BANK OF BARODA vs M/S PRABHAT TERPENES AND SYNTHETICS LIMITED on 11 August 2026

ORDER

1. On 01.12.1999, Bank of Baroda, filed the suit for the recovery of Rs.2,29,40,511/- with interest against M/s Prabhat Terpenes and

Synthetics Limited and other (defendants) in the Civil Court Jammu. However, vide order dated 30.04.2024, this suit was transferred by the Court of Principal District Judge, Jammu, to DRT-I, Chandigarh.

2. Bank’s case is that on 08.02.1997, it had sanctioned the following credit facilities to Defendant No.1: - C.C. Hypothecation Limit of Rs.70.00 lacs C.C. Pledge of Rs.50.00 lacs Bill Purchase/Bill Discount of Rs.30.00 lacs Bank Guarantee of Rs.10.00 lacs Foreign Letter of Credit/Inland of Rs.100.00 lacs.

The Board of Directors, vide resolution dated 08.02.1997, had authorized Defendant No.2 to execute the documents on behalf of Defendant No.1. To secure the loan, defendants had created security interest in favour of the Bank by mortgaging their properties, fully detailed in Para Nos.4, 5, 14(a), (b), (c) and (d) of the suit. As per Bank, Defendant Nos.2 to 5 are directors and guarantors, who had executed the documents and the guarantee deed on 11.02.1997. Defendant Nos.6 and 7 were also the guarantors and had executed the guarantee deed on 11.02.1997. Since the defendants did not make the repayment, on 01.12.1999, Bank of Baroda filed the suit for the recovery of Rs.2,29,40,511/-.

3. During the pendency of the TA, defendants had filed IA No.1150 of 2024, which was disposed of by this Tribunal vide order dated 17.04.2025. In the said IA, defendants had admitted the principal amount due. However, they had raised a dispute regarding the rate of interest.

4. It appears that defendants had created security interest in respect of some of their properties in favour of other creditors, and the Bank had second charge over the said properties. The other creditors had sold the property(ies) of the defendants, and there was a surplus amount of Rs.6,22,85,321/-. There were also some proceedings before the Hon’ble

J&K High Court. On 06.03.2020, the Hon’ble J&K High Court directed that the amount lying with SIDCO be transferred to Bank of Baroda and deposited in an FDR fetching the maximum rate of interest. Pursuant to the order of the Hon’ble J&K High Court, on 24.09.2020, Bank had issued an FDR for Rs.6,22,85,321/-. As mentioned earlier, defendants had filed IA No.1150 of 2024, which was disposed of by this Tribunal vide order dated 17.04.2025. On 17.04.2025, it was ordered that the Bank would adjust a sum of Rs.6,29,09,125/- from the amount of FDR of Rs.7,32,79,542/- (approximately).

5. Mr. Mathur, counsel for Defendant Nos.1, 2 and 5, argues that the Bank had issued the FDR with interest @4.10% per annum with quarterly rests. In fact, the rate of interest should have been much higher. He has further argued that the Bank had kept the money with it for around five years. Accordingly, the rate of interest should have been much higher.

6. Mr. Pasricha, counsel for the Bank, argues that the Bank is ready to pay interest @ 7% per annum with quarterly rests from the date of the FDR till date. He further submits that during the pendency of the TA, there has been variation in the rate of interest on the loans granted by the Bank to the borrowers. Mr. Pasricha, submits that the rate of interest may be reduced by this Tribunal. He admits that, as far as pendente lite and future interest are concerned, the same is within the judicial discretion of this Tribunal.

7. Bank has produced on the record, the original documents. I have perused the same. On the basis of the evidence on record, I am satisfied that the Bank has proved its case that it had advanced the above said loan facilities to Defendant No.1 on the guarantees of Defendant Nos.2 to 7.

Defendants had also mortgaged their properties, fully detailed in Para Nos.4, 5, 14(a), (b), (c) and (d) of the suit.

8. Taking into consideration the totality of facts and circumstances of the case, the case of the Bank for the recovery of Rs.2,29,40,511/- (Rupees Two Crore Twenty-Nine Lacs Forty Thousand Five Hundred and Eleven Only), with interest @15% per annum with monthly rests from the date of filing of the TA till the date of realization, is hereby allowed with costs. Bank would also recalculate the amount of the FDR in respect of the sum of Rs.6,22,85,321/- from 24.09.2020 till date, with interest @7% per annum with quarterly rests. The Bank would make the necessary adjustment/appropriation on the respective dates on which the FDR amounts were adjusted by it. Bank would be entitled to adjust the remaining amount lying in the FDR. The liability of all the defendants shall be joint and several. The Bank would be entitled to recover its dues by the sale of mortgaged properties mentioned in the TA, as well as from the personal movable and immovable properties of the defendants. The Bank would be entitled to get the original documents released on the submission of certified copies

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

10. Recovery Certificate be issued accordingly.

11. Parties are directed to appear before the concerned Recovery Officer on 15.09.2026.

12. 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: 11.08.2026 Presiding Officer DRT-1, Chandigarh Pankaj