Allowed

Bank of India v. Mahesh Dhirajlal Shah

DRT8 May 2026OA/306/2022

Case brief

AI extract

What is this about?

In an Original Application under Section 19(1) of the RDBFI Act, 1993, Bank of India sought recovery of ₹41.13 Lakhs along with interest and enforcement of hypothecated securities from Defaulting borrower. The Tribunal found the claim uncontroverted, allowed the application, and issued a Recovery Certificate.

What did the court decide?

Allowed Original Application; directed defendant to pay ₹41.13 Lakhs with future interest; issued Recovery Certificate; secured by hypothecated properties; defendant entitled to redeem.

Bank of India versus Mahesh Dhirajlal Shah — Contract and Commercial Disputes | DRT (2026)

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ORIGINAL APPLICATION NO.306 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.306 OF 2022

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Date of Institution: 24.12.2021 Date of Decision: 08.05.2026

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TOTAL CLAIM AMOUNT :

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₹ 41,13,017.81/-

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BANK OF INDIA, A Bank, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act V of 1970, having their Head Office at Star House, C-5, G-Block, BandraKurla Complex, Bandra (East), Mumbai-400 051 and one of its branch office amongst others known as Jacob Circle Branch, situated at Maulana Azad Road, Jacob Circle, Mumbai-400 011, through its Constituted Attorney Mr Balram Tewary, Chief Manager of the Applicant.

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… Applicant

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Versus

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MR MAHESH DHIRAJLAL SHAH, Proprietor of M/s. Hetvi Food Products, Having address at Plot No.2/3, Industrial Area, Near Kajal Petrol Pump, Behind Chiman Garage, Vithalwadi Stattio Road, Taluka-

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Page 1 of 10

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ORIGINAL APPLICATION NO.306 OF 2022

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Kalyan, Thane-421 002. Also at Flat No.22, Vaishnavi Apartment, 3^rd Floor, ‘B’ Wing, Hanuman Nagar, Katemanivali, Kalyan (East), District Thane-421 306.

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…Defendant

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APPEARANCES

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For the Applicant : Mr Kaustubh Kakade a/w Mr Prashant Shinde i/b M/s. A. B. Shinde & Co. - Advocate

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For Defendant : 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 aggregating to a sum of ₹41,13,017.81/(Rupees Forty-One Lakhs Thirteen Thousand Seventeen and paisa EightyOne Only) wherein a sum of ₹37,74,001.28/(Rupees Thirty-Seven Lakhs Seventy-Four Thousand One and paisa Twenty-Eight Only) under Cash Credit Account No.005930110000078 with future interest @ 12.90% per annum with monthly rest and a sum of ₹3,39,016.53/- (Rupees Three Lakhs Thirty-Nine Thousand Sixteen and paisa Fifty-Three Only) under Working Capital

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Page 2 of 10

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ORIGINAL APPLICATION NO.306 OF 2022

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Term Loan Account No.005973410000032 with future interest @ 7.85% per annum with monthly rest thereon from the date of presentation of the Original Application i.e. 24.12.2021 till payment/realization and to enforce the hypothecated securities.

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The details of the claim amount are as under: -

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S r N o	Nat ure of Facil ity	O/s . inc lus i ve of Unap p l ied inte res t	Unap p lied inte res t	Penal I nte res t	Tota l Amo unt
1	Cas h Credit Accou nt No .005 93 011000 00 78	₹33,87 ,748 .56 /-	@ 12 .90% p er annum fr o m 01.04 .20 21 to 23.12 .20 21 = ₹3,34, 339 .75 / -	@ 2% per annum fr o m 01.04 .20 21 to 23.12 .20 21 = ₹51,912 .28 /-	₹37,74 ,001 .28 /-
2	Working Capital Term Loa n Accou nt No .005 97 341000 00 32	₹3,15, 614 .58 / -	@ 7. 85% per annum fr o m 01.04 .20 21 to 23.12 .20 21 = ₹18,644 .54 /-	@ 2% per annum fr o m 01.04 .20 21 to 23.12 .20 21 = ₹4,757 .41 /-	₹3,39, 016 .53 /-
	G rand Tota l Amoun t	-	-	-	₹ 41,13 ,01 7.8 1/ -

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(2) It is undisputed fact in the matter that the Defendant no.1 was duly served with the summons vide order-sheet dated 26.04.2023. Despite service, the defendant did not enter his appearance and therefore, he was set ex-parte on 26.02.2026.

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(3) Defendant no.1 is the principal borrower who approached the Applicant Bank and sought

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Page 3 of 10

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ORIGINAL APPLICATION NO.306 OF 2022

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financial assistance by way of CC and Working Capital Term Loan Facilities. Pursuant to the loan application made by defendants, the Applicant sanctioned the loan vide Sanction Letter dated 12.08.2015 in sum of ₹30 Lakhs under Cash Credit (Hypothecation of Stocks) and sum of ₹8 Lakhs under Cash Credit (Hypothecation of Bookdebts) aggregating to ₹30 Lakhs payable with interest at the rate of 3.90% over base rate with 14.10% per annum with monthly compounding.

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The details of the Sanction amount are as under: -

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S r	Da te o f	A m ou n t	RO I		S e c u ri ty
No	S a n c ti on
1	1 2 . 0 8 . 20 1 5	₹3 0 L a kh s	@ 3 . 9 0%	o v e r	H y p o th e c a tio n o f S t o c k s o f S u g a r ,	L iq u i d
			b a s e r a te	w ith	G lu c o s e , Co c o n u t P o wd e r , W h o le	M ilk
			1 4 . 1 0%	p e r	P o wd e r , P o lly W r a p p e r s , J a r Ca p s ,	E mp ty
			a n n u m	w ith	J a r s , J a r S t ic k P o u c h , Co r r u g a te d	Bo x e s ,
			mo n th ly		F la v o u r M ix L o o s e T o f f e e ,	Bo o k -
			c o mp o u n d i	n g	d e b ts / r e c e iv a b le s e tc .
	T ota l	₹ 3 0 L a k h s	-		-
	A m ou n t

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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 (B) to (G) of the Original Application. Defendant hypothecated Stocks of Sugar, Liquid Glucose, Coconut Powder, Whole Milk Powder, Polly Wrappers, Jar Caps, Empty Jars, Jar Stick Pouch, Corrugated Boxes, Flavour Mix Loose Toffee, Book -debts/receivables etc. to secure the loan. The details of the documents executed by the

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Page 4 of 10

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ORIGINAL APPLICATION NO.306 OF 2022

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Defendant are as under: -

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(a) Sanction Letter dated 12.08.2015;

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(b) D.P. Note dated 28.08.2015;

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(d) Hypothecation cum Loan Agreement dated 28.08.2015;

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(e) Composite Agreement dated 28.08.2015; (f) Non-Relationship Declaration dated 28.08.2015;

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(g) Undertaking cum Declaration to supply audited financial statement dated 28.08.2015;

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(h) D.P. Note dated 08.06.2020;

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(i) Bearer Letter dated 08.06.2020;

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(j) Loan Installment Letter dated 08.06.2020;

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(k) Supplemental Loan cum Hypothecation Agreement dated 08.06.2020;

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(l) Composite Agreement dated 08.06.2020;

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(m) RBLR Agreement dated 08.06.2020;

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(n) Acknowledgement of Debt in respect of CC Account no.005930110000078 for an amount of ₹29,87,248.44/(Rupees Twenty-Nine Lakhs Eighty-Seven Thousand Two Hundred Forty-Eight and paisa Forty-Four Only) dated 23.08.2018;

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(o) Acknowledgement of Debt in respect of

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Page 5 of 10

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ORIGINAL APPLICATION NO.306 OF 2022

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CC Account no.005930110000078 for an amount of ₹33,87,748.56/(Rupees Thirty-Three Lakhs Eighty-Seven Thousand Seven Hundred Forty-Eight and paisa Fifty-Six Only) dated 23.08.2018.

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(5) After availing the loan, defendant 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 borrower was declared as Non-Performing Assets (N.P.A.) on 31.03.2021 as per RBI Guidelines. Therefore, on 07.09.2021, the applicant, through its advocate, called upon defendant to liquidate the outstanding in the sum of ₹33,87,748.56/- (booko/s.) under Cash Credit and a sum of ₹3,15,614.58/- (book-o/s.) under Term Loan with further interest at the rate of 12.90% per annum and at the rate of 7.85% per annum with monthly rest plus 2% p.a. penal interest due from 21.03.2021 till payment and/or realization within 7 days from receipt of this notice. Despite notice, defendant no. 1 failed and neglected to pay. (6) As on 24.12.2021, there was owing, due and payable by defendant to the applicant the aggregate sum of recover aggregating to a sum of ₹41,13,017.81/(Rupees Forty-One Lakhs

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Page 6 of 10

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ORIGINAL APPLICATION NO.306 OF 2022

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Thirteen Thousand Seventeen and paisa EightyOne Only) wherein a sum of ₹37,74,001.28/(Rupees Thirty-Seven Lakhs Seventy-Four Thousand One and paisa Twenty-Eight Only) under Cash Credit Account No.005930110000078 with future interest @ 12.90% per annum with monthly rest and a sum of ₹3,39,016.53/- (Rupees Three Lakhs Thirty-Nine Thousand Sixteen and paisa Fifty-Three Only) under Working Capital Term Loan Account No.005973410000032 with future interest @ 7.85% per annum with monthly rest thereon. 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, defendant 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 24.12.2021.

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(8) The applicant has filed affidavit (exhibit-6) in lieu of examination in chief of Mr Rakesh Kumar Choudhary, Chief Manager and list of documents (exhibit-7) thereby adducing in evidence the documents at AW-1 to AW-28, 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 recover aggregating to a sum of ₹41,13,017.81/(Rupees Forty-One Lakhs

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Page 7 of 10

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ORIGINAL APPLICATION NO.306 OF 2022

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Thirteen Thousand Seventeen and paisa EightyOne Only) wherein a sum of ₹37,74,001.28/(Rupees Thirty-Seven Lakhs Seventy-Four Thousand One and paisa Twenty-Eight Only) under Cash Credit Account No.005930110000078 with future interest @ 12.90% per annum with monthly rest and a sum of ₹3,39,016.53/- (Rupees Three Lakhs Thirty-Nine Thousand Sixteen and paisa Fifty-Three Only) under Working Capital Term Loan Account No.005973410000032 with future interest @ 7.85% per annum with monthly rest thereon from the date of presentation of the Original Application i.e. 24.12.2021 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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Page 8 of 10

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ORIGINAL APPLICATION NO.306 OF 2022

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(13) Hence, the following order:

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ORDER

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(A) The Original Application No.306 of 2022 is allowed with costs.

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(B) Defendant is ordered and directed to pay to the applicant, the recover aggregating to a sum of ₹41,13,017.81/(Rupees Forty-One Lakhs Thirteen Thousand Seventeen and paisa EightyOne Only) wherein a sum of ₹37,74,001.28/(Rupees Thirty-Seven Lakhs Seventy-Four Thousand One and paisa Twenty-Eight Only) under Cash Credit Account No.005930110000078 with future simple interest @ 12% per annum and a sum of ₹3,39,016.53/- (Rupees Three Lakhs Thirty-Nine Thousand Sixteen and paisa FiftyThree Only) under Working Capital Term Loan Account No.005973410000032 with future simple interest @ 7.85% per annum thereon from the date of presentation of the Original Application i.e. 24.12.2021 till payment/realization after adjusting the recoveries made by the Applicant under SARFAESI Act, 2002 or any other amount paid by the borrower after filing of this O.A. No.306 of 2022.

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(C) The aforesaid adjudicated amount is secured by the valid and subsisting hypothecated properties, that is, Stocks of Sugar, Liquid Glucose, Coconut Powder, Whole Milk Powder, Polly Wrappers, Jar

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Page 9 of 10

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ORIGINAL APPLICATION NO.306 OF 2022

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Caps, Empty Jars, Jar Stick Pouch, Corrugated Boxes, Flavour Mix Loose Toffee, Bookdebts/receivables etc.

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(D) Defendant is entitled to redeem the hypothecated properties as per law failing which the applicant has right to proceed to sell the hypothecated properties and recover dues as per law.

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(E) Issue Recovery Certificate.

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(F) 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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(Harish Kumar Kaushik)

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Presiding Officer, DRT-2, Mumbai

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Bank of India v. Mahesh Dhirajlal Shah

Case brief

What is this about?

What did the court decide?

Bank of India v. Mahesh Dhirajlal Shah

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

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Case details

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