CANARA BANK vs M/S PRACHI FASHIONS AND ANOTHER on 16 July 2026

FINAL ORDER

1. Present Transfer Application was instituted by the applicant under Section 19 of the Recovery of Debts and Bankruptcy Act 1993, against the defendants for recovery of Rs.39,98,457.69 (Rupees Thirty Nine Lac Ninety Eight Thousand Four Hundred Fifty Seven and Paise Sixty Nine Only). The Transfer Application has been filed through Sh. Parminder Singh, Officer, of the applicant, who is competent to institute the Transfer Application vide Authority Letter dated 10.10.2022, which is Annexure A1 to this TA.

2. The brief facts of the TA are that the defendant no.1, through its proprietor defendant no.2, approached the applicant for CC Limit of Rs.18.00 lacs vide Loan Application dated 09.10.2014, which is Annexure A2 to this TA.

Thereafter, the defendant no.1, through its proprietor defendant no.2, approached the applicant to restructure overdue amount of Rs.3.05 lacs in CC Limit vide Loan Application dated 24.09.2019, which is Annexure A10 to this TA.

Thereafter, the defendant no.1, through its proprietor defendant no.2, again approached the applicant to restructure overdue amount of Rs.3.55 lacs in CC Limit.

3. The applicant sanctioned the CC Limit of Rs. 18.00 lacs vide Sanction Letter dated 09.10.2014, which is Annexure A3 to this TA and the terms and conditions were duly accepted by the defendants.

Thereafter, the applicant sanctioned the renewal of CC Limit of Rs. 18.00 lacs as per request vide Sanction Letter dated 18.02.2017, which is Annexure A8 to this TA; Sanction Letter dated 03.04.2019, which is Annexure A9 to this TA.

Thereafter, the applicant restructured the overdue amount in CC Limit into WCTL Loan of Rs.3.05 lacs vide Sanction Letter and Ratification of Sanction (colly) dated 30.09.2019 and 20.05.2020, which are Annexure A11 to this TA.

Thereafter, the applicant restructured the overdue amount in CC Limit into WCTL Loan of Rs.3.55 lacs vide Sanction Letter dated 21.01.2021, which is Annexure A14 to this TA.

Thereafter, the applicant sanctioned FITL Loan of Rs.1,03,390.00 and GECL Loan of Rs.6.00 lacs during period of COVID pandemic vide Sanction Letter dated 30.12.2021, which is Annexure A18 to this TA.

4. Defendant no.1, through its proprietor defendant no.2, hypothecated its stock & book debts and plant & machinery vide Cash Credit Agreement dated 09.10.2014, which is Annexure A6 to this TA;

Agreement regarding Collateral Security dated 09.10.2014, which is Annexure A7 to this TA; Documents executed: Letter of Proprietorship dated 09.10.2014, which is Annexure A4 to this TA; D.P. Note dated 09.10.2014, which is Annexure A5 to this TA; Debt Restructuring Agreement dated 30.09.2019, which is Annexure A12 to this TA; Debtor Creditor Agreement dated 30.09.2019, which is Annexure A13 to this TA; Letter of Undertaking from Borrower for Restructuring dated 31.12.2020, which is Annexure A15 to this TA; Debt Restructuring Agreement dated 31.12.2020, which is Annexure A16 to this TA; Debtor Creditor Agreement dated 31.12.2020, which is Annexure A17 to this TA; B.C. Letters dated 10.03.2017, 03.04.2019, 29.12.2021, 29.09.2022 &, which are Annexures A19 to A22 to this TA; Legal Notice dated which is Annexure A23 to this TA; Statement of Account of OCC Limit, which is Annexure A24 to this TA; Statement of Account of WCTL-I, which is Annexure A25 to this TA; Statement of Account of CFITL, which is Annexure A26 to this TA; Statement of Account of WCTL-II, which is Annexure A27 to this TA; Statement of Account of GECL 1.0 (Extension), which is Annexure A28 to this TA.

5. The loan accounts became irregular and were classified as NPA and after adjusting debit and credit entries in loan accounts, there was a debit of Rs.39,98,457.69 (Rupees Thirty Nine Lac Ninety Eight Thousand Four Hundred Fifty Seven and Paise Sixty Nine Only), which is recoverable and the defendants were served recall notices but they did not repay the outstanding amount, therefore, the applicant requested to accept the application and to issue Recovery Certificate accordingly.

6. The defendants were served summons to appear before this Tribunal but no one appeared on behalf of defendants and they were proceeded ex-parte vide order dated 14.07.2026.

7. In support of the TA, affidavit of Sh. Parminder Singh, Officer, Canara Bank, has been filed.

8. Heard ex-parte arguments and perused record.

9. It was argued by learned counsel for applicant that in view of the documentary evidence brought on record which had gone unrebutted, the applicant had proved its case. From the perusal of all the Annexures A1 to A28 to this TA, it is proved that the defendant no.1, through its proprietor defendant no.2, approached applicant for availing of the loan facilities, which were granted to them. They had executed all the relevant documents in favour of the applicant. The defendants failed to pay back the loans as per terms and conditions of the agreement between the parties. Subsequently, all the accounts of the defendants were classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.39,98,457.69 (Rupees Thirty Nine Lac Ninety Eight Thousand Four Hundred Fifty Seven and Paise Sixty Nine Only), along with interest from the defendants, jointly and severally, from the date of filing of the present Transfer Application till realization of the amount.

10. In so far as pendent elite and future rate of interest is concerned, the applicant has claimed interest @14.00% p.a. in CC Limit, @12.60% in WCTL-I, @14.05 in WCTL-II, @13.35 in FITL and @11.25 in GECL with monthly rests from 05.08.2024 till the realization.

The Tribunal is of the considered opinion that sometimes in appropriate cases the prerogative of mercy is the brightest jewel in the crown of the Judge. Keeping in view the facts and circumstances of the instant case including nature of the hypothecated assets, undertaking of the defendants, quantum of loans and prevalent market rates of interest which have gone drastically downhill in yester years, while exercising the discretion vested in this Tribunal, this Tribunal deems it just and appropriate to grant uniform simple interest @8.00% p.a. in all the loan accounts from the date of filing of the TA till realization of the amount ordered vide this final order. It is ordered accordingly.

11. In the result, the application is allowed declaring that the defendants are liable to pay to the applicant a total sum of Rs.39,98,457.69 (Rupees Thirty Nine Lac Ninety Eight Thousand Four

Hundred Fifty Seven and Paise Sixty Nine Only), jointly and severally, with costs, current and future simple interest @8.00% p.a. in all the loan accounts from the date of filing of TA till the date of realization of the amount. Accordingly, the applicant shall be entitled to recover aforesaid amount from the sale of hypothecated assets of the defendant no. 1 in execution proceedings if not sold earlier under the provisions of the SARFAESI Act, 2002. If the dues of the applicant still remain unsatisfied, it shall be entitled to recover the same by attachment and sale of personal assets of the defendants. The applicant is at liberty to enforce the claim through due process of law.

12. Any other application pending stands disposed of.

13. Issue Recovery Certificate accordingly.

14. Parties to appear before Learned Recovery Officer of this Tribunal on 31.07.2026

15. Copy of this order be given dasti to the applicant and be sent to defendants through registered/speed post and this order be also uploaded on the official website of this Tribunal and record be consigned. Pronounced by me in the open Tribunal. Dated: 16.07.2026

(MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh