Allowed

Canara Bank v. M/S K S Ispat Udyog and Another

DRT11 Jun 2026OA/297/2025

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed Canara Bank's original application for recovery of Rs. 30.64 lakhs against M/s K.S. Ispat Udyog. The court reduced the claimed interest rate to 8.00% p.a. and issued a Recovery Certificate allowing attachment of assets under SARFAESI.

What did the court decide?

Recovery Certificate issued. Defendants liable to pay Rs. 30,64,633 along with costs and simple interest @ 8.00% p.a. Amount recoverable from sale of assets.

Canara Bank versus M/S K S Ispat Udyog and Another — Banking and Recovery | DRT (2026)

¶1

DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

¶2

ORIGINAL APPLICATION NO. 297/2025

¶3

PRESIDED OVER BY MRIDULESH KUMAR SINGH

¶4

DATE OF INSTITUTION: 18.03.2025

¶5

DATE OF DECISION: 11.06.2026

¶6

CANARA BANK, a body corporate, constituted under Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970, having its Head Office at J.C.Road Bangalore, and interalia a Branch Office at MSME Sulabh, Bharat Nagar Chowk, Ludhiana, Punjab-141001, through its attorney and principal officer, Sh. Tarun Goyal, Manager.

¶7

……..Applicant

¶8

Versus

¶9

M/s K.S. Ispat Udyog, Mahadev Nagar, Opposite G.K. Kanda, Dhandari to Lohara Road, Village-Lohara, Ludhiana, Punjab141016, through its Sole Proprietor, Sh. Ishan Bhutani S/o Sh. Sanjeev Bhutani.

¶10

2. Sh. Ishan Bhutani S/o Sh. Sanjeev Bhutani R/o House No.1939, Street No.3, Preet Nagar, Sewakpura, Milarganj, Ludhiana, Punjab141003.

¶11

.……Defendants

¶12

Advocates:

¶13

Argued by Sh. Aseem Kataria, Advocate proxy for Sh. Kanwar Ashok Kumar Davesar, Advocate for applicant

¶14

None for Defendants (already ex parte vide order dated 09.06.2026)

¶15

FINAL ORDER

¶16

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.30,64,633.00 (Rupees Thirty Lacs Sixty Four Thousand Six Hundred Thirty Three Only). The Original Application has been filed through Sh. Tarun Goyal, Manager , of the applicant, who is competent to institute the Original Application vide Authority Letter dated 15.09.2022, which is Annexure A1 to this OA.

¶17

2 OA/ 297/2025 CANARA BANK VS M/S K.S. ISPAT UDYOG AND ANOTHER

¶18

The brief facts of the OA are that the defendant no. 1, through its proprietor defendant no. 2, approached the applicant for grant of CC Limit of Rs. 11.70 lacs and Term Loan of Rs. 18.23 lacs vide Loan Application dated 14.03.2023, which is Annexure A2 to this OA. Thereafter, the defendant no. 1, through its proprietor defendant no. 2, approached the applicant for renewal of CC Limit of Rs. 11.70 lacs vide Application for Renewal dated 14.03.2024, which is Annexure A10 to this OA.

¶19

The applicant sanctioned the CC Limit of Rs. 11.70 lacs and Term Loan of Rs. 18.21 lacs vide Sanction Memorandum dated 31.03.2023, which is Annexure A3 to this OA and the terms and conditions were duly accepted by the defendants.

¶20

Thereafter, the applicant sanctioned renewal of the CC Limit of Rs. 11.70 lacs vide Sanction Memorandum dated 24.04.2024, which is Annexure A11 to this OA. 4. Defendant no. 1, through its proprietor defendant no. 2, hypothecated its stock & books debts and machinery purchased out of bank finance vide Deed of Hypothecation dated 28.04.2023, which is Annexure A6 to this OA.

¶21

Documents executed: Cash Credit Agreement, Letter of Proprietorship and Specimen Signature Card dated 28.04.2023, which are Annexure A4 to this OA; Pronote and Request for OD Facility dated 28.04.2023, which is Annexure A5 to this OA; Pronote and Take Delivery Letter to DPN dated 28.04.2023, which is Annexure A7 to this OA; Letter of Undertaking dated 28.04.2023, which is Annexure A8 to this OA; Letter of Consent, Link Letter and Letter containing Particulars of Machinery dated 28.04.2023, 29.04.2023 and 16.05.2023, which are Annexure A9 to this OA; Letter of Renewal and Letter of Proprietorship dated 06.05.2024, which are Annexure A12 to this OA; Letter of Undertakings and Consent Letter dated 06.05.2024, which are Annexure A13 to this OA; AOD & Security for OCC Limit dated 06.05.2024, which is Annexure A14 to this OA; AOD & Security for Term Loan dated 06.05.2024, which is Annexure A15 to this OA; Legal Notice with Postal Receipts dated 07.12.2024, which is Annexure A16 to this OA; Statement of Account for CC Limit with Certificate, which is

¶22

3 OA/ 297/2025 CANARA BANK VS M/S K.S. ISPAT UDYOG AND ANOTHER

¶23

Annexure A17 to this OA; Statement of Account for Term Loan with Certificate, which is Annexure A18 to this OA.

¶24

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.30,64,633.00 (Rupees Thirty Lacs Sixty Four Thousand Six Hundred Thirty Three 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. 6. The defendants were served summons to appear before this Tribunal but no one appeared on behalf of defendants and they were proceeded ex-parte vide order dated 09.06.2026. 7. In support of the OA, affidavit of Sh. Tarun Goyal, Manager, Canara Bank, h as been filed. 8. Heard ex-parte arguments and perused record. 9. It was argued by learned proxy counsel for applicant that in view of the documentary evidence brought on record which had gone unrebutted, the applicant had proved its case.

¶25

From the perusal of all the Annexures A1 to A18 to this OA, it is proved that the Defendant no. 1, through its proprietor defendant no. 2, approached applicant for availing of the loan facilities, which were granted to them. They had executed all the relevant documents in favour of the applicant. The defendants failed to pay back the loans as per terms and conditions of the agreement between the parties. Subsequently, both the 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.30,64,633.00 (Rupees Thirty Lacs Sixty Four Thousand Six Hundred Thirty Three 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. 10. In so far as pendent elite and future rate of interest is concerned, the applicant has claimed interest @11.15% p.a. in CC Limit and @11.80% p.a. in Term Loan with monthly rests from 14.03.2025 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

¶26

¶27

OA/ 297/2025 CANARA BANK VS M/S K.S. ISPAT UDYOG AND ANOTHER

¶28

crown of the Judge. Keeping in view the facts and circumstances of the instant case including nature of the hypothecated assets and machinery, 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 @8.00% p.a. in both 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.

¶29

In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.30,64,633.00 (Rupees Thirty Lacs Sixty Four Thousand Six Hundred Thirty Three Only), jointly and severally, with costs, current and future simple interest @8.00% p.a. in both 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 and machinery of the defendant no. 1 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.

¶30

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

¶31

Parties to appear before Learned Recovery Officer of this Tribunal on 25.06.2026

¶32

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 .

¶33

Dated: 11.06.2026

¶34

(MRIDULESH KUMAR SINGH) Presiding Officer,

¶35

DRT-III, Chandigarh

Canara Bank v. M/S K S Ispat Udyog and Another

Case brief

What is this about?

What did the court decide?

Canara Bank v. M/S K S Ispat Udyog and Another

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Indian Overseas Bank versus M/S Aadhya Fashion and Another

Punjab Gramin Bank versus Sh. Sukhdeep Singh and Another

State Bank of India versus Sh. Jaspreet Singh

Icici Bank Limited versus M/S Nanaksar Infra and Another

Hdfc Bank Limited versus M/s Aalam Enterprises and Others

Hdfc Bank Limited versus Sh. Pankaj Kumar