Allowed

Punjab National Bank v. M/s Gaurav Automobile Services

DRT22 May 2026OA/586/2022

Case brief

AI extract

What is this about?

DRT allowed the applicant's claim for recovery of an outstanding term loan of Rs.31,94,349.32 from the defendants. The court dismissed the defendants' grievances regarding the loan scheme as unsubstantiated and granted interest at 07.35% p.a.

What did the court decide?

Directing defendants to pay Rs.31,94,349.32 with simple interest at 07.35% p.a.; recovery via sale of mortgaged/hypothecated assets.

Punjab National Bank versus M/s Gaurav Automobile Services — Money Laundering | DRT (2026)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO. 586/2022

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 11.03.2022

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DATE OF DECISION: 22.05.2026

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Punjab National Bank, a Body Corporate constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970 having its Head Office at Plot No.4, Sector 10, Dwarka, New Delhi (a Government of India Undertaking) and having one of its Branch situated at Punjab National Bank, Old Court Road, Near City Police Station, Nawanshahr, District S.B.S. Nagar, Punjab through Sh. Ajay Sharma who is presently working as Manager, Punjab National Bank, Old Court Road, Near City Police Station, Nawanshahr, District S.B.S. Nagar, Punjab constituted Power of Attorney Holder of the Bank and Principal Officer.

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….…A pplicant

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Versus

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M/s Gaurav Automobile Services, though its Proprietor Sh. Gurbinder Singh Gaurav, B-10, Industrial Area, Focal Point, Banga Road, Nawanshahr, District S.B.S. Nagar, Punjab

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Sh. Gurbinder Singh Gaurav (Proprietor) M/s Gaurav

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Automobiles Services, S/o Sh. Satnam Singh, B-10, Industrial Area, Focal Point, Banga Road, Nawanshahr, District S.B.S. Nagar, Punjab

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….…Defendants

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Advocates:

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Argued by Sh. Mohinder Nath Sharma, Advocate for the applicant (through VC)

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None for defendants

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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 defendant for recovery of Rs.31,94,349.32 (Rupees Thirty

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OA NO.586/2022 PUNJAB NATIONAL BANK VS. MESSRS GAURAV AUTOMOBILE SERVICES AND ANOTHER

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One Lacs Ninety Four Thousand Three Hundred Forty Nine and Paise Thirty Two Only). The Original Application has been filed through Sh. Ajay Sharma, Manager of the applicant, who is competent to institute the Original Application vide Power of Attorney dated 04.02.2019, which is Annexure A1 to this OA.

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The brief facts of the OA are that the defendant no. 1 through its proprietor defendant no. 2 approached the applicant for the grant of Term Loan of Rs.25 Lacs vide loan application dated 18.01.2019, which is Annexure A2 to this OA. Interview cum appraisal form dated 18.01.2019, which is Annexure A3 to this OA. 3. The applicant sanctioned Term Loan of Rs.25 Lacs vide Appraisal Memorandum/Sanction, which is Annexure A4 to this OA and the terms and conditions were duly accepted by the defendants. 4. Defendant no. 1 through its proprietor hypothecated Cozi Car (equipment), other mandatory items and Boom fittings vide Term Loan Agreement dated 26.03.2019, which is Annexure A10 to this OA. Defendant no. 2 mortgaged his immovable property i.e. Land measuring 2Kanal-01Marla situated at Village Garhi Mahan Singh, Hadbast no. 187, Tehsil Phillaur, District Jalandhar, Punjab through equitable mortgage of Transfer Deed bearing vasika no. 1947 dated 28.03.2017, along with its translation, which are Annexures A5 and A5(T) to this OA; Advocate Report on Title dated 18.03.2019, which is Annexure A6 to this OA; Non-Encumbrance Certificate, along with its translation, which are Annexures A7 and A7(T) to this OA; Property Declaration Form dated 26.03.2019, which is Annexure A8 to this OA; Letter by Borrower requesting to acknowledge receipt of Title Deed deposited with the bank in order to secure the loan/limit dated 27.03.2019, which is Annexure A9 to this OA. Documents executed: Recall Notice dated 02.08.2021, which is Annexure A11 to this OA; Notice dated 19.01.2022 u/s 13(2) of SARFAESI Act, which is Annexure A12 to this OA; Statement of account, which is Annexure A13 to this OA.

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OA NO.586/2022 PUNJAB NATIONAL BANK VS. MESSRS GAURAV AUTOMOBILE SERVICES AND ANOTHER

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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.31,94,349.32, 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 and after service upon defendants, Defendant no. 2 appeared in person on 02.03.2023. Power of Attorney of Sh. G.S. Jagpal, Advocate was filed on behalf of defendant on 15.05.2024.

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Reply to the OA was filed by Sh. Satnam Singh (Authorized Representative and Father of defendant no. 2) on behalf of defendants by post which was received in the Tribunal vide diary no. 41 dated 08.02.2023. Again, another detailed reply was filed by post which was received in the Tribunal vide diary no. 290 dated 21.10.2024. Thereafter, again another reply/complaint was filed by post which was received in the Tribunal vide diary no.56 dated 18.02.2025. Written Arguments on behalf of defendants were filed on 18.05.2026.

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On 11.06.2025 the counsel for defendants denied to participate in the process of admission or denial of documents, therefore, opportunity of defendants for admission or denial of documents was closed vide order dated 17.06.2025.

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In the reply of defendants received vide diary no. 41 dated 08.02.2023 the defendants only raised issue of Capital Subsidy and non-release of Subsidy. It was also stated that no sanction letter or copy of agreement has been supplied by applicant to defendants. In the another reply received vide diary no. 290 dated 21.10.2024, it is again stated regarding non release of Subsidy by the applicant and the bank has not sanctioned the loan under MSME Stand Up India Scheme under which the loan was applied by the applicant. Due to sanction of loan in General Scheme, the special benefits of subsidies and interest subsidies were not received by defendants. It is also stated that the

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OA NO.586/2022 PUNJAB NATIONAL BANK VS. MESSRS GAURAV AUTOMOBILE SERVICES AND ANOTHER

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defendants have given no objection to the applicant for sale of the mortgaged property. Another reply received vide diary no. 56 dated 18.02.2025 is nothing but a complaint against applicant for noncompliance of MSME Stand Up India Scheme and Rules and Regulations of Reserve Bank of India.

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In the written arguments of defendants also, it is stated regarding non release of Subsidy and failure of applicant to comply with MSME Stand Up India Scheme and loan was not sanctioned by the applicant under the MSME Stand Up India Scheme in which the loan was applied by defendants. It is also stated that attitude of Officials of applicant has always remained adamant is non cooperative due to which defendants has suffered huge mental harassment.

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In support of the OA, affidavit of Sh. Ajay Sharma, Manager, Punjab National Bank h as been filed.

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Heard arguments and perused record.

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It was argued by learned counsel for applicant through video

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conferencing that in view of the documentary evidence brought on record, the applicant had proved its case.

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No one appeared on behalf of defendants for arguments.

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From the perusal of all the Annexures A1 to Annexure A13 to

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this OA, it is proved that the defendant no.1 through its proprietor defendant no. 2 approached the applicant for availing of the loan facility which was granted to him. The defendants 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, loan account was classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.31,94,349.32 (Rupees Thirty One Lacs Ninety Four Thousand Three Hundred Forty Nine and Paise Thirty 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 amount.

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OA NO.586/2022 PUNJAB NATIONAL BANK VS. MESSRS GAURAV AUTOMOBILE SERVICES AND ANOTHER

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The replies filed by defendants are nothing but a complaint against applicant for non-sanction of loan under Stand Up India Scheme. The Loan application of defendants dated 18.01.2019 (Annexure A2) is application for MSME for loans up to Rs.100 Lacs. Nowhere in the application Stand Up India Scheme is mentioned. Though in the appraisal form/sanction (Annexure A4) it is mentioned regarding sanction of stand up term loan of Rs.25 Lacs but it is not mentioned that loan is sanctioned under Stand Up India Scheme of Govt. of India.

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Further, the defendants have not placed on record any document to support that the loan was sanctioned by applicant under Stand Up India Scheme nor they have placed on record any decision in their favour by MSME Department of Government of India or Reserve Bank of India or Higher Authority of the applicant. Therefore, it is inferred that cock and bull story was prepared by the defendants before this Tribunal.

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Further, it is pertinent to mention that the replies filed by defendants are also not as per the Debts Recovery Tribunal Regulations as the same were sent to the Tribunal through post and not uploaded on e-DRT system.

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At the time of arguments or before it, learned counsel for defendants has not produced any evidence which could create any doubt on the claim of the applicant. Contents of reply are vague and contradictory. Therefore, there is no reason to disbelieve the documentary evidence produced by the applicant from Annexures A1 to A13.

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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 @7.35%p.a. with @2% penal interest and monthly rests from 08.03.2022 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 and

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OA NO.586/2022 PUNJAB NATIONAL BANK VS. MESSRS GAURAV AUTOMOBILE SERVICES AND ANOTHER

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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 @07.35%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.

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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.31,94,349.32 (Rupees Thirty One Lacs Ninety Four Thousand Three Hundred Forty Nine and Paise Thirty Two Only), jointly and severally, with costs, current and future simple interest @07.35%p.a. in the loan account 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 mortgaged property of defendant no. 2 and hypothecated assets of 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.

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13. 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 15.06.2026.

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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: 22.05.2026.

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(MRIDULESH KUMAR SINGH)

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Presiding Officer,

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DRT-III, Chandigarh

Punjab National Bank v. M/s Gaurav Automobile Services

Case brief

What is this about?

What did the court decide?

Punjab National Bank v. M/s Gaurav Automobile Services

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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Case details

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