Allowed

State Bank of India v. M/S Modish Fashion Wears and Another

DRT9 Jan 2026OA/346/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an original application filed by State Bank of India against a proprietorship firm for recovery of a debt. The tribunal held the defendants jointly and severally liable to pay Rs.34,96,402.00 with adjusted interest and directed the issuance of a Recovery Certificate.

What did the court decide?

Order to pay Rs.34,96,402.00 with 8% per annum simple interest; issuance of Recovery Certificate; liberty to enforce claim via sale of assets.

State Bank of India versus M/S Modish Fashion Wears and Another — Specific Performance | DRT (2026)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.346/2023

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 05.03.2023

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DATE OF DECISION: 09.01.2026

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State Bank of India, a body corporate constituted under the State Bank of India Act, 1955 having its Corporate Centre at Madame Cama Road, Nariman Point, Mumbai and one of its Local Head Office at Sector 17A, Chandigarh having branches all over India and one of its Specialized Branch S ME City Credit Centre (SMECCC)-2, Administrative Office Building, Second Floor, Civil Lines Fountain Chowk Ludhiana through its Chief Manager and Principal Officer Sh. Abinash Kumar Roy.

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……..Applicant

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Versus

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M/s Modish Fashion Wears, House No. B-III- 1254, Street No.1 Bajwa Nagar, Ludhiana, a proprietorship firm through its proprietor Sh. Dikshant Dawar son of Sh. Ashok Kumar Dawar

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Sh. Dikshant Dawar son of Sh. Ashok Kumar Dawar, resident of House No. B-III-1254, Street No.1, Bajwa Nagar, Ludhiana .

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….……Defendants

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Advocates:

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Argued by Sh. Vijay Kumar Sharma, Advocate for Applicant Defendants already ex parte vide order dated 15.07.2024

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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 & Bankruptcy Act, 1993, against the defendants for recovery of Rs.34,96,402.00 (Rupees Thirty Four Lacs Ninety Six Thousand Four Hundred Two Only). The Original Application has been filed through Sh. Abinash Kumar Roy, Chief Manager, of the applicant, who is competent to institute the Original Application in the terms of Gazette Notification published in the Gazette of India dated 26.09.1959, 26.08.1972 and 27.03.1987 issued

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OA/346/2023 STATE BANK OF INDIA VS. M/S MODISH FASHION WEARS AND ANOTHER

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by Executive Committee of the Central Board in exercise of the powers conferred on it under Regulation No. 76 & 77 of State Bank of India General Regulations, made by the RBI in exercise of powers framed in exercise of the powers conferred by section 50 of the State Bank of India Act, 1955.

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The brief facts of the OA are that the defendant no.1 through its proprietor approached the applicant for the grant of Cash Credit Limit of Rs. 15.00 Lacs vide Letter dated 29.08.2012, which is Annexure A1 to this OA. Thereafter, the defendant no.1 through its proprietor approached the applicant for renewal of CC Limit and grant of Term Loan of Rs. 6.00 Lacs for purchase of machinery vide application dated 21.08.2013. Thereafter, the defendant no.1 through its proprietor approached the applicant for enhancing of the CC Limit to Rs.30.00 Lacs vide letter dated 27.10.2024, which is Annexure A6 to this OA. Thereafter, the defendant no.1 through its proprietor approached the applicant for Working Capital Term Loan (GECL) of Rs.4.80 Lacs, Funded Interest Term Loan (FITL) of Rs. 1,76,539.00 and again for restructuring of credit facilities.

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The applicant sanctioned the Cash Credit Limit of Rs. 15.00 Lacs vide Letter of arrangement dated 15.10.2012, which is Annexure A2 to this OA and terms and conditions were duly accepted by the defendants. Thereafter, the applicant sanctioned renewal of the CC Limit along with sanction of Medium Term Loan of Rs. 6.00 Lacs vid letter of arrangement dated 19.09.2013, which is Annexure A4 to this OA. Thereafter, the applicant enhanced the CC Limit to Rs.24.00 Lacs vide sanction letter dated 08.12.2014, which is Annexure A7 to this OA. Thereafter, the CC Limit and Term Loan was renewed vide letter of arrangement dated 04.03.2015, which is Annexure A8 to this OA. Thereafter, the applicant also sanctioned a Working Capital Term Loan (GECL) of Rs. 4.80 Lacs vide letter of arrangement dated 19.06.2020,

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OA/346/2023 STATE BANK OF INDIA VS. M/S MODISH FASHION WEARS AND ANOTHER

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which is Annexure A10 to this OA and later sanctioned Funded Interest Term Loan (FITL) of Rs.1,76,539.00 vide letter of arrangement dated 19.06.2020, which is Annexure A12 to this OA. Thereafter, the applicant restructured the credit facilities and sanctioned fresh Funded Interest Term Loan (FITL) of Rs.5,68,224.00 vide letter of arrangement dated 07.07.2021, which is Annexure A13 to this OA. 4. Defendant no. 1 through its proprietor defendant no. 2 hypothecated current assets and receivables, stocks, etc. vide agreement of loan cum hypothecation dated 15.10.2012, 19.09.2013 and 04.03.2015 which are Annexures A3, A5 and A9 to this OA; Supplements Agreement of Loan cum hypothecation dated 19.06.2020, which is Annexure A11 to this OA. Documents executed: - Demand Notice dated 19.12.2022, which is Annexure A14 to this OA and Statement of accounts with Banker’s Certificates, which are Annexures A15 to A18 to this OA. 5. The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in the loan accounts there was a debit of Rs.34,96,402.00, 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 notices to appear before this Tribunal but no one appeared on behalf of defendants and they were proceeded ex parte vide order dated 15.07.2024. 7. In support of the OA, affidavit of Sh. Abinash Kumar Roy, Chief Manager, State Bank of India, has been filed. 8. Heard ex-parte arguments and perused record. 9. It was argued by learned counsel that in view of the documentary evidence brought on record which had gone unrebutted,

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OA/346/2023 STATE BANK OF INDIA VS. M/S MODISH FASHION WEARS AND ANOTHER

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the applicant had proved its case. From the perusal of all the Annexures A1 to A18 to this OA, it is proved that the defendants approached applicant for availing of the loan facilities which were 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 loans as per terms and conditions of the agreement between the parties. Subsequently, accounts of the defendants were classified as NPA. From the documentary evidence brought on record, it is proved that applicant bank is entitled to recover a sum of Rs.34,96,402.00 (Rupees Thirty Four Lacs Ninety Six Thousand Four Hundred Two Only) along with interest from the defendants, jointly and severally, from the date of filing of the present Original Application till realization of the accounts.

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In so far as pendente lite and future rate of interest is concerned, the applicant in relief clause has claimed interest @12.75%p.a. with 5% penal interest and monthly rests in CC Limit, interest @9.25%p.a. with monthly rests in GECL Account and interest @12.75%p.a. with monthly rests in FITL, from 16.02.2023 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 mortgaged property/hypothecated assets, 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 all 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.

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OA/346/2023 STATE BANK OF INDIA VS. M/S MODISH FASHION WEARS AND ANOTHER

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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.34,96,402.00 (Rupees Thirty Four Lacs Ninety Six Thousand Four Hundred Two Only) jointly and severally, with costs, current and future simple interest @8.00%p.a. in all 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 of 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. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 23.01.2026. 15. 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 . Dated: 09.01.2026.

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(MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

State Bank of India v. M/S Modish Fashion Wears and Another

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State Bank of India v. M/S Modish Fashion Wears and Another

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