Allowed

State Bank of India v. M/S Kula Majra and Company and Others

DRT7 Mar 2026OA/459/2022

Case brief

AI extract

What is this about?

The Dharti Rasoi Tribunal allowed the State Bank of India's application to recover Rs. 39,67,254.00 from the borrower and guarantor after they defaulted on loan facilities. The court decreed the liability, reduced the interest rate to 8% p.a., and ordered the issuance of a Recovery Certificate.

What did the court decide?

Declaratory order establishing liability for Rs. 39,67,254.00 plus interest at 8% p.a.; order for issuance of Recovery Certificate.

State Bank of India versus M/S Kula Majra and… — Contract and Commercial Disputes | DRT (2026)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.459/2022

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION:18.11.2021

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DATE OF DECISION: 07.03.2026

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State Bank of India, a Body Corporate constituted under the State Bank of India Act, 1955, and having its Corporate Office at Madame Cama Road, Nariman Point, Mumbai and one of its Local Head Office at Sector -17 Chandigarh, its Administrative Office at Sheranwala Gate, The Mall, Patiala and State Bank of India, SMECC Cell at The Mall Patiala, represented through its Chief Manager, Sh. Ashok Kumar Sharma.

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……..Applicant

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Versus

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M/S Kula Majra and Company, Anaj Mandi, Sanour Road, Patiala. 2. Sh. Kashmir Singh S/o Sh. Gurnam Singh, R/o H. No23, Village Kule Majra, Tehsil and District Patiala.

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Sh. Gurjit Singh S/o Sh. Jagdev Singh, H.No.10-Z, Tej Bagh Colony, Arian Majra, Patiala.

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………Defendants

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Advocates:

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Argued by Sh. Amit Rishi, Advocate proxy for Sh. Kanwal Deep Sachdeva, Advocate for the applicant

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Defendants already ex-parte vide order dated 18.07.2024

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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.39,67,254.00 (Rupees Thirty Nine Lacs Sixty Seven Thousand Two Hundred and Fifty Four Only). The Original Application has been filed through Sh. Ashok Kumar Sharma, Chief Manager of the applicant, who is competent to institute the Original Application in the terms of notification dated 26.09.1959, 26.08.1972 and 02.05.1987 issued by the Executive Committee of the Central Board in exercise of powers conferred on it under regulation

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2 OA NO.459/2022 STATE BANK OF INDIA VS. M/S KULA MAJRA AND COMPANY AND OTHERS

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no. 76 and 77 of State Bank of India General Regulations framed in exercise of powers conferred by sub-section 3 of section 50 of the State Bank of India Act, 1955 .

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The brief facts of the OA are that defendant no. 1 through its proprietor defendant no. 2 approached the applicant for grant of Cash Credit Limit of Rs.24.50 Lacs vide Loan Application dated 30.05.2012, which is Annexure A1 to this OA. Defendant no. 2 stood as guarantor. Thereafter, defendant no. 1 through its proprietor defendant no. 2 approached the applicant for enhancement of the limit to Rs.32.00 Lacs vide loan application dated 27.08.2015, which is Annexure A9 to this OA. Thereafter, defendant no. 1 through its proprietor defendant no. 2 approached the applicant for adhoc renewal of the limit vide application dated 27.03.2017, which is Annexure A16 to this OA. Thereafter, defendant no. 1 through its proprietor defendant no. 2 approached the applicant for renewal of the limit vide loan application dated 07.06.2019, which is Annexure A19 to this OA. Thereafter, defendant no. 1 through its proprietor defendant no. 2 approached the applicant for Funded Interest Term Loan (FITL) during COVID-19. 3. The applicant sanctioned Cash Credit Limit of Rs.24.50 Lacs vide Sanction dated 25.07.2012, which is Annexure A2 to this OA and letter of arrangement dated 04.08.2012, which is Annexure A3 to this OA and terms and conditions were duly accepted by the defendants. Thereafter, the limit was enhanced by the applicant to Rs.32.00 Lacs vide Sanction dated 16.10.2015, which is Annexure A10 to this OA and letter of arrangement dated 29.10.2015, which is Annexure A11 to this OA and terms and conditions were duly accepted by the defendants. Thereafter, the applicant sanctioned adhoc renewal of the limit vide sanction dated 30.03.2017, which is Annexure A17 to this OA and renewed the limit thereafter, vide sanction dated 20.04.2019 and 17.06.2019, which are Annexures A18 and A20 to this OA; Letter of arrangement dated 18.06.2019, which is Annexure A21 to this OA. Thereafter, the applicant sanctioned Funded Interest Term

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3 OA NO.459/2022 STATE BANK OF INDIA VS. M/S KULA MAJRA AND COMPANY AND OTHERS

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Loan (FITL) of Rs.1,56,195.00 under COVID-19 regulatory package vide letter of arrangement dated 05.03.2021, which is Annexure A23 to this OA.

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Defendant no. 1 through its proprietor defendant no. 2 hypothecated book debts, stocks, receivables and other current assets vide agreement of loan cum hypothecation dated 04.08.2012, 29.10.2015, which are Annexures A4 and A12 to this OA.

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Defendant no. 3 mortgaged his immovable property i.e. Residential property i.e. House No. 10Z measuring 238.8 Sq. Yards situated at Village Araiye Majra, Tez Bag Colong, Tehsil and District Patiala, Punjab through equitable mortgage of Sale Deed bearing vasika no.13957 dated 30.11.2005, along with its translation, which is Annexure A7 to this OA; Letter dated 06.08.2012 of confirmation for creation of mortgage by deposit of title deeds, which is Annexure A5 to this OA; Letter dated 29.10.2015 of Confirmation of mortgage of deposit of Title Deeds/mortgage for Enhanced Limit, which is Annexure A6(Colly) to this OA.

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Documents executed: Guarantee Agreement dated 04.08.2012, which is Annexure A8 to this OA; DP Note, No Lien Letter, Guarantee Agreement, all dated 29.10.2015, which are Annexures A13 to A15 to this OA; BCL/Revival Letters dated 29.10.2015, 01.10.2018, 31.03.2019, which are Annexure A22 to this OA; Recall Notice (FITL) dated 22.04.2021, which is Annexure A24 to this OA; Statement of Accounts with certificates, which are Annexures A25 to A28 to this OA. 5. The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in loan accounts there were a debit of Rs.39,67,254.00 which is recoverable and the defendants were served recall notice but defendants did not repay the outstanding amount, therefore, the applicant requested to accept the application and to issue Recovery Certificate accordingly.

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4 OA NO.459/2022 STATE BANK OF INDIA VS. M/S KULA MAJRA AND COMPANY AND OTHERS

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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 18.07.2024.

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In support of the OA, affidavit of Sh. Ashok Kumar Sharma, Chief Manager, State Bank of India, has been filed.

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Heard ex-parte arguments and perused record.

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It was argued by learned proxy counsel that in view of the documentary evidence brought on record which had gone unrebutted, the applicant had proved its case. From the perusal of all the Annexures A1 to A28 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 applicant. 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 is entitled to recover a sum of Rs.39,67,254.00 (Rupees Thirty Nine Lacs Sixty Seven Thousand Two Hundred and Fifty Four 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 @13.50%p.a. and monthly rests from 22.10.2021 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

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5 OA NO.459/2022 STATE BANK OF INDIA VS. M/S KULA MAJRA AND COMPANY AND OTHERS

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@08.00%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. 11. In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.39,67,254.00 (Rupees Thirty Nine Lacs Sixty Seven Thousand Two Hundred and Fifty Four 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/mortgaged properties of the 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.. 12. Any other application pending stands disposed of . 13. Issue Recovery Certificate accordingly. 14. Parties to appear before Learned Recovery Officer of this Tribunal on 25.03.2026. 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: 07.03.2026. (MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

State Bank of India v. M/S Kula Majra and Company and Others

Case brief

What is this about?

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State Bank of India v. M/S Kula Majra and Company and Others

Case brief

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