PUNJAB NATIONAL BANK vs VARUN BHATIA on 16 December 2025

FINAL ORDER

This original application has been filed by the applicant bank before DRT-III, Delhi and then transferred to DRT-I Delhi on 07.02.2012 under Section 19 of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 against the defendants for recovery of Rs.5,62,36,645/- (Rupees Five Crores Sixty Two Lacs Thirty Six Thousand Six Hundred Forty Five only) as on 06.02.2012, out of which Rs.5,55,57,224/- in Cash Credit account @12.50% pendentelite and future interest per annum, Rs.6,47,590/- and Rs.31,831/- in Car Loan accounts @11% pendentelite and future interest per annum with monthly rests from 06.02.2012 till the date of realization and costs.

2. The brief facts of the case are that on the request of the defendant no.1 as proprietor of M/s Varun International in the business of wholesale trading of dry fruits and Kirana items along with defendant no.2 to 4 as guarantors, the applicant bank sanctioned Cash Credit limit for Rs.60.00 lacs (Rupees Sixty lacs only) on 05.08.2006 which was enhanced / sanctioned from time to time and lastly enhanced to Rs.389.00 lacs @13% interest per annum on 09.02.2008 and Adhoc limit of Rs.77.00 lacs was sanctioned on 27.08.2008 totaling Rs.466.00 lacs. In addition, the applicant bank sanctioned Car Loan facility of Rs.9.00 lacs @10.25% interest per annum on 12.04.2007 in order to purchase Toyota Innova Diesel Car to be repaid in 48 EMIs of Rs.23,000/- and another car loan of

Rs.3,15,000/- @12% interest to be repayable in 60 EMIs of Rs.7,007/- to purchase Chevrolet Spark LT Car on 23.11.2007. The defendants agreed to charging of penal interest @2% in case of default in repayment by the applicant bank.

3. In order to avail the loan facilities, the defendant no.1 as proprietor of M/s Varun International submitted loan applications and enhancement of limits on different dates and executed Agreement for Hypothecation of Goods and Book Debts to secure Cash Credit facility, Agreement for Hypothecation of Movable Assets Forming part of Fixed/Block Assets, Agreement for Hypothecation of Current Assets, Master Undertaking, Hypothecation Letter of Hypothecation (Car) on various dates as and when the limits were sanctioned / enhanced by the applicant bank. The defendant no.2 to 4 executed Agreements of Guarantee continuing their guarantee and liability as co-extensive with the liability of defendant no.1 for the credit facilities sanctioned by the applicant bank.

4. That in order to secure the Cash Credit and Car loan facilities, the defendant No.1 hypothecated the current assets, stocks of Dry fruits, Kirana items, book debts, Two cars bearing Toyota Innova diesel Car bearing Registration No.DL-4CAE- 7514 and Chevrolet Spark LT car bearing Registration No.DL- 2CAJ-0508 towards applicant bank as prime security. Further, the defendant no.1,3 and 4 created equitable mortgage of properties at i) Ground Floor, Plot No.55, Block BGH, Shalimar Bagh, Delhi measuring 70 sq.metres; ii) Ground Floor, Plot No.14, Block BT, Shalimar Bagh, Delhi measuring 207 sq.yds.; iii) Shop No.474 with roof rights, part of property no.694/449, Katra Ishwar Bhawan, Khari Baoli, Delhi (these 3 properties redeemed under OTS by DRT-III order) The defendant no.4 created equitable mortgage of property being Western Portion of First Floor of Built Up Property with roof rights on land measuring 207 sq.yds bearing Plot No.14, Block-BT, Shalimar Bagh, Delhi by deposing Original Perpetual Lease Deed dated 10.03.1977 registered as Document No.2723, A.B.No.I, Volume No.3444 on Pages 190 to 195 on 30.03.1977 and Original Conveyance Deed dated 11.03.1997 registered as Document No.1945 in A.B.No.I, Volume No.298 on Pages 72 to 74 on 12.03.1997 and Original Gift Deed dated 15.06.2006 registered as Document No.8636 in A.B.No.I, Volume No.438, on Pages 72 to 78 on 15.06.2006.

5. It has been submitted by the applicant bank that after availing the loan facilities, the defendants failed to adhere the terms and conditions of sanction and failed to maintain financial discipline by not submitting stock statements, statements of sundry debtors nor routed the sale and purchase transactions through the account despite follow up due to which the account became irregular and sticky. The applicant bank classified the account as NPA on 31.05.2008 as per RBI guidelines. On the request of defendant No.1, the applicant bank sanctioned restructure proposal by converting Cash Credit limit into WCTL on 28.03.2009 to be repaid in 82 EMIs of Rs.6,14,100/- and submission of financial data regularly and routing all transactions through newly opened Current Account failing which bank will recall the entire outstanding immediately. The defendant No.1 failed to pay interest / EMIs and submit stocks statements and financial data including

Balance Sheet as of 31.03.2008 due to which the applicant bank again classified all the accounts as NPA on 31.05.2009. The applicant issued legal notice on 09.052009 and 03.02.2012, but no response, hence the applicant bank has approached this Tribunal for recovery of their dues.

6. Notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 dated 01.06.2009 was issued to the defendants but they failed to pay the dues. The applicant bank sanctioned OTS proposal of defendant no.1 along with other 2 sister concern for Rs.985.00 lacs but defendants failed to clear dues as per sanction and OTS was withdrawn on 11.02.2011. During pendency of OA, third property was also released by the applicant bank. The applicant bank served notice under Section 13(4) for possession which was challenged by filing SA before Hon'ble DRT-III Delhi, pending adjudication.

7. In the written statement submitted on behalf of defendant no.1 to 4, it is submitted that the claim amount is not payable nor due, rate of interest not disclosed, penal interest charged, request letters of enhancement of limits not accepted by defendants, the defendant no.2 to 4 are close relatives and residing in same house but not associated with the business of defendant no.1 and defendant no.4 stood as guarantor who is housewife not associated with business and not mortgaged her property with the applicant bank. The defendant no.1,3 and 4 denied mortgaging their properties at Mall Road branch by depositing original title deeds, possession notice affixed illegally on 26.04.2011 and defendant no.3 and 4 filed SA against action of applicant bank in taking physical possession owned by them, obtained stay. The application not signed by authorized person, not disclosed the allegations made therein. The applicant bank cannot file OA unless action under Sarfaesi Act is not completed as per Section 13(10), denied the statement of account entries, Application is based on false, fabricated and manufactured documents, each and every entry purported to be alleged statement of accounts is vehemently denied and disputed. Further, signature of defendants got on undated and unfilled printed performs, stamp papers, filling by hand subsequently without mandate of defendants, not time given to read the documents. Further, defendant no.1 paid Rs.61,55,375/- between 10.08.2009 to 09.02.2010 and repayment was to be commenced from May 2009 but account was classified as NPA on 31.05.2008 and declared car loan as NPA on 31.05.2009 which cannot be two dates of NPA whereas one car loan was adjusted and No Dues issued on 20.05.2010. In view of above, defendants prayed to dismiss the OA with heavy costs and grant any other relief.

8. The applicant bank vehemently denied the submissions of defendants and submitted that upon execution of fresh documents, no requirement to file previous documents or statement of account, no necessity to inform changed rate of interest linked with BPLR which are notified from to time. The OA filed by duly authorized person, holding power of attorney which is valid and binding. It is further submitted that as per Hon'ble Supreme Court held in Transcore matter that both actions can be initiated under Sarfaesi Action and RDDBFI Act 1993 and OA has been filed based on loan documents executed by defendants on various dates and maintained in due and regular course of banking business. It is submitted that defendant no.1 requested for enhancement of limit which was guarantee by defendant no.2 and 3 and defendant no.1 & 3 cet mortgaging their respective properties as collateral security. It is further submitted that defendant no.4 mortgaged her property for M/s Varun International, M/s Gaurav International and extended to cover credit facilities availed by M/s S.S.Impex and executed letter of confirmation of creation of mortgage. The defendant no.1 acknowledged liability by executing Balance & Security Confirmation on 07.02.2009. Further, amount of Rs.4.00 lacs was deposited after filing of OA and bank has not taken over the possession of car. Further, instalment of WCTL was to be commenced from May 2009 but was NPA on 31.05.2008 not upgraded till one year from date of restructuring and proper follow up of financial discipline and there was no agreement to charge concessional rate of interest. The documents were duly filled, read-over duly explained to defendants who put their signatures voluntarily and consciously. In view of the above, applicant bank prayed to pass final order against the defendants, jointly and severally.

9. In order to prove its case, the applicant bank has filed its evidence by way of affidavit of Shri Raj Kumar Paul, authorized representative of the applicant bank who has proved the documents such as General Power of Attorney, Letters of Hypothecation of Cars, Agreements of Guarantees, Agreement for Hypothecation of Goods & Book Debts, Agreement for Hypothecation of Movable Assets, Enhancement Request Letter, Adhoc Limit Request, Agreements of Guarantee, Agreement for Hypothecation of Current Assets and Master Undertaking, Letter for Change of Branch, Photocopies of Perpetual Lease Deed, Conveyance Deed, Gift Deed, Confirmation of Creation of Mortgage, Letter of -Continuity, Letter of Deposit of Title Deeds, Confirmation, Balance and Security Confirmation, Restructuring Letters, Supplementary sd

Agreement, Sanction Letters, Declaration, Term Loan Agreement, Notice dated 09.05.2009, UPC, Postal Receipts, Corrigendum Notice, Statements of Accounts certified under Bankers' Books Evidence Act, Accrued Interest at Contractual Rates, Certificate of Rate of Interest applied marked as Ex.AW1/1 to Ex.AW1/77.

10. Heard and perused the pleadings. Apparently, defendants no.1 to 4 have raised the objections that the applicant bank has got signed the blank documents from them while granting the loan facilities. This Tribunal has gone through the documents which are duly filled and executed by the defendants no.1 to 4 and this Tribunal is of the view that plea of blank documents are 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. The witness of the applicant bank has fully corroborated the averments made in this O.A. The evidence lead by the applicant bank which consists of mainly written / typed documents have gone unchallenged and there is no question of disbelieving the same based upon the documents. This Tribunal has also observed that not an iota evidence/documents has been led by the defendants against the claim of the applicant bank and has made only submission on fact as stated in the written statement evidence. In the civil proceedings it cardinal principle, that whosoever alleges a fact he/she has to prove in the court of law by leading evidence mere assertion are not sufficient and nowhere defendants have denied about the availment of the loan.

12. The defendants have also challenged the statement of account of the bank but this Tribunal is of the view that statement of account is duly certified under Section 4 of the Bankers Books of Evidences Act and the same cannot be challenged unless specific entry is pointed by the defendants. Hence, the said objection is not maintainable and the same is hereby rejected.

13. In view of the above facts and circumstances, this Tribunal is of the view that the defendants have failed to convince this Tribunal and this Tribunal do not find any merit and reject the contentions of the defendants as baseless. I hereby allow this O.A. as the applicant bank has proved its claim beyond reasonable doubt.

14. 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.

15. 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.

16. 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, jointly or severally, within a period of 30 days, a sum of Rs.5,62,36,645/- (Rupees Five Crores Sixty Two Lacs Thirty Six Thousand Six Hundred Forty Five only) as on 06.02.2012 together with pendentelite and future interest @13.00% per annum with monthly rests from 06.02.2012 till the date of realization and costs; failing which the amount shall be recovered from sale of hypothecated stocks, book debts, current assets, Vehicles etc. and mortgaged property being Western Portion of First Floor of Built Up Property with roof rights on land measuring 207 sq.yds bearing Plot No.14, Block- BT, Shalimar Bagh, Delhi. In case of shortfall, the same shall be recovered from the sale of movable and immovable properties of the defendant no.1 to 4. (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 13.02.2026. (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: 16.12.2025