UNION BANK OF INDIA vs LANCO THERMAL POWER LTD AND ORS on 13 August 2026

**FINAL ORDER**

1. This original application has been filed by the Applicant Bank i.e. Andhra Bank on 30.08.2018, through Sh. B. Srinivas, Chief Manager, being the authorized officer of the Applicant Bank, under Section 19 of the Recovery of Debts Due to Banks and Financial Institution Act, 1993 against the Defendants No. 1 to 6 for recovery of a sum of Rs. 129,99,93,951.00 (Rupees One Hundred Twenty Nine Crore Ninety Nine Lakh Ninety Three Thousand Nine Hundred and Fifty One only) @ 12.30% as on 31.07.2018 together with pendentelite and future interest and other charges thereon p.a. linked to BR with monthly rests from the date of filing of OA till the date of payment and for realization in full along with all costs, charges, expenses etc. & other relief(s).

1.2 It is pertinent to note here that this OA bearing no. 1409/2018 was originally filed before Ld. DRT-II, Delhi, however, in pursuance to Gazette Notification No. 4718 (E) dated 04.10.2022 issued by Government of India, Department of Financial Services, Ministry of Finance, this case file was transferred by Ld. DRT-II, Delhi to this Tribunal in November 2022 and was numbered at TA-252/2022.

2. The brief facts of the case are that the Applicant Bank i.e. Andhra Bank is a Public Limited Banking Company incorporated under the Banking Companies Act having its Head Office at Hyderabad, Telangana and Circle Office at Rajinder Place, New Delhi and having its one of the Branch at Connaught Place, New Delhi.

It is further stated that the Applicant Bank is filing the present OA through Sh. B. Srinivas, presently working as Chief Manager and duly constituted attorney and principal officer of the Applicant Bank who is fully conversant with the facts and circumstances of the present case and is fully authorized, empowered and competent by the Applicant Bank to sign, verify and file the present OA and pleadings, file documents as may be just and necessary in the interest of the Applicant Bank and to do all such acts as may be necessary for proper conduct of legal proceedings filed on behalf of Applicant Bank and in connection with this Application by virtue of Authority Letter of the Applicant Bank.

2.1 It is stated in the OA that the Defendant no. 1 is a Company Limited and is engaged in the business of Thermal Power. The Defendant no. 1 approached the Applicant Bank to meet general corporate requirement in the year 2015.

The Defendants no. 2 & 3 extended their personal guarantee. The Defendants no. 4 & 5 extended the Corporate Guarantees for securing the credit facilities granted to Defendant no. 1 and stood as Guarantors / Mortgagors. The Defendant no. 6 to secure the repayment of the loan, pledged the demat shares of the Defendant no. 1 held by it in favour of the Applicant Bank. It is pertinent to note here that the Defendant no. 1 is 100% subsidiary of the Defendant no. 6.

So far as, Defendant no. 7 is concerned, it is a Bank who extended certain credit facilities to the Defendant no. 1 under multi banking facility. The Defendant no. 7 has been impleaded as proforma Defendant and no relief as such is being sought against the Defendant no. 7 in the present OA.

2.2 It is stated in the OA that at the request of the Defendant no. 1, the credit facilities were granted to them in the year 2015 amounting to Rs. 100.0 Crore vide Sanction Letter dated 01.10.2015 [terms and conditions of the said Sanction have been detailed in Para 5(5.6) of the OA].

2.3 In pursuance to the sanction of the credit facilities by the Applicant Bank, the Defendant no. 1 passed a Board Resolution on 26.10.2015 acknowledging the credit facilities granted by the Applicant Bank as per the Sanction Letter dated 01.10.2025.

Pursuing to the passing of the Board Resolution dated 26.10.2015 and sanction of the above credit facilities, following documents were executed by Defendant no. 1 :-

- (i) Defendant no. 1 submitted duly certified Memorandum of Association and Articles of Association of the Defendant no. 1 to the Applicant Bank;

- (ii) The Defendant no. 1 executed Composite Agreement dated 03.11.2015 thereby agreeing to pay interest at the rates mentioned in the agreement for all facilities or such rates and rests as may be fixed by the Applicant Bank and/or as per the guidelines issued by RBI from time to time;

- (iii) After executing the loan documents, the charges i.e. residual charges on the assets of the 10MW Hydro Projects of the Defendant no. 1 in the state of Himachal Pradesh was duly registered with the Ministry of Corporate Affairs;

- (iv) Defendant no. 1 wrote a letter to Applicant Bank on 03.11.2015 acknowledging the Sanction of Credit Facilities and accepting all the terms and conditions mentioned in the Sanction Letter dated 01.10.2015;

- (v) Defendant no. 1 executed an Undertaking on 03.11.2015 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 or default if any to the Credit Information Bureau Limited (CIBIL) or any other agency so authorized;

- (vi) Defendant no. 1 executed an Undertaking on 03.11.2015 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 or default if any to the Reserve Bank of India(RBI);

- (vii) Defendant no. 1 executed an Undertaking on 03.11.2015 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 or default if any to the Media or any other agency so deemed fit by the Applicant Bank.

- (viii) Defendant no. 1 passed a Board Resolution on 26.10.2015 acknowledging the credit facilities and as per the terms and conditions of the Sanction Letter of the Applicant Bank, it was agreed to provide the security in the form of Pledge of 2.77 crore of equity shares of Rs. 10/- each of Lanco Tanjore Power Company Limited

- (ix) In pursuance of the Board Resolution dated 26.10.2015, the Defendant no. 1 executed a Deed of Pledge in favour of the Applicant Bank for securing the due repayment of the corporate loan in terms of the Composite Agreement together with interest had pledged 2,77,12,953 equity shares of the Lanco Tanjore Power Company Limited (LTPCL) constituting 24.10% of equity of the paid of share capital of LTPCL.

2.4 It is stated in the OA that Defendants no. 2 & 3 executed General Form of Guarantee dated 03.11.2015 in favour of the Applicant Bank to secure the repayment of the credit facilities along with interest and other charges.

Further, Defendants no. 2 & 3 also executed an Undertaking on 03.11.2015 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 and furnishing of guarantee on default or if any on their part of obligation to repay the dues of the Defendant no. 1, to the CIBIL or any other agency so authorized.

Defendants no. 2 & 3 also executed an Undertaking on 03.11.2015 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 and furnishing of guarantee on default or if any on their part of obligation to repay the dues of the Defendant no. 1, to the RBI for inclusion of their names in the defaulter's list.

Moreover, Defendants no. 2 & 3 also executed an Undertaking on 03.11.2015 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 and furnishing of guarantee on default or if any on their part of obligation to repay the dues of the Defendant no. 1, to the media or any other agency as deemed fit by the Applicant Bank.

2.5 It is stated in the OA to in accordance with the terms and conditions of the Sanction Letter dated 01.10.2015, the Defendants no. 4 & 5 agreed and accepted to extend their guarantees to secure the due repayment of the loan of the Defendant no. 1 along with interest thereon.

2.6 Pursuant to the acceptance of terms and conditions, the Defendant no. 4 passed a Board Resolution dated 21.10.2015 thereby giving approval for the execution of the Guarantee Agreement and to extend the equitable mortgage on the immovable property owned by the Defendant no. 4 in the state of Chattisgarh admeasuring 100.55 Acres situated at Dist. Korba, Chattisgarh as collateral security in favour of the Applicant Bank with respect to the loan sanction to the Defendant no. 1.

In pursuant to the Board Resolution dated 21.10.2015, the Defendant no. 4 executed General Form of Guarantee dated 03.11.2015 in favour of the Applicant Bank to secure the repayment of the credit facilities along with interest and other charges.

Pursuant to the Board Resolution dated 21.10.2015, the Defendant no. 4 executed Form No. 255 B dated 03.11.2015 in favour of the Applicant Bank thereby extending the mortgage of its property, title documents of which was already deposited on 12.11.2012 situated in the state of Chhattisgarh admeasuring 100.55 Acres situated at Dist. Korba, Chattisgarh as collateral security in favour of the Applicant Bank with respect to the loan sanctioned to the Defendant no. 1.

It is stated in the OA that the Defendant no. 4 executed an undertaking on 03.11.2015 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 and furnishing of guarantee or default if any on its part of obligation to repay the dues of the Defendant no. 1, to the CIBIL or any other agency so authorized.

It is further stated in the OA that the Defendant no. 4 executed an undertaking on 03.11.2015 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 and furnishing of guarantee or default if any on its part of obligation to repay the dues of the Defendant no. 1, to the RBI for inclusion its name in the defaulter's list.

It is stated in the OA that the Defendant no. 4 executed an undertaking on 03.11.2015 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 and furnishing of guarantee or default if any on its part of obligation to repay the dues of the Defendant no. 1, to the media or any other agency as deemed fit by the Applicant Bank.

It is also stated in the OA that after extending the mortgage by the Defendant no. 4 on its property the charge was registered with the Ministry of Corporate Affairs. In this regard, Certificate of Registration dated 03.11.2015 was issued by the Ministry of Corporate Affairs.

2.7 Pursuant to the acceptance of terms and conditions, the Defendant no. 5 passed a Board Resolution dated 26.10.2015 thereby giving approval for the execution of the Corporate Guarantee in favour of the Applicant Bank for securing the due repayment of the loan of the Defendant no. 1 along interest accrued thereon.

In pursuant to the Board Resolution dated 26.10.2015, the Defendant no. 5 executed General Form of Guarantee dated 03.11.2015 in favour of the Applicant Bank to secure the repayment of the credit facilities along with interest and other charges.

It is also stated in the OA that pursuant to the acceptance of terms and conditions, the Defendant no. 5 passed a Board Resolution thereby giving approval for extension of the 

equitable mortgage on the immovable property owned by the Defendant no. 5 in the state of Tamil Nadu admeasuring 217.75 Acres situated at Memardur Village Dist. Tuticorn, Tamil Nadu as collateral security in favour of the Applicant Bank with respect to the loan sanctioned to the Defendant no. 1.

It is further stated in the OA that pursuant to the Board Resolution dated 26.10.2015, the Defendant no. 5 executed Form 255B dated 03.11.2015 in favour of the Applicant Bank thereby extending the mortgage of its property, title documents of which was already deposited on 15.07.2015 for securing the loan sanctioned as the Defendant no. 1, situated in the State of Tamil Nadu admeasuring 217.74 Acres situated at Memardur Village Dist. Tuticorn, Tamil Nadu as collateral security in favour of the Applicant Bank with respect to the loan sanctioned to the Defendant no. 1. It is also stated that the extent of 217.25 acres is covered under 20 title deeds [details given in Para 5(5.24) of the OA].

It is stated in the OA that the Defendant no. 5 executed an undertaking on 03.11.2015 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 and furnishing of guarantee or default if any on its part of obligation to repay the dues of the Defendant no. 1, to the CIBIL or any other agency so authorized.

It is further stated in the OA that the Defendant no. 5 executed an undertaking on 03.11.2015 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1

and furnishing of guarantee or default if any on its part of obligation to repay the dues of the Defendant no. 1, to the RBI for inclusion its name in the defaulter's list.

It is stated in the OA that the Defendant no. 5 executed an undertaking on 03.11.2015 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 and furnishing of guarantee or default if any on its part of obligation to repay the dues of the Defendant no. 1, to the media or any other agency as deemed fit by the Applicant Bank.

It is also stated that after extending the mortgage by the Defendant no. 5 on its property the charge was registered with the Ministry of Corporate Affairs and the Certificate of Registration dated 03.11.2015 was issued by the Ministry of Corporate Affairs.

2.8 It is stated in the OA that in accordance with the terms and conditions of the Sanction Letter dated 01.10.2015, the Defendant no. 6, for approval for execution of necessary documents for creating security for due repayment of the loan of the Defendant no. 1 which is 100% subsidiary of the Defendant no. 6, along with the interest by pledging the 4 Crore Equity Shares of the Defendant no. 6 in favour of the Applicant Bank, passed Board Resolution dated 26.10.2015.

In pursuance of the Board Resolution dated 26.10.2015, the Defendant no. 6 executed an Agreement for pledge in favour of the Applicant Bank for securing the due repayment of the corporate loan in terms of the Composite Agreement together with interest, and had pledged 4 crore equity shares of the Defendant no. 6.

2.9 It is stated in the OA that the Defendant no. 1 failed to maintain financial discipline and route the transactions pertaining to the Credit Facilities provided by the Applicant Bank. Moreover, the Defendant no. 1 also did not service the interest and failed to fulfil its obligations under the Loan Agreement. It is further stated that with the passage of time, the Defendant no. 1 also failed to meet assurances in regard to their obligations towards the Applicant Bank. Thus, the Defendant no. 1 miserably failed and neglected to pay and meet their liabilities towards the Applicant Bank.

The fact of the outstanding amount was repeatedly brought to the notice of the Defendant no. 1 and was requested to regularize the account. However, despite repeated requests and reminders including personal visits of the officers of the Bank and in spite of assurance promise and representation by the Defendant no. 1, the Defendant no. 1 failed to meet their incontestable obligations towards the Applicant Bank.

Inspite of several requests by the Applicant Bank, the Defendant no. 1 failed to honour their commitment with regard to the dues towards the Applicant, hence, the account of the Defendant no. 1 was classified as Non Performing Asset (NPA) on 31.12.2016.

2.10 It is stated in the OA that the Applicant Bank sent a notice dated 24.01.2017 under Section 13(2) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) to all the Borrowers demanding Rs. 106,50,15,241/- as on 24.01.2017 along interests, cost etc. Applicant Bank also put on notice that the Defendants shall not transfer by sale, lease or otherwise the said secured assets without obtaining written consent of the Bank.

The Applicant Bank also sent a notice dated 24.01.2017 under Section 13(2) of SARFAESI Act to the Guarantors demanding Rs. 106,50,15,241/- as on 24.01.2017 along interests, cost etc. Applicant Bank also put on notice that the Guarantors shall not transfer by sale, lease or otherwise the said secured assets without obtaining written consent of the Bank.

2.11 It is stated in the OA that since the Defendants no. 1 to 6 failed to adhere to maintain financial discipline, thus, the Applicant Bank has been compelled to file this Application before this Tribunal.

3. Notices of this O.A. were issued to the Defendants, and Defendants no. 1 to 6 appeared through their counsels. It is matter of record that Defendants no. 2, 3, 5 & 6 filed their respective separate WS(s).

3.1 So far as, Defendants no. 1 is concerned, it did not chose to file any WS.

3.2 So far as, Defendant no. 7 is concerned, it neither appeared nor filed any WS before this Tribunal.

It is matter of record that the Defendant no. 7 is the Proforma Defendant against whom no relief has been claimed by Applicant Bank in this OA.

4. Defendant no. 2 has raised following main objections in his WS:-

- (i) Defendant no. 2 has raised an objection that the instant OA is not maintainable as the General Power of Attorney executed is not supported by a Board Resolution and as such lacks authority which gives to the very root of the matter.

- (ii) Next objection raised by Defendant no. 2 is that this Hon'ble Tribunal does not have jurisdiction to entertain the present OA.

- (iii) Defendant no. 2 has also taken a plea that the instant OA is liable to be kept in abeyance till continuation of moratorium qua Defendant no. 1 as the liability of the answering Defendant cannot be ascertained in absence of Defendant no. 1.

- (iv) Defendant no. 2 has raised an objection that the Applicant Bank has failed to produce the complete statement of account and their claims are not supported by any voucher thereby rendering the same inadmissible in the instant proceeding. It is also stated in the WS that the transactions and debits relating to interest, penal interest and interest on penal interest are completely conspicuous by their absence in such purported Statement(s) of Account(s). Moreover, respective rates of interest for each of such debit relating to interest is conspicuous by its absence and a mere summary of such amounts is not enough to maintain the present OA.

(v) Defendant no. 2 has stated in the WS that the Defendant no. 1 company is a holding company for its SVS – Lanco Babbandh Power Limited (LBPL) and Lanco Vidarbha Thermal Power Ltd. (LVTPL). Further more, Applicant Bank is a Lender in the consortium that lent money to both the said SPVs. It is further stated that ICICI Bank, lead Bank, has filed OA No. 904/2018 against LBPL and in the said OA, Applicant Bank is also the part of the consortium and is arrayed as Proforma Defendant. It is also stated that PNB is the lead Banker that has filed the OA No. 1048/2018 against LVTPL and in the said OA, the Applicant Bank herein is arrayed as Applicant no. 9. In both the cases, the Consortium of Lenders failed to disburse the amounts on time which led to the respective companies failing to get proper and sufficient funds on time. On one hand, the Banks in the consortium (including Applicant Bank) failed to disburse the funds on time and on the other hand, they were demanding progress be shown and that the money lent be returned. Due to this, the SPVS viz. LBPL and LVTPL could not repay the amount on time and as a result they defaulted. It is stated that Defendant no. 1 company has no business of its own, but thrives on the dividend that it expects out of the shares held of LBPL and LVTPL. Due to failure of the Consortium in ensuring timely disbursement of funds to LBPL and LVTPL, they defaulted and as a result they are unable to pay the Defendant no. 1 company any money. Consequently, Defendant no. 1 company 

was also left high and dry and no dividends could be expected from LBPL and LVTPL, due to them also being left cash-starved. Now this OA filed against Defendant no. 1 is frivolous and filed with the sole intent of harassing the promoters of the company and further disrupt its daily operations.

It is stated in the WS that since the Applicant Bank had also failed to abide by the terms of the Loan Agreement which resulted in untimely and poor disbursal of funds to LBPL and LVTPL, the same resulted in them defaulting in their respective loans. As a result, they could not pay any money (in the form of dividend to their parent company viz. LTPL / Defendant no. 1 company). As a result, the Applicant Bank is precluded from claiming any relief against the Defendant no. 1 company. Consequently, no relief can also be claimed against the answering Defendant due to the terms of the contract being breached and agreements violated. Hence, the same discharges the answering defendant from any further liability.

- (vi) Next plea taken by Defendant no. 2 is that the Defendant no. 1 company is presently undergoing CIRP before Hon'ble NCLT, Hyderabad, hence, the control of the management of the affairs of the said company lie with the hands of a Resolution Professional appointed by the Applicant Bank themselves. Hence, the Applicant Bank and the Defendant are one and the same. Thus, it would be illegal and amount to forum shopping coming to this Hon'ble Tribunal seeking the said relief(s) from the answering Defendant while the same can be taken from the Hon'ble NCLT, Hyderabad itself.

- (vii) Defendant no. 2 has raised an objection that the validity of the documents executed are disputed and they have no evidentiary value in the eyes of law.

In the light of above, it has been prayed to dismiss the OA with exemplary cost.

- 5. Defendant no. 3 has also filed its separate WS raising similar objections as raised by Defendant no. 2, in his WS.

- 6. So far as, Defendant no. 5 is concerned, it has filed its WS through Sh. Subba Rao Yarraguntla, AR of Defendant no. 5 and it has also raised similar objections, as taken by Defendant no. 2 in his WS.

- 7. So far as, Defendant no. 6 is concerned, it has filed its WS through Sh. Prabhjot Singh, AR of Defendant no. 6. In its WS, Defendant no. 6 has also raised similar objections, as raised by Defendant no. 2. Apart from similar objections, some other objections have also been raised by Defendant no. 6 which are as follows :-

- (i) Defendant no. 6 has raised an objection that it is settled law that the present proceedings are in the nature of a suit for recovery of money resulting primarily in a money decree. Therefore, this Hon'ble Tribunal is bound by law to first adjudicate the liability of Defendant no. 1 Company / principal debtor – against the claimed debt of the Applicant Bank and its other co-lenders arrayed as Proforma Defendants in this OA. It is stated that as on date, the Defendant no. 1 is governed by the Committee of Creditor constituted pursuant to admission of Applicant Bank's petition to NCLT, Hyderabad vide Order dated 09.05.2019 under the Insolvency and Bankruptcy Code, 1016. Thus, the Creditor (Applicant Bank) and the principal debtor (Defendant no. 1) are under common management as on date. In these circumstances, Defendant is unable to defend itself against its primary liability towards the alleged debt, recovery whereof is sought in the present proceedings. Thus, the liability of Defendant no. 1 cannot be determined in its absence or when it is rendered unable to fruitfully defend itself by the very creditor seeking recovery of debt i.e. the Applicant Bank and its co-lenders. It is stated that no liability can be cast on any other defendant till such time that the liability of Defendant no. 1 is ascertained in totally. Therefore, the present proceedings must be adjourned *sine die* till such time that the Applicant Bank and its co-lenders are divested of the management of the Defendant no. 1 Company.

- (ii) Defendant no. 6 has also taken a plea that the answering Defendant has been arrayed as a defendant in the alleged capacity of a pledger, however, no document has been placed on record to reflect that the alleged pledge has been invoked. In fact, the two notices placed on record with the OA reflect that the same were never addressed to the answering Defendant. Further, Section 176 of the Indian Contract Act, 1872 mandatorily requires a notice before proceeding against the pledger or appropriating the pledged goods. No such notice has over been given / sent to the answering Defendant, thus, the action of the Applicant Bank in trying to seek alleged dues against the answering Defendant is *de hors* any cause of action and the OA ought to be rejected against the answering Defendant at the outset.

(iii) Defendant no. 6 has stated in the WS that as per documents placed on record by the Applicant Bank – one Board Resolution dated 26.10.2015 came to be passed by the answering Defendant and in pursuance whereof an agreement for pledge in favour of the Applicant Bank was executed on 06.11.2015. As per the alleged agreement place, 4 crore equity share of Defendant no. 1 value Rs. 10/- held by Defendant no. 6 were purportedly pledged by the answering Defendant to the Applicant Bank. As per clause 2.6 of the said Pledge Agreement, the Applicant Bank has been empowered to receive all amounts in respect of collateral, transfer and register in the name of the pledgee all the pledged shares and even vote in respect of all or any part of the pledged shares. Moreover, it is the case of the Applicant Bank that the answering Defendant also executed one Power of Attorney in the name of the Applicant Bank to give effect to the purported pledge. From the alleged power of attorney placed on record, it is apparent that the Applicant Bank has been granted power to take any action and execute any instrument that it may deem necessary to accomplish the purpose of the Deed of Pledge. It is to be noted that the alleged power of attorney is irrevocable until the Deed of Pledge would be terminated in accordance with the terms and conditions of the Deed of Pledge. Since, no termination has been placed by the Applicant Bank, thus, the Applicant Bank is in complete control of the allegedly pledged shares.

Thus, as per the Applicant Bank's own case, the answering Defendant has delegated all its rights in the alleged pledged shares to the Applicant bank. In consequence, Applicant Bank is exclusively vested with total control over the pledged goods and the answering Defendant is impaired from taking any action in respect thereof. Thus, no monetary claim can be raised against the answering Defendant. The Applicant Bank cannot hold back the pledged goods while at the same time seeking its dues in monetary terms.

It is stated that the Applicant Bank is free to appropriate the pledged goods to the present case. In fact, Defendant no. 1 company (the Borrower) in this case is in Corporate Insolvency Resolution Process and the Applicant Bank has already filed its claim with the Resolution Professional for the amounts it alleges to be due from the Borrower. Now no claim can be made against the pledged shares against the pledger especially during the moratorium in operation during the CIRP.

In the light of above, it has been prayed to dismiss the OA with exemplary cost in favour of the answering Defendant no. 6.

8. Rejoinder(s) to the WS(s) of Defendants no. 5 & 6 have also been filed by the Applicant Bank denying the allegations levelled against it and reiterating the averments made in the OA.

9. To prove its case, the Applicant Bank leads its evidence by filling the affidavit of Sh. Deepak Singh, Chief Manager of the Applicant Bank.

9.1 Sh. Deepak Singh, Officer of Applicant Bank has placed reliance upon the documents filed by the Applicant Bank which includes:-

- (i) Authority Letter issued by the Applicant Bank in favour of the deponent (**Ex. AW 1/1**);

- (ii) Sanction Letter dated 01.10.2015 issued by the Applicant Bank and duly acknowledged by the Defendant no. 1 (**Ex. AW 1/2**);

- (iii) Board Resolution dated 26.10.2015 acknowledging the credit facilities granted as per the Sanction Letter dated 01.10.2015 (**Ex. AW 1/3 - which is actually not exhibited being photocopies**);

- (iv) Duly certified copy of Memorandum of Association and Articles of Association of the Defendant no. 1 submitted by the Defendant no. 1 to the Applicant Bank (**Ex. AW 1/4 which is actually exhibited as Ex. AW 1/3**).);

- (v) Composite Agreement dated 03.11.2015 executed by Defendant no. 1 thereby agreeing to pay interest at the rates mentioned in the agreement for all facilities or such rates and rests as may be fixed by the Applicant Bank and/or as per the guidelines issued by RBI from time to time (Ex. AW 1/5 **which is actually exhibited as Ex. AW 1/4**);

- (vi) Certificate of Registration dated 03.11.2015 issued by the Ministry of Corporate Affairs in respect of residual charges on the assets of the 10MW Hydro Projects of the Defendant no. 1 in the state of Himachal Pradesh (Ex. AW 1/6 **which is actually exhibited as Ex. AW 1/5**);

- (vii) Letter dated 03.11.2015 written by Defendant no. 1 to the Applicant Bank acknowledging the Sanction of Credit Facilities and accepting all the terms and conditions mentioned in the Sanction Letter dated 01.10.2015 (Ex. AW 1/7 **which is actually exhibited as Ex. AW 1/6**);

- (viii) Undertaking dated 03.11.2015 executed by Defendant no. 1 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 or default if any to the Credit Information Bureau Limited (CIBIL) or any other agency so authorized (Ex. AW 1/8 **which is actually exhibited as Ex. AW 1/7**);

- (ix) Undertaking dated 03.11.2015 executed by Defendant no. 1 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 or default if any to the Reserve Bank of India(RBI) (Ex. AW 1/9 **which is actually exhibited as Ex. AW 1/8**);

(x) Undertaking dated 03.11.2015 executed by Defendant no. 1 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 or default if any to the Media or any other agency so deemed fit by the Applicant Bank (Ex. AW 1/10 **which is actually exhibited as Ex. AW 1/9**);

(xi) Board Resolution passed by Defendant no. 1 on 26.10.2015 acknowledging the credit facilities and as per the terms and conditions of the Sanction Letter of the Applicant Bank, it was agreed to provide the security in the form of Pledge of 2.77 crore of equity shares of Rs. 10/- each of Lanco Tanjore Power Company Limited (Ex. AW 1/11 **which is actually exhibited as Ex. AW 1/10**);

(xii) Deed of Pledge dated 06.11.2015 executed by Defendant no. 1 in favour of the Applicant Bank for securing the due repayment of the corporate loan in terms of the Composite Agreement together with interest and had pledged 2,77,12,953 equity shares of the Lanco Tanjore Power Company Limited (LTPCL) constituting 24.10% of equity of the paid of share capital of LTPCL (Ex. AW 1/12 **which is actually exhibited as Ex. AW 1/11**);

- (xiii) Sanction Letter dated 01.10.2016 duly acknowledged by Defendants no. 2 & 3 accepting the terms and conditions of the Sanction Letter (Ex. AW 1/13 **which is actually exhibited as Ex. AW 1/12**);

- (xiv) General Form of Guarantee dated 03.11.2015 executed by Defendants no. 2 & 3 in favour of the Applicant Bank (Ex. AW 1/14 **which is actually exhibited as Ex. AW 1/13**);

- (xv) Undertaking dated 03.11.2015 executed by Defendants no. 2 & 3 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 and furnishing of guarantee on default or if any on their part of obligation to repay the dues of the Defendant no. 1, to the CIBIL or any other agency so authorized (Ex. AW 1/15 **which is actually exhibited as Ex. AW 1/14**);

- (xvi) Undertaking dated 03.11.2015 executed by Defendants no. 2 & 3 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 and furnishing of guarantee on default or if any on their part of obligation to repay the dues of the Defendant no. 1, to the RBI for inclusion of their names in the defaulter's list (Ex. AW 1/16 **which is actually exhibited as Ex. AW 1/15**);

- (xvii) Undertaking dated 03.11.2015 executed by thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 and furnishing of guarantee on default or if any on their part of obligation to repay the dues of the Defendant no. 1, to the media or any other agency as deemed fit by the Applicant Bank (Ex. AW 1/17 **which is actually exhibited as Ex. AW 1/16**);

(xviii) Sanction Letter dated 01.10.2015 with terms and conditions acknowledged by Defendants no. 4 & 5 (Ex. AW 1/18 **which is actually same document exhibited as Ex. AW 1/2**);

(xix) Board Resolution dated 21.10.2015 passed by Defendant no. 4 thereby giving approval for the execution of the Guarantee Agreement and to extend the equitable mortgage on the immovable property owned by the Defendant no. 4 in the state of Chattisgarh admeasuring 100.55 Acres situated at Dist. Korba, Chattisgarh as collateral security in favour of the Applicant Bank with respect to the loan sanction to the Defendant no. 1 (Ex. AW 1/19 **which is actually exhibited as Ex. AW 1/17**);

(xx) Duly certified copy of Memorandum and Articles of Association of the Defendant no. 4 (Ex. AW 1/20 **which is actually exhibited as Ex. AW 1/18**);

(xxi) General Form of Guarantee dated 03.11.2015 executed by Defendant no. 4 in favour of the Applicant Bank (Ex. AW 1/21 **which is actually exhibited as Ex. AW 1/19**);

- (xxii) Form No. 255 B dated 03.11.2015 executed by Defendant no. 4 in favour of the Applicant Bank thereby extending the mortgage of its property, title documents of which was already deposited on 12.11.2012 situated in the state of Chhattisgarh admeasuring 100.55 Acres situated at Dist. Korba, Chattisgarh as collateral security in favour of the Applicant Bank with respect to the loan sanctioned to the Defendant no. 1 (Ex. AW 1/22 **which is actually exhibited as Ex. AW 1/20**);

- (xxiii) Copy of Letter evidencing deposit of documents of title, executed by Defendant no. 4 in favour of the Applicant Bank on 16.11.2022 (Ex. AW 1/23 – **which is actually not exhibited being photocopies**);

- (xxiv) Copy of the Lease Deed registered vide document No. 2204/2011 dated 20.10.2011 along with site Plan (in respect of property of Defendant no. 4) (Ex. AW 1/24 **which is actually exhibited as Ex. AW 1/21**);

- (xxv) Copy of the Letter dated 17.09.2012 issued by Chattisgarh Industrial Development Corporation Limited conveying the permission to mortgage in favour of the Applicant Bank (Ex. AW 1/25 **which is actually exhibited as Ex. AW 1/22**);

- (xxvi) Undertaking dated 03.11.2015 executed by Defendant no. 4 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 and furnishing of guarantee or default if any on its part of obligation to repay the dues of the Defendant no. 1, to the CIBIL or any other agency so authorized (Ex. AW 1/26 **which is actually exhibited as Ex. AW 1/23**);

(xxvii) Undertaking dated 03.11.2015 executed by Defendant no. 4 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 and furnishing of guarantee or default if any on its part of obligation to repay the dues of the Defendant no. 1, to the RBI for inclusion its name in the defaulter's list (Ex. AW 1/27 **which is actually exhibited as Ex. AW 1/24**);

(xxviii) Undertaking dated 03.11.2015 executed by Defendant no. 4 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 and furnishing of guarantee or default if any on its part of obligation to repay the dues of the Defendant no. 1, to the media or any other agency as deemed fit by the Applicant Bank (Ex. AW 1/28 **which is actually exhibited as Ex. AW 1/25**);

(xxix) Certificate of Registration dated 03.11.2015 issued by the Ministry of Corporate Affairs with regard to charge created by Defendant no. 4 on its property after extending the mortgage (Ex. AW 1/29 **which is actually exhibited as Ex. AW 1/26**);

(xxx) Board Resolution dated 26.10.2015 passed by Defendant no. 5 thereby giving approval for the execution of the Corporate Guarantee in favour of the Applicant Bank for securing the due repayment of the loan of the Defendant no. 1 along interest accrued thereon (Ex. AW 1/30 **which is actually exhibited as Ex. AW 1/27**);

(xxxii) Duly certified copy of Memorandum and Articles of Association of Defendant no. 5 (Ex. AW 1/31 – **which is actually not exhibited being photocopies**);

(xxxii) General Form of Guarantee dated 03.11.2015 executed by Defendant no. 5 in favour of the Applicant Bank (Ex. AW 1/32 **which is actually exhibited as Ex. AW 1/28**);

(xxxiii) Board Resolution thereby giving approval for extension of the equitable mortgage on the immovable property owned by the Defendant no. 5 in the state of Tamil Nadu admeasuring 217.75 Acres situated at Memardur Village Dist. Tuticorn, Tamil Nadu as collateral security in favour of the Applicant Bank with respect to the loan sanctioned to the Defendant no. 1 (Ex. AW 1/33 **which is actually exhibited as Ex. AW 1/29**);

(xxxiv) Form 255B dated 03.11.2015 executed by Defendant no. 5 in favour of the Applicant Bank thereby extending the mortgage of its property, title documents of which was already deposited on 15.07.2015 for securing the loan sanctioned as the Defendant no. 1, situated in the State of Tamil Nadu admeasuring 217.74 Acres situated at Memardur Village Dist. Tuticorn, Tamil Nadu as collateral security in favour of the Applicant Bank with respect to the loan sanctioned to the Defendant no. 1 (Ex. AW 1/34 **which is actually exhibited as Ex. AW 1/30**);

- (xxxv) Copies of title deeds of the property admeasuring 217.25 acres (covered under 20 title deeds) (Ex. AW 1/35-colly - **which is actually not exhibited being photocopies**);

- (xxxvi) Chart of 20-Title Deeds of the property mortgaged by Defendant no. 5 (Ex. AW 1/36 – **which is actually not exhibited being photocopies**);

- (xxxvii) Memorandum confirming deposit of Title Deeds dated 17.03.2016 with regard to mortgage created by Defendant no. 5 on its properties on 15.07.2015 (**which is actually exhibited as Ex. AW 1/31**).

- (xxxviii) Undertaking dated 03.11.2015 executed by Defendant no. 5 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 and furnishing of guarantee or default if any on its part of obligation to repay the dues of the Defendant no. 1, to the CIBIL or any other agency so authorized (Ex. AW 1/37 **which is actually exhibited as Ex. AW 1/32**);

- (xxxix) Undertaking dated 03.11.2015 executed by Defendant no. 5 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 and furnishing of guarantee or default if any on its part of obligation to repay the dues of the Defendant no. 1, to the RBI for inclusion its name in the defaulter's list (Ex. AW 1/38 **which is actually exhibited as Ex. AW 1/33**);

(xli) Undertaking dated 03.11.2015 executed by Defendant no. 5 thereby giving consent to the Applicant Bank to give information with regard to availing the credit facilities by the Defendant no. 1 and furnishing of guarantee or default if any on its part of obligation to repay the dues of the Defendant no. 1, to the media or any other agency as deemed fit by the Applicant Bank (Ex. AW 1/39 **which is actually exhibited as Ex. AW 1/34**);

(xlii) Certificate of registration dated 03.11.2015 issued by the Ministry of Corporate Affairs with regarding extending the mortgage by the Defendant no. 5 on its property (Ex. AW 1/40 **which is actually exhibited as Ex. AW 1/35**);

(xliii) Board Resolution dated 26.10.2015 executed by Defendant no. 6 (Ex. AW 1/41 **which is actually exhibited as Ex. AW 1/36**);

(xliv) Agreement for Pledge dated 06.11.2015 executed by Defendant no. 6 along with Power of Attorney in favour of Applicant Bank (Ex. AW 1/42 **which is actually exhibited as Ex. AW 1/37**);

(xlv) Copy of Notice dated 24.01.2017 issued u/s 13(2) of SARFAESI Act by the Applicant Bank to all the Borrowers (Ex. AW 1/43 **which is actually exhibited as Ex. AW 1/38**);

(xlv) Copy of notice dated 24.01.2017 u/s 13(2) of SARFAESI Act issued by the Applicant to the Guarantors (Ex. AW 1/44 **which is actually exhibited as Ex. AW 1/38**);

(xlvi) Statement of Accounts duly certified under Section 4 of the Bankers Books of Evidence Act in respect of Loan Account of Defendant no. 1 (Ex. AW 1/45 **which is actually exhibited as Ex. AW 1/39**).

10. So far as, Defendants no. 1 to 6 are concerned, they did not chose to file any Evidence, hence the defence taken by these Defendants remained unsubstantiated / uncorroborated.

11. During the pendency of this OA, it was informed by the Ld. counsel for the Applicant Bank that CIRP proceedings have been initiated qua Defendants no. 1 & 4 before Ld. NCLT, Hyderabad and personal insolvency proceedings have also been commenced qua Defendants no. 2 & 3 before Ld. NCLT, Hyderabad.

12. It is also matter of record that during the pendency of this OA, the name of Union Bank of India was substituted in place of Andhra Bank vide Order dated 19.08.2023 passed in IA No. 329/2022.

13. Further more, name of Defendant no. 1 was deleted from the array of parties vide Order dated 08.02.2024 passed in IA No. 1641/2022.

14. Similarly, name of Defendant no. 4 was also deleted from the array of parties vide Order dated 23.01.2025 passed in IA No. 82/2025.

15. Further more, due to non-appearance, Defendants no. 5 to 7 were proceeded ex parte vide Order dated 15.04.2024 of this Tribunal.

16. Heard Ld. counsel for the Applicant Bank and perused the entire record.

16.1 It is matter of record that name(s) of Defendants no. 1 & 4 have already been deleted from the array of parties, as discussed above.

It is also matter of record that personal insolvency proceedings have been initiated qua Defendants no. 2 & 3 before Ld. NCLT, Hyderabad, hence, no final order can be passed qua Defendants no. 2 & 3, at this stage.

However, it is directed that Applicant Bank shall be at liberty to revive the OA qua Defendants no. 2 & 3 in case personal insolvency proceedings are quashed / withdrawn in future, in accordance with law.

It is also directed that in case Applicant Bank receives any amount from CIRP / personal insolvency proceedings, it shall give due adjustment of the same in the recovery proceedings.

16.2 It is matter of record that though Defendants no. 2, 3 & 4 filed their respective WS(s) but there is no need to deal the same as Defendants no. 2 & 3 are before Ld. NCLT, Hyderabad and Defendant no. 4 has already been deleted from the array of parties.

16.3 Now I would like to deal with the objections raised by Defendants no. 5 & 6 in their respective WS(s), in following paras:- **Common objections raised by Defendants no. 5 & 6 in their respective WS(s)**

- (i) Defendants no. 5 & 6 have raised an objection that the instant OA is not maintainable as the General Power of Attorney executed is not supported by a Board Resolution and as such lacks authority which gives to the very root of the matter.

I have gone through the record and it is evident from the records that the Applicant Bank has duly proved the Authority Letter issued by the Applicant Bank in favour of its deponent (Ex. AW 1/1). Further more, in its Rejoinder, Applicant Bank has clearly stated that the Applicant herein is a banking institution constituted under the Banking Companies (Acquisition and Transfers of Undertakings) act, 1970 and not a company registered under the Companies Act, 2013. Hence, General Power of Attorney executed in favour of Authorized Officer of the Applicant Bank need not to be supported by a Board Resolution. I also find merit in the contention of Applicant Bank. Even otherwise, no infirmity or illegality is found in the Authority Letter issued by the erstwhile Andhra Bank as well as Union Bank of India in favour of their respective authorized officers. In these circumstances, this Tribunal is of the view that the Defendants no. 5 & 6 have failed to substantiate this plea and same is hereby rejected.

(ii) Next objection raised by Defendants no. 5 & 6 is that this Hon'ble Tribunal does not have jurisdiction to entertain the present OA.

It is matter of record that the issue of jurisdiction has already been decided by this Tribunal vide Order dated 03.12.2024 of this Tribunal wherein it is held that this Tribunal is having jurisdiction to entertain this OA. It is also evident that the said order has never been challenged before any higher authority, hence, same has already attained finality. Hence, this objection with regard to jurisdiction stands rejected.

(iii) Defendants no. 5 & 6 have also taken a plea that the instant OA is liable to be kept in abeyance till continuation of moratorium qua Defendant no. 1 as the liability of the answering Defendant cannot be ascertained in absence of Defendant no. 1.

It is admitted position that CIRP proceedings were commenced qua Defendant no. 1 before Ld. NCLT, Hyderabad. But it is also admitted fact that Defendants no.5 & 6 have been impleaded in this OA as corporate guarantor and pledger respectively. This Tribunal is of the view that pendency of CIRP proceedings before Ld. NCLT does not bar this Tribunal to pass an order for recovery of dues of Applicant Bank qua Guarantors / Pledger. Hence, this plea of Defendants no. 5 & 6 stands rejected.

(iv) Defendants no. 5 & 6 have raised an objection that the Applicant Bank has failed to produce the complete statement of account and their claims are not supported by any voucher thereby rendering the same inadmissible in the instant proceeding. It is also stated in the WS that the transactions and debits relating to interest, penal interest and interest on penal interest are completely conspicuous by their absence in such purported Statement(s) of Account(s). Moreover, respective rates of interest for each of such debit relating to interest is conspicuous by its absence and a mere summary of such amounts is not enough to maintain the present OA.

I have gone through the record and found that the Applicant Bank has filed duly certified copy of Statement of Account of Defendant no. 1 along with Certificate u/s 4 of Bankers Books of Evidence Act (Ex. AW 1/39). It is also matter of record that though the Defendants no. 5 & 6 were always at liberty to file their own statement of accounts but they have not done so. Thus, this Tribunal is of the view that this objection of Defendants no. 5 & 6 is merely a bald allegation without any substantial documentary evidence, hence, same is liable to be dismissed and same stands dismissed.

(v) Defendants no. 5 & 6 have stated in the WS that the Defendant no. 1 company is a holding company for its SVS – Lanco Babbandh Power Limited (LBPL) and Lanco Vidarbha Thermal Power Ltd. (LVTPL). Further more, Applicant Bank is a Lender in the consortium that lent money to both the said SPVs.

It is further stated that ICICI Bank, lead Bank, has filed OA No. 904/2018 against LBPL and in the said OA, Applicant Bank is also the part of the consortium and is arrayed as Proforma Defendant. It is also stated that PNB is the lead Banker that has filed the OA No. 1048/2018 against LVTPL and in the said OA, the Applicant Bank herein is arrayed as Applicant no. 9. In both the cases, the Consortium of Lenders failed to disburse the amounts on time which led to the respective companies failing to get proper and sufficient funds on time. On one hand, the Banks in the consortium (including Applicant Bank) failed to disburse the funds on time and on the other hand, they were demanding progress be shown and that the money lent be returned. Due to this, the SPVS viz. LBPL and LVTPL could not repay the amount on time and as a result they defaulted. It is stated that Defendant no. 1 company has no business of its own, but thrives on the dividend that it expects out of the shares held of LBPL and LVTPL. Due to failure of the Consortium in ensuring timely disbursement of funds to LBPL and LVTPL, they defaulted and as a result they are unable to pay the Defendant no. 1 company any money. Consequently, Defendant no. 1 company was also left high and dry and no dividends could be expected from LBPL and LVTPL, due to them also being left cash-starved. Now this OA filed against Defendant no. 1 is frivolous and filed with the sole intent of harassing the promoters of the company and further disrupt its daily operations.

It is stated in the WS that since the Applicant Bank had also failed to abide by the terms of the Loan Agreement which resulted in untimely and poor disbursal of funds to LBPL and LVTPL, the same resulted in them defaulting in their respective loans. As a result, they could not pay any money (in the form of dividend to their parent company viz. LTPL / Defendant no. 1 company). As a result, the Applicant Bank is precluded from claiming any relief against the Defendant no. 1 company. Consequently, no relief can also be claimed against the answering Defendant due to the terms of the contract being breached and agreements violated. Hence, the same discharges the answering defendant from any further liability.

Defendants no. 5 & 6 have failed to substantiate their contention in the absence of any documentary evidence. It is matter of record that in this case, the borrower company is Lanco Thermal Power Ltd. and facilities were sanctioned to the same to which Defendant no. 5 stood as guarantor & mortgagor and Defendant no. 6 stood as pledger. Thus, the defaults in payment were made by the Defendant no. 1 whereas LBPL and LVTPL are not party to the present OA. Hence, by taking such pleas they cannot get absolved from their respective liability. In these circumstances, this plea of Defendants no. 5 & 6 stands rejected accordingly.

(vi) Next plea taken by Defendants no. 5 & 6 is that the Defendant no. 1 company is presently undergoing CIRP before Hon'ble NCLT, Hyderabad, hence, the control of the management of the affairs of the said company lie with the hands of a Resolution Professional appointed by the Applicant Bank themselves. Hence, the Applicant Bank and the Defendant are one and the same. Thus, it would be illegal and amount to forum shopping coming to this Hon'ble Tribunal seeking the said relief(s) from the answering Defendant while the same can be taken from the Hon'ble NCLT, Hyderabad itself.

It is matter of record that this OA has been filed under RDB Act against the defendants for recovery of its dues. This Tribunal is of the view that on account of CIRP of Defendant no. 1 / Principal Borrower, the proceedings before this Hon'ble Tribunal only with respect to the Borrower would be stayed in terms of the moratorium imposed under Section 14 of the IBC. The overriding effect of IBC over the RDB Act in no manner concerns the proceedings related to Defendants no. 5 & 6 herein which are admittedly not under CIRP. There is no bar under the provisions of IBC or any other applicable law on continuation of the proceedings related to a corporate guarantor / pledger under RDB Act before this Tribunal solely on account that CIRP of the principal borrower is ongoing. In the light of above, this objection of Defendants no. 5 & 6 does not hold any water and same stands rejected.

(vii) Defendants no. 5 & 6 have raised an objection that the validity of the documents executed are disputed and they have no evidentiary value in the eyes of law.

It is matter of record that the Defendants no. 5 & 6 have admitted availment of loan facilities as well as execution of security documents by them. Hence, at the time of paying the dues of the Applicant Bank, such type of bald allegations will not help the Defendants from getting them absolved from their liabilities. Even otherwise, this Tribunal is of the view that in the absence of any documentary, this plea of Defendants no. 5 & 6 is not acceptable and same stands rejected.

**Other objections raised by Defendant no. 6**

- (i) Defendant no. 6 has raised an objection that it is settled law that the present proceedings are in the nature of a suit for recovery of money resulting primarily in a money decree. Therefore, this Hon'ble Tribunal is bound by law to first adjudicate the liability of Defendant no. 1 Company / principal debtor – against the claimed debt of the Applicant Bank and its other co-lenders arrayed as Proforma Defendants in this OA. It is stated that as on date, the Defendant no. 1 is governed by the Committee of Creditor constituted pursuant to admission of Applicant Bank's petition to NCLT, Hyderabad vide Order dated 09.05.2019 under the Insolvency and Bankruptcy Code, 2016. Thus, the Creditor (Applicant Bank) and the principal debtor (Defendant no. 1) are under common management as on date. In these circumstances, Defendant is unable to defend itself against its primary liability towards the alleged debt, recovery whereof is sought in the present proceedings. Thus, the liability of Defendant no. 1 cannot be determined in its absence or when it is rendered unable to fruitfully defend itself by the very creditor seeking recovery of debt i.e. the Applicant Bank and its co-lenders. It is stated that no liability can be cast on any other defendant till such time that the liability of Defendant no. 1 is ascertained in totally. Therefore, the present proceedings must be adjourned *sine die* till such time that the Applicant Bank and its co-lenders are divested of the management of the Defendant no. 1 Company.

As already discussed in above paras that pendency of CIRP proceedings qua Borrower company does not bar the Applicant Bank for pursuing its case against other Defendants being guarantors / pledger. Hence, this objection of Defendant no. 6 is hereby rejected.

- (ii) Defendant no. 6 has also taken a plea that the answering Defendant has been arrayed as a defendant in the alleged capacity of a pledger, however, no document has been placed on record to reflect that the alleged pledge has been invoked. In fact, the two notices placed on record with the OA reflect that the same were never addressed to the answering Defendant. Further, Section 176 of the Indian Contract Act, 1872 mandatorily requires a

notice before proceeding against the pledger or appropriating the pledged goods. No such notice has ever been given / sent to the answering Defendant, thus, the action of the Applicant Bank in trying to seek alleged dues against the answering Defendant is *de hors* any cause of action and the OA ought to be rejected against the answering Defendant at the outset.

It is admitted fact that Defendant no. 6 is impleaded in this OA in the capacity of Pledger only. Record reveals that Applicant Bank has duly filed relevant documents executed by Defendant no. 6 being Board Resolution dated 26.10.2015 (Ex. AW1/36) as well as Agreement for Pledge dated 06.11.2015 along with Power of Attorney (Ex. AW 1/37) executed by Defendant no. 6. Hence, it cannot be said that the Applicant Bank has not filed any document executed by Defendant no. 6 in support of its OA. Accordingly, this plea of Defendant no. 6 stands rejected.

(iii) Defendant no. 6 has stated in the WS that as per documents placed on record by the Applicant Bank – one Board Resolution dated 26.10.2015 came to be passed by the answering Defendant and in pursuance whereof an agreement for pledge in favour of the Applicant Bank was executed on 06.11.2015. As per the alleged agreement place, 4 crore equity share of Defendant no. 1 value Rs. 10/- held by Defendant no. 6 were purportedly pledged by the answering Defendant to the Applicant Bank. As per clause 2.6

of the said Pledge Agreement, the Applicant Bank has been empowered to receive all amounts in respect of collateral, transfer and register in the name of the pledgee all the pledged shares and even vote in respect of all or any part of the pledged shares. Moreover, it is the case of the Applicant Bank that the answering Defendant also executed one Power of Attorney in the name of the Applicant Bank to give effect to the purported pledge. From the alleged power of attorney placed on record, it is apparent that the Applicant Bank has been granted power to take any action and execute any instrument that it may deem necessary to accomplish the purpose of the Deed of Pledge. It is to be noted that the alleged power of attorney is irrevocable until the Deed of Pledge would be terminated in accordance with the terms and conditions of the Deed of Pledge. Since, no termination has been placed by the Applicant Bank, thus, the Applicant Bank is in complete control of the allegedly pledged shares. Thus, as per the Applicant Bank's own case, the answering Defendant has delegated all its rights in the alleged pledged shares to the Applicant bank. In consequence, Applicant Bank is exclusively vested with total control over the pledged goods and the answering Defendant is impaired from taking any action in respect thereof. Thus, no monetary claim can be raised against the answering Defendant. The Applicant Bank cannot hold back the pledged goods while at the same time seeking its dues in monetary terms. It is stated that the Applicant Bank is free to appropriate the pledged goods to the present case. In fact, Defendant no. 1 company (the Borrower) in this case is in Corporate Insolvency Resolution Process and the Applicant Bank has already filed its claim with the Resolution Professional for the amounts is alleges to be due from the Borrower. Now no claim can be made against the pledged shares against the pledger especially during the moratorium in operation during the CIRP.

It is matter of record that Defendant no. 6 has been impleaded in this OA as Pledger only on the ground that Defendant no. 6 pledged the demat shares of the Defendant no. 1 held by it in favour of the Applicant. It is also matter of record that Defendant no. 6 did not execute any guarantee agreement in favour of the Applicant Bank. Hence, this Tribunal is of the considered view that Defendant no. 6 cannot be held liable for the entire amount due to the Applicant Bank but Applicant Bank shall be entitled to sell the shares of Defendant no. 1 Company pledged by Defendant no. 6 in favour of the Applicant Bank in pursuance to Agreement for Pledge dated 06.11.2015 alongwith Power of Attorney executed by Defendant no. 6 in favour of the Applicant Bank.

**Now it is held that the liability of Defendant no. 6 shall be restricted to the extent of Pledged Shares of Defendant no. 1 company held by it, pursuant to the Agreement for Pledge dated 06.11.2015 along with power of attorney executed by**

**Defendant no. 6 (Ex. AW 1/37) in favour of the original Lender (now Applicant).**

16.4 So far as, Defendant no. 7 is concerned, it is a Proforma Defendant and no relief has been claimed against the said defendant by the Applicant Bank.

16.5 On the other hand, the witness of applicant bank has fully corroborated the averments made in the OA. Even otherwise the whole case of the applicant bank is based on the documents and the witness has duly proved all these documents. The evidence filed by the applicant bank gone unrebutted and there is no question of disbelieving the evidence lead by the applicant bank and applicant has proved its case beyond reasonable doubts. Accordingly, the Applicant bank is entitled to recover the entire amount, as claimed in the OA from the Defendants along with pendentelite and future interest @12% p.a. and cost of this OA.

16.6 In this OA, Applicant has prayed to issue recovery certificate against Defendants no. 1 to 6 wherein the Defendant 1 is principal borrower and Defendants no. 2 to 5 are personal / corporate guarantors and Defendant no. 6 is the Pledger of shares of Defendant no. 1.

16.7 So far as, defendant no. 7 is concerned, no relief has been claimed by Applicant Bank qua the said Defendant being Proforma Defendant.

16.8 It is also matter or record that the Defendants no. 1 & 4 have already been deleted from the array of parties, as discussed above.

16.9 Further more, personal insolvency proceedings have been initiated qua Defendants no. 2 & 3 before Ld. NCLT, Hyderabad, hence, no final order can be passed qua Defendants no. 2 & 3, at this stage.

16.10 Consequently, OA No. 252/2022 is liable to be allowed in favour of Applicant Bank against Defendant No. 5 (being Corporate Guarantor) and Defendant no. 6 (being Pledger), who are liable to pay the dues of the Applicant along with costs and pendentelite & future interest @12% p.a. from the date of filing of present OA, till the date of payment in full.

However, it is made clear that the liability of Defendant no. 6 shall be restricted to the extent of Pledged Shares of Defendant no. 1 company held by it, pursuant to the Agreement for Pledge dated 06.11.2015 along with power of attorney executed by Defendant no. 6 (Ex. AW 1/37) in favour of the original Lender (now Applicant), as discussed above.

**ORDER**

- (i) TA No. 252/2022 stands allowed in favour of Applicant Bank and against the Defendants no. 5 & 6 for a sum of Rs. 129,99,93,951.00 (Rupees One Hundred Twenty Nine Crore Ninety Nine Lakh Ninety Three Thousand Nine Hundred and Fifty One only) along with pendentelite and future interest @12% p.a. from the date of filing of this OA till realization of the entire dues of the Applicant Bank.

Now Defendants no. 5 & 6 are directed to the aforesaid amount(s) to the Applicant Bank, within 30 days, failing which, the aforesaid amount shall be recovered from the sale of secured assets / mortgaged properties / hypothecated assets / stocks / pledged shares etc. belonging to Defendants no. 5 & 6.

**However, it is made clear that the liability of Defendant no. 6 shall be restricted to the extent of Pledged Shares of Defendant no. 1 company held by it, pursuant to the Agreement for Pledge dated 06.11.2015 along with power of attorney executed by Defendant no. 6 (Ex. AW 1/37) in favour of the original Lender (now Applicant).**

In case of shortfall, same shall be recovered from the movable and immovable assets of Defendant no. 5 only.

- (ii) Since personal insolvency proceedings have been initiated qua Defendants no. 2 & 3 before Ld. NCLT, Hyderabad, hence, no final order can be passed qua Defendants no. 2 & 3, at this stage.

However, it is directed that Applicant Bank shall be at liberty to revive the OA qua Defendants no. 2 & 3 in case personal insolvency proceedings are quashed / withdrawn in future, in accordance with law.

It is also directed that in case Applicant Bank receives any amount from CIRP / personal insolvency proceedings, it shall give due adjustment of the same in the recovery proceedings.

(iii) It is also directed that the Applicant shall adjust the amount(s), if any, received from the Defendants during the pendency of this case.

(iv) It is also directed that the sale proceeds of the secured assets shall be distributed between the consortium members, as per inter-se agreements executed amongst them.

(v) The recovery certificate be issued forthwith and be sent to the Recovery Officer-I, Debts Recovery Tribunal-III, Delhi.

(vi) Parties are directed to appear before the Recovery Officer-I, DRT-III, Delhi on 15.10.2026.

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

File be closed and consigned to records.

(SHIV KUMAR - I) PRESIDING OFFICER, DRT-III, DELHI

(Pronounced in open court) Dated: 13.08.2026

**DEBTS RECOVERY TRIBUNAL-III, DELHI**

**TA/252/2022**

**Union Bank of India Vs. Lanco Thermal Power Ltd. & Ors.**

Date : 13.08.2026

Item No. 13

1. 1. This matter is taken up by this Tribunal through Hybrid Mode.

2. 2. Today, captioned TA is listed for pronouncement of final order. Accordingly, final order prepared in separate sheets, signed and pronounced.

3. 3. File be closed and consigned to record room.

(SHIV KUMAR - I) PRESIDING OFFICER, DRT-III, DELHI

13.08.2026

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