Reliance Asset Reconstruction Company Limited vs M/S SACHIN ARTS (INDIA) PVT LTD on 19 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.55,74,838.42/- 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 Limit of Rs.25,00,000/-, vide sanction letter dt.06.06.2008, Additional Cash Credit Facility of Rs.9,00,000/- vide sanction letter dt.11.09.2009. Applicant also renewed the existing Cash Credit Facility and also granted the Term Loan Facility for a sum of Rs.52,00,000/- vide sanction letter dt.02.12.2009 as specified in Transfer Original Application and on them executing loan and security documents.

3. 3. The Defendants vide its letter dt.05.12.2009 once again approached the Applicant to seek reduction of margin money to 15% and also reduction in interest rate to 14% for loan against hypothecation of machineries, considering the said request the Applicant by its revised sanction letter dt.16.12.2009 once against conveyed the sanction of the following facilities with the reduction of margin money and also with reduction in the interest amount and as detailed therein.

<table border="1"> <thead> <tr>

<th>Margin</th>

</tr> </thead> <tbody> <tr> <td>1.</td> <td>Cash Credit Facility against Hyp of Book Debts</td> <td>25%</td> <td>34.00</td> <td>0.00</td> <td>34.00</td> </tr> <tr> <td>2.</td> <td>Term Loan Facility Hyp of Plant and Machineries</td> <td></td> <td></td> <td></td> <td></td> </tr> <tr> <td></td> <td>Heidelberg Offset Printing Machine</td> <td>15%</td> <td>41.50</td> <td>9.00</td> <td>50.50</td> </tr> <tr> <td></td> <td>Against Hyp of Polar Paper Cutting Machine</td> <td>15%</td> <td>7.88</td> <td>1.67</td> <td>9.55</td> </tr> <tr> <td></td> <td>Paper Munching Machine</td> <td>15%</td> <td>2.62</td> <td>0.33</td> <td>2.95</td> </tr> <tr> <td colspan="2"><b>Total</b></td> <td></td> <td><b>86.00</b></td> <td><b>11.00</b></td> <td><b>97.00</b></td> </tr> </tbody> </table>

4. It is also stated that in February, 2013, the Defendant No.1 had approached, the Applicant for renewal of Cash Credit Facility and for review of Term Loan Facility vide sanction letter dt.06.02.2013 as under:- <table border="1"> <thead> <tr>

</tr> </thead> <tbody> <tr> <td></td> <td></td> <td></td> <td></td> <td></td> </tr> </tbody> </table>

<table border="1"> <thead> <tr> <th></th> <th></th> <th></th> <th>Lakhs)</th> <th></th> </tr> </thead> <tbody> <tr>

<td>34.00</td> <td>0.00</td> <td>34.00</td> </tr> <tr>

<td>45.29</td> </tr> </tbody> </table>

5. It is also stated that in February, 2014, the Defendant No.1 had approached, the Applicant for renewal of existing Cash Credit Facility and for review of Term Loan Facility vide sanction letter dt.10.02.2014 as under:- <table border="1"> <thead> <tr>

</tr> </thead> <tbody> <tr>

<td>34.00</td> <td>0.00</td> <td>34.00</td> </tr> <tr>

<td>(28.63)</td> <td>34.37</td> </tr> </tbody> </table>

6. It is also stated that in February, 2015, the Defendant No.1 had approached, the Applicant for renewal of Cash Credit Facility and for review of Term Loan Facility vide sanction letter dt.10.02.2015 as under:- <table border="1"> <thead> <tr>

</tr> </thead> <tbody> <tr> <td></td> <td></td> <td></td> <td></td> <td></td> </tr> </tbody> </table>

<table border="1"> <tr>

<td>34.00</td> <td>0.00</td> <td>34.00</td> </tr> <tr>

<td>(36.06)</td> <td>26.94</td> </tr> </table>

7. Defendants created mortgage viz.,

- a. All the plant and machinery, other assets etc. installed at the factory at and all other tangible movable assets, assets imbedded in the earth, plant and machinery, furniture, fixtures, fittings and all other articles (present and future) lying on the premise or in the godown of the Borrower or in the custody of any person who are mercantile agents of the Borrower or in the courses of transit or on high seas or on order or delivery, howsoever and whatsoever.

- b. Present and future book debts, outstanding monies, receivables, claims, bills, rights to or in movables properties and movable assets which are due owing and payable or belonging to the Defendant No.1 or which are due owing or payable to the Defendant No.1 or which are during the continuance of the security due, owing and payable to the Defendant No.1 in the course of its business.

- c. Flat No. 301, "A" Wing, Denzil Apartment, 3rd Cross Lane, Lokhandwala Complex, Andheri (W), Mumbai - 400 053 in favour of the applicant to secure the loan.

8. Despite the undertaking effected, Defendants 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:

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

10. 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 19.11.2015. Defendants were duly served with the summons for appearance on 16.12.2015 and Transfer Notice on 06.12.2016. Defendants filed vakalatnama on 26.02.2016 and also file an application to recall the exparte order dt.04.12.2015 and on 24.03.2017 Right to file Written statement by the Defendants stood forfeited.

11. The applicant filed an affidavit (exhibit-24) in lieu of examination in chief through Mr. Tushar Shinde, Authorised Officer of the bank, had produced documents, which are admitted in evidence, read, recorded and exhibited and were marked as AW-1 to AW-41.

12. Accordingly, the Transfer Original Application was filed for the recovery of Rs.34,86,620.42/- under the Cash Credit Facility with further interest @14% p.a. and Rs.20,88,218/- under the Term Loan Facility with further interest @14% p.a. and other expenses for the period from the date of filing of this T.O.A. till payment/realization.

13. 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.

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

15. Hence, the following order is passed:

ORDER

a. T.O.A. stands allowed with cost and the Defendant no.1 to 3 are held liable jointly and severally to pay to the Applicant Bank within two months a sum of Rs.34,86,620.42/- under the Cash Credit Facility with further interest @17.50% p.a. and Rs.20,88,218/- under the Term Loan Facility with further interest @16.50% p.a. 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 A handwritten signature or mark, possibly initials, located at the bottom right of the page.

i. All the plant and machinery, other assets etc. installed at the factory at and all other tangible movable assets, assets imbedded in the earth, plant and machinery, furniture, fixtures, fittings and all other articles (present and future) lying on the premise or in the godown of the Borrower or in the custody of any person who are mercantile agents of the Borrower or in the courses of transit or on high seas or on order or delivery, howsoever and whatsoever.

ii. Present and future book debts, outstanding monies, receivables, claims, bills, rights to or in movables properties and movable assets which are due owing and payable or belonging to the Defendant No.1 or which are due owing or payable to the Defendant No.1 or which are during the continuance of the security due, owing and payable to the Defendant No.1 in the course of its business.

iii. Flat No. 301, "A" Wing, Denzil Apartment, 3rd Cross Lane, Lokhandwala Complex, Andheri (W), Mumbai - 400 053 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.

10/08/2026

- 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 :19.08.2026.

(Dictated to my Stenographer, transcribed by him, corrected and signed by me and pronounced in open forum on 19.08.2026).

Place:- Mumbai Date:- 19.08.2026

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