Debts Recovery Tribunal allowed the applicant's Original Application instituting recovery proceedings against the defendants for an outstanding loan of Rs.20,46,723.00, ordering payment with interest and specifying enforcement measures.
Debt of Rs.20,46,723 plus interest at 8% p.a. ordered; authority to recover via sale of hypothecated or personal assets given.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH
ORIGINAL APPLICATION NO. 867/2026
PRESIDED OVER BY MRIDULESH KUMAR SINGH
DATE OF INSTITUTION: 08.06.2026
DATE OF DECISION: 20.07.2026
State Bank of India, a body corporate constituted under the State Bank of India Act, 1955, having its Corporate Centre at Madame Cama Road, Nariman Point, Mumbai-400021, and one of its Local Head Offices at Sector 17, Chandigarh and its Small & Medium Enterprises Credit City Centre (SMECCC), Sheranwala Gate, Patiala, Punjab, through its Chief Manager and Authorized Officer, Sh. Mohit Jindal.
Versus
Advocates:
Argued by Ms. Anupama Takhi, Advocate for Applicant.
None for Defendants (already ex-parte vide order dated 15.07.2026)
FINAL ORDER
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OA/867/2026 STATE BANK OF INDIA VS. M/S FUNK AND ANOTHER
Limit of Rs.20.00 lac vide Loan Application Form dated 19.10.2022, which is Annexure A2 to this OA. Thereafter, the Defendant no.1, through its proprietor defendant no.2, approached the applicant for renewal of CC Limit of Rs.20.00 lac vide Application Form for Renewal dated 16.11.2023, which is Annexure A7 to this OA; Application Form for Renewal dated 24.10.2024, which is Annexure A9 to this OA. 3. The applicant sanctioned the CC Limit of Rs.20.00 lac, vide Letter of Arrangement dated 19.10.2022, which is Annexure A3 to this OA and terms and conditions were duly accepted by the defendants. Thereafter, the applicant sanctioned renewal of the CC Limit of Rs.20.00 lac, vide Letter of Arrangement dated 07.12.2023, which is Annexure A8 to this OA; Letter of Arrangement dated 21.01.2025, which is Annexure A10 to this OA. 4. Defendant no.1, through its proprietor defendant no.2, hypothecated its stock and book debts vide Loan-cum-Hypothecation Agreement dated 19.10.2022, which is Annexure A4 to this OA; Documents executed: Notifications (Colly) dated 27.03.1987 and 17.05.2001, which are Annexure A1 to this OA; CERSAI Certificate dated 27.10.2022, which is Annexure A5 to this OA; Balance Confirmation Letter dated 31.03.2023, which is Annexure A6 to this OA; Revival Letter dated 20.03.2026, which is Annexure A11 to this OA; Legal Notice dated 08.05.2025, which is Annexure A12 to this OA; Postal Receipts dated 08.05.2025, which are Annexure A13 to this OA; Statement of Account, which is Annexure A14 to this OA; Closure Balance dated 04.06.2026, which is Annexure A15 to this OA. 5. The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in the loan account, there was a debit of Rs.20,46,723.00 (Rupees Twenty Lac Forty Six Thousand Seven Hundred Twenty Three 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.
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OA/867/2026 STATE BANK OF INDIA VS. M/S FUNK AND ANOTHER 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 15.07.2026. 7. In support of the OA, affidavit of Sh. Mohit Jindal , Chief Manager, State Bank of India , has been filed. 8. Heard arguments and perused record. 9. It was argued by learned counsel 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 A15 to 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 them. 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.20,46,723.00 (Rupees Twenty Lac Forty Six Thousand Seven Hundred Twenty Three 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. 10. In so far as pendente lite and future rate of interest is concerned, the applicant in relief clause has claimed interest @9.90% p.a. with monthly rests from 05.06.2026 till the realization. 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 @08.00% p.a. in the loan account
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OA/867/2026 STATE BANK OF INDIA VS. M/S FUNK AND ANOTHER
from the date of filing of the OA till realization of the amount, ordered vide this final order. It is ordered accordingly.
12. Any other application pending stands disposed of.
(MRIDULESH KUMAR SINGH)
Presiding Officer, DRT-III, Chandigarh
2 issues framed by the court
Whether the applicant is entitled to recovery of the outstanding loan amount with interest.
Whether the applicant can enforce the claim through sale of hypothecated assets or attachment of personal assets.
2 provisions across 2 enactments
State Bank of India
M/s Funk
Sh. Ashish Sharma
MRIDULESH KUMAR SINGH
As recorded by the court registry
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