INDIAN OVERSEAS BANK vs M/S MERCURY METAL INDUSTRIES on 10 April 2026

J U D G M E N T

1. 1. This is an application under Section 19(1) of Recovery of the Debt and Bankruptcy Act, 1993 (for short, 'the 1993 Act') to recover Rs.60,80,52,729/- with future interest thereon from the date of presentation of the Transfer Original Application till payment/realization and to enforce the mortgaged securities.

2. 2. D1 is a proprietorship firm which had availed unsecured loan from D2 a Ltd. company. Applicant along with 06 other banks have jointly financed D2 with a sum of Rs.2,260 Crores on 23.09.2013. After CDR the applicants along with 20 other consortium member have financed D2 a sum to the tune of Rs.2260 Crores. As per approved scheme of CDR and by arrangement between D1 & D2, the applicant had come in place of D2. So, the amount due from D1 to D2 has become the receivables of D2 hypothecated to applicant along with other 20 consortium banks.

3. 3. D2 along with applicant and other 20 banks entered into Master Restructuring agreement on 23.09.2013. The Supplemental interse agreements dt.29.12.2012 working capital consortium agreement dt.29.12.2012 joint hypothecation dt.29.12.2012, are also entered into between D2 and Applicant, sanctioning the working capital to the tune of Rs.2,260 Crores.

4. D1 had availed unsecured loan to the tune of Rs.60,80,52,729/- from D2 and name of D1 is appearing in the balance sheet account of D2. So, the amount due from D1 to D2 has become the receivables of D2. Both D1 and D2 had failed to make any repayment to the applicant.

5. Defendant No. 1 has not paid amount as mentioned above till date, and name of Defendant No. 1 is still reflecting in the books of Defendant No. 2. Hence a sum of Rs.60,80,52,729/- is due and payable by Defendant No. 1 to the Defendant No. 2. By virtue of Hypothecation Agreement executed by Defendant No. 2 in favour of the Applicant and as per Minutes of Meeting, Defendant No. 1 is directed to pay a sum of Rs.60,80,52,729/- directly to the Applicant.

6. Despite the undertaking effected by Defendants they had failed to regularise the account and service interest in the account. So the account remained out of order since long time resulting it to be declared as NPA.

7. Since defendants failed to make the repayment, the applicant was left with no other alternative other than to file the Transfer Original Application which was presented on

25.11.2015. Defendant Nos.1 & 2 were duly served with the summons for appearance on 28.08.2017 & 16.10.2017. Despite receipt of summons, the defendants did not appear. They had remained absent without any representation for them and so, they were set at exparte.

1. 8. The applicant filed an affidavit (Exhibit-27) in lieu of examination in chief through Mr. Moynak Mazumdar, Assistant Manager of the bank, had produced documents, which are admitted in evidence, read, recorded and exhibited and were marked as AW-1 to AW-8.

2. 9. Accordingly, the Transfer Original Application was filed for the recovery of Rs.60,80,52,729/- with further interest @ 18% p.a. and other expenses for the period from 01.04.2013 till payment/realization.

3. 10. As the applicant sought relief only against the Defendant No.1 and no relief is sought from the Defendant No.2, no relief is granted against Defendant No.2.

4. 11. A scrutiny of the averments in the Transfer Original Application and an analysis of the evidence adduced by the applicant, which has gone unchallenged, uncontroverted and unrebutted, shows that there is no reason to reject the claim made by the applicant bank.

12. In view of the observations made hereinabove, Transfer Original Application filed by the applicant deserves to be allowed.

13. Hence, the following order is passed.

ORDER

- a. T.O.A. stands allowed with cost and the Defendant No. 1 is liable to pay to the Applicant Bank within two months a sum of Rs.60,80,52,729/- with further interest @ 18% p.a. and other expenses from the date of filing of this O.A. till the date of realization; failing which the aforesaid amount shall be recovered from the sale of hypothecation and in case of shortfall, the same shall be recovered from the sale of the movable and immovable properties of the Defendants. As the applicant sought relief only against the Defendant No.1 and no relief is sought from the Defendant No.2, no relief is granted against Defendant No.2.

- b. Defendants are directed to declare, on oath, to the Recovery Officer, Debts Recovery Tribunal - I, Mumbai, both their moveable and immovable assets for the purpose of attachment and sale for realizing the shortfall, if any.

- c. Let a Recovery Certificate be issued with a memo of cost immediately u/s 19(22) of The Recovery of Debts and Bankruptcy Act, 1993 together with the details of the properties, if any.

- d. The Defendants are restrained from depleting, transferring, encumbering, alienating or in any way dealing with their properties/assets without first paying the claim of the Applicant Bank.

- e. Copies of this judgment be sent to the parties free of cost and file be consigned to the record room.

- f. Give under my hand and the seal of this Tribunal on this date : 10.04.2026.

(Dictated to my Stenographer, transcribed by him corrected and signed by me and pronounced in open forum on 10.04.2026)

Place:- Mumbai Date:- 10.04.2026

Presiding Officer, DRT-1, Mumbai (Sreekala Suresh)