Allowed

Uco Bank v. M/S Alson Leasing (Pvt) Ltd.

DRT21 Aug 2026TA/251/2023

Case brief

AI extract

What is this about?

DRT-1, Chandigarh allowed an application for recovery of Rs.1.62 crore plus 15% p.a. interest from M/s Alson Leasing Private Limited and its directors/guarantors, directing issuance of a recovery certificate and appearance before the Recovery Officer on 24.09.2026.

What did the court decide?

Recovery of Rs.1,62,32,847/- with interest at 15% p.a. from 23.02.2000 till payment; Recovery Certificate issued; Appearance ordered before Recovery Officer on 24.09.2026.

Uco Bank versus M/S Alson Leasing (Pvt) Ltd. — Contract and Commercial Disputes | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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BEFORE: A S NARANG, PRESIDING OFFICER

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TA No: 251/2023 Date of Institution:23.02.2000 Date of Decision: 21.08.2026

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UCO Bank, B/o Budshah Chowk, Srinagar. …Applicant

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1. M/s Alson Leasing (Pvt.) Ltd. National Highway Sonwar, Srinagar Through its Managing Director/Director Finance i.e. defendant No.2.

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1. Sultan Ali Shah 3. Niaz Ahmad Shah 4. Mubeen Ahmad Shah 5. Liyaquat Ali Shah All sons of Late Kh. Ali Shah

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1. Yasmin Ali D/o Late Kh. Ali Shah All residents of Alson House, Buchwara, Srinagar. …Defendants

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Advocates

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Sh. Anup Prajapati, proxy Counsel for Sh. Nonish Kumar, Counsel for the Applicant Bank. Defendants – ex parte .

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TA for the Recovery of Rs.1,62,32,847/- with interest @15% per annum with monthly rests from 23.02.2000.

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ORDER

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On 23.02.2000, UCO Bank filed the suit for the recovery of Rs.1,62,32,847/- with interest against M/s Alson Leasing (Pvt.) Ltd. and others (defendants) in the Court of District Judge, Srinagar. However, vide order dated 05.11.2022, this suit was transferred by the Court of Additional District Judge (Bank Cases), Srinagar, to DRT-1, Chandigarh.

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Defendant No.1 is a company and defendant Nos.2 to 6 are its directors. Bank’s case is that on 14.07.1989, it had sanctioned a Cash Credit Hypothecation Facility of Rs.42.00 lacs to defendant No.1, through defendant No.2, Managing Director, for business purpose. To secure the facility, defendant No.1 had hypothecated its assets (fully detailed in Annexure P-11). Defendant Nos.2 to 6 and their parents Kh. Ali Shah and Mrs. Mumtaz Begum stood as Guarantors vide Guarantee Deed dated 23.08.1989. Defendant Nos.2 to 6 are the LRs of Kh. Ali Shah and Mrs. Mumtaz Begum. The facility was chargeable to interest @17.34% per annum with quarterly rests. The defendants had acknowledged their liability towards the debt on 12.08.1991, 27.03.1996, 27.07.1996, 07.10.1996, 29.10.1996, 24.03.1997, 26.08.1997, 13.05.1999, and 14.05.1999. On 30.11.1999, a sum of Rs.1,62,32,847/was due from the defendants. Despite repeated requests, defendants did not make the repayment. Hence, this suit.

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On 17.09.2003, defendant Nos.1, 2 and 4 had filed their written statement wherein they alleged that the suit of the Bank is ex facie barred by law of limitation and accordingly is liable to be dismissed; They have denied that defendant No.1 has committed any default as alleged by the Bank, they have alleged that the guarantors namely Late Kh. Ali Shah and Late Mrs. Mumtaz Begum, have passed away and the deed executed by them is not legally enforceable contract of guarantee, hence the question of defendant Nos.2 and 4 having incurred any liability on account of the alleged contract of guarantee does not arise; They further denied that a sum of Rs.1,62,32,847/- along with interest is due and payable from them. Hence, the OA be dismissed.

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3a. On 17.09.2003, defendant No.5 had also filed his written statement wherein he alleged that the suit has been instituted by

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unauthorized person; the facilities were not actually granted in full by the bank to the defendant No.1. He states that defendant No.1 is a company, and in law, a company speaks only through a resolution, no liability can be fastened on the defendants on account of any liability arising out of a contract or otherwise in the absence of formal resolution empowering and authorizing any of the Director or Directors of defendant No.1 to enter into a contract or any legal relationship for and on behalf of defendant No.1. Hence, the OA be dismissed.

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On 08.06.2019, defendant Nos.3, 5 and 6 were proceeded ex parte in the Court of District Judge, Srinagar. After transfer, on 04.05.2023, summonses were sent to the defendants by registered post and publication, which were duly served. However, the defendants did not put in appearance. Vide order dated 15.05.2025, they were proceeded ex parte .

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In order to prove its case, the Bank has placed on record the affidavit of Mr. Nazir Ahmad Khan, Senior Manager, along with the original loan and security documents. 6. I have perused the evidence on the record. I am of the considered view that the Bank has proved its case that it had advanced a Cash Credit Hypothecation Facility of Rs.42.00 lacs and on 30.11.1999, a sum of Rs.1,62,32,847/- was due. 7. Accordingly, the application of the Bank for the recovery of Rs.1,62,32,847/- (Rupees One Crore Sixty-Two Lacs Thirty-Two Thousand Eight Hundred and Forty-Seven Only) with interest @15% per annum with monthly rests from 23.02.2000 till the date of payment is hereby allowed with costs. The liability of all the defendants would be joint and several co-extensive with the borrower company. Bank can recover its dues by the sale of hypothecated assets (fully detailed in

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Annexure P-11 of the plaint) as well as from the personal movable and immovable property(ies) of the defendants. 8. Pending IAs, if any, stand disposed of. 9. Recovery Certificate be issued accordingly. 10. Parties are directed to appear before Recovery Officer on 24.09.2026, who is directed to distribute the sale proceeds of the hypothecated assets as per the provisions of Section 19(20-AB) of the Act . 11. A Copy of this order along with Recovery Certificate be sent to the Recovery Officer as well as the parties. Pronounced in the open court. (A S Narang) Dated: 21.08.2026 Presiding Officer DRT-1, Chandigarh HARSH

Uco Bank v. M/S Alson Leasing (Pvt) Ltd.

Case brief

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Uco Bank v. M/S Alson Leasing (Pvt) Ltd.

Case brief

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What did the court decide?

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