CENTRAL BANK OF INDIA vs M/S NAPHA PHARMACEUTICALS PVT LTD on 18 August 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.1,26,47,176.21/- with future interest thereon from the date of presentation of the Transfer Original Application till payment/realization.

2. 2. The Defendants were granted a Cash Credit (Hypothecation) Limit for a sum of Rs.25,00,000/-, Bills Purchase Limit (Inland and Foreign) for a sum of Rs.30,00,000/- and Letter of Credit Limit (Inland for Purchase of Raw Material) for a sum of Rs.5,00,000/- vide sanction letter dt.01.12.2001. Defendants approached the Applicant for enhancement of the following credit facilities as Cash Credit (Hypothecation) Limit for a sum of Rs.50,00,000/- and Bill Purchase Limit (Inland and Foreign) for a sum of Rs.35,00,000/- vide sanction letter dt.07.09.2002 and as specified in para no.5.3 & 5.9 of the Transfer Original Application and on them executing loan and security documents.

3. 3. Defendants created the hypothecation of all the stocks, goods, machineries, shed, equipments and raw materials belonging to the Defendant No.1 and also created mortgaged the property viz., Flat No. 18, 6th Floor, Vithal Court Apartment Co-operative Housing Society Ltd., 151, August Kranti Marg, Mumbai- 400 036, in favour of the applicant to secure the loan.

4. 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 in it to be declared as NPA.

5. Despite issuance of letters, personal visits, telephonic conversation and reminders the Defendants had failed to regularise the account. So the Applicant had caused the issuance of lawyer notice to Defendants to pay up the dues with interest.

6. Since the 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 23.10.2006. Defendants were duly served with the summons for appearance on 12.02.2007. Defendant No.2 & 3 filed vakalatnama on 06.06.2007 and 10.08.2007 respectively. A Memo of Undertaking filed by the Advocate Mr. Herbert Naronha to file Vakalatnama on behalf of Legal Heirs of deceased Defendant No.2 and WS by the Defendants on 17.09.2008. But subsequently there was no representation for the Defendants. The last representation for them was made on 12.04.2018 then they remained absent.

7. The applicant filed an affidavit (exhibit-9) in lieu of examination in chief through Mr. A. K. Verma, Chief

Manager of the bank, had produced documents, which are admitted in evidence, read, recorded and exhibited and were marked as AW-1 to AW-26.

1. 8. As stated earlier apart from filing a memo of undertaking to file written statement, no effective representation is made for the defendants since 10.07.2018. No Written statement is filed by the defendants and no argument notes are seen filed by the defendants. Even though applicant had filed CAOD and written argument notes nothing is attempted to by defendants who had persistently remained absent since 10.07.2018. So, the contentions of the applicant are being accepted.

2. 9. Accordingly, the Transfer Original Application was filed for the recovery of Rs.43,30,312.12/- under Cash Credit Facility and Rs.83,16,864.09/- under Bill Purchase Limit with further interest @ 15% p.a. along with 1% p.a. Penal interest and other expenses for the period from the date of filing of this T.O.A. till payment/realization.

3. 10. 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.

A handwritten signature or mark, possibly initials, located at the bottom right of the page.

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

12. Hence, the following order is passed:

**ORDER**

a. T.O.A. stands allowed with cost and the Defendant no.1, 2(a) to 2(c) and 3 are held liable jointly and severally to pay to the Applicant Bank within two months a sum of Rs.43,30,312.12/- under Cash Credit Facility and Rs.83,16,864.09/- under Bill Purchase Limit with further interest @ 15% p.a. along with 1% p.a. penal interest and other expenses from the date of filing of this T.O.A. till the date of realization; failing which the aforesaid amount shall be recovered from the sale of hypothecated stocks and mortgage property viz., Flat No. 18, 6th Floor, Vithal Court Apartment Co-operative Housing Society Ltd., 151, August Kranti Marg, Mumbai- 400 036 and in case of shortfall, the same shall be recovered from the sale of the movable and immovable properties of the Defendants.

b. Defendants are directed to declare, on oath, to the Recovery Officer, Debts Recovery Tribunal – I, Mumbai, both their moveable and immoveable 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 :18.08.2026.

(Dictated to my Stenographer, transcribed by him, corrected and signed by me and pronounced in open forum on 18.08.2026).

Place:- Mumbai Date:- 18.08.2026

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

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