CANARA BANK vs M/S SHIVAAY KNIT FAB AND ANOTHER on 30 September 2026

FINAL ORDER

1. Present Transfer Application was instituted by the applicant under Section 19 of the Recovery of Debts & Bankruptcy Act 1993, against the defendants for recovery of Rs.36,14,002.93 (Rupees Thirty Six Lacs Fourteen Thousand Two and Paise Ninety Three Only). The Transfer Application has been filed through Sh. Tarun Goyal, Authorized Officer of the applicant, who is competent to institute the

Transfer Application vide Authorized Letter, dated 15.09.2022, 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 grant of Term Loan Facility for purchase of fully computerized high speed flat bed knitting machine and accessories of Rs.31,50,000.00 vide Application form for loans to MSMEs, dated 21.06.2022, which is Annexure A2 to this TA.

3. The Applicant sanctioned the Term Loan Facility for purchase of fully computerized high speed flat bed knitting machine and accessories of Rs.31,50,000.00 vide Sanction Letter, dated 30.07.2022, which is Annexure A3 to this TA and the terms and conditions were duly accepted by the defendant no. 1 through its proprietor defendant no. 2.

4. Defendant no. 1 through its proprietor defendant no. 2 hypothecated its movable assets i.e., Fully computerized high speed flat bed knitting machine 10 gauge 72”X3 system with needles and accessories, model Giant Star FX-3- 72SJ vide Deed of Hypothecation machinery, dated 01.08.2022, which is Annexure A4 to this TA. Defendant no. 2 mortgaged his Immovable Property i.e., All the part and parcel of property bearing Municipal Corporation No. B-V-195, measuring 32-1/2 square yards, situated at Village Taraf Saidan, Locality known as Chah Tundi Office Gali, Near Mohalla, Saidan, Tehsil and District Ludhiana. The said equitable mortgage was created by depositing the Sale Deed bearing document no. 2021- 22/102/1/5928, dated 21.12.2021, along with its translation, which is Annexure A12 to this TA. To confirm the creation of the said mortgage and further secure the facility, Defendant No. 2 executed a Letter Evidencing Deposit of Title Deeds, dated 01.08.2022, which is Annexure A11 to this TA. Subsequently, the fact of the creation of this charge was duly entered into the Municipal Corporation records on

18.05.2023, and an official confirmation letter to that effect was issued letter dated 22.05.2023, which are Annexures A13 & A14 to this TA. Documents executed: Demand Promissory Note, Letter of undertaking, Letter of Proprietorship, Letter evidencing execution of documents, Certificate of loan papers obtained, Take delivery letter to DPN, all dated 01.08.2022, which are Annexures A5 to A10 to this TA; Notice u/s 13(2), dated 09.05.2023 and Possession Notice, dated 01.09.2023, along with postal receipts, which is Annexure A15 to this TA; Statement of Account along with certificate, which are Annexures A16 & A17 to this TA.

5. The loan account became irregular and was classified as NPA and after adjusting debit and credit entries in the loan account there was a debit of Rs.36,14,002.93, 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 16.09.2026.

7. In support of the TA, affidavit of Sh. Tarun Goyal, Authorized 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. None was present on behalf of defendants for arguments. From the perusal of all the Annexures A1 to A17 to this TA, it is proved that the defendant no. 1 through its proprietor defendant no. 2 approached applicant for availing of loan facility which was granted to them and for that they had executed all the relevant documents in favour of the bank. The defendants failed to pay back the loan as per terms and conditions of the agreement between the parties. Subsequently, loan account was classified as NPA. From the documentary evidence brought on record, it is proved that applicant is entitled to recover a sum of Rs.36,14,002.93 (Rupees Thirty Six Lacs Fourteen Thousand Two and Paise Ninety Three 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 pendente lite and future rate of interest is concerned, the applicant in relief clause has claimed interest @14.45%p.a. including penal interest, 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 and mortgaged property, undertaking of the defendants, quantum of loan 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 simple interest @8.00%p.a. in the loan account 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 sum Rs.36,14,002.93 (Rupees Thirty Six Lacs Fourteen Thousand Two and Paise Ninety Three Only), jointly and severally, with costs, current and future simple interest @8.00%p.a. in the loan account 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 defendant no. 1 and mortgaged property of defendant no. 2 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 14.10.2026.

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: 30.09.2026

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