Allowed

Union Bank of India v. M/S Rich and Royal and Another

DRT4 May 2026OA/48/2026

Case brief

AI extract

What is this about?

In this Debt Recovery Tribunal proceeding, the Applicant sought recovery of a ₹27.33 lakh loan from Defendants who failed to repay a Cash Credit facility. The Tribunal allowed the application, reduced the interest rate to 8%, and issued a Recovery Certificate. The Defendants were proceeded ex-parte.

What did the court decide?

Application allowed; Defendants liable to pay Rs. 27,32,822.60 with 8% p.a. interest; Recovery Certificate issued.

Union Bank of India versus M/S Rich and Royal and… — Contract and Commercial Disputes | DRT (2026)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.48/2026

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 08.01.2026

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DATE OF DECISION: 04.05.2026

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Union Bank of India, a Body Corporate, constituted under Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, having its Head Office at 239, Vidhan Bhawan Marg, Nariman Point, Mumbai and having a Branch Office inter-alia at Village Phullanwal, Tehsil and District Ludhiana, Punjab through duly Authorized Person and Attorney Holder, Sh. Jagmohan Singh, Branch Manager

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……..Applicant

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Versus

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M/S Rich & Royal, Shop no. 15, Goal Market, Domoria Pull, Ludhiana, Punjab- 141008 through its Proprietor, Smt. Jyoti Seghal

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Smt. Jyoti Seghal, W/o Sh. Sajan Vig, R/o House no. 1, Juhi Enclave, near Jassian Chowk, Haibowal Kalan, Ludhiana, Punjab141001, Proprietor of M/S Rich & Royal

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……….Defendants

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Advocates:

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Argued by Sh. Amod Kumar Thakur, Advocate proxy for Sh. R.K. Chauhan, Advocate for applicant

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None for defendants (already ex-parte vide order dated 29.04.2026)

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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 and Bankruptcy Act, 1993, against the defendants for recovery of Rs. 27,32,822.60 (Rupees Twenty Seven Lacs Thirty Two Thousand Eight Hundred Twenty Two and Paise Sixty Only). The Original Application has been filed through Sh. Jagmohan Singh, Branch Manager o f the applicant, who is competent to institute the Original Application vide General Power of Attorney dated 17.08.2022, which is Annexure A1 to this OA.

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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 CC

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2 OA NO.48/2026

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UNION BANK OF INDIA VS. M/S RICH & ROYAL AND ANOTHER

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Limit of Rs. 25.00 Lacs vide Application Form dated 16.08.2024, which is Annexure A2 to this OA.

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The applicant sanctioned the CC Limit of Rs. 25.00 Lacs vide Sanction Letter dated 17.08.2024, which is Annexure A7 to this OA and the terms and conditions were duly accepted by the defendants.

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Defendant no. 1 through its Proprietor defendant no. 2 hypothecated their Stocks and Books Debts vide Hypothecation Agreement dated 17.08.2024, which is Annexure A10 to this OA.

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Documents executed: GST Registration Certificate dated 20.06.2024, which is Annexure A3 to this OA; Udyam Registration Certificate dated 21.06.2024, which is Annexure A4 to this OA; Memorandum to Sanctioning Authority, Sanction Advice, DP Note, Letter of Continuity, Letter of Undertaking not to alienate Hypothecated Goods, Annexure- 1, AD-02 A, Deed of Guarantee and Annexure- II, all dated 17.08.2024, which are Annexure A5, A6, A8, A9 and A11 to A15 to this OA; Letters for Adjustment of Over Dues dated 05.07.2025, 04.09.2025, 17.09.2025 and 23.09.2025, which are Annexure A16 (Colly) to A19 (Colly) to this OA; Recall Notice dated 26.09.2025, which is Annexure A20 (Colly) to this OA; Legal Notice dated 19.12.2025, which is Annexure A21 (Colly) to this OA and Statement of Account with certificate, which are Annexure A22 and A23 to this OA.

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The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in loan account there was a debit of Rs. 27,32,822.60, 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.

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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 29.04.2026. 7. In support of the OA, affidavit of Sh. Jagmohan Singh, Branch Manager, Union Bank of India h as been filed. 8. Heard ex-parte arguments and perused record.

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3 OA NO.48/2026 UNION BANK OF INDIA VS. M/S RICH & ROYAL AND ANOTHER

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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 Annexure A1 to A23 to this OA, it is proved that the defendants approached applicant for availing of the loan facility which was 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 loan as per terms and conditions of the agreement between the parties. Subsequently, account of the defendants was classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.27,32,822.60 (Rupees Twenty Seven Lacs Thirty Two Thousand Eight Hundred Twenty Two and Paise Sixty Only), along with interest from the defendants, jointly and severally from the date of filing of the present Original Application till realization of the account. 10. In so far as pendente lite and future rate of interest is concerned, the applicant in relief clause has claimed interest @10.75%p.a. plus @2% penal interest with monthly rests from 01.12.2025 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 hypothecated assets, undertaking of the defendants, quantum of loan 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 simple interest @08.00% p.a. in the loan account 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.27,32,822.60 (Rupees Twenty Seven Lacs Thirty Two Thousand Eight Hundred Twenty Two and Paise Sixty Only), jointly and severally with costs, current and future simple interest @08.00% p.a. in the loan account from the date of filing of OA till the date of realization of

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OA NO.48/2026 UNION BANK OF INDIA VS. M/S RICH & ROYAL AND ANOTHER

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the amount. Accordingly, the applicant shall be entitled to recover aforesaid amount from the sale of hypothecated assets 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.

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12. Any other application pending stands disposed of.

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Issue Recovery Certificate accordingly.

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Parties to appear before Learned Recovery Officer of this Tribunal on 25.05.2026.

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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.

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Pronounced by me in the open Tribunal .

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Dated: 04.05.2026

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(MRIDULESH KUMAR SINGH)

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Presiding Officer,

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DRT-III, Chandigarh

Union Bank of India v. M/S Rich and Royal and Another

Case brief

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Union Bank of India v. M/S Rich and Royal and Another

Case brief

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