Allowed

Bank of Baroda v. Kay Raj Agro Industries and Another

DRT26 May 2026OA/778/2025

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the bank's original application for recovery of a defaulted loan. The tribunal held the defendants liable to pay the principal amount along with interest, exercising discretion to fix the interest rate at 8% p.a. Recovery of the dues via hypothecated or personal assets in execution proceedings was directed.

What did the court decide?

Recovery Certificate issued for Rs. 25,31,298.60 plus costs and simple interest at 8% p.a. from date of OA.

Bank of Baroda versus Kay Raj Agro Industries and Another — Arbitration | DRT (2026)

¶1

DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO. 778/2025

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 17.06.2025

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DATE OF DECISION: 26.05.2026

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BANK OF BARODA, a body corporate, constituted under The Banking Companies (Acquisition and Transfer of Undertakings), Act 1970, having its Head Office at Mandvi, Baroda and one of its branch situated at Tagore Nagar, Ludhiana, through its Constituted Attorney, Sh. Atul Dwivedi, Chief Manager, Bank of Baroda, Ludhiana, who is also the principal officer of the applicant Bank.

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……..Applicant

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Versus

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M/s Kay Raj Agro Industries, Registered Office at opposite KVM School, Civil Lines, Ludhiana, through its Sole Proprietor, Sh. Keshav Rai Gupta.

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Sh. Keshav Rai Gupta, Sole Proprietor M/s. Kay Raj Agro Industries, resident of Opposite KVM School, Civil Lines, Ludhiana.

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Advocates:

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Argued by Sh. Ashok Kumar Verma, Advocate for applicant

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None for defendants (already ex-parte vide order dated 22.05.2026)

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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 & Bankruptcy Act 1993, against the defendants for recovery of Rs.25,31,298.60 (Rupees Twenty Five Lacs Thirty One Thousand Two Hundred Ninety Eight and Paise Sixty Only). The Original Application has been filed through Sh. Atul Dwivedi, Chief Manager, of the applicant, who is competent to institute the Original Application vide Copy of Power of Attorney, which is Annexure A1 to this OA.

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2 OA/778/2025 BANK OF BARODA VS. M/S KAY RAJ AGRO INDUSTRIES 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 CC Limit of Rs.10.00 Lacs vide Loan Application, which is Annexure A2 to this OA.

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Thereafter, the defendant no. 1, through its proprietor defendant
no. 2, approached the applicant for enhancement of CC Limit from
Rs.10.00 Lacs to Rs. 20.00 lacs and a term loan of Rs. 2.38 lacs vide
Loan Application, which isAnnexure A9to this OA. Thereafter, the defendant no. 1, through its proprietor defendant
no. 2, approached the applicant for grant of GECL Loan of Rs.4.00 Lacs. Thereafter, the defendant no. 1, through its proprietor defendant
no. 2, approached the applicant to reduce CC Limit from Rs.20.00 Lacs
to Rs. 5.00 lacs and grant of a WCTL of Rs. 15.00 lacs. 3. The applicant sanctioned CC Limit of Rs.10.00 Lacs vide Sanction Letter dated 10.03.2017, which isAnnexure A3to this OA and terms
and conditions were duly accepted by the defendants. Thereafter, the applicant sanctioned enhancement of CC Limit
from Rs.10.00 Lacs to Rs. 20.00 lacs and a term loan of Rs. 2.38 lacs vide Sanction Letter dated 02.06.2018, which isAnnexure A11to this OA. Thereafter, the applicant sanctioned GECL of Rs.4.00 Lacs vide
Sanction of Loan dated 04.08.2020, which isAnnexure A24to this OA. Thereafter, the applicant reduced CC Limit from Rs.20.00 Lacs to
Rs. 5.00 lacs and sanctioned a term loan of Rs. 15.00 lacs vide Sanction
Letter dated 24.03.2021, which isAnnexure A32to this OA.
4. Defendants hypothecated their stocks & book debts and
machinery purchased out of bank finance vide Composite Hypothecation
Agreement dated 15.03.2017, which isAnnexure A7to this OA;
Composite Hypothecation Agreement dated 02.06.2018, which
isAnnexure A16to this OA.
Documents executed: D.P. Note dated 15.03.2017, which
isAnnexure A4to this OA; Letter of Sole Proprietorship dated
15.03.2017, which isAnnexure A5to this OA; Letter of Continuity
dated 15.03.2017, which isAnnexure A6to this OA; Declaration-Cum-

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3 OA/778/2025 BANK OF BARODA VS. M/S KAY RAJ AGRO INDUSTRIES AND ANOTHER

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Undertaking-Cum-Authority dated 15.03.2015, which is Annexure A8 to this OA; Letter of Review of Credit Facility dated 02.06.2018, which is Annexure A10 to this OA; D.P. Note for Rs.20,00,000/- dated 02.06.2018, which is Annexure A12 to this OA; D.P. Note for Rs.2,38,000/- dated 02.06.2018, which is Annexure A13 to this OA; Letter of Sole Proprietorship dated 02.06.2018, which is Annexure A14 to this OA; Letter of Continuity dated 02.06.2018, which is Annexure A15 to this OA; Declaration-Cum-Undertaking-CumAuthority dated 02.06.2018, which is Annexure A17 to this OA; Letter of Undertaking in respect of Book Debts dated 02.06.2018, which is Annexure A18 to this OA; Undertaking not to withdraw deposits dated 02.06.2018, which is Annexure A19 to this OA; Draft Undertaking dated 02.06.2018, which is Annexure A20 to this OA; Letter of Installments dated 02.06.2018, which is Annexure A21 to this OA; Power of Attorney in respect of Book Debits dated 02.06.2018, which is Annexure A22 to this OA; Undertaking dated 04.06.2018, which is Annexure A23 to this OA; D.P. Note for Rs.40,00,000/- dated 04.08.2020, which is Annexure A24A to this OA; Letter of Sole Proprietorship dated 04.08.2020, which is Annexure A25 to this OA; Letter of Continuity dated 04.08.2020, which is Annexure A26 to this OA; General Undertaking dated 04.08.2020, which is Annexure A27 to this OA; Draft Undertaking dated 04.08.2020, which is Annexure A28 to this OA; Letter of Installments dated 04.08.2020, which is Annexure A29 to this OA; Loan-Cum-Hypothecation Agreement dated 04.08.2020, which is Annexure A30 to this OA; Modification Deed for restructuring of Loan, which is Annexure A31 to this OA; D.P. Note for Rs.15,00,000/- dated 24.03.2021, which is Annexure A33 to this OA; Letter of Sole Proprietorship dated 24.03.2021, which is Annexure A34 to this OA; Letter of Continuity dated 24.03.2021, which is Annexure A35 to this OA; General Undertaking dated 24.03.2021, which is Annexure A36 to this OA; Draft Undertaking dated 24.03.2021, which is Annexure A37 to this OA; Letter of Installments dated 24.03.2021, which is Annexure A38 to this OA; Letter of Acknowledgement of Debt dated 02.06.2018, which

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4 OA/778/2025 BANK OF BARODA VS. M/S KAY RAJ AGRO INDUSTRIES AND ANOTHER

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is Annexure A39 to this OA; Letter of Acknowledgement of Debt dated 01.01.2021, which is Annexure A40 to this OA; Letter of Acknowledgement of Debt dated 21.02.2023, which is Annexure A41 to this OA; Notice under Section 13 of the SARFAESI ACT dated 25.07.2024, which is Annexure A42 to this OA; Certified Copy of Statement of Cash Credit Account, which is Annexure A43 to this OA; Certified copy of statement of Working Capital Term Loan Account, which is Annexure A44 to this OA; Certified copy of statement of (BGCEL) Term Loan Account, which is Annexure A45 to this OA; Certified Copy of Statement of Term Loan Account, which is Annexure A46 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.25,31,298.60 (Rupees Twenty Five Lacs Thirty One Thousand Two Hundred Ninety Eight and Paise Sixty Only), 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 summons to appear before this Tribunal but no one appeared on behalf of defendants and they were proceeded ex-parte vide order dated 22.05.2026. 7. In support of the OA, affidavit Sh. Atul Dwivedi, Chief Manager, Bank of Baroda, has been filed. 8. Heard ex-parte arguments and perused record.

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It was argued by learned counsel that in view of the documentary evidence brought on record which had gone unrebutted, the applicant bank had proved its case.

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From the perusal of all the Annexure A1 to A46 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, all the accounts of the defendants were classified as NPA. From the documentary evidence brought on

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5 OA/778/2025 BANK OF BARODA VS. M/S KAY RAJ AGRO INDUSTRIES AND ANOTHER

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record, it is proved that applicant bank is entitled to recover a sum of Rs.25,31,298.60 (Rupees Twenty Five Lacs Thirty One Thousand Two Hundred Ninety Eight 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 amount.

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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 @13.10% p.a. plus 2.00% penal interest with monthly rests from 09.06.2025 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 @8.00% p.a. in all the 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.25,31,298.60 (Rupees Twenty Five Lacs Thirty One Thousand Two Hundred Ninety Eight and Paise Sixty Only), jointly and severally, with costs, current and future simple interest @8.00% p.a. in all the 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 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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6 OA/778/2025 BANK OF BARODA VS. M/S KAY RAJ AGRO INDUSTRIES AND ANOTHER

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Parties to appear before Learned Recovery Officer of this Tribunal on 17.06.2026 15. 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. Pronounced by me in the open Tribunal . Dated: 26.05.2026

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(MRIDULESH KUMAR SINGH) Presiding Officer,

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DRT-III, Chandigarh

Bank of Baroda v. Kay Raj Agro Industries and Another

Case brief

What is this about?

What did the court decide?

Bank of Baroda v. Kay Raj Agro Industries and Another

Case brief

What is this about?

What did the court decide?

What the court decided

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