite various requests and personal visits etc. The applicant bank classified the account as NPA on 09.07.2023 in accordance with RBI guidelines and issued loan recall notice calling upon the defendants to pay outstanding dues but they failed to do so,

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O.A. No.254 of 2024

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hence, the applicant bank has approached this tribunal for recovery of its dues.

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Notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 dated 21.02.2024 was issued by applicant bank invoked the guarantees of defendant no.2 & 3 but defendants failed to pay the outstanding amount.

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Notices of this O.A. were issued to the defendants and despite of proper service, the defendants have chosen to absent from the proceedings. As per order dated 22.09.2025, defendants have been proceeded ex-parte as not appeared before the Tribunai and even no written statement, evidence and affidavit of assets have been filed by the defendants.

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In order to prove its case, the applicant bank has filed its evidence by way of affidavit of Mrs.Sheenu Dinesh, authorized representative of the applicant bank who have proved the documents such as Gazette Notifications, Letters of Arrangements, Guarantee Agreements, Undertaking and Confirmations, Declaration/Acknowledgement, Undertakings, Loan cum Hypothecation Agreement, Supplemental Agreement of Loan cum Hypothecation, Acknowledgements, Undertakings, End Use Certificate, Affidavit of details of Assets & Liabilities, Memorandum for Recording of Mortgage by Deposit of title Deeds along with Chain of Documents of Mortgaged property, Demand Notice u/s 13(2) with Postal Receipts, Loan Recall Notice, Certified Statement of Accounts under Bankers' Book Evidence Act along with Interest Calculation Sheet and total outstandings, Certified for Computerized Statement and Copy of Valuation Report of Mortgage property marked as Ex.AW1/1 to Ex.AW1/80.

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O.A. No.254 of 2024

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The applicant bank has fully corroborated the averments made in the O.A. Even otherwise the whole case of the applicant bank is based on the documents and the same have been duly proved.

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The case filed by the applicant bank gone unrebutted and there is no question of disbelieving the case of the applicant bank and the applicant bank has proved its case beyond reasonable doubts.

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In the light of the above discussions, the Original Application deserves to be allowed.

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ORDER

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al!ow this OA and direct the defendants to pay to the applicant bank within a period of 30 days, jointly or severally, a sum of Rs.5,82,60,735.25 (Rupees Five Crores Eighty-Two Lacs Sixty Thousand Seven Hundred Thirty-Five & paisa Twenty-Five only) as on 11.04.2024, out of which:

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Rs.5,11,80,614.26 in Cash Credit account along with pendentelite and future interest @12.25% per annum; - Rs.70,80,120.99 in GECL account along with pendentelite and future interest @7.40% per annum interest.

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From 11.04.20242024 till the date of its realization and costs, failing which the aforesaid amount shall be recovered from the sale of hypothecated stocks, book debts, machinery, receivable etc. of defendant no.1 as well as sale of mortgaged property situated at House No.288, Tarun Enclave, Pitampura, Delhi measuring 160 sq.yds. In case of shortfall, the same shall be recovered from sale of movable and immovable properties of the defendants.

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O.A. No.254 of 2024

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(II) The recovery certificate be issued forthwith and be sent to the Recovery Officer, Debt Recovery Tribunal-I, Delhi.

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(III) Parties are directed to appear before the Recovery Officer, DRT I, Delhi on 25.09.2026.

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(IV) Copies of final order as well as Recovery Certificate are to be sent to all concerned free of cost.

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(GOVIND BALLABH SHARMA) PRESIDING OFFICER DRT-I, DELHI

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(Dictated and pronounced in open court) Dated: 27.07.2026

State Bank of India v. Sahil Garg and Ors.

Case brief

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State Bank of India v. Sahil Garg and Ors.

Case brief

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