STATE BANK OF INDIA vs M/S SPACAKS TURNKEY PROJECT AND ORS on 14 October 2026

FINAL ORDER

This original application has been filed by the applicant bank, on t6.02.2004 through Shri. D. Girdhar, Chief Manager of the applicant ban( under Section 19 of the RDB Act, 1993 against the defendants for recovery of a sum of Rs.6,36,9t,7241- together with cost, charges and pendentellite and future interest ^

TANO.20l8of2023 2 @15olo from date of filing of this O.A. till the realization in full.

2. The brief facts of the case are that at the request of the defendant nos.l to 3, the applicant bank sanctioned a Bank Guarantee Limit Facility of Rs.250 Lacs, Letter of Credit Limit Facility of Rs.200 Lacs and Cash-Credit Facility (Hyp. of Goods and Book-debts) of Rs.25.00 Lacs. The defendant nos.1 to 3 executed all necessry loaning documents on 08.03.2001, 20.02.200L and 11.11.2000. The defendant no.1 had created equitable mortgage in favour of the applicant bank, its immovable properties i.e., (a).Agricultural Land out of Khasra No. 4/11(1-2),20 (7-13),21 (8-0), s/u1 (0-16), tlz (7-4),2 (8-0), 3(s-3), 10 (8-0), 4/19 (L-6), 22(7 -3), 23(0- L2), 6/s(8-0),6(8-0), Mortgaged Share- 2, Kanals out ofTotal Kitas-I3 and Total Rakba- 7l Kanal and 9 Marlas, Village Sururpur, Tehsil Ballabhgarh, Distt. Faridabad. (b). Agricultural Land out of Khasra Nos.5l8l3l2 (0-13), 81313(0-LZ) and 5/9(8- 0), Mortgaged share 825 Sq. Yds. outofTotalRakba of 5596 Sq. Yds. situated in Village Sururpur, Tehsil Ballabhgarh, Distt. Faridabad, Haryana. (c). H. No'916, Sector-15, Urban Estate, Faridabad, Haryana. The defendant no.2 had mortgaged in favour of the applicant bank, his immovable property being Flat No. 8-503, Vasundhra Co-op. Group Housing Society, Sector-6, Plot No.16, Dwarka Phase-I, New Delhi. The defendant no.3 had mortgaged in favour of the bank, his immovable property being, Falt No. A-407, Vasundhra Co-op. Group Housing Society, Sector-6, Plot No.16, Dwarka Phase-I, New Delhi. Again, at the request of defendant no.1, the applicant bank enhanced a Bank Guarantee Limit by Rs.100 Lacs on 21.O3.2002. C\

TA NO. 2018 of2023

The defendant nos.1 to 4 executed all necessary loaning documents on 21.03.2002. The defendant no.4 had equitable mortgaged in favour of the bank, his immovable property i.€., Residential Pot No.220, Sector-3O, Urban Estate, Faridabad. Again, at the request of defendant no.1, the applicant bank enhanced the Cash Credit Limit by Rs.75 Lacs on 15.10.2002. The defendant nos.l to 5 executed all necessary loaning documents on 16.10.2002. The defendant no.5 had equitable mortgaged in favour of the applicant bank, her immovable propefi i.e., Piece of Land bearing Old Khasra No.49l1 Min. New Khasra No.108, msg. 0.137 hect., (15' x 40), situated in Village Kunda, Tehsil Kashipur, Distt, Udham Sigh Nagar, Uttaranchal. In consideration of the applicant bank sanctioning and allowing the defendant no.1 the total credit facilities of Rs.650 Lacs being Cash Credit Limit of Rs.100 lacs, Bank Guarantee Limit of Rs.350 Lacs and Letters of Credit Limit of Rs.200 Lacs, the defendant no'6 executed all necessary loaning documents on 19.03.2004 and 20.03.2004. The defendant no.6 had equitable mortgaged in favour of the applicant bank, her immovable propefi i.e., Piece of Land mq.0.792 hectares (0.279 + 0.513) Out of Khasra No'21 Min. and Land measuring 1.402 hectares (0'935 + 0.467) out of Khasra No.117 Min., situated in Village Kunda, Tehsil Kashipur, Udham Singh Nagar, Uttaranchal' It is submitted that during the pendency of the O.A, the defendant no.5/ Smt. Raj Kumari Kalra was died and the LR of defendant no.5/ Smt. Raj Kumari Kalra was impleaded in the Present OA.

3. It is further submitted that the defendants enjoyed and utilized the, l=9-an facility, but failed to 9A

TANO.20l8of2023 4 maintain the financial discipline and failed to repay the due amounts. The applicant bank requested the defendants to regularize the loan account by visits and letters, but there was no response from the defendants, hence the account was classified as NPA. Therefore, the applicant bank served a legal notice dated 29.09.2004 to the defendants, demanding the amount due as on that date, but failed to recover the same Thus, the present O.A.fi-.A. is preferred by the applicant bank to recover its dues.

4. On notice by this Tribunal, defendant nos.1 & 5 failed to put appearance at all, despite service' Accordingly, the defendant nos.1 & 5 were proceeded against exparte on 01.09.2005. The defendant nos.2 to 4 and defendant no.6 put appearance through counsel and defendant nos.2 & 6 have filed wriften statement and evidence. The defendant nos.3 & 4 failed to file written statement. Thereafter, the defendant no'3 & 4 failed to put appearance in the mafter. Accordingly, the defendant nos.3 & 4 were proceeded against exparte on 10.05.2010.

5. In the written statement the defendant nos'2 & 6 have denied the fact mentioned in the O.A. It is submitted that the applicant bank did on L6.L2.20M institute the O.A. proceedings for recovery of Rs.636.91 lac in which the Spack Turn Key Projects (P) Ltd. was arrayed as defendant no.1 and that consequent upon directions about Notice of O.A. to be given to defendant no.1 company, it appears that on 20.1.2005, the notices were sent by Registered Post and while the defendant 5^

nos.z and 6 respectfully submit that they did not receive any summon/notice or paper book meant for defendant no.1, on 25.2.2005 the presumption was taken by the Ld. Tribunal, DRT-I, Delhi about seruice on defendant no.1. It is further submitted that during the course of proceedings on 1.9.2005 the Ld. Tribunal was pleased to proceed ex-parte, inter-alia, against the defendant no.1 company. It is fufther submitted that the defendant no.l company i.e. Spack Turn Key ProjecE hlt. Ltd. on account of the financial stringencies had to face a very critical position and had to be confronted with the winding up petition CP 36l2OL3 filed before the Hon'ble Delhi High Couft and the provisional winding up order was passed on 15.1.2005 by Hon'ble Justice Shri A.K. Sikari and the Official Liquidator attached to the said Hon'ble Court was appointed as the provisional liquidator' In view of the passing of the order dated 15.1.2005 about appointment of the Provisional Liquidator, the affairs of the Company stood being looked after by the provisional liquidator i.e. the Ld. official liquidator attached to Hon'ble Delhi High Court, Delhi and obviously enough when the Notices are appearing to be having sent on 20.1.2005 i.e' subsequent to passing of the order for appointment of the provisional liquidator, the same could not have been considered to having been serued on the provisional liquidator of the company and hence for the obvious reasons, the defendant no.1 was not properly served' After appointment of provisional liquidator vide order dated 15.1.2005, the defendant no.1 company has been subjected to passing of the winding up order on

22. t0.20t3 in company Petition No.36/2003. It is stated that a bare perusal of the O.A., without prejudice to the C.\

TANO.2018of2023 6 just legal and grounds and remedies availabb to the applicants of this application who have been arrayed as defendant nos.2 and 6, it is perceptible that they having been arrayed as defendant nos.2 and 6 appearing to be purported "guarantors" in respect of the credit facilities granted by the eSB Indore to defendant no.1 company which obviously enough has been set up and projected as principal debtor. It is submitted that during the course of these O.A. proceedings, the applicant nank claiming to be secured creditor has taken recourse to measures under Section 13(a) of SARFAESI Act, 2002 and had sold the borrowers assets which has been subjected to the serious challenge/objection by the Ld. official liquidator in which subject winding up petition by filing Application No.CA 1713/2009 on 9.10.2009. It is submitted that the company application moved by the Ld. Official Liquidator is still under adjudication by the Hon'ble Company Judge of the Delhi High Court. In view of the fact that the company having been projected as defendant no.1 as principal borrower and the applicant purportedly as guarantors and arrayed as defendant no.2 and thus, in view of the obtaining legal position subject to all the just rights and remedies available to the applicants, the liability of the "guarantor" being co- extensive with principal debtor and it is necessary that since the principal debtor Company cannot be considered to have been served in a legally sustainable manner, the seruice of summons along with paper book is made on it so that the principal debtor in a meaningful and legally sustainable manner is able to contest the case and no order even if the applicant bank ventures into it, is passed by the Ld. Tribunal in back of it. It is submitted that while the defendant nos.2 and 6 are having the exclusive -figltt of representation and 9)-(

TANO.20t8of2023 7 participation in the present proceedings, it ceftainly has the right to deal with the submissions and presentation which can be made by defendant no.1 company as principal borrower which at present for the obvious reasons is represented by Official Liquidator attached to Hon'ble Delhi High Court. It further submitted that besides there being no service on defendant no.1 company through the proper official i.e' Official Liquidator attached to Hon'ble Delhi High Court, since the serious objection has been taken by the Ld. Official Liquidator who is acting as Liquidator to the defendant no.1 company with relation to certain assets having been subjected to sale under SARFAESI Act, 2002 and the matter being under seize of the Hon'ble Company Judge, Delhi High Court and the same having convergence on the said matter of O.A. it further strengthens the submissions being made in the present application by the defendant nos.2 and 6 as Applicant that the proper seruice of summons and the paperbook on the Defendant No.1 Company through its liquidator is necessary and is not only in realm of principles of natural justice but according to Scheme of Act of 1993, rules made thereunder and regulations of practice of the Ld. DRT is mandatory. It is prayed that this Honble Tribunal may dismiss the present O.A.

6. IA no. 87012026 has been filed on behalf of defendant nos. 2 & 6 under Section 19(25) and 22(1) of The RDB Act, 1993 read with Rule 18 of The DRT (Procedure) Rules, 1993, inter-alia, seeking taking on record and , consideration of documents filed vide Diary No. 66/2026 dated 03.01.2026, directions to the applicant bank to clariff the status of the loan account, and grant of opportunity to address fina1 alguments on the original 9\

application as well as the documents on record prior to pronouncement of final order.

7. The Ld. Counsel of defendant nos.2 & 6 has submitted the defendant nos. 2 & 6, with due diligence and in continuation of their defence, had filed material documents vide Diary No. 66/2026 dated 03.01'2026, including (i) a certified copy of the order dated 0L.12.2025 passed by the Ld. ACIM, Rouse Avenue Courts, New Delhi, and (ii) a Statement of Account dated 29.11.2025 issued by the applicant bank itself. The said documents are not ancillary but go to the very foundation of the proceedings, inasmuch as the Statement of Account issued by the applicant bank itself records that the subject loan account stood closed on 06.03.2021 with a nil closing balance, thereby prima facie establishing that no amount remains due or payable. It is further submitted that the order dated

01. t2.2025 passed by the Ld. ACIM, Rouse Avenue Courts records a categorical statement made on behalf of the applicant bank through its Chief Manager that the concerned account stands closed and that no securities or collaterals subsist' Such statement, having been made before a couft of competent jurisdiction, constitutes a clear and binding admission on the part of the applicant bank. It is submitted that the aforesaid documents were duly filed and were also specifically adverted to during the course of hearing; however, the order dated 24.03.2026 does not record the same' The defendant nos. 2 & 6, with utmost respect, submit that the omission appears to be inadveftent, and unless the said documents are expressly taken on record and considered, there exists a real and substantial risk of the matter being adjudicatedrruithout due consideration e'I

TA NO. 2018 of2023

of material evidence which goes to the very existence of the alleged debt. It is submitted that this Hon'ble Tribunal is predicated upon the existence of a legally recoverable "debt". Where the applicant banks own records and admissions demonstrate closure of the account with a nil balance, the continuation of the present proceedings without first addressing this foundational issue would render the entire exercise legally unsustainable and contrary to the settled scheme of the statute. In the aforesaid circumstances, it becomes necessary that the applicant bank be directed to place on record a specific clarification on affidavit explaining whether any amount is still claimed to be due despite closure of the account on 06.03.2021, and if so, the precise basis and supporting statement of account for such claim. In the absence of such clarification, the claim of the applicant bank remains inherently contradictory and incapable of sustaining adjudication. It is submitted that they seek an opportunity not merely to address the documents filed, but to advance comprehensive final arguments on the Original Application itself, in conjunction with and in the light of the said documents, so that the entire controversy is adjudicated in a complete and holistic manner. It is a fundamental principle of adjudication, recognised in Order )0/III Rule 2 CPC, that parties must be afforded an effective opportunity of oral arguments on the issues arising in the matter. The said provision embodies a salutary principle of fair hearing, which squarely applies to proceedings before this Hon'ble Tribunal, notwithstanding the technical inapplicability of the CPC. It is submitted that the right to address final arguments on tite Original Application has neither been waived nor abandoned at anYstage. At no point have .a; TANO.2018of2023 l0 the defendant nos. 2 & 6 given up their right to advance submissions on merits, and any inference to the contrary would be wholly misplaced and contrary to the record. The Ld. Counsel of defendant nos.2 & 6 has relied on the judgment of the Hon'ble Supreme Court in "Mohd. Akram Ansari v. Chief Election Officer", (2008) 2 SCC 95, judgment passed by the Hontle High Couft Delhi in "National Sugar Institute vs CGIT', 2023 SCC Online De16811, judgment passed by the Hon'ble Debts Recovery Appellate Tribunal in "Girnar Mineral Ltd vs Central Bank of India", 2011 SCC OnLine DRAT 122, ln view of the aforesaid settled position, it becomes imperative that the defendant nos. 2 & 6 be afforded an opportunity to specifically press all issues arising from the Original Application as well as the documents filed, so that the same are duly considered and adjudicated. Failure to do so would result in grave prejudice and may lead to the erroneous presumption that such issues were never pressed. It is prayed that this Honble Tribunal may take on record and expressly consider the documents Rled by defendant nos. 2 & 6 vide Diary No. 66/2026 dated 03'01.2026a and direct the applicant bank to file a detailed clarification/ affidavit explaining the sLatus of the loan account, the effect of its closure on 06.03.2021, and the existence, if any, of any subsisting liability and grant an effective opportunity to the defendant nos. 2 & 6 to address final arguments on the Original Application as well as the documents flled on record, prior to pronouncement of final order. B. The applicant bank and defendant nos.2 & 6 have filed their respective ":ti*

ll

9. Heard the Ld. Counsels of applicant bank and defendant nos.2 & 6 and perused the record.

10. In the present matter both the parties has submitted that the mortgaged properties has already been sold and the amount shown as principal NPA has already been recovered. The Ld. counsel of the applicant has submitted that though the principal NPA amount has already been recovered from the sale of the mortgaged properties of the mortgagor and from the liquidation of defendant no.1 but unapplied pendentelite and future interest accumulated during the pendency of the original application has not been recovered and therefore, the defendants may be directed to pay the unapplied pendentelite and future interest. The applicant bank has submitted a table of calculation at page no.21 of the pleading. On the other hand the Ld. counsel for defendants has submitted that the entire dues of the bank has already been paid and bank has no authority to recover any amount. It is submitted that the Chief Manager of the bank in a proceedings pending before Rouse Avenue Court in case CBI Vs. Balvinder Mohan Kullar has specifically admitted that the subject loan account stood fully closed as on 06.03.2021. The official statement of account submitted by the bank itself in the criminal proceedings reflected zero closing balance. Therefore, there is no dues and bank has no authority to recover any dues. Therefore, the main dispute is whether the amount has become already been paid or still there are certain dues. The main contenUon is that the statement of account filed in the Rouse Avenue Coutt shows zero balance and the statement qf the official of the bank cr TANO.2Ol8of2023 12 shows that the account has been closed. On the other hand the contention of the bank is that the account become NPA, the account freezes and the interest is not shown in the account. It is submitted that the principal amount has been paid but the pendentelite and future interest has not been paid. The contention of the counsel of the bank appears true and is liable to be accepted. From perusal of the statement of account filed in the present case shows that the principal amount of the NPA has been paid but the pendentelite and future interest has not been paid. Merely because the Chief Manager of the bank has made a statement in the Rouse Avenue Court cannot prove that the entire dues has been paid. Therefore, the contention of the defendant has no force and cannot be accepted' The defendants are bound not only to pay the principal NPA amount but also the pendentelite and future interest. Therefore, the OA may be allowed with regard to the future and pendentelite interest. In the light of the above discussions, the present TA deserues to be allowed. The defendant no.1 has already been liquidated. The documents are taken on record and are being considered, therefore, the IA no. 87012026 is disposed of accordingly.

ORDER

1) I hereby allow this T.A. of the Applicant Bank and direct the defendant nos.2 to 6 to pay jointly and severally to the applicant the interest after declaration of the account as NPA and pendentelite interest from the date of filing of the OArruhich has become T.A till e).

realization @15olo on the outstanding amount of re.5,44,32,671 as due on L5.L2.2004 inclusive of interest upto 30.09.2003. However, the liability of LR of deceased Smt. Raj Kumari Kalra /defendant no.5 is limited to the extent of property/assets inherited by him from deceased Smt. Raj Kumari Kalra.

2) In case of failure to deposit the above amount within the stipulated period, the same shall be recovered from the sale of personal movable and immovable assets of the defendant nos. 2 to 6.

3) IA no. 87012026 is disposed of.

4) Recovery Certificate be issued forthwith and be sent to Recovery Officer, Debts Recovery Tribunal-Il, Delhi.

5) The registry of this Tribunal is hereby directed to issue free copy of the order and send the same to both the parties.

6) Parties are directed to appear before the Ld. Recovery Officer, DRT-II, Delhi on L4.L2.2026. Pending IAs, if any, stand disposed of. File be consigned to records. Date : 14.10.2026 (sJ.\ (susHrl rIuMnn irn#ocr) PRESIDING OFFICER DRT-II, Delhi This judgement has been signed, dated and pronounced in oPen court. Date : 14.10.2026 c-I (susHrl KUMAR RAsrO# PRESIDING OFFICER DRT-II, Delhi t