PUNJAB NATIONAL BANK vs M/S R J GOLD on 20 August 2026

ORDER

1. On 16.01.2020, Punjab National Bank filed the suit for the recovery of Rs.92,91,780/- with interest against M/s R.J. Gold, through its Proprietor, Sh. Robin Jain (defendant), in the Court of District Judge, Jammu. However, vide order dated 27.09.2022, this suit was transferred by the Court of Additional District Judge (Commercial Court), Jammu, to DRT-I, Chandigarh.

2. Bank’s case is that on 05.02.2011, it had granted a Cash Credit facility of Rs.84 lacs to defendant, through its Proprietor, for business purpose. To secure the loan, defendant, through its proprietor, had hypothecated its assets under CGFSMSE (Credit Guarantee Fund Scheme for Micro and Small Enterprises) (fully detailed in the Hypothecation Deed: Annexure V). The Cash Credit facility was chargeable to interest @13.50% per annum with monthly rests. The Cash Credit Limit of Rs.84 lacs was further renewed from time to time and

last renewed on 07.11.2017. The defendant, through its Proprietor, had acknowledged his liability towards the debt on 29.07.2019. On 16.01.2020, a sum of Rs.92,91,780/- was due from the defendant. Despite repeated requests, defendant did not make the repayment. Hence, this suit.

3. On 20.07.2024, defendant, through its proprietor, had filed his written statement wherein he alleged that M/s RJ Gold is a proprietorship firm and is engaged in the business of manufacturing jewelry/ornaments of gold, silver and diamond and has an unblemished business reputation and enjoys tremendous goodwill amongst its suppliers and customers. Defendant states that there was no default on the part of the defendant and the Bank had illegally and arbitrarily classified the account as N.P.A. on 28.08.2019. Defendant further states that DRT has no jurisdiction or authority at this premature stage to decide this suit as the Bank was under a statutory imperative duty to form a committee and conduct a viability study and rehabilitate the MSME enterprise of the defendant. The Bank cannot straightaway initiate recovery measures and file a recovery suit under Section 19 of the RDB Act, 1993, by ignoring the mandatory RBI directives dated 17.03.2016 and 03.07.2017 which have statutory legal force and are binding on all scheduled commercial banks.

4. On 03.11.2023, summonses were sent to the defendant by registered post, which were duly served. On 11.12.2025, the defendants were summoned for the purpose of admission and denial. The defendant perused the documents and admitted the signatures of the defendant on Exhibits A-5 and A-6 but denied the contents and admitted the remaining documents.

5. In order to prove its case, the Bank has placed on record the affidavit of Ms. Renu Kaul, Authorized Officer, along with the loan and original security documents.

6. 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.84 lacs to defendant, through its proprietor and on 16.01.2020, a sum of Rs.92,91,780/- was due.

7. Accordingly, the application of the Bank for the recovery of Rs.92,91,780/- (Rupees Ninety-Two Lacs Ninety-One Thousand Seven Hundred and Eighty Only) with interest @13.30% per annum with monthly rests from 16.01.2020, till the date of payment is hereby allowed with costs. Bank can recover its dues by the sale of hypothecated assets (fully detailed in the Hypothecation Deed: Annexure V, attached with the plaint), as well as from the personal movable and immovable property(ies) of the defendant.

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

9. Recovery Certificate be issued accordingly.

10. Parties are directed to appear before Recovery Officer on 24.09.2026, who is directed to distribute the sale proceeds of the mortgaged property as per the provisions of Section 19(20-AB) of the Act.

11. 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: 20.08.2026 Presiding Officer DRT-1, Chandigarh HARSH