CANARA BANK vs M/S ZARGAR HANDICRAFTS on 20 July 2026

ORDER

1. On 20.12.2018, Canara Bank filed the suit for the recovery of Rs.50,58,799.71p with interest against M/s Zargar Handicrafts and another (defendants) in the Court of Principal District Judge, Srinagar. However, vide order dated 08.02.2023, this suit was transferred by the Court of Additional District Judge (Bank Cases), Srinagar, to DRT-I, Chandigarh.

2. Defendant No.2 is the sole proprietor of defendant No.1. Bank’s case is that on 19.06.2014, it had granted a Cash Credit facility of Rs.25 lacs to defendant No.1, through its proprietor, for business purpose. The Cash Credit facility was chargeable to interest @11.45% per annum with monthly rests. On 25.11.2014, Bank had granted a Working Capital Term Loan (WCTL) limit of Rs.10 lacs to defendant No.1, through its proprietor. The WCTL was chargeable to interest @10.20% per annum

with monthly rests. On 21.02.2017, Bank had granted a Funded Interest Term Loan (FITL) limit of Rs.5.20 lacs to defendant No.1, through its proprietor. The FITL was chargeable to interest @10.85% per annum with monthly rests. On 21.03.2017, Bank had granted an ad-hoc limit of Rs.5 lacs to defendant No.1, through its proprietor. The ad-hoc limit was chargeable to interest @11.45% per annum with monthly rests. To secure the loan facilities, defendant No.1, through its proprietor, had hypothecated its assets (fully detailed in Para No.3 of the plaint). The defendants had acknowledged their liability towards the debt on 30.11.2016. On 21.11.2018, total sum of Rs.50,58,799.71p was due from the defendants. Despite repeated requests, defendants did not make the repayment. Hence, this suit.

3. On 25.04.2023, summonses were sent to the defendants by registered post, which were duly served. However, defendants did not put in appearance. Vide order dated 06.07.2026, they were proceeded ex parte.

4. In order to prove its case, the Bank has placed on record the affidavit of Mr. Mudasir Ahmad Shah, Branch Manager, along with the loan and original security documents.

5. I have perused the evidence on the record. I am of the considered view that the Bank has proved its case that it had advanced the Cash Credit facility of Rs.25 lacs; WCTL of Rs.10 lacs; FITL of Rs.5.20 lacs and ad-hoc limit of Rs.5 lacs to defendant No.1, through its proprietor and on 21.11.2018, total sum of Rs.50,58,799.71p was due in CC, WCTL and FITL.

6. Accordingly, the application of the Bank for the recovery of Rs.50,58,799.71p (Rupees Fifty Lacs Fifty-Eight Thousand Seven Hundred Ninety-Nine and Paise Seventy-One Only) with interest

@11.45% per annum with monthly rests from 20.12.2018, till the date of payment is hereby allowed with costs. Bank can recover its dues by the sale of hypothecated assets (fully detailed in Para No.3 of the plaint), as well as from the personal movable and immovable property(ies) of the defendants.

7. Pending IAs, if any, stand disposed of.

8. Recovery Certificate be issued accordingly.

9. Parties are directed to appear before Recovery Officer on 24.08.2026, who is directed to distribute the sale proceeds of the mortgaged property as per the provisions of Section 19(20-AB) of the Act.

10. A Copy of this order along with Recovery Certificate be sent to the Recovery Officer as well as the parties.

Pronounced in the open court.

(A S Narang) Dated: 20.07.2026 Presiding Officer DRT-1, Chandigarh HARSH