BANK OF BARODA vs M/s Sri sai industries on 6 October 2026

FINAL ORDER

This original application has been filed by the applicant bank on 18.01.1995 before DRT-III, Delhi and then transferred to DRT-I Delhi against the defendants for recovery of a sum of Rs.8,89,865/- in Term Loan account facility together with pendentelite and future interest @17.75% and Rs.15,63,728.01 in Cash Credit facility together with pendentelite & future interest @22.25% per annum from the date of filing till realization in full.

2. The brief facts of the case are that on the request of the defendant no.2 being proprietor of defendant no.1 M/s Sri Sai Industries submitted loan application for setting up plant for LDPE Laminated cloth, the applicant bank sanctioned Cash Credit facility of Rs.3,00,000/- (Rupees Three lacs only) @15.50% interest per annum with quarterly rests as working capital requirements and Term Loan facility of Rs.5,00,000/- (Rupees Five lacs only) for purchase of machinery on 25.08.1990 @13.50% interest per annum with quarterly rests against hypothecation of stocks, goods and movable machinery, spare parts etc. and equitable mortgage of land measuring 8 Bigha 15 Biswa, Khasra No.42/13/2(2-8), 14(4-16), 15(1-11), Village Pehladpur Bangar, Delhi. On the request of defendant no.1 & 2, the applicant bank enhanced Cash Credit facility to Rs.7.00 lacs on 04.03.1991. The term loan facilities was to be repaid in 50 EMI of Rs.10,000/- on quarterly basis. The defendant no.3 to 8 stood as guarantors and offered Sd- their personal guarantees for the credit facilities sanctioned in favour of defendant no.1 and 2 by the applicant bank. On the request of defendant no.1 through its proprietor, the applicant bank issued Bankers' cheque in favour of M/s Garg Enterprises for supply of plant on 27.08.1990.

3. In order to avail the credit facilities, the defendant no.2 as proprietor of defendant no.1 submitted loan application and executed Demand Promissory Note, Agreement of Hypothecation of Machinery including stocks, goods etc., Letter of Instalment with acceleration clause, Letter of Continuing Security, Hypothecation of Goods including all cotton cloth LDPE/PVC film goods in process & finished goods etc., Written Consent by defendants, General Form of Guarantees by defendant no.3 to 8 towards the applicant bank on 25.08.1990 and 04.03.1991.

4. That in order to secure the credit facilities, the defendant no.2 as proprietor hypothecated the stocks, machinery, goods of defendant no.1 in favour of applicant bank. The defendant no.3 to 7 created equitable mortgage of land measuring 8 Bigha 15 Biswa, Khasra No.42/13/2(2-8), 14(4-16), 15(1-11), Village Pehladpur Bangar, Delhi by depositing title deeds dated 17.05.1989 registered as document no.5672, Additional Book I, Volume 6084 with Sub-Registrar, Delhi. The applicant bank confirmed to have noted its charge in the records of Halqua Patwari as per Khatoni dated 10.09.1990 received.

5. It has been submitted by the applicant bank that after availing the credit facilities, the defendant no.1 failed to adhere to the financial discipline and committed defaults in the loan accounts. The defendants were requested repeatedly to regularization of the account vide various letters and personal sd- visits to clear the irregularities in the account and submission of financial statements as per terms of sanction but no heed paid by the defendants. The applicant bank issued legal notice on 14.08.1992 and defendants acknowledged their liability on 07.07.1993 and 24.10.1994 and accounts never regularized, hence the applicant bank has approached this tribunal for recovery of its dues.

6. Final order in O.A.no.697/95 was passed by the Tribunal and delivered on 30.10.2001 against the defendant no.1 to 8 for recovery of Rs.8,89,865/- together with pendentelite and future interest @17.75% per annum in term loan account and for Rs.15,63,728.01 in Cash Credit account together with pendentelite and future interest @22.25% per annum till its realization with costs. The defendant no.4 to 6 filed Misc. Application No.281/2002 & 282/2002 before Hon'ble DRAT Delhi, which set aside the impugned order dated 12.07.2002 passed by DRT and final order dated 30.10.2001 against the appellant subject to payment of Rs.20,000/- as costs to bank. The defendant no.4 to 6 filed their written statements alleging that their signatures are forged and never stood as guarantor for alleged loan. The defendants no. 4 to 6 submitted that they were owners of mortgaged property as land was purchased from vendors along with defendant no.3 and 7 on 17.05.1989 thru registered sale deed and sold the land on 14.08.1989 to Sh.Kartar & Others by registered sale deed on 25.08.1989. Further, they submitted that property documents were given to Sh.Mahinder Singh Ruhil who was one of the vendees and they have no right, title claim or concern with the property. They filed applications for summoning original documents for exhibition of documents kept with the Hon'ble Court of MM (Central), Tis Hazari Delhi in FIR no.214/02, CC No.173/14

*sd-*

under Section 419,420, 468 IPC State Vs Mohinder Singh etc. The Patwari from SDM Narela appeared and confirmed that Khatoni for 1999-2000 issued from their office and Khatoni of 1980-81 is not in the revenue records of Village Pahladpur Banger.

7. The applicant bank vehemently denied the allegations of the defendant no.4 to 6 and submitted that they executed General Forms of Guarantee on 25.09.1990 alongwith defendant no.7 in respect of joint immovable property thereby collaterally securing the credit facilities extended to defendant no.1 and 2. Further, the alleged vendees of property filed objections on 01.08.2003 before Ld.Recovery Officer staking claim to the compensation awarded on the mortgaged property alleging that defendant no.3 to 7 did not delivered the sale deed dated 17.05.1989 on the pretext that had been misplaced.

8. Notice of this O.A. was issued to the defendants and defendant no.1, 2 and 8 filed their written statement and admitted that defendant no.2 was sole proprietor of defendant no.1 and other defendants were co-guarantors. The defendant no.2 admitted sanctioning of credit facilities, enhancement of cash credit facility, signature on the documents alleging signature on blank papers which were later misutilized etc.

9. Vide order dated 23.07.2026, the defendants have been proceeded ex-parte as the defendants have not appeared before the Tribunal and affidavit of assets have not been filed by the defendants.

10. In order to prove its case, the applicant bank has filed its evidence by way of Affidavit of authorized representatives of Sd/- applicant bank, who has proved the documents such as Power of Attorney, Demand Promissory Note, Deeds of Hypothecation, Letters of Guarantees of defendant no.3 to 8, Letters creating Mortgage along with Copy of Khatoni & Sale Deed, Legal Notice, Letters of Acknowledgement of Debts and Certified copy of Statements of accounts certified under Bankers' Book of Evidence Act and Balance Confirmation Letters marked as Ex.AW1/1 to AW1/23, Ex.AW2/7 to AW2/9, Ex.AW3/2 to AW3/5.

11. The applicant bank has fully corroborated the averments made in the O.A. Even otherwise the whole case of the applicant bank is based on the documents and the same have been duly proved.

12. The case filed by the applicant bank gone unrebutted and there is no question of disbelieving the case of the applicant bank and the applicant bank has proved its case beyond reasonable doubts.

13. As per the provision of Section 19(20) of the Recovery of Debts Due to Banks and Financial Institution Act, 1993 which is analogous to Section 34 of CPC, on filing of the suit/claim, the contract between the parties comes to an end and the Court/Tribunal has a discretion to award the same depending upon the circumstances of each case. Same principle has been laid down by the Hon'ble Apex Court in the case of Central Bank of India Vs. Ravindra & Others. Taking stock of all the circumstances and keeping in view that there is a drastic fall in rates of interest globally and domestically, I am of the opinion that interest of justice will be served if the interest at the rate of 15% p.a. is awarded.

*Sd -*

14. In the light of the above discussions, the Original Application deserves to be allowed.

**ORDER**

I, allow this OA and direct the defendants to pay to the applicant bank within a period of 30 days, jointly or severally, a sum of Rs.24,53,593.01 (Rupees Twenty Four lacs Fifty Three thousand Five hundred Ninety Three & paisa One only) out of which Rs.8,89,865/- in Term Loan account and Rs.15,63,728.01 in Cash Credit facility together with pendentelite & future interest @15.00% per annum from the date of filing of this application till its realization, failing which the aforesaid amount shall be recovered from the hypothecated of stocks, goods and machinery and mortgaged land measuring 8 Bigha 15 Biswa, Khasra No.42/13/2(2-8), 14(4-16), 15(1-11), Village Pehladpur Bangar, Delhi. In case of default/shortfall, the amount shall be recovered from the sale of movable and immovable assets of the defendants.

(II) The recovery certificate be issued forthwith and be sent to the Recovery Officer, Debt Recovery Tribunal-I, Delhi.

(III) Parties are directed to appear before the Recovery Officer, DRT I, Delhi on 07.12.2026.

(IV) Copies of final order as well as Recovery Certificate are to be sent to all concerned free of cost.

*e sd-* **(GOVIND BALLABH SHARMA)** **PRESIDING OFFICER** **DRT-I, DELHI**

(Dictated and pronounced in open court) Dated: 06.10.2026