In an ex-parte application for recovery of a loan under RDB Act, the Tribunal found the defendants liable to pay the principal amount with adjusted simple interest at 8% p.a., allowing the issuance of a Recovery Certificate.
Recovery Certificate issued; Defendants directed to pay Rs. 27,26,944.53 plus simple interest at 8% p.a. payable upon realization.
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. 964/2026
PRESIDED OVER BY MRIDULESH KUMAR SINGH
DATE OF INSTITUTION: 29.06.2026
DATE OF DECISION: 25.08.2026
Union Bank of India, a Body Corporate constituted under Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its Head Office at 239, Vidhan Bhawan Marg, Nariman Point, Mumbai and having a Branch Office inter-alia at Basant City, Ludhiana, Punjab through its duly Authorized Person, Sh. Simranjeet Singh, Branch Manager
……..Applicant
Versus
Advocates:
Argued by Sh. Amod Kumar Thakur, Advocate for applicant None for defendants (already ex-parte vide order dated 18.08.2026)
FINAL ORDER
2 OA/964/2026 UNION BANK OF INDIA VS. M/S BMS KNITS AND ANOTHER
Limit of Rs. 24.90 Lacs vide Loan Application Form dated 14.08.2024, which is Annexure A2 to this OA. 3. The applicant sanctioned CC Limit of Rs. 24.90 Lacs vide Sanction Letter dated 14.08.2024, which is Annexure A6 to this OA and the terms and conditions were duly accepted by the defendants. 4. Defendant no. 1 through its Proprietor defendant no. 2 hypothecated their stocks vide Hypothecation Agreement dated 14.08.2024, which is Annexure A11 to this OA. Documents Executed: GST Registration Certificate dated 26.03.2020, which is Annexure A3 to this OA; Udyam Registration Certificate dated 12.10.2023, which is Annexure A4 to this OA; Memorandum, Terms and Conditions of Sanction, Undertaking, DP Note, Letter of Continuity, AD-02, Letter of Undertaking and Agreement on Rate of Interest, all dated 14.08.2024, which are Annexure A5, A7 to A10 and A12 to A14 to this OA; Letters dated 22.08.2025, 06.10.2025, 13.11.2025 and 03.12.2025, which are Annexure A15 to A18 to this OA; Legal Notices dated 03.10.2025 and 24.02.2026 along with postal receipts, which are Annexure A19 and A20 to this OA and Statement of Account with certificate, which are Annexure A21 and A22 to this OA. 5. 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. 27,26,944.53 which is recoverable and the defendants were served recall notice 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 18.08.2026. 7. In support of the OA, affidavit of Sh. Simranjeet Singh, Branch Manager , Union Bank of India, has been filed. 8. Heard ex-parte 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.
3 OA/964/2026
UNION BANK OF INDIA VS. M/S BMS KNITS AND ANOTHER
From the perusal of all the Annexure A1 to A22 to this OA, it is proved that defendant no. 1 through its Proprietor defendant no. 2 approached applicant for availing of the loan facility which was granted to them and for that they had executed all the relevant documents in favour of the applicant. 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. 27,26,944.53 (Rupees Twenty Seven Lacs Twenty Six Thousand Nine Hundred Forty Four and Paise 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.
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 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.
4
OA/964/2026 UNION BANK OF INDIA VS. M/S BMS KNITS AND ANOTHER
2 issues framed by the court
Whether the applicant is entitled to recover the outstanding debt and issue a Recovery Certificate.
Whether to grant simple interest at a reduced rate of 8.00% p.a. instead of the claimed rate.
1 provisions across 1 enactments
Union Bank of India
M/S BMS Knits
Smt. Surinder Rathor
Mridulesh Kumar Singh
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
