BANK OF MAHARASHTRA vs ARVIND DHAM AND ORS on 31 July 2025

**FINAL ORDER**

1. 1. This original application has been filed by the applicant bank, on 05.10.2018, through Mr. G.D. Singh, Assistant General Manager of applicant bank, being Authorized Representative of Applicant Bank, under Section 19 of the Recovery of Debts Due to Banks and Financial Institution Act, 1993 against defendant no. 1 for recovery of a sum of Rs. 352,38,15,562/- (Rupees Three Hundred Fifty Two Crore Thirty Eight Lakh Fifteen Thousand Five Hundred and Sixty Two only) as on 19.09.2018 plus other charges along with future interest for Term Loan – I @12.55% p.a. [presently Base Rate (i.e. 09.50%) +03.05%] and for Term Loan – II @12.55% p.a. [presently Base Rate (i.e. 09.50%) +03.05%] and penal interest @2% with monthly rests with pendentelite and charges etc. with other relief(s).

1.2 It is pertinent to note here that this OA bearing no. 1354/2018 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-388/2022.

2. The brief facts of the case are that the Applicant herein is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. It is further stated that present OA is being signed, verified and filed by Sh. G.D. Singh working as Assistant General Manager with the Applicant Bank's branch at B-29, Maharashtra Bank Building, Connaught Place, New Delhi - 110001 and is fully competent and authorized to file the same by virtue of powers vested in him vide circular dated 30.12.2015, inter alia, to file recovery proceedings, sign, verify documents and depose on behalf of the applicant bank. Certified copy of Circular dated 30.12.2015 issued by the Head Office of Bank of Maharashtra, Pune is also annexed with the OA.

2.1 It is stated in the OA that Amtek Auto Limited (hereinafter referred to as 'the Borrower') is a company registered under the Companies Act, 1956 which is in the business of manufacturing of forged, aluminium casting and machined components for the automobile sector and gradually diversified into non automobile sector as a strategic move to expand the product portfolio and to diversify the product risk.

Defendant no. 1 is one of the Directors of the Borrower Company and is also personal guarantor of the credit facilities granted to the Borrower. It is stated in the OA that Defendant no. 1 had executed a personal Guarantee Deed dated 19.12.2015 in favour of the Applicant Bank and the Deed of Guarantee dated 23.12.2016 in favour of the Lead Bank for the benefit of the Lenders.

Further, the defendants no. 2 to 12 are the pledger / promoter who, in order to secure the credit facilities granted to the Defendant no. 1, have executed their respective share pledge power of attorney of the shares of the Borrower Company, in favor of the Applicant Bank.

It is also stated in the OA that Defendant no. 13 is the Lead Bank of the Joint Lender Forum and the Defendants no.14 to 30 are the Lenders and members of the Joint Lender Forum. The Defendant no. 31 is the security trustee and the custodian of all the documents executed between the parties.


The defendant no. 32 is the Borrower Company and has been impleaded only as Proforma Defendant.

2.2 It is stated in the OA that the Borrower, through its Directors, approached the Applicant Bank to avail a Term Loan of Rs. 250,00,00,000/- (Rupees Two Hundred Fifty Crore only) for financing ongoing capex plan of the company involving capex of Rs.350.05 crore.

Thereafter, on 07.08.2012, the request of the Borrower was considered favourably by the Applicant Bank and accordingly, vide Sanction Letter dated 07.08.2012, the Applicant Bank sanctioned Term Loan Credit Facility of Rs.250.0 Crore to the Borrower for financing its ongoing capex plan. The sanction of the aforesaid credit facility was secured by first pari passu charge in favour of the Applicant Bank on all the immovable assets of the Company, future and present.

As per the terms of the sanction, the principal amount was to be repaid in 3-equal instalments of Rs. 83.0 crore (approx.) each starting from 30.08.2015 till 31.08.2017 and the interest / charges were to be paid as and when the same became due and payable.

2.3 Thereafter, vide a Letter dated 11.08.2012, the Borrower duly acknowledged and accepted the terms of the Sanction. On 14.08.2012, pursuant to the sanction, the Borrower, executed the following documents, and requested for making the term loan credit facility available :-

- (ii) Agreement for Term Loan dated 14.08.2012;

- (iii) Confirmation for creation of security in favour of the Applicant Bank dated 10.10.2014; It is also stated in the OA that vide a Letter dated 14.08.2012, the Borrower requested the Applicant to make the Term Loan credit facility available to it. Post execution of all the necessary documents, the applicant bank duly made available the aforesaid facility to the Borrower for afore-stated purpose. A copy of the Receipt for amount of the loan dated 16.08.2012 is also filed with the OA.

2.4 Thereafter, in the year 2015, the Borrower approached the applicant bank to avail Corporate Loan of Rs.25.0 Crore and to refinance the existing term loan for a sum of Rs. 249,45,00,000/- (Rupees Two Hundred Forty Nine Crore and Forty Five Lakh only). Accordingly, considering the request of the Defendant no. 1, vide a Sanction Letter dated 18.12.2015, the Applicant Bank sanctioned a corporate loan of Rs. 25.0 crore and refinanced the existing term loan for a sum of Rs. 249,45,00,000/-, on the terms and conditions mentioned in the sanction letter.

Thereafter, the Borrower executed the following documents in connection with and in order to secure the Corporate Loan to the tune of Rs. 25.0 Crore in favour of the Applicant Bank :-

- (ii) Request Letter dated 19.12.2015 for making credit facility available;

- (iii) Receipt for amount of Loan dated 19.12.2015;

- (iv) Letter dated 19.12.2015 confirming utilization of credit facilities sanctioned by the Applicant Bank; 

- (v) Power of Attorney dated 19.12.2015 executed by the Borrower thereby appointing the Applicant Bank its Attorney;

- (vi) Agreement for Term Loan of Rs.25.0 crore dated 19.12.2015;

- (vii) Composite Deed of Hypothecation dated 19.12.2015 executed by the Borrower in favour of the Applicant Bank;

- (viii) Deed of Guarantee dated 19.12.2015 executed by the Defendant no. 1 in favour of the applicant bank;

- (ix) Undertaking for non-disposal of shares held in DEMAT form executed and submitted by the Defendants no. 2 to 13.

It is also stated in the OA that Defendant no.1 had executed a Guarantee Deed dated 19.12.2015 thereby securing the Corporate Term Loan of the aggregate sum of Rs. 25.0 Crore granted by the Applicant Bank.

Further, Defendants no. 1 to 12 also executed and submitted an Undertaking for non-disposal of shares held in DEMAT form, thereby agreeing to not part with the custody, transfer, assign, pledge, dispose off, charge or create lien, of their respective shares, in favour of any person, without prior written approval of the Applicant Bank. The Defendants no. 1 to 12 had executed Power of Attorneys qua their respective shares in favour of the Applicant Bank and appointed the Applicant Bank their Attorney in terms thereof.

2.5 Thereafter, the Borrower executed following documents in connection with and in order to secure the Corporate Loan to the tune of Rs. 249,45,00,000/- (Rupees Two Hundred Forty Nine Crore and Forty Five Lakh only) in favour of the Applicant Bank:-

- (ii) Request Letter dated 19.12.2015 for making credit facility available;

- (iii) Receipt for amount of Loan dated 19.12.2015;

- (iv) Letter dated 19.12.2015 confirming utilization of credit facilities sanctioned by the Applicant Bank;

- (v) Power of Attorney dated 19.12.2015 executed by the Borrower thereby appointing the Applicant Bank its Attorney;

- (vi) Agreement for Term Loan of Rs. 25.0 crore dated 19.12.2015;

- (vii) Composite Deed of Hypothecation dated 19.12.2015 executed by the Borrower in favour of the Applicant Bank;

- (viii) Declaration cum Undertaking dated 23.12.2015 executed and issued by the Defendant no. 1;

- (ix) Two (2) Declaration cum Undertaking dated 23.12.2015 executed and issued by the Borrower.

2.6 Thereafter, since the account of the Borrower was reported in Special Mention Account – 2 (SMA-2) category by banks, a joint meeting of all lenders as per RBI guidelines on SMA account in terms of the RBI Circular "Framework for revitalizing Distress Assets in the Economy – Guidelines on Joint Lenders Forum (JLF) and Corrective Action Plan" was held on 12.06.2015 at IDBI Bank, Red Cross Society Building, New Delhi. The meeting was called for formation of JLF and deliberation on a Corrective Action Plan. IDBI Bank having the highest exposure on the account agreed to take lead in JLF as per RBI guidelines.

On 25.07.2016, the Applicant and certain other banks constituted Joint Lenders Forum (JLF) in terms of RBI guidelines vide Circular bearing no. DBOD.BP.BC. No.98/21.04.132/2013-2014 dated 26.02.2014, as amended vide Circular dated 08.06.2015 and Circular dated 25.02.2016, with IDBI Bank as the Lead Bank.

2.7 Since, the Borrower had agreed for the Corrective Action Plan based in techno Economic Viability Study and the JLF Lenders at the meeting held on 08.05.2015 had broadly accepted the Corrective Action Plan in terms of the aforesaid RBI Circular. Accordingly, a Framework Agreement for Corrective Action Plan dated 23.12.2016 was executed between the Applicant, the Defendants and the other JLF members. At the request of the Borrower, in terms of the afore-stated Framework Agreement dated 23.12.2016, the Lenders along with the Applicant issued a fresh or / and continued / renewed the existing terms loans and existing working capital, as the case may be, for critical capital expenditure and for shoring up the net working capital, subject to the Borrower and the Defendants no. 1 to 12 infusing funds, monetizing investments and providing additional collateral securities as required under the terms of the CAP.

2.8 In order to secure the facilities and comply with the terms of the RBI Circular, following documents were executed :-

- (i) Joint Deed of Hypothecation dated 23.12.2016 by the Borrower in favour of the Lead Bank for the benefit of the Lenders;

- (ii) Inter-se Agreement dated 23.12.2016 between the Lead Bank and the Lenders;

- (iii) Confirmation by the Borrower to Inter-se Agreement dated 23.12.2016;

- (iv) Letter of Authority executed by the Lenders in favour of the Lead Bank for the benefit of Lender Banks;

- (v) Deed of Guarantee dated 23.12.2016 executed and issued by the Defendant no.1 in favour of the Lead Bank for the benefit of the Lenders;

- (vi) Trust and Retention Account Agreement dated 23.12.2016 by and between the Borrower, IDBI Bank as Account Bank and the Lead Bank;

- (vii) Net worth Affidavit dated 23.12.2016 by Mr. Arvind Dham i.e. defendant no. 1, in favour of the Lead Bank for and on behalf of the Lenders;

- (viii) Undertaking of the Borrower dated 23.12.2016 in favour of the lead bank for and on behalf of the lenders;

- (ix) Security Trustee Agreement dated 23.12.2016 executed by and between the Borrower, the Lenders, the Lead Bank and the Axis Trustee Services Ltd.

2.8 It is stated in the OA that the Applicant (along with other lender banks) have charges over various movable and immovable assets of the Borrower [details given in Para 5(XXVIII) (a) (i) to (xviii) and (b) to (e) of the OA].

It is important to note here that in terms of the Clause 8 of the Inter-Se Agreement dated 23.12.2016 entered into between the Lender Banks, all documents of title evidencing the creation of securities by the Borrower, and all documents relating to said Accounts shall be held by the Defendant no.31 i.e. Axis Trustee. As such, all the documents pertaining to the instant case are in possession of the Defendant No. 31.

2.9 It is further stated in the OA that in terms of the sanction of aforesaid Credit Limit, the Borrower has required to maintain and operate the said accounts in accordance with the terms and conditions of his sanction and was also required to maintain financial discipline. However, the Borrower failed to maintain financial discipline and defaulted in properly maintaining the said accounts in addition to various other breaches and violations of sanction of said Credit Limit and consequently, a huge outstanding became due and payable by the Borrower to the Applicant Bank in respect of the said Credit Limit. Thereafter, despite repeated requests and reminders from the Applicant Bank, the Borrower failed to make good the defaults and breaches of the terms and conditions of sanction of said Credit Limit. Therefore, in accordance with the recognized accounting procedure followed by the Applicant Bank and the instructions of the RBI from time to time having statutory force, the said accounts of Borrower stood classified as Non-Performing Assets w.e.f. 30.11.2015. Since, despite repeated reminders and requests, no further payments of the dues or compliance of the undertakings and representations, were forthcoming, the Applicant Bank, vide a Notice dated 17.07.2017, recalled all the dues in respect of credit facilities granted to the defendant no. 1 and the Defendants were directed to make payment of the overdue amount of Rs. 303,37,58,961.00 within 7-days. Since, the Borrower defaulted in making the payment of the overdue in terms of the recall notice, the Applicant Bank was constrained to invoke the personal guarantee of the Defendant no.1 vide Notice dated 05.04.2018 and defendant no. 1 was directed to make the payment of the overdue amount of Rs.332,25,31,000/- as on 05.04.2018. Hence, as on 19.09.2018, the defendants are jointly and severally liable to pay to the Applicant Bank the following amounts under the said Credit Facilities :- <table border="1"> <thead> <tr> <th>Account No.</th> <th>Principal Outstanding</th> <th>Accrued Interest w.e.f. 30.11.2015 till 19.09.2017</th> <th>Arrears Penalty</th> <th>Total</th> </tr> </thead> <tbody> <tr> <td>60104893590</td> <td>246,85,28,157.00</td> <td>73,15,99,202.00</td> <td>82,08,238.00</td> <td><b>320,83,35,597.00</b></td> </tr> <tr> <td>60238273890</td> <td>25,00,00,000.00</td> <td>6,50,13,329.00</td> <td>4,66,636.00</td> <td><b>31,54,79,965.00</b></td> </tr> <tr> <td colspan="4" style="text-align: center;">Total Outstanding</td> <td><b>352,38,15,562.00</b></td> </tr> </tbody> </table>

2.10 It is stated in the OA that the Borrower Company (Proforma Defendant no. 32) was under Insolvency Proceedings under Insolvency & Bankruptcy Code, 1016 and the resolution plan submitted by Resolution Applicant Liberty House Group Pte has been accepted by NCLT Chandigarh vide their order dated 25.07.2018 passed in Corporation Bank Vs. Amtek Auto Limited, CP(IB) No.42/Chd/Hry/2017.

2.11 Since, the defendants did not pay the outstanding amount to the applicant bank, hence, the applicant bank was compelled to file this OA for recovery of its dues.


3. Notices of this O.A. were issued to the defendants and defendant no. 1 appeared through counsel and filed the WS.

3.1 So far as, defendants no. 2 to 12 are concerned, they neither appeared before the Tribunal nor chosen to file any WS, hence, the case was directed to proceed ex parte vide orders dated 29.09.2022 as well as 01.06.2024 of this Tribunal.

3.2 So far as, proforma defendants no. 13 to 32 are concerned, some of the defendants appeared thorough their counsel, however, the respective WS(s) were filed by defendants no. 13/IDBI Bank Limited, defendant no. 14/Allahabad Bank, defendant no. 16/Canara Bank and defendant no. 20/Karnataka Bank only. It is pertinent to note here that no relief has been claimed by the Applicant Bank qua proforma defendants no. 13 to 32 in this OA.

3.3 In the WS, defendant no. 1 has raised following main objections :- **Preliminary submissions**

- (i) That there is delay in disbursement under Corrective Action Plan (CAP) [as per para A (1 to 51) of WS];

- (ii) That the disbursement could not be utilized for business [as per para B (52 to 54) of WS];

- (iii) That there were bonafide intentions of the promoters and their continuation [as per para C (55 to 60) of WS];

- (iv) That the guarantee of defendant no. 1 was discharged in view of novation of contract [as per Para D (61 to 75) of WS];

- (v) That certain payments were made by the Borrower to the applicant bank [as per Para E (76) of WS];

- (vi) That the defendant no. 32 company (Borrower) has suffered loss of business and reputation in view of the non grant of timely facilities by the applicant bank [as per Para F(78 to 85) of WS];

- (vii) That defendant no. 1 has suffered huge loss of reputation [as per Para G (86 to 90) of WS];

- (viii)

**Additional Submissions**

- (ix) That the amount claimed by way of present OA is unsubstantiated;

- (x) That the statement of account on which the applicant bank has placed reliance is false and fabricated and the same is not supported with a proper certificate in terms of the Bankers' Books Evidence Act, 1891;

- (xi) That the rate of interest charged by the Applicant Bank is exorbitant, harsh and the same was never agreed between the parties;

- (xii) That the case built up by the Applicant Bank is false, malicious and deserves to be dismissed; **Parawise Reply**

- (xiii) That this OA is not within limitation prescribed under Section 24 of the RDB Act 1993;

- (xiv) That the present OA has not been filed by duly authorized officer of the bank;

- (xv) That the applicant bank has failed in fulfilling its obligation under the Framework Agreement and the Corrective Action Plan;

- (xvi) That due to failure on part of the applicant bank and other consortium members to disburse the sanctioned amount in a timely manner, the creation of mortgage cannot be deemed to be subsisting;

- (xvii) That defendant no. 1 has not executed the Deed of Guarantee;

- (xviii) That the statement of account cannot be termed to be a valid Statement of Account and as such the OA deserves to be dismissed for want of clarity. Moreover, the penal interest has been charged and compounded which is against the principles laid down by the Hon'ble Supreme Court in *Central Bank of India Vs. Ravindra (2002) 1 SCC 367*. Moreover, the Statement of Accounts is not in accordance with the provisions of Banker's Book of Evidence Act, 1891 since it is not certified and has not annexed any ledger to substantiate the same.

In the light of above, it has been prayed to dismiss the OA filed by the Applicant Bank.

4. Rejoinder to the WS of defendant no. 1 was filed by the applicant bank denying the allegations levelled against it and reiterating the averments made in the OA.

5. To prove its case, the Applicant Banks leads its evidence by filling the affidavit of Sh. Radhey Shyam Bansal, Deputy General Manager of Applicant Bank, being Authorized Representative of Applicants Bank.

5.1 Sh. Radhey Shyam Bansal, Deputy General Manager of Applicant Bank has placed reliance upon the following documents:-

- (i) Certified copy of the Circular dated 30.12.2015 issued by the Head Office of Bank of Maharashtra, Pune for authorizing the official of the bank to file this OA (Ex. AW-1);

- (ii) Sanction Letter dated 07.08.2012 of the Applicant Bank sanctioning Term Loan Credit Facility of Rs.250.0 Crore to the Borrower (Ex. AW-1);

- (iii) Letter dated 11.08.2012 of the Borrower acknowledging and accepting the terms of the Sanction dated 07.08.2012 (Ex. AW-3);

- (iv) Demand Promissory Note dated 14.08.2012 (Ex. AW-4);

- (v) Agreement for Term Loan dated 14.08.2012 (Ex. AW-5);

- (vi) Confirmation for creation of security in favour of the Applicant Bank dated 10.10.2014 (Ex. AW-6);

- (vii) Letter dated 14.08.2012 of the Borrower requesting the Applicant to make the Term Loan credit facility available to it (Ex. AW-7); A small green rectangular stamp or mark with a handwritten symbol next to it.

- (viii) Receipt for amount of the loan dated 16.08.2012 (Ex. AW-8);

- (ix) Sanction Letter dated 18.12.2015 of the Applicant Bank sanctioning corporate loan of Rs. 25.0 crore and refinancing the existing term loan for a sum of Rs. 249,45,00,000/- (Ex. AW-9); Documents with regard to Corporate Loan to the tune of Rs. 25,00,00,000/- :-

- (x) Demand Promissory Note dated 19.12.2015 (Ex. AW-10);

- (xi) Request Letter dated 19.12.2015 for making credit facility available (Ex. AW-11);

- (xii) Receipt for amount of Loan dated 19.12.2015 (Ex. AW-12);

- (xiii) Letter dated 19.12.2015 confirming utilization of credit facilities sanctioned by the Applicant Bank (Ex. AW-13);

- (xiv) Power of Attorney dated 19.12.2015 executed by the Borrower thereby appointing the Applicant Bank its Attorney (Ex. AW-14);

- (xv) Agreement for Term Loan of Rs.25.0 crore dated 19.12.2015 (Ex. AW-15);

- (xvi) Composite Deed of Hypothecation dated 19.12.2015 executed by the Borrower in favour of the Applicant Bank (Ex. AW-16);

- (xvii) Deed of Guarantee dated 19.12.2015 executed by the Defendant no. 1 in favour of the applicant bank (Ex. AW-17);

- (xviii) Undertaking for non-disposal of shares held in DEMAT form executed and submitted by the Defendants no. 2 to 123 (Ex. AW-18);

- (xix) Undertaking for non-disposal of shares held in DEMAT form executed by defendants no. 1 to 12 (Ex. AW-19-colly); Documents with regard to Corporate Loan to the tune of Rs. 249,45,00,000/-:-

- (xx) Demand Promissory Note dated 19.12.2015 (Ex. AW-20);

- (xxi) Request Letter dated 19.12.2015 for making credit facility available (Ex. AW-21);

- (xxii) Receipt for amount of Loan dated 19.12.2015 (Ex. AW-22);

- (xxiii) Letter dated 19.12.2015 confirming utilization of credit facilities sanctioned by the Applicant Bank (Ex. AW-23);

- (xxiv) Power of Attorney dated 19.12.2015 executed by the Borrower thereby appointing the Applicant Bank its Attorney (Ex. AW-24);

- (xxv) Agreement for Term Loan of Rs. 25.0 crore dated 19.12.2015 (Ex. AW-25);

- (xxvi) Composite Deed of Hypothecation dated 19.12.2015 executed by the Borrower in favour of the Applicant Bank (Ex. AW-26);

- (xxvii) Declaration cum Undertaking dated 23.12.2015 executed and issued by the Defendant no. 1 (Ex. AW-27);

- (xxviii) Two (2) Declaration cum Undertaking dated 23.12.2015 executed and issued by the Borrower (Ex. AW-28-colly); 

- (xxix) Framework Agreement for Corrective Action Plan dated 23.12.2016 executed between the Applicant, the Defendants and the other JLF members (Ex. AW-29);

- (xxx) Joint Deed of Hypothecation dated 23.12.2016 by the Borrower in favour of the Lead Bank for the benefit of the Lenders (Ex. AW-30);

- (xxxi) Inter-se Agreement dated 23.12.2016 between the Lead Bank and the Lenders (Ex. AW-31);

- (xxxii) Confirmation by the Borrower to Inter-se Agreement dated 23.12.2016 (Ex. AW-32);

- (xxxiii) Letter of Authority executed by the Lenders in favour of the Lead Bank for the benefit of Lender Banks (Ex. AW-33);

- (xxxiv) Deed of Guarantee dated 23.12.2016 executed and issued by the Defendant no.1 in favour of the Lead Bank for the benefit of the Lenders (Ex. AW-34);

- (xxxv) Trust and Retention Account Agreement dated 23.12.2016 by and between the Borrower, IDBI Bank as Account Bank and the Lead Bank (Ex. AW-35);

- (xxxvi) Net worth Affidavit dated 23.12.2016 by Mr. Arvind Dham i.e. defendant no. 1, in favour of the Lead Bank for and on behalf of the Lenders (Ex. AW-36);

- (xxxvii) Undertaking of the Borrower dated 23.12.2016 in favour of the lead bank for and on behalf of the lenders (Ex. AW-37);

- (xxxviii) Security Trustee Agreement dated 23.12.2016 executed by and between the Borrower, the Lenders, the Lead Bank and the Axis Trustee Services Ltd. (Ex. AW-38);

(xxxix) Notice dated 17.07.2017 issued by the Applicant Bank (Ex. AW-39);

(xl) Notice dated 05.04.2018 issued by the Applicant Bank to defendant no. 1 for invoking the personal guarantee (Ex. AW-40);

(xli) Statement of Account No. 60104893590 (Term Loan-I) from 16.08.2012 to 05.06.2017 along with Banker's Book Evidence (Ex. AW-41-colly);

(xlii) Statement of Account No. 60238273890 (Term Loan-II) from 31.03.2016 to 31.03.2017 along with Banker's Book Evidence (Ex. AW-42-colly);

(xliii) Statement of Account of interest accrued but not applied in the accounts w.e.f. 30.11.2015 fr Account No.60104893590 (Term Loan-I) (Ex. AW-43);

(xliv) Statement of Account of interest accrued but not applied in the accounts w.e.f. 30.11.2015 fr Account No. 60238273890 (Term Loan-I) (Ex. AW-44).

6. So far as, evidence of defendant no. 1 is concerned, he did not file any evidence in support of the WS filed in this OA.

7. It is pertinent to note here by during the pendency of this OA it was informed by Ld. counsel for applicant bank that Personal Insolvency Resolution Process had been imitated by State Bank of India (as one of the consortium lenders), qua defendant no. 1 before Ld. NCLT, Delhi, by filing an application under Section 95 of the IBC, 2016, registered as IB-1038(ND)/2020 (SBI Vs. Mr. Arvind Dham). It was also informed that pursuant thereto, a Repayment Plan was submitted by the Resolution Professional under Section 106 of the Code. However, the said Plan was rejected by the majority of creditors, holding 59.51% of the voting shares.

Subsequently, it is informed by the applicant bank that vide order dated 30.06.2025, Ld. NCLT, Delhi rejected the Repayment Plan under Section 114(1) of the Code and directed closure of the Personal Insolvency Resolution Process, thereby terminating any protection or moratorium that may have otherwise been available to defendant no.1. Accordingly, with the rejection of the resolution plan and in absence of any bar under the IBC, the present recovery proceedings before this Tribunal are maintainable.

8. Heard and perused the entire record.

8.1 It is matter of record that defendant no. 1 had filed the WS, however, no evidence was filed on behalf of defendant no. 1. Hence, the defence taken by defendant no.1 remained substantiated / uncorroborated. However, I would like to deal with the objections raised by defendant no. 1 in following paras :-

- (i) Defendant no. 1 has raised an objection that there is delay in disbursement under Corrective Action Plan (CAP).

In this case, defendant no. 1 has failed to file any evidence in support of his WS. On the other hand, applicant bank has corroborated the averments made in the OA. From the record of this OA, it is clear that the Applicant Bank sanctioned and disbursed the credit facilities to the complete satisfaction of the Borrower Company. If the Borrower Company and/or the defendant no. 1 had any issues qua alleged non-disbursal of the credit facilities, they ought to have approached the Applicant Bank for resolution of the alleged dispute. However, in the present case, that has not happened, as there was no such issue and this issue is only being raised by the Defendant no. 1 in order to get absolved from the contractual liability to pay. Hence, this Tribunal is of the view that defendant no. 1 has failed to prove the present objection, accordingly same is hereby rejected.

(ii) Next objection raised by defendant no. 1 is that the disbursement could not be utilized for business.

This Tribunal is of the view that it is difficult to understand as to how a party can take a defence that the Borrower Company, which was run and directly managed by the Defendant no. 1 (Promoter / Chairman cum Managing Director) could not utilize the funds for business. Now at this belated stage after having utilized the credit facilities to its complete satisfaction, without raising any issue prior to filing of the WS, defendant no. 1 cannot take any benefit from this Tribunal. Accordingly, this plea of defendant no. 1 is liable to be rejected and same stands rejected.


- (iii) Defendant no. 1 has raised taken a plea in the WS that there were bonafide intentions of the promoters and their contribution.

This Tribunal is of the view that in case defendants had bonafide intentions and contribution, their account(s) could not get stuck nor they had declared as NPA. Hence, this plea of defendant no. 1 does not hold any water and same stands dismissed.

- (iv) One more objection raised by defendant no.1 is that the guarantee of defendant no. 1 was discharged in view of novation of contract.

A bare perusal of the OA and the document attached with it (duly proved by the applicant bank), would made it abundantly clear that the defendant no.1 willfully and knowingly executed several Deeds of Guarantee in favour of the Applicant Bank from time to time and had hound himself in terms thereof. Even otherwise, there is nothing on record to suggest that the terms of the guarantees were altered and modified so as to fall under the definition of "variance". The terms of the guarantee stand "as it is" even as on date, as such, Section 133 of the Contract Act, 1872 will have no applicability in the present case. With these observations, this objection of defendant no. 1 is hereby rejected.

(v) Defendant no. 1 has stated in the WS that certain payments were made by the Borrower to the applicant bank.

In the absence of evidence of defendant no. 1, I do not find any merit in the contention of defendant, accordingly, same stands dismissed.

(vi) Next objection raised by defendant no.1 is that the defendant no. 32 company (Borrower) has suffered loss of business and reputation in view of the non grant of timely facilities by the applicant bank.

In the light of discussion made in above paras, this Tribunal is of the view that defendant no. 1 has failed to prove the present objection, accordingly, same also stands dismissed.

(vii) Defendant no. 1 has also raised an objection that he suffered huge loss of reputation.

In the absence of evidence of defendant no. 1, I do not find any merit in the contention of defendant, accordingly, same stands dismissed.

(viii) Defendant no. 1 has also raised an objection that the amount claimed by way of present OA is unsubstantiated.

Record reveals that the applicant bank has duly proved the documents filed in support of its WS, hence, the claim made in the OA has been duly corroborated by the Bank. In these circumstances, 

this objection of defendant no.1, being devoid of any merit, stands rejected.

- (ix) Next objection raised by the defendant no.1 is that the statement of account on which the applicant bank has placed reliance is false and fabricated and the same is not supported with a proper certificate in terms of the Bankers' Books Evidence Act, 1891.

Record reveals that applicant bank has already filed complete statement of accounts (duly proved as Ex. AW-41-colly and AW-42-colly) along with Banker's Books of Evidence Act. Hence, this Tribunal is of the view that this objection of defendant does not hold any water and same stands dismissed.

- (x) Defendant no. 1 has raised an objection that the rate of interest charged by the Applicant Bank is exorbitant, harsh and the same was never agreed between the parties. Moreover, it is stated that the statement of account cannot be termed to be a valid Statement of Account and as such the OA deserves to be dismissed for want of clarity. Moreover, the penal interest has been charged and compounded which is against the principles laid down by the Hon'ble Supreme Court in *Central Bank of India Vs. Ravindra (2002) 1 SCC 367*. Moreover, the Statement of Accounts is not in accordance with the provisions of Banker's Book of Evidence Act, 1891 since it is not certified and has not annexed any ledger to substantiate the same.

Record reveals that the applicant bank has already filed the Statement (s) of Accounts of the Loan Accounts under Bankers' Books of Evidence Act (Ex. A-41-colly & A-42-colly). Moreover, statement of interest accrued but not applied in the accounts in both the accounts (Ex. A-43 & A-44) have also been filed by the applicant bank. Defendant no. 1 was always at liberty to file his own statement of accounts with correct figures but he has failed to do so. In these circumstances, this plea of defendant no. 1 is also hereby rejected.

(xi) Defendant no. 1 has raised an objection that the case built up by the Applicant Bank is false, malicious and deserves to be dismissed Since, applicant bank has duly corroborated the averments made in the OA with the documentary evidence, hence, this pleas of defendant no. 1 does not hold any water and same stands dismissed.

(xii) Defendant no. 1 has also raised an objection that this OA is not within limitation prescribed under Section 24 of the RDB Act 1993.

Record reveals the defendants executed security documents from time to time and lastly on 23.12.2016, however, this OA has been filed on 05.10.2018. Hence, this OA has been filed well within the period of limitation. Accordingly, this 

objection of defendant no. 1 does not hold any water and same stands rejected.

- (xiii) Next objection raised by defendant no. 1 is that the present OA has not been filed by duly authorized officer of the bank.

Applicant bank filed certified copy of the Circular dated 30.12.2015 (Ex.AW-1) issued by Head Office of applicant bank and the officer of applicant bank is fully competent and authorized to file the OA by virtue of powers vested to him vide aforesaid Circular. Hence, this objection of defendant no.1 is also liable to be dismissed and same is hereby dismissed.

- (xiv) Defendant no.1 has raised an objection that the applicant bank has failed in fulfilling its obligation under the Framework Agreement and the Corrective Action Plan.

This issue has already been discussed in above paras, accordingly, same is hereby dismissed.

- (xv) Next objection raised by defendant no. 1 is that due to failure on part of the applicant bank and other consortium members to disburse the sanctioned amount in a timely manner, the creation of mortgage cannot be deemed to be subsisting.

In the light of discussion made in above paras, this plea of defendant, being devoid of any merit, is hereby dismissed.

(xvi) Defendant no. 1 has also taken a plea that he has not executed the Deed of Guarantee.

Record reveals that applicant bank has filed Deed of Guarantee dated 19.12.2015 (Ex. AW-17) as well as Deed of Guarantee dated 23.12.2016 (Ex. AW-34) executed by defendant no.1. Moreover, defendant no.1 has not denied his signatures over the said Deeds. Hence, the plea of defendant no. 1, being devoid of merits, is hereby dismissed.

8.2 So far as, defendants no. 2 to 12 are concerned, they are already ex parte since 01.06.2024. Hence, the case of applicant bank remained uncontested by the defendants no. 2 to 12.

It is also matter of record that in the OA itself it is stated by the applicant bank that the Borrower Company (Proforma Defendant no. 32) is under Insolvency Proceedings under Insolvency & Bankruptcy Code, 1016 and the resolution plan submitted by Resolution Applicant Liberty House Group Pte has been accepted by NCLT Chandigarh vide their order dated 25.07.2018 passed in Corporation Bank Vs. Amtek Auto Limited, CP(IB) No.42/Chd/Hry/2017.

In this case, Defendants no. 2 to 12 have been impleaded as the pledger(s) of shares of Borrower Company (Proforma Defendant no. 32). Since the Borrower Company itself is before Ld. NCLT, Chandigarh, hence, no final order can be passed by this Tribunal qua defendants no. 2 to 12 being Pledgers of Borrower Company.


8.3 So far as, defendants no. 13 to 32 are concerned, they are proforma defendants against whom no relief has been claimed by the Applicant Bank.

8.4 On the other hand, the witness(s) of Applicant Bank have fully corroborated the averments made in the OA. Even otherwise the whole case of the applicant is based on the documents and the witness has duly proved all these documents. The evidence filed by the applicant gone unrebutted and there is no question of disbelieving the evidence lead by the applicant bank and applicant bank has proved their case beyond reasonable doubts. Accordingly, the Applicant Bank is entitled to recover the entire amount, as claimed in the OA from the defendant(s) along with pendentelite interest i.e. @12% p.a. and costs as agreed between the parties. So far as, prayer for granting penal interest @ 2% is concerned, same is hereby declined.

8.5 In this OA, applicant has prayed to issue recovery certificate against defendant no. 1 who is the guarantor of the Borrower Company (Proforma Defendant no.32) which is already before Ld. NCLT, Chandigarh.

So far as Defendants no. 2 to 12 ae concerned, these defendants are the pledger(s) of shares of Borrower Company (Proforma Defendant no. 32). Since the Borrower Company itself is before Ld. NCLT, Chandigarh, hence, no final order can be passed by this Tribunal qua defendants no. 2 to 12 being Pledgers of Borrower Company.

9. Consequently, TA No. 388/2022 is liable to be allowed in favour of the Applicant Bank and against defendant 1 being Guarantor of the Borrower (defendant no. 32) 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.

ORDER

(i) TA No. 388/2022 stands allowed and the defendant no. 1 is directed to pay to the applicant bank, within 30 days, a sum of a sum of Rs. 352,38,15,562/- (Rupees Three Hundred Fifty Two Crore Thirty Eight Lakh Fifteen Thousand Five Hundred and Sixty Two only) along with cost, pendentelite and future interest @12% p.a. from the date of filing of this OA till realization of the entire dues of the Applicant from the sale of secured assets / mortgaged properties / hypothecated assets / stocks etc. belonging to the defendant no. 1.

In case of shortfall, same shall be recovered from the movable and immovable assets of defendant no. 1.

(ii) In this case, Defendants no. 2 to 12 are the pledger(s) of shares of Borrower Company (Proforma Defendant no. 32). Since the Borrower Company itself is before Ld. NCLT, Chandigarh, hence, no final order can be passed by this Tribunal qua defendants no. 2 to 12 being Pledgers of Borrower Company.


- (iii) It is also directed that the sale proceeds of the secured assets shall be distributed between the applicant bank and proforma defendants (banks), as per inter-se agreements executed amongst them.

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

- (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 06.10.2025.

- (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.

31.07.2025 (SHIV KUMAR - I) PRESIDING OFFICER, DRT-III, DELHI

(Pronounced in open court) Dated: 31.07.2025

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