Allowed

Indian Overseas Bank v. M/S Aadhya Fashion and Another

DRT10 Jun 2026OA/688/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the applicant bank's recovery application against the manufacturers and guarantor. The court fixed simple interest at 8% p.a. and ordered the formation of a recovery certificate for the outstanding principal amount.

What did the court decide?

The defendants are ordered to pay Rs. 31,18,354.78 with costs and simple interest at 8% p.a. A Recovery Certificate is issued for enforcement.

Indian Overseas Bank versus M/S Aadhya Fashion and Another — Execution and Attachment | DRT (2026)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO.688/2022

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 01.06.2022

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DATE OF DECISION: 10.06.2026

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Indian Overseas Bank, a Body Corporate constituted under the provisions of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Central Office at 763, Anna Salai, Chennai, Tamil Nadu- 600002 and having one of its Branch at Sunder Nagar, Ludhiana, Punjab- 141007 through its Chief Manager, Sh. Deepak Kumar Jha

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……..Applicant

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Versus

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M/S Aadhya Fashion through its sole Proprietor, Smt. Rashi Joshi, Street no. 01, Priya Colony, Village Bajra Rahon Road, Ludhiana, Punjab

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Sh. Balwinder Joshi, S/o Sh. Nanak Chand Joshi, R/o 349, G.K. Estate, Chandigarh Road, Ludhiana, Punjab

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2^nd Address: 231, Street no. 2, Krishna Colony, Dasuya, Hoshiarpur, Punjab- 144205

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….……Defendants

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Advocates:

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Argued by Sh. Amit Rishi, Advocate proxy for Ms. Monika Thakur, Advocate for applicant

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None for defendants (already ex-parte vide order dated 08.06.2026)

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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. 31,18,354.78 (Rupees Thirty One Lacs Eighteen Thousand Three Hundred Fifty Four and Paise Seventy Eight Only). The Original Application has been filed through

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Sh. Deepak Kumar Jha, Chief Manager o f the applicant, who is

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2 OA/688/2022 INDIAN OVERSEAS BANK VS. M/S AADHYA FASHION AND ANOTHER

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competent to institute the Original Application vide Power of Attorney dated 28.01.2012, which is Annexure A1 to this OA.

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The brief facts of the OA are that defendant no. 1 approached the applicant for grant of CC Limit of Rs. 11.00 Lacs vide Loan Application dated 03.06.2013. Thereafter, defendant no. 1 approached the applicant for renewal of CC Limit of Rs. 11.00 Lacs. Thereafter, defendant no. 1 approached the applicant for enhancement of CC Limit to Rs. 22.00 Lacs vide Application dated 21.10.2014. Thereafter, defendant no. 1 approached the applicant for enhancement of CC Limit to Rs. 30.00 Lacs. Thereafter, defendant no. 1 approached the applicant for enhancement of CC Limit to Rs. 40.00 Lacs vide Loan Application dated 03.07.2017, which is Annexure A2 to this OA. 3. The applicant sanctioned CC Limit of Rs. 11.00 Lacs vide Sanction Memorandum dated 08.06.2013, which is Annexure A3 to this OA and terms and conditions were duly accepted by the defendants. Thereafter, the applicant sanctioned renewal of CC Limit of Rs. 11.00 Lacs vide Sanction Memorandum dated 27.09.2014, which is Annexure A11 to this OA. Thereafter, the applicant sanctioned enhancement of CC Limit to Rs. 22.00 Lacs vide Sanction Memorandum dated 10.11.2014, which is Annexure A12 to this OA. Thereafter, the applicant sanctioned enhancement of CC Limit to Rs.30.00 Lacs vide Sanction Memorandum dated 25.02.2016, which is Annexure A22 to this OA. Thereafter, the applicant sanctioned renewal of CC Limit of Rs. 30.00 Lacs vide Sanction Memorandum dated 17.07.2017, which is Annexure A34 to this OA. Defendant no. 2 stood as guarantor. 4. Defendant no. 2 mortgaged his immovable property i.e. Land measuring 100 Sq. Yards situated at Bajra, Tehsil and District Ludhiana, Punjab vide Letter of Confirmation dated 10.06.2013, Confirmation Letters for Supplemental Mortgage dated 11.11.2014 and 25.02.2016 and Letter of Creation of Equitable Mortgage dated

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3 OA/688/2022 INDIAN OVERSEAS BANK VS. M/S AADHYA FASHION AND ANOTHER

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24.12.2014, which are Annexure A10, A20, A21, A31 and A32 to this OA.

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Defendant no. 1 hypothecated its entire stocks of raw material, work in process, finished goods, spares etc. both present and future vide Letters of Hypothecation, Hypothecation of Book Debts and Supplemental Deed of Hypothecation dated 08.06.2013, 10.11.2014 and 25.02.2016, which are Annexure A6 to A8, A15 to A18 and A25 to A28 to this OA.

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Documents executed: DP Note, Letter of Continuity and Guarantee, dated 08.06.2013, 10.11.2014 which are Annexure A4, A5, A9, A13, A14 and A19 to this OA; DP Note, Letter of Continuity, Revival Letter and Guarantee, all dated 25.02.2016, which are Annexure A23, A24, A29, A30 and A33 to this OA; Balance Confirmation Letters dated 30.09.2014, 01.04.2015, 23.06.2016, 17.07.2017 and 31.03.2022, which are Annexure A35 to A40 to this OA; Revival Letters dated 21.02.2019, which are Annexure A41 and A42 to this OA; Demand Notices dated 18.05.2022 and 20.05.2022, which are Annexure A43 and A44 to this OA and Statement of Account which is Annexure A45 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. 31,18,354.78, 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 08.06.2026. 7. In support of the OA, affidavit of Sh. Deepak Kumar Jha, Chief Manager, Indian Overseas Bank h as been filed.

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Heard ex-parte arguments and perused record.

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4 OA/688/2022 INDIAN OVERSEAS BANK VS. M/S AADHYA FASHION 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.

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From the perusal of all the Annexure A1 to A45 to this OA, it is proved that defendant no. 1 approached applicant for availing of the loan facility which was granted to defendant no. 1. Defendant no. 2 stood as guarantor. 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, 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. 31,18,354.78 (Rupees Thirty One Lacs Eighteen Thousand Three Hundred Fifty Four and Paise Seventy Eight 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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In so far as pendent elite and future rate of interest is concerned, the applicant in relief clause has claimed interest @10.05%p.a. plus @2% p.a. penal interest with monthly rests from 23.05.2022 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/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.

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5 OA/688/2022 INDIAN OVERSEAS BANK VS. M/S AADHYA FASHION 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.31,18,354.78 (Rupees Thirty One Lacs Eighteen Thousand Three Hundred Fifty Four and Paise Seventy Eight 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 the amount. Accordingly, the applicant shall be entitled to recover aforesaid amount from the sale of hypothecated assets of defendant no. 1 and mortgaged property of defendant no. 2 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 24.06.2026.

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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: 10.06.2026

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(MRIDULESH KUMAR SINGH)

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Presiding Officer,

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DRT-III, Chandigarh

Indian Overseas Bank v. M/S Aadhya Fashion and Another

Case brief

What is this about?

What did the court decide?

Indian Overseas Bank v. M/S Aadhya Fashion and Another

Case brief

What is this about?

What did the court decide?

What the court decided

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