PUNJAB NATIONAL BANK vs NAMIT ENTERPRISES on 21 February 2026

FINAL ORDER

This original application has been filed by the applicant bank on 09.07.2014 before DRT-III, Delhi and then transferred to DRT-1, Delhi through Ms. Rita Puri, authorized representative of the applicant bank under Section 19 of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 against the defendants for recovery of Rs.28,10,220.55 (Rupees Twenty Eight Lacs Ten Thousand Two Hundred Twenty and paisa Fifty Five only) as on 10.07.2014 along with pendentelite and future interest @16.75% per annum from the date of filing this application till the date of realization along with costs.

2. The brief facts of the case are that on the request of the defendant no.1 through its proprietress being defendant no.2 in the business of stitching clothes vide loan application dated 15.09.2011, the applicant bank sanctioned Cash Credit facility for a sum of Rs.50,00,000/- (Rupees Fifty Lacs only) @14.75% rate of interest on 23.09.2011 against hypothecation of stocks and book debts which was later reduced to Rs.25,00,000/- in September 2012 on the request of defendant no.2. The defendant no.3 was one of the major customers of defendant no.1 and defendant no.4 is director of defendant no.3 responsible for all decision and working of defendant no.3.

3. In order to avail the loan facility, the defendant no.1 through its proprietor being defendant no.2 submitted loan application dated 15.09.2011 and executed Agreement for Hypothecation of Goods & Book Debts, Master Undertaking, Acceptance of Terms and Conditions and Supplementary Agreement with the applicant bank on 23.09.2011.

4. The defendant no.1 through its proprietress being defendant no.2 acknowledged the debt of Rs.25,28,556.26 as of 31.12.2012 towards applicant bank and executed Balance and Security Confirmation Letter dated 10.01.2013 and defendant no.3 and 4 confirmed outstanding payment towards defendant no.1 and 2 vide letter dated 24.05.2013.

5. The defendant no.1 handed over several cheques issued by defendant no.3 in lieu of sale of hypothecated goodsbut which not realized / dishonored on account of insufficiency of funds of defendant no.3 through defendant no.4 due to which defendant no.2 avoiding the debt of applicant bank and not taken any action for not making the payments as per cheques issued to defendant no.1.

6. It has been submitted by the applicant bank that after availing the loan facility, the defendant no.1 was regular in routing their transaction thru the account but account became irregular since January 2013 when defendant no.1 stopped furnishing the monthly stock statement and submit quarterly

VAT returns for quarter of year 2012-2013 and failed to submit annual return and Balance Sheets for the year ending on 2012- 2013 and projected balance sheet for 2013-14. Further, no sales were routed through the account since 28.062013 and irregularities/ lapses were observed during inspections held on 23.05.2013.

7. It has been submitted by applicant bank that the defendant no.1 and 2 failed to maintain financial discipline despite several request letters and defendant no.2 handed over several cheques allegedly given by defendant no.3 in lieu of hypothecated goods, but the same were unrealized/dishonored on account of insufficiency of funds. Ultimately, the applicant bank classified the account as NPA on 02.08.2013 as per RBI guidelines and issued legal notice dated 27.06.2014 but defendant no.1 and 2 failed to clear outstanding dues, hence the applicant bank has approached this tribunal for recovery of its 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 13.10.2025, all the defendants have been proceeded ex-parte as they have not appeared before the Tribunal nor written statement, evidence and affidavit of assets have been filed.

9. It has been submitted that defendant no.1 through defendant no.2 have filed written statement stating that one of the sanction conditions was that all the manufactured goods will be purchased by defendant no.3 and 4 and they failed to make payments for the goods purchased and cheques issued by defendant no.3 & 4 were dishonored, due to which defendant no.1 & 2 could not initiate any legal proceedings against them.

10. It has been submitted that defendants have raised the objection that the applicant bank has got the signature of the defendants on blank documents while granting the loan facilities to the defendants. This Tribunal has gone through the documents which are duly filled and executed by the defendants and this Tribunal is of the view that plea of blank documents is no plea in the eyes of law as has been held by the Hon'ble Delhi High Court in the matter of "Indian Bank Vs. Cheese Wafers (India) Pvt. Ltd. It was held if the defendants have not filed any complaint before higher authorities of the bank or filed any complaint before police authorities ". Thus, the plea of blank documents is not maintainable after filing of the suit and the same is rejected.

11. In order to prove its case, the applicant bank has filed its evidence by way of affidavit of Mr. Suresh Kumar Kashyap, authorized representative of the applicant bank who has proved the documents as Power of Attorney, Request letter, Agreement for Hypothecation of Goods and Book debts, Master Undertaking, Acceptance of Terms and Conditions of Sanction, Supplementary Agreement, Balance & Security Confirmation Letter, Letters, Inspection Report, Stock Statement, Cheques, Legal Notices along with Postal Receipts, Books of Statement of Accounts marked as Ex.AW-1/1 to Ex.AW-1/16.

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. sd - 5

13. 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.28,10,220.55 (Rupees Twenty Eight Lacs Ten Thousand Two Hundred Twenty and paisa Fifty Five only) as on 10.07.2014 together with interest @16.75% with pendentelite and future interest with monthly rest from 10.07.2014 till the date of realization and costs, failing which, the same shall be recovered from sale of hypothecated stocks and book debts. In case of default / 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 23.04.2026. (IV) Copies of final order as well as Recovery Certificate be sent to all concerned free of cost. 1_69-26 (GOVIND BALLABH SHARMA) PRESIDING OFFICER DRT-I, DELHI (Dictated and pronounced in open court) Dated: 21.02.2026