Allowed

State Bank of India v. M/S Grand Rock Fashions and Another

DRT3 Jun 2026OA/914/2025

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an application under RDB Act for recovery of a sanctioned loan of Rs.20 Lakhs. Respondents failed to repay dues, account classified as NPA. Tribunal ordered recovery of principal and awarded simple interest at 8% p.a. instead of claimed rate due to market conditions.

What did the court decide?

Recovery Certificate issued. Respondents ordered to pay Rs.21,94,653.00 with simple interest at 8% p.a. Amount to be recovered from sale of hypothecated assets or personal assets.

State Bank of India versus M/S Grand Rock Fashions and Another — Banking and Recovery | DRT (2026)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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ORIGINAL APPLICATION NO. 914/2025

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PRESIDED OVER BY MRIDULESH KUMAR SINGH

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DATE OF INSTITUTION: 14.07.2025

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DATE OF DECISION: 03.06.2026

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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 and one of its Local Head Office at Sector 17-A, Chandigarh, having branches all over India and one of its Branch at Gill Road, Ludhiana and one of its Specialized Branch at S.M.E. City Credit Centre (SMECCC), Administrative Office Building, Second Floor, Civil Lines, Fountain Chowk, Ludhiana, through its Chief Manager and Principal Officer, Sh. Abinash Kumar Roy.

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……..Applicant

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Versus

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M/S Grand Rock Fashions, House No. 6162, Second Floor, Lajpat Nagar, Street No. 2, New Shivpuri, Ludhiana (Punjab), a proprietorship firm, through its proprietor, Smt. Sandeep Kaur wife of Sh. Baljinder Singh.

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Smt. Sandeep Kaur wife of Sh. Baljinder Singh, resident of House No. 129, Street No. 3, Hussainpura Road, Green City, G.D. Farm, Phagguwal, Ludhiana (Punjab).

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…….Defendants

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Advocates:

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Argued by Sh. Shubham Pabbi, Advocate proxy for Sh. V.K. Sharma, Advocate for Applicant.

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None for Defendants (already ex-parte vide order dated 01.06.2026)

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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.21,94,653.00 (Rupees Twenty One

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OA/914/2025 STATE BANK OF INDIA VS. M/S GRAND ROCK FASHIONS AND ANOTHER

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Lacs Ninety Four Thousand Six Hundred Fifty Three Only). The Original Application has been filed through, Sh. Abinash Kumar Roy, Chief Manager, of the Applicant, who is competent to institute the Original Application.

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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 sanction of CC Limit of Rs.20,00,000.00 vide Loan Application dated 22.12.2022, which is Annexure A1 to this OA. 3. The applicant sanctioned the CC Limit of Rs.20,00,000.00, vide Letter of Arrangement dated 27.01.2023, which is Annexure A2 to this OA and terms and conditions were duly accepted by the defendants.

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Defendant no.1, through its proprietor defendant no.2, hypothecated its entire current assets including all kinds of raw material, consumable stores and spares, stock-in-process, finished goods, wherever located, and all bills, book debts and receivables vide Agreement of Loan cum Hypothecation dated 27.01.2023, which is Annexure A3 to this OA.

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Documents executed: Legal Notice dated 24.02.2025, which is Annexure A4 to this OA; Statement of Account with certificate, which are Annexures A5 & A6 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 the loan account, there was a debit of Rs.21,94,653.00 (Rupees Twenty One Lacs Ninety Four Thousand Six Hundred Fifty 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. 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 01.06.2026.

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OA/914/2025 STATE BANK OF INDIA VS. M/S GRAND ROCK FASHIONS AND ANOTHER

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In support of the OA, affidavit of Sh. Abinash Kumar Roy, Chief Manager, State Bank of India , has been filed.

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Heard arguments and perused record.

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It was argued by learned proxy counsel for applicant 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 Annexures A1 to A6 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. They 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.21,94,653.00 (Rupees Twenty One Lacs Ninety Four Thousand Six Hundred Fifty 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.

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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 @12.15% p.a. plus 2.00% p.a. penal interest with monthly rests from 21.06.2022 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 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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OA/914/2025 STATE BANK OF INDIA VS. M/S GRAND ROCK FASHIONS 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.21,94,653.00 (Rupees Twenty One Lacs Ninety Four Thousand Six Hundred Fifty Three 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 the defendant no. 1 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. 14. 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. Pronounced by me in the open Tribunal . Dated: 03.06.2026.

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(MRIDULESH KUMAR SINGH)

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Presiding Officer, DRT-III, Chandigarh

State Bank of India v. M/S Grand Rock Fashions and Another

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State Bank of India v. M/S Grand Rock Fashions and Another

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