Allowed

Canara Bank v. Messrs Brands Inn and Another

DRT2 Jan 2026OA/75/2024

Case brief

AI extract

What is this about?

In an ex-parte proceeding, the Debt Recovery Tribunal allowed a recovery application filed by Canara Bank against a business proprietor and his firm. The decree ordered payment of principal plus interest at 8% per annum and directed issuance of a recovery certificate. This case fits banking-and-recovery best, but also involves civil procedure and limitation concepts.

What did the court decide?

Declaration of liability to pay Rs. 26,67,064 plus costs and simple interest at 8.00%p.a.; recovery certificate issued; liberty to execute via sale of hypothecated assets.

Canara Bank versus Messrs Brands Inn and Another — Banking and Recovery | DRT (2026)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH CAMP COURT, LUDHIANA

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ORIGINAL APPLICATION NO.75/2024

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 01.12.2023

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DATE OF DECISION: 02.01.2026

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Canara Bank a body Corporate, constituted under The Banking Companies (Acquisition and Transfer of Undertaking) Act 1970 and having its Head office at 112, JC Road Bangaluru-2 with its Branches throughout India and one such branch at Canara Bank, B-349, BRS Nagar, Ludhiana141012, Punjab through its Principle Officer Sh. Vaneet Kumar, Officer at Canara Bank, B-349, BRS Nagar, Ludhiana141012, Punjab.

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……..Applicant

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Versus

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M/s Brands Inn, through its Proprietor Sh. Raghav Mohindru, having office at 290-C, BRS Nagar, Canal Road, Ludhiana 141012, Punjab.

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Sh. Raghav Mohindru S/o Vinay Kumar Mohindru, Proprietor M/s Brands Inn, R/o 10604, Near Santosh Dharam Shala, New Patel Nagar, Haibowal Kalan, Ludhiana -141001 Punjab.

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….……Defendants

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Advocates:

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Argued by Ms. Anuradha Gupta, Advocate for applicant (through VC) Defendants already ex parte vide order dated 20.12.2025

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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 & Bankruptcy Act, 1993, against the defendants for recovery of Rs.26,67,064.00 (Rupees Twenty Six Lacs Sixty Seven Thousand Sixty Four Only). The Original Application has been filed through Sh. Vaneet Kumar, Officer of the applicant, who is competent to institute the Original Application vide Authority Letter dated 08.02.2023, which is Annexure A1 to this OA.

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OA NO.75/2024 CANARA BANK VS MESSRS BRANDS INN 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 the grant of Cash Credit Limit of Rs.8.00 Lacs vide loan application dated 24.07.2019, which is Annexure A2 to this OA. Thereafter, the defendant no. 1 through its proprietor defendant no. 2 approached the applicant for grant of Loan of Rs. 1.60 Lacs under Guaranteed Emergency Line of Credit (GECL) vide loan application dated 08.06.2020. Thereafter, the defendant no. 1 through its proprietor defendant no. 2 approached the applicant for renewal of the limit vide application dated 29.07.2020. Thereafter, the defendant no. 1 through its proprietor defendant no. 2 approached the applicant for renewal of the limit with its enhancement to Rs. 15.00 Lacs vide Loan application dated 04.08.2021. Thereafter, the defendant no. 1 through its proprietor defendant no. 2 approached the applicant for grant of Working Capital Term Loan of Rs. 79,000/- under GECL 1.0 Extension vide loan application dated 30.10.2021.

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The defendant no. 2 also approached the applicant for grant of Vehicle Loan of Rs. 6.60 Lacs for purchase of Maruti Baleno Car vide loan application dated 04.01.2020.

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The applicant sanctioned the Cash Credit Limit of Rs.8.00 Lacs vide sanction letter dated 24.07.2019, which is Annexure A3 to this OA. Thereafter, the applicant sanctioned loan of Rs. 1.60 Lacs under GECL vide sanction letter dated 08.06.2020, which is Annexure A13 to this OA. Thereafter, the limit was renewed by the applicant vide sanction letter dated 29.07.2020, which is Annexure A7 to this OA. Thereafter, the applicant renewed the limit with enhancement to Rs.15.00 Lacs vide sanction letter dated 08.09.2021, which is Annexure A8 to this OA. The terms and conditions were duly accepted by the defendants vide Letter of Renewal dated 08.09.2021, which is Annexure A10 to this OA. Thereafter, the applicant

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OA NO.75/2024 CANARA BANK VS MESSRS BRANDS INN AND ANOTHER

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sanctioned Working Capital Term Loan of Rs. 79,000/- under GECL 1.0 Extension vide sanction letter dated 25.10.2021, which is Annexure A18 to this OA.

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The applicant also sanctioned Car Loan of Rs. 6.60 Lacs to defendant no. 2 vide sanction letter dated 04.01.2020, which is Annexure A23 to this OA.

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Defendant nos. 1 through its proprietor defendant no. 2 hypothecated Stock of Garments vide agreement cum deed of hypothecation dated 11.06.2020 and 30.10.2021, which are Annexures A14 and A19 to this OA.

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Defendant no.2 had hypothecated Car i.e. MARUTI BALENO ALPHA bearing registration no. PB10HH4404, Chassis No. MBHEWB22SKM415801 & Engine No. K12MP1163941 vide Vehicle loan agreement dated 07.01.2020, which is Annexure A24 to this OA; Registration Certificate of the Vehicle, which is Annexure A25 to this OA.

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Documents executed: Cash Credit Agreement, Letter of undertaking, letter of proprietorship, pronote, , all dated 24.07.2019, which are Annexures A3 to A6 to this OA; Supplemental Agreement, undertaking from borrower, letter of undertaking, all dated 08.09.2021, which are Annexures A9, A11 and A12 to this OA; Letter of undertaking, pronote, take delivery letter to DPN, all dated 11.06.2020, which are Annexures A15 to A17 to this OA; Undertaking letter from borrower, pronote, take delivery letter to DPN, all dated 30.10.2021, which are Annexures A20 to A22 to this OA; Acknowledgement of debt & security dated 08.09.2021, 28.04.2022 & 15.03.2023, which are Annexures A26 to A28 to this OA; Demand Notice dated 10.10.2022 u/s 13(2) of SARFAESI Act, which is Annexure A29 to this OA; Legal notice dated 13.09.2023 along with

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OA NO.75/2024 CANARA BANK VS MESSRS BRANDS INN AND ANOTHER

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postal receipts, which are Annexures A30 & A31 to this OA and Statement of accounts, which are Annexures A32 to A36 to this OA.

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The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in the loan accounts there was a debit of Rs.26,67,064.00, 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 notices to appear before this Tribunal but no one appeared on behalf of defendants and they were proceeded ex-parte vide order dated 20.12.2025.

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In support of the OA, affidavit of Sh. Vaneet Kumar, Officer, Canara Bank, has been filed.

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Heard ex-parte arguments and perused record.

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It was argued by learned counsel through video conferencing 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 A36 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 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.26,67,064.00 (Rupees Twenty Six Lacs Sixty Seven Thousand Sixty 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. 10. In so far as pendente lite and future rate of interest is concerned, the applicant in relief clause has claimed interest

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OA NO.75/2024 CANARA BANK VS MESSRS BRANDS INN AND ANOTHER

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@15.80%p.a. with 2% penal interest and monthly rests in CC Limit, interest @9.40%p.a. with 2% penal interest and monthly rests in GECL Loans and Vehicle loan from 01.09.2023 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 @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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In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.26,67,064.00 (Rupees Twenty Six Lacs Sixty Seven Thousand Sixty Four Only) jointly and severally, 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 amount. Accordingly, the applicant shall be entitled to recover aforesaid amount from the sale of hypothecated assets and vehicle of 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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OA NO.75/2024 CANARA BANK VS MESSRS BRANDS INN AND ANOTHER

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Parties to appear before Learned Recovery Officer of this Tribunal on 14.01.2026.

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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 at Camp Court, Ludhiana.

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Dated: 02.01.2026

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(MRIDULESH KUMAR SINGH)

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Presiding Officer,

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DRT-III, Chandigarh

Canara Bank v. Messrs Brands Inn and Another

Case brief

What is this about?

What did the court decide?

Canara Bank v. Messrs Brands Inn and Another

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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