PUNJAB NATIONAL BANK vs M/S J K FABRICS on 17 January 2026

FINAL ORDER

This original application has been filed by the applicant bank on 01.07.2022 before DRT-II, Delhi and then transferred to DRT-1, Delhi under Section 19 of Recovery of Debts and Bankruptcy Act, 1993 against the defendants for recovery of a sum of Rs.92,75,931.59 (Rupees Ninety Two Lacs Seventy Five Thousand Nine Hundred Thirty One & paisa Fifty Nine only) as on 28.02.2022 along with pendentelite and future interest ©7.50% per annum in Cash Credit loan account and @9.30%

interest in Term Loan account along with @2% penal interest from 01.03.2022 till the date of realization along with costs.

2. The brief facts of the case are that on the request of defendant no.1 being proprietorship concern of Sh.Shahid Ali, the applicant bank sanctioned Cash Credit (Hyp) for Rs.30.00 lacs ©10.95% interest per annum in May 2016 which was enhanced to Rs.60.00 lacs @10.40% interest per annum with monthly rests against hypothecation of fabrics, goods and current assets of defendant no.1. The defendant no.2 stood as guarantor for the credit facility sanctioned favoring defendant no.1 and offered his property as collateral security. Further, the applicant bank sanctioned GECL Loan of Rs.12.00 lacs and Demand Loan of Rs.5.00 lacs on 05.05.2020 & 09.10.2020 due to Covid-19 pandemic in order to meet statutory dues, salary and rent etc. against hypothecation and extension of mortgage.

3. In order to avail the loan facilities, the defendant no.1 submitted loan applications and executed Hypothecation of Goods to Secure Demand Cash Credit Facility and Agreement for Loan/Cash Credit / Overdraft and defendant no.2 executed Agreement of Guarantee on 13.05.2016 and 24.08.2017 in favour of applicant bank.

4. That in order to secure the credit facilities, the defendant no.1 hypothecated the stocks of fabrics, finished goods and current assets. The defendant no.2 created mortgaged by deposit of title deeds of freehold residential property no. A-31/163-B, Khasra No.368, 3rd Floor with roof rights at Village Moujpur, Gali No.5, Mata Mandir Marg, Illaqa Shandara, Delhi on 05.04.2016 towards applicant bank and extended on renewal/sanction and enhancement of limits.

5. The defendant no.1 executed Balance and Security Confirmation Letter dated 18.01.2019 for outstanding dues of Rs.59.99.769.16 towards the applicant bank.

6. It has been submitted by the applicant bank that after availing the credit facilities, the defendants failed to comply with the terms and conditions of sanction and failed to maintain financial discipline in the account with the applicant bank despite letters for regularization of the accounts. The applicant bank issued recall notices on various dates and classified the account as NPA on 31.03.2021 as per RBI guidelines but defendants failed to regularize the account.

7. Notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 was issued by the applicant bank on 10.04.2021 calling upon the defendants to pay the entire outstanding dues. The applicant bank issued notice u/s 13(4) for possession of property on 15.09.2021 but the defendants neglected to clear the dues.

8. Notices of this O.A. were issued to the defendants and despite of proper service, the defendants have chosen to absent from the proceedings. As per order dated 06.10.2025, the defendants have been proceeded ex-parte as they have not appeared before the Tribunal and even written statement, evidence and affidavit of assets have not been filed by the defendant.

9. In order to prove its case, the applicant bank has filed its evidence by way of affidavit of Sh.Surendra Singh, authorized representative of the applicant bank who has proved the documents such as General Power of Attorney, Hypothecation of Goods to Secure Demand Cash Credit facility, Agreement of Guarantee, Rectification Deed dated 22.032016 along with Sale Deed dated 01.03.2016 & GPA, Letter of Continuity, Hypothecation of Movable Assets forming part of Fixed/Block Assets, Agreement for Loan/Cash Credit/Overdraft, Balance and Security, Recall Notices, Demand Notice, Status Note for NPA, Statement of Accounts, Certificate as per Banker's Book of Evidence Act marked as Page No.1 to 198.

10. 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 approved.

11. 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.

12. 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, jointly or severally, within a period of 30 days, a sum of Rs.92,75,931.59 (Rupees Ninety Two Lacs Seventy Five Thousand Nine Hundred Thirty One & paisa Fifty Nine only) as on 28.02.2022 together with pendentelite and future interest @9.30% per annum with monthly rests from 01.03.2022 till the date of realization and costs. In case of shortfall, the same shall be recovered from the sale of hypothecated stocks, book debts, current assets and mortgaged property No. A-31/163-B, Khasra No.368, 3rd Floor with roof rights at Village Moujpur, Gali No.5, Mata Mandir Marg, Ilaqua Shandara, Delhi. In case of shortfall, the same shall be recovered from the sale of movable and immovable properties 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 18.03.2026 (IV) Copies of final order as well as Recovery Certificate be sent to all concerned free of cost. (GOVIND BALLABH SHARMA) PRESIDING OFFICER DRT-I, DELHI (Dictated and pronounced in open court) Dated: 17.01.2026