CITY UNION BANK LIMITED vs M/S AMERICAN RADIO AND AUTOMOBILE CO PVT LTD AND ORS on 15 September 2026

**FINAL ORDER**

This original application has been filed by the applicant bank on 08.09.2022 through Shri Prince Bhagat, authorized representative of the applicant bank under Section 19 of Recovery of Debts and Bankruptcy Act, 1993 against the defendants for recovery of a sum of Rs.5,04,70,189.20 (Rupees Five crores Four lacs Seventy thousand One hundred Eighty Nine and paisa Twenty only) as on 30.07.2022 together with pendentelite and future interest @14.75% in OLCC account, @13% interest in OSL Term EMI & OSL-Special account and @9.25% in ECLGS account with monthly rests from the date of filing this application till the date of realization and costs.

2. The brief facts of the case are that at the request of defendant no.1 being private limited company of defendant no.2 to 5 as its directors/guarantors engaged in the business of providing automobile parts and services vide their loan application along with Board Resolution dated 05.08.2011, the applicant bank sanctioned OLCC limit of Rs.2,50,00,000/- (Rupees Two crores Fifty lacs only) @14.75% interest per annum on 11.08.2011 as working capital, OSL Term-EMI facility of Rs.60,00,000/- (Rupees Sixty lacs only) @13% interest per annum on 01.03.2019 to be repaid in 96 EMIs of Rs.1,00,843.53, OSL Special limit of Rs.82,00,000/- (Rupees Eighty Two lacs only) @13% interest per annum on 24.04.2020 and ECLGS loan of Rs.62,00,000/- (Rupees Sixty Two lacs only) @9.25% interest per annum on 30.12.2020 for working capital requirement during Covid-19 crisis. These aggregate limits of Rs.454.00 lacs (Rupees Four crores Fifty Four lacs only) were sanctioned and reviewed on various dates against hypothecation of stocks, book debts and equitable mortgage of Shop no.1681-1683, S.P.Mukherjee Marg, Delhi owned by Sd/- defendant no.1. In case of default or irregularities in the account, the applicant bank will charge penal interest over the agreed rate of interest.

3. That in order to avail the said credit facilities, the defendant no.1 as per Board Resolution dated 05.08.2011 authorized the defendant no.2 to execute security documents and defendant no.2 & 3 to create equitable mortgage of property. The defendant no.1 submitted Loan applications on different dates and executed Sanction Letters dated 11.08.2011, 15.12.2018/01.03.2019, 24.04.2020 and 14.12.2020, Demand Promissory Notes, Agreement loan cum Hypothecation, Board Resolution, Overdraft Rules, Letter of Continuity, Application cum Undertaking, Supplemental Agreement of Loan cum Hypothecation and Guarantee Agreements by defendant no.2 to 5 on 11.08.2011, 01.03.2019, 24.04.2020 and 30.12.2020 towards the applicant bank.

4. That in order to secure the various credit facilities, the defendant no.1 created equitable mortgage by executing Memorandum of Deposit of Title Deeds and deposited original Sale deeds along with chain of documents in respect of Shop No.1680 and 1681, admeasuring 31'.6" X 24'.9", S.P.Mukherjee Marg, Delhi with the applicant bank on 31.01.2012 and further extended during the sanction of various other credit facilities by executing Letter of Extension of Memorandum of Deposit of Title Deeds and renewal of credit facilities on 01.03.2019, 24.04.2020 and 30.12.2020 in favour of applicant bank.

5. The defendant no.1 through its authorized directors no.2 and 3 executed Letter of Revivals on different dates and confirm the debt by executing Confirmation of Balance towards SD

the applicant bank on 30.09.2014, 18.08.2017, 12.03.2020 and 03.12.2021.

6. It has been submitted by the applicant banks that after availing the credit facilities, the defendants miserably failed and neglected to pay the interest in OLCC account and installments in the OSL as well as ECLGS limits accounts and failed to maintain financial discipline as per sanction terms despite various reminders. The applicant bank classified the account as NPA on 22.11.2021 as per prudential accounting norms of Reserve Bank of India but the defendants neglected to regularize the accounts. Hence, the applicant bank has approached this tribunal for recovery of its dues.

7. Notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 dated 10.02.2022 was issued to the defendants calling upon them to pay the entire outstanding dues with the applicant bank but the defendants not cared to pay and adjust the accounts.

8. Notices of this O.A. were issued to the defendants and despite proper service, the defendants have chosen to absent from the proceedings. As per order dated 29.10.2025, 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. In order to prove its case, the applicant bank has filed its evidence by way of affidavit of Shri Prince Bhagat, authorized representative of the applicant who has proved the documents such as General Power of Attorney, Demand promissory Notes, Agreement of Loan cum Hypothecation, Board Resolution, SD

Overdraft Rules, Letters of Continuity, Guarantee Agreements, Memorandum of Deposit of Title Deeds, Title Deeds, Sale Deed dated 03.05.1993, Godnama dated 26.03.1984, WILL dated 14.10.1974, Sale Deeds 22.09.1951, WILL dated 02.04.1952, Khasra Girdawai, Letter of Mutation dated 02.03.1998, Property Tax Receipt, Letters of Revival & Balance of Confirmations, Sanction Letters, Supplemental Agreement of Loan cum Hypothecation, Extension of Memorandum of Deposit of Title Deeds, Notice u/s 13(2), Postal Receipts, Envelops received back unserved, Newspaper Publication, Statement of Accounts along with Bankers' Certificate, are marked as Exhibit AW 1/1 to Exhibit AW 1/69.

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 proved.

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 within 30 days, jointly or severally, a sum of Rs.5,04,70,189.20 (Rupees Five crores Four lacs Seventy thousand One hundred Eighty Nine and paisa Twenty only) as on 30.07.2022 together with pendentelite and future interest SD

@13.00% per annum with monthly rests from 30.07.2022 till the date of realization and costs failing which the aforesaid amount shall be recovered from the sale of hypothecation stock, book debts and mortgaged properties i.e. Shop No.1680 and 1681, admeasuring 31'.6" X 24'.9", S.P.Mukherjee Marg, Delhi-110006. 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 Recovery Officer, DRT I, Delhi on 13.11.2026.

(IV) Copies of final order as well as Recovery Certificate be sent to all concerned free of cost.

= Sd- 31/2026 **(GOVIND BALLABH SHARMA)** **PRESIDING OFFICER** **DRT-I, DELHI**

(Dictated and pronounced in open court) Dated: 15.09.2026