CENTRAL BANK OF INDIA vs M/S GUPTA ENTERPRISES AND ORS on 31 August 2026

FINAL ORDER

This original application has been filed by the applicant bank before DRT-III, Delhi on 29.01.2022 and then transferred to DRT-I Delhi under Section 19 of Recovery of Debts and Bankruptcy Act, 1993 against the defendants for recovery of a sum of Rs.44,23,975/- (Rupees Forty Four lacs Twenty Three thousand Nine Hundred Ninety Five only) as on 19.01.2022, together with pendentelite and future interest @24% interest per annum with monthly rests and costs.

2. The brief facts of the case are that on the request of the defendant no.1 as proprietorship firm of defendant no.2 engaged in hardware and sanitary items etc., the applicant bank sanctioned Cash Credit limit of Rs.19,00,000/- (Rupees Nineteen lacs only) on 23.02.2015 @11.25% floating rate of interest for business needs against hypothecation of stocks and mortgage of property at Uttam Nagar, Delhi owned by defendant no.2. In case of default in repayment, the defendants agreed to pay interest @2% as penal interest over the agreed rate of interest.

3. In order to avail the credit facility, the defendant no.1 through its proprietor submitted loan application along with necessary KYC documents etc. and executed Sanction Letter, Agreement of Hypothecation, Letter of Continuity, Demand Promissory Note and other necessary documents in favour of the applicant bank on 24.02.2015.

4. In order to secure the loan facility, the defendant no.2 as proprietor of defendant no.1 hypothecated the stocks and book of accounts in favour of applicant bank on 24.02.2015.

5. That in order to secure the loan facility, the defendant no.2 created equitable mortgage of property no. WZ-6A/1, Kh.No.89/13, Vilalge Hastal, South Extension Part I, Uttam Nagar, Delhi-110018 by executing declaration and undertaking by depositing Sale Deed dated 04.04.2014 with the applicant bank on 24.02.2015.

6. It has been submitted by the applicant bank that after availing the loan facility, the defendants failed to comply with the terms and conditions of sanction and were irregular in maintaining the account. The defendants failed to serve interest timely despite repeated requests and defaulted in repayment of their liabilities with the applicant bank. Ultimately, the applicant bank classified the account as NPA on 28.07.2016 as per RBI guidelines and issued legal notice dated 20.10.2021 to pay the entire outstanding dues to the applicant bank but neglected by the defendants, hence the applicant bank has approached this Tribunal for recovery of their dues.

7. 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 23.03.2026, 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.

8. In order to prove its case, the applicant bank has filed its evidence by way of Affidavit of Sh.Ram Gopal Meena, authorized representative of the applicant bank who has proved the documents such as General Power of Attorney Exhibit AW1/1, Sanction Letter Exhibit AW1/2(OSR), sa

Hypothecation Agreement Exhibit AW1/3(OSR), Declaration & Undertaking Exhibit AW1/4(OSR), Title Documents of Property Exhibit AW1/5(OSR), Recall Notice with Postal Receipts Exhibit AW1/6, Certified Statement of Account under Sectio 65B of Indian Evidence Act 1872 and Certificate under Section 2A of Bankers' Books Evidence Act Exhibit AW-1/7(Colly).

9. 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.

10. 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 12% p.a. is awarded.

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. sd

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.44,23,975/- (Rupees Forty Four lacs Twenty Three thousand Nine Hundred Ninety Five only) as on 19.01.2022 together with pendentelite and future interest @12% per annum from 19.01.2022 till the date of its realization and costs; failing which the aforesaid amount shall be recovered from the sale of hypothecated stock, book debts and sale of mortgaged property bearing no.WZ-6A/1, Kh.No.89/13, Vilalge Hastal, South Extension Part I, Uttam Nagar, Delhi-110018 owned by defendant no.2. 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 30.10.2026. (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: 31.08.2026