RBL BANK LIMITED vs M/S KHARBANDA AUTOMOTIVES on 17 January 2026

FINAL ORDER

This original application has been filed by the applicant bank on 05.08.2021 before DRT III, Delhi & then transferred to DRT-I, Delhi under Section 19 of Recovery of Debts and Bankruptcy Act 1993 seeking order against the defendants for recovery of Rs.4,02,88,010.03 (Rupees Four Crores Two Lacs Eighty Eight Thousand Ten & paisa Three only) as on 30.06.2021 along with pendentelite and future interest @Contractual rate of interest along with penal interest @2% per annum from 30.06.2021 till its realization along with costs.

2. The brief facts of the case are that on the request of defendant no.2 being proprietorship concern of defendant no.1 in the business of manufacture, export and sale of automotive spare parts vide their loan request with Networth Certificate dated 28.02.2014, the applicant bank sanctioned Credit facility of Rs.500.00 lacs (with sublimit of CC of Rs.400.00 lacs and EPC/PCFC of Rs.500.00 lacs) @13.00% interest on 25.03.2014 which was renewed/decreased the CC limit to Rs.450.00 lacs on 25.06.2015 and further to Rs.400.00 lacs on 27.06.2016 and lastly to Rs.382.00 lacs on 21.11.2019. The defendant no.3 and 4 are Junior Lenders who have breached the terms of Subordination Agreement undertaking not to receive any payment to recover their loans until entire loan of applicant bank recovered but received monies over which Applicant Bank has first right. The defendant no.5 has been impleaded who is responsible for collection of GST and substantial amount of excess GST is refundable to defendant no.1 by defendant no.5 and Applicant Bank is entitled to receive any pending refund.

3. That in order to avail the loan facility, the defendant no.1 through defendant no.2 executed Sanction Letters, Credit Facility Agreements, Agreements for Export Credit, Demand Promissory Notes, Letters of Continuity of Demand Promissory Note, Composite Deeds of Hypothecation, General Power of Attorney, Personal Guarantee, Subordination Agreement executed by defendant no.3 and 4, Fax/Email Indemnity, Undertaking, Declaration of Proprietor, Undertaking for Negative Lien, Affidavit on 27.03.2014 & 26.11.2019 etc. The defendant no.1 through defendant no.2 executed Declaration of Proprietor and Undertaking dated 26.11.2019 undertook to transfer requisite funds from Yes Bank, IDBI Bank and DCB Bank.

4. That in order to secure the credit facility, the defendant no.2 hypothecated the present & future receivables, book debts, Bills and currents assets of defendant no.1 in favour of applicant bank. The defendant no.2 created Negative Lien on property bearing Jaypee Green Residential Flat KCA00101105 Classic Jaypee Green, Noida-201304 on 27.03.2014 and declaration dated 09.04.2014 declaring owner of Commercial Property No.T-2419, Guru Nanak Market, Faiz Road, Karol Bagh, New Delhi and Memorandum of Record of Equitable Mortgage dated 09.04.2014 recording deposit of title deeds with the applicant bank.

5. The defendants executed Letter of Acknowledgement of Debt on 23.11.2015, 15.07.2016, 02.05.2019 and 26.11.2019 acknowledged the amount due and consented enforceability of security documents in favour of applicant bank. Further, ITR dated 01.11.2019 of all assets & liabilities including unsecured loans availed by defendant no.1 from defendant no.3 and 4

were contained which shows loan advanced have been reduced which is not as per Subordination Agreement.

6. It has been submitted by the applicant bank that after availing the credit facility, the defendant no.1 failed to adhere to the financial discipline of the repayment of the loan. The account became irregular due to non-service of interest timely and due to consequent defaults by defendant no.1, the applicant bank classified the account as NPA as NPA on 31.03.2021 as per RBI guidelines and issued loan recall cum Invocation of Guarantee dated 15.04.2021 to clear the outstanding dues with interest but defendants failed to pay, hence the applicant bank has approached this tribunal for recovery of its dues.

7. The applicant bank submitted that they got conducted audit of defendant no.1 about status of GST refund due from defendant no.5 which discovered that an amount of Rs.3,18,49,144/- is owed and applicant bank is entitled to recover refundable GST in order to recover the dues of defendant no.1.

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 25.08.2025, 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 defendants.

9. In order to prove its case, the applicant bank has filed its evidence by way of affidavit of Shri Deepak Gupta, authorized representative of the applicant bank who has proved the documents as Power of Attorney, Networth Certificates, Sanction Letters, Credit Facility Agreements, Agreements for Export Credit, Demand Promissory Notes, Letters of Continuity of DP Note, Composite Deeds of Hypothecation, General Power of Attorney, Personal Guarantees, Subordination Agreements, Fax/Email Indemnity, Undertakings, Declarations of Proprietor, Undertaking for Negative Lien, Declaration by Mortgagor for Proposed Equitable Mortgage, Affidavit, Memorandum of Record of Equitable Mortgage, Mortgagors Letter of Confirmation of Equitable Mortgage, Letters of Acknowledgement, Acknowledgement of Debt and Confirmation of Security and Documents, ITRs, Loan Recall Notice along with Postal Receipts, Demand Notice, Statement of Account, Certificate under Bankers' of Evidence Act and Title Deeds of Mortgaged Properties and Valuation Report marked as Exh.AW-1/1 to Exh.AW-1/40.

10. On the request of defendant no.1 and 2, the applicant bank sanctioned OTS proposal of defendant no.1 & 2 for Rs.240.00 lacs along with applicant interest from on 1.10.2022 to be repayable in multiple tranches on or before 01.02.2016, out of which defendant no.1 & 2 deposited an amount of Rs.160.00 lacs and got released mortgaged property but failed to clear remaining settlement amount. As per settlement, it was agreed that if defendants failed to pay OTS amount, bank will be entitled to claim full amount as per application filed.

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 approved. So far as any grievance regarding GST dues of defendant no.1, the applicant bank may directly approach to the Office of Principle Chief Commissioner of GST

& Excise for refund of GST with respect to defendant no.1 by defendant no.5.

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

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

ORDER

I, allow this OA and direct the defendant no.1 to 4 to pay to the applicant bank, within a period of 30 days, jointly and severally, a sum of Rs.4,02,88,010.03 (Rupees Four Crores Two Lacs Eighty Eight Thousand Ten & paisa Three only) as on 30.06.2021 (out of which Rs.160.00 lacs deposited under OTS settlement) together with pendentelite and future interest @13.00% per annum from date of filing of this application and costs; failing which the aforesaid amount shall be recovered from hypothecated book debts, currents assets etc. In case of shortfall, the same shall be recovered from the sale of movable and immovable properties of the defendants. For any grievance regarding GST dues of defendant no.1, the applicant bank may directly approach to the Office of Principle Chief Commissioner of GST & Excise for refund of GST with respect to defendant no.1 by defendant no.5. (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 BALLAB SHARMA) PRESIDING OFFICER DRT-I, DELHI (Dictated and pronounced in open court) Dated: 17.01.2026