Allowed

Punjab National Bank v. M/S Vishal Trading and Co. and Another

DRT12 Feb 2026OA/659/2024

Case brief

AI extract

What is this about?

The Tribunal allowed the bank's application for recovery of Rs.1.20 Crore against sole proprietorship concerns. After ex-parte proceedings, the court ordered payment of principal, costs, and reduced uniform simple interest at 8% p.a., permitting recovery via hypothecated assets or attachment of personal assets.

What did the court decide?

Declaration of liability to pay Rs.1,20,65,714.55 with costs and simple interest at 8% p.a.; authorization for recovery via sale of hypothecated assets or attachment of personal assets; issue of Recov

Punjab National Bank versus M/S Vishal Trading and Co. and… — Banking and Recovery | DRT (2026)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.659/2024

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 02.05.2024

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DATE OF DECISION: 12.02.2026

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Punjab National Bank is a body corporate and a Nationalized Bank constituted under the provisions of the Banking Companies (Acquisition & Transfer of Undertaking) Act 5 of 1970 with its Head Office at Plot No.4, Sector 10, Dwarka, New Delhi-110075 and amongst others a branch at Feroze Gandhi Market, Ludhiana, Punjab through Sh. Navin Kumar Bansal, Senior Manager and Attorney holder.

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……..Applicant

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Versus

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M/s Vishal Trading and Co., a sole proprietorship concern, situated at 199, Street No.3/4, Model Colony, Rahon Road, Ludhiana-141003 through its proprietor Sh. Vishal

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2^nd Address: B3-2/1213/2 Jujhar Singh Nagar, Street No.2, Near Gehlewal Rahon Road, Ludhiana Punjab-141007

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Sh. Vishal S/o Sh. Ashrafi Shah R/o H.No.539/6B, New No. B25A, New Vishnu Puri, Street No.1, Main Shivpuri Road, Ludhiana Punjab-141008.

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……. Defendants

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Advocates:

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Argued by Ms. Richa, Law Officer for Applicant

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Defendants already ex-parte vide order dated 27.11.2025

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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.1,20,65,714.55 (Rupees One Crore Twenty Lacs Sixty Five Thousand Seven Hundred Fourteen and Paise Fifty Five Only). The Original Application has been filed through Sh. Navin Kumar Bansal, Senior Manager of the applicant, who is competent to institute the Original Application, vide Power of Attorney dated 05.10.2005, which is Annexure A1 to this OA.

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2 OA/659/2024 PUNJAB NATIONAL BANK VS. M/S VISHAL TRADING AND CO. AND ANOTHER

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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 grant of Cash Credit Limit of Rs.40.00 Lacs vide Loan application dated 29.05.2019, which is Annexure A3 to this OA. Thereafter, the defendant no. 1 through its proprietor defendant no.2 approached the applicant for grant of Term Loan of Rs.35.00 Lacs and for enhancement of CC Limit to Rs.60.00 Lacs vide loan application dated 13.03.2020, which is Annexure A10 to this OA. Thereafter, the defendant no. 1 through its proprietor defendant no.2 approached the applicant for grant of Working Capital Term Loan (WCTL) of Rs.7.90 Lacs under GECL vide loan application dated 04.08.2020, which is Annexure A17 to this OA. Thereafter, the existing loans were renewed/reviewed by the applicant along with sanction of Funded Interest Term Loan (FITL) of Rs.2.70 Lacs for restructuring of credit facilities vide sanction letter dated 31.08.2021, which is Annexure A24 to this OA.

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The applicant sanctioned the Cash Credit Limit of Rs.40.00 Lacs vide Sanction Letter dated 19.06.2019, which is Annexure A4 to this OA and the terms and conditions are acceptable by defendants. Thereafter, the limit was enhanced by the applicant to Rs.60.00 Lacs with sanction of Fresh Term Loan of Rs.35.00 Lacs for purchase of machinery, vide sanction letter dated 30.03.2020, which is Annexure A11 to this OA. Thereafter, the applicant sanctioned Working Capital Term Loan of Rs.7.90 under GECL vide sanction letter dated 04.08.2020, which is Annexure A18 to this OA.

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Defendant no. 1 through its proprietor defendant no. 2 hypothecated stock of raw material, work in process, finished goods, book debts, machinery etc. vide agreement of hypothecation of assets dated 20.06.2019, which is Annexure A6 to this OA; Undertaking for assignment of receivables and cash flows dated 20.06.2019, which is Annexure A7 to this OA; Agreement of hypothecation of books and debts dated 08.05.2020, which is Annexure A13 to this OA;

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3 OA/659/2024 PUNJAB NATIONAL BANK VS. M/S VISHAL TRADING AND CO. AND ANOTHER

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Agreement of hypothecation of goods dated 08.05.2020, which is Annexure A16 to this OA. Documents executed: Amalgamation Scheme / Gazette Notification dated 04.03.2020, which is Annexure A2 to this OA; Sole Proprietorship Letter, Common Agreement, Undertaking, all dated 20.06.2019, which are Annexures A5, A8 and A9 to this OA; Demand Promissory Note, Master Agreement, Term Loan agreement, all dated 08.05.2020, which are Annexures A12, A14 and A15 to this OA; Demand Promissory Note, Master Agreement, Agreement for WCTL, all dated 04.08. 2020, which are Annexures A19 to A21 , to this OA; Letter of Consent from Switching over from MCRL Rate to RLLR rate, Supplementary Agreement, all dated 08.10.2020, which are Annexures A22 and A23 to this OA; Demand Promissory Note, Master Agreement, both dated 04.09.2021, which are Annexures A25 and A26 to this OA; Balance and Security Confirmation Letters dated 27.09.2022, which is Annexure A27 to this OA; Notice dated 20.01.2023, which is Annexure A28 to this OA; Notice dated 19.01.2023 u/s 13(2) of SARFAESI Act, which is Annexure A29 this OA; Statement of Accounts, which are Annexures A30 to A33 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 was a debit of Rs.1,20,65,714.55 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 27.11.2025. 7. In support of the OA, affidavit of Sh. Navin Kumar Bansal, Senior Manager, Punjab National Bank has been filed. 8. Heard ex-parte arguments and perused record.

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4 OA/659/2024 PUNJAB NATIONAL BANK VS. M/S VISHAL TRADING AND CO. AND ANOTHER

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It was argued by Nodal Officer of applicant 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 A33 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 favor 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 is entitled to recover a sum of Rs.1,20,65,714.55 (Rupees One Crore Twenty Lacs Sixty Five Thousand Seven Hundred Fourteen and Paise Fifty Five 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 pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @11.40% including plus 2% penal interest in CC Limit, @12.20%p.a. including 2% penal interest in Term Loan, @9.25% in WCTL, @11.40% including plus 2% penal interest in FITL, with monthly rests in all from 01.04.2024 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 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 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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5 OA/659/2024 PUNJAB NATIONAL BANK VS. M/S VISHAL TRADING AND CO. 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.1,20,65,714.55 (Rupees One Crore Twenty Lacs Sixty Five Thousand Seven Hundred Fourteen and Paise Fifty Five Only) 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 amounts. 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 26.02.2026.

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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. Dated: 12.02.2026.

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(MRIDULESH KUMAR SINGH)

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Presiding Officer, DRT-III, Chandigarh

Punjab National Bank v. M/S Vishal Trading and Co. and Another

Case brief

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Punjab National Bank v. M/S Vishal Trading and Co. and Another

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